Tracy Lynn Rennie, Keith Bailey and David Lewis Golden v. Keith Alan Young

AFFIRMED; Opinion Filed July 31, 2015.
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-01109-CV
TRACY LYNN RENNIE (FORMERLY KNOWN AS TRACY LYNN SMITH),
KEITH BAILEY AND DAVID LEWIS GOLDEN, Appellants
V.
KEITH ALAN YOUNG, Appellee
On Appeal from the 429th Judicial District Court
Collin County, Texas
Trial Court Cause No. 429-03129-2009
MEMORANDUM OPINION
Before Justices Bridges, Lang, and Schenck
Opinion by Justice Lang
After a bench trial, the trial court made findings of fact and conclusions of law and
rendered judgment in favor of appellee Keith Alan Young. In a single issue, appellants Tracy
Lynn Rennie, Keith Bailey, and David Lewis Golden contend the trial court erred as a matter of
law in ruling that after their mother’s death her separate property could be used to pay
community debts. We affirm the trial court’s judgment.
BACKGROUND
Lynda Faye Young1 died in 2006. At the time of her death, she was married to appellee
Young. Rennie, Bailey, and Golden are Lynda’s adult children. Young is not appellants’ father,
1
For clarity, we will refer to Lynda Faye Young as “Lynda.”
however. Lynda and Young were married for more than twenty years, and Golden resided with
them at their home in Princeton, Texas. Lynda died without a will. Young filed an affidavit of
heirship supported by affidavits from appellants, and a judgment declaring the parties’ interests
in the estate was rendered in 2006. Subsequent disputes arose among the parties, however, and
appellants brought suit against Young in 2009.
The particular issue on appeal is whether, as a matter of law, Young could pay off
Lynda’s share of community debts owed when she died using the proceeds from a sale of her
separate real property in McKinney in which Lynda owned a one-half interest with her sister
Wanda Sue Marshall. At trial, the evidence was undisputed that Lynda and Marshall2 signed a
contract to sell the McKinney property to Rene and Rosemary Pardon, and that the Pardons made
payments on the property. It was also undisputed at trial as to the balance remaining to be paid
by the Pardons on the contract and the community debts that existed at the time of Lynda’s
death. The parties also agree on their respective shares of Lynda’s estate.
The trial court found that although upon Lynda’s death, interests in the property passed to
appellants, these interests were “subject to the payment of Lynda Fay Young’s debts.” Thus, the
trial court concluded that “the debts of Lynda Faye Young extinguished any other assets which
would have passed upon her death” to appellants. Finally, the trial court rendered judgment that
appellants take nothing from Young respecting his retention of the proceeds from the sale of
Lynda’s separate property with which he paid Lynda’s debts. This appeal followed.
STANDARDS OF REVIEW
Findings of fact made after a bench trial have the same force and dignity as a jury’s
answers to jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991).
The trial court’s findings of fact are reviewable for legal and factual sufficiency of the evidence
2
Marshall’s interest was subsequently conveyed to appellee Young, but only Lynda’s interest is at issue here.
–2–
to support them by the same standards that are applied in reviewing evidence supporting a jury’s
answer. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Catalina v. Blasdel, 881 S.W.2d 295,
297 (Tex. 1994). We review the trial court’s conclusions of law de novo, and uphold them on
appeal if the judgment can be sustained on any legal theory supported by the evidence. Highland
Credit Opportunities CDO, L.P. v. UBS AG, 451 S.W.3d 508, 519 (Tex. App.—Dallas 2014, no
pet.).
APPLICABLE LAW
The statutes in force at the time of death govern the disposition of the decedent’s estate.
