Dessie Maria Andrews and Dan Parkhurst v. Timothy C. Smith, Independent of the Estate of William F. Baska

• Court: Court of Appeals of Texas
• Decided: March 28, 2002
• Docket: 03-01-00402-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

444444444444444 NO. 03-01-00402-CV 444444444444444

Dessie Maria Andrews and Dan Parkhurst, Appellants

v.

Timothy C. Smith, Independent Executor of the Estate of William F. Baska, Deceased, Appellee

FROM THE DISTRICT COURT OF BURNET COUNTY, 33RD JUDICIAL DISTRICT NO. 20,808 HONORABLE GUILFORD L. JONES, III, JUDGE PRESIDING

Dessie Maria Andrews1 and Dan Parkhurst appeal from a default judgment favoring

Timothy C. Smith, the independent executor of the Estate of William F. Baska. Parkhurst has not

filed a brief; he has thereby waived all complaints. See Tex. R. App. P. 38.8(a)(3). Andrews

contends that the district court lacked jurisdiction, erred by finding that Andrews had a fiduciary duty

to Smith, and erred by awarding property to Smith. We affirm the judgment.

BACKGROUND

Baska died on March 25, 2001 at his home in Spicewood, Burnet County, Texas. In

his will, Baska named Smith his sole heir and the independent executor of his estate.

1 Andrews was also referred to by the middle name “Marie” at times in the district court. She was sued “individually and as purported trustee of an alleged LCS Trust” but, because her notice of appeal does not mention her capacity as trustee, this appeal is taken only in her individual capacity. Baska’s estate2 sued Parkhurst and Andrews, individually and as purported trustee of

the alleged LCS Trust, seeking recovery of money, property, and land that Smith alleged they had

taken improperly before and after Baska’s death. Smith alleged that Andrews, acting as Baska’s

financial advisor, breached a fiduciary duty to Baska by structuring bank accounts so that she could

transfer funds from Baska’s accounts into accounts she controlled as part of the LCS Trust, which

Smith alleges to be a fiction. Smith further alleged that appellants converted the personal property

of Baska by removing the property from his home after his death. Smith sought to set aside a deed

transferring real estate from Baska to the LCS Trust; Smith alleged the deed should be set aside

because the LCS Trust did not exist, Baska was not mentally competent when he signed the deed,

the LCS Trust did not pay consideration for the deed, and the Trust obtained the deed in violation

of Andrews’s fiduciary duty as a financial consultant. Smith sought exemplary damages and

attorney’s fees, as well as a temporary injunction requiring the return of personal property and money

and the non-interference with Smith’s use of the real estate.