Dickson v. Simpson, 807 S.W.2d 726, 727 (Tex. 1991). The parties rely on four sections of the
Texas Probate Code that were effective at the time of Lynda’s death on January 15, 2006:3
§ 37. Passage of Title Upon Intestacy and Under a Will
When a person dies, leaving a lawful will, all of his estate devised or
bequeathed by such will, and all powers of appointment granted in such
will, shall vest immediately in the devisees or legatees of such estate and
the donees of such powers; and all the estate of such person, not devised or
bequeathed, shall vest immediately in his heirs at law; subject, however, to
the payment of the debts of the testator or intestate, except such as is
exempted by law, and subject to the payment of court-ordered child support
payments that are delinquent on the date of the person’s death; and
whenever a person dies intestate, all of his estate shall vest immediately in
his heirs at law, but with the exception aforesaid shall still be liable and
subject in their hands to the payment of the debts of the intestate and the
delinquent child support payments; but upon the issuance of letters
testamentary or of administration upon any such estate, the executor or
administrator shall have the right to possession of the estate as it existed at
the death of the testator or intestate, with the exception aforesaid; and he
shall recover possession of and hold such estate in trust to be disposed of in
accordance with the law.
3
The Probate Code was repealed and the Estates Code enacted by Act of May 26, 2009, 81st Leg., R.S., ch. 680, §§ 1–12, 2009 TEX. GEN.
LAWS 1512–1732, eff. January 1, 2014. Sections 37, 156, 160, and 168 were enacted in 1955 in the Probate Code and are now codified in the
Estates Code: (1) TEX. PROB. CODE § 37, Act of Mar. 16, 1955, 54th Leg., R.S., ch. 55, § 37, 1955 TEX. GEN LAWS 88, 100 (amended 1969 and
1981) (codified at TEX. EST. CODE §§ 101.001, 101.051); (2) TEX. PROB. CODE § 156, Act of Mar. 16, 1955, 54th Leg., R.S., ch. 55, § 156, 1955
TEX. GEN. LAWS 88, 139 (amended 1971 and 2007) (codified at TEX. EST. CODE §§ 101.052, 453.006); (3) TEX. PROB. CODE § 160, Act of
March 16, 1955, 54th Leg., R.S., ch. 55, § 160, 1955 TEX. GEN. LAWS 88, 140 (amended 1993 and 2007) (codified at TEX. EST. CODE
§§ 453.003, 453.004); and (4) TEX. PROB. CODE § 168, Act of March 16, 1955, 54th Leg., R.S., ch. 55, § 168, 1955 TEX. GEN. LAWS 88, 141–42
(amended 1971 and 2007) (codified at TEX. EST. CODE §§ 453.006–453.008). We will refer to these provisions by their section numbers in the
Probate Code applicable at the time of Lynda’s death in 2006.
–3–
TEX. PROB. CODE § 37.
§ 156. Liability of Community Property for Debts
The community property subject to the sole or joint management, control,
and disposition of a spouse during marriage continues to be subject to the
liabilities of that spouse upon death. In addition, the interest that the
deceased spouse owned in any other nonexempt community property passes
to his or her heirs or devisees charged with the debts which were
enforceable against such deceased spouse prior to his or her death. In the
administration of community estates, the survivor or personal representative
shall keep a separate, distinct account of all community debts allowed or
paid in the administration and settlement of such estate.
TEX. PROB. CODE § 156.
§ 160. Powers of Surviving Spouse When No Administration is Pending
(a) When no one has qualified as executor or administrator of the estate of a
deceased spouse, the surviving spouse, whether the husband or wife, as the
surviving partner of the marital partnership, without qualifying as
community administrator as hereinafter provided, has power to sue and be
sued for the recovery of community property; to sell, mortgage, lease, and
otherwise dispose of community property for the purpose of paying
community debts; to collect claims due to the community estate; and has
such other powers as shall be necessary to preserve the community
property, discharge community obligations, and wind up community affairs.
...
(c) This section does not affect the disposition of the property of the
deceased spouse.
TEX. PROB. CODE § 160.
§ 168. Accounting by Survivor
The survivor, whether qualified as community administrator or not, shall
keep a fair and full account and statement of all community debts and
expenses paid by him, and of the disposition made of the community
property; and, upon final partition of such estate, shall deliver to the heirs,
devisees or legatees of the deceased spouse their interest in such estate, and
the increase and profits of the same, after deducting therefrom the
proportion of the community debts chargeable thereto, unavoidable losses,
necessary and reasonable expenses, and a reasonable commission for the
management of the same. Neither the survivor nor his bondsmen shall be
liable for losses sustained by the estate, except when the survivor has been
guilty of gross negligence or bad faith.
TEX. PROB. CODE § 168.
–4–
Under former section 37 of the Probate Code, property of an intestate vests “immediately
in his heirs at law,” but is subject in their hands to the payment of the intestate’s debts. See
Jackson v. Hubert, 234 S.W.2d 414, 416 (Tex. 1950) (discussing predecessor statute). Each heir
is liable only for a proportional share of the debt, and the extent of the liability is limited to the
property received from the estate. See, e.g., Potts v. W.Q. Richards Mem’l Hosp., 558 S.W.2d
939, 943 (Tex. Civ. App.—Amarillo 1977, no writ).
DISCUSSION
In a single issue, appellants contend the trial court erred by concluding Young could use
cash proceeds from Lynda’s separate property to pay community debts that existed at the time of
Lynda’s death and that nothing was due to appellants. Relying on sections 156 and 160 of the
Probate Code, appellants argue that only community property may be used to pay community
debts. They contend they are entitled to inherit Lynda’s separate property free from community
debts. Appellants do not cite any case authority for this proposition. Young, in turn, relies on
sections 37, 160, and 168 of the Probate Code to argue the contrary.
Two of the trial court’s conclusions of law are at issue:
51. Due to the death of Lynda Faye Young, property interests passed to
Tracy Lynn Smith, Keith Bailey and David Lewis Golden, subject to the
payment of Lynda Faye Young’s debts.
52. . . . Except for the assets set forth herein in the Conclusions of Law, the
debts of Lynda Faye Young extinguished any other assets which would
have passed upon her death to Tracy Lynn Smith, Keith Bailey and David
Lewis Golden.
Although appellants do not contest the amounts of the debts for which Young offered
evidence, they raise an additional contention that because Young’s affidavit in support of the
application for heirship recited that “there are no debts owed by Decedent that are not secured by
liens on real estate, and there is no necessity for administration of the estate,” the debts should
not be paid from Lynda’s estate. We cannot agree. The evidence offered by Young showed that
–5–
he paid almost all of the debts prior to the heirship proceeding, and the trial court could have
found that there was no conflict between the affidavit and Young’s testimony and evidence
admitted at trial.
It is without question that sections 156 and 160 provide that (1) community property of
the decedent is subject to community debts; and (2) a surviving spouse may dispose of
community property for the payment of community debts. However, these provisions do not
negate or conflict with section 37’s requirement that title to an estate passes to heirs “subject . . .
to the payment of the debts of the intestate.” Section 37 provides in relevant part that “whenever
a person dies intestate, all of his estate shall vest immediately in his heirs at law, but with the
exception aforesaid shall still be liable and subject in their hands to the payment of the debts of
the intestate.” See Jackson, 234 S.W.2d at 416. Accordingly, we conclude appellants’ shares in
the estate are subject to Lynda’s debts, although appellants are not personally liable for amounts
in excess of their shares. See Potts, 558 S.W.2d at 942–43.
The evidence also supports the trial court’s finding and conclusion that Lynda’s debts
“extinguished any other assets which would have passed upon her death” to appellants. We
decide appellants’ sole issue against them. See Highland Credit, 451 S.W.3d at 519 (we uphold
trial court’s conclusions of law if judgment can be sustained on any legal theory supported by
evidence).
CONCLUSION
We affirm the trial court’s judgment.
141109F.P05
/Douglas S. Lang/
DOUGLAS S. LANG
JUSTICE
–6–
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
TRACY LYNN RENNIE (formerly known On Appeal from the 429th Judicial District
as TRACY LYNN SMITH), KEITH Court, Collin County, Texas
BAILEY AND DAVID LEWIS GOLDEN, Trial Court Cause No. 429-03129-2009.
Appellants Opinion delivered by Justice Lang;
Justices Bridges and Schenck participating.
No. 05-14-01109-CV V.
KEITH ALAN YOUNG, Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.
It is ORDERED that appellee Keith Alan Young recover his costs of this appeal from
appellants Tracy Lynn Rennie, Keith Bailey, and David Lewis Golden.
Judgment entered this 31st day of July, 2015.
–7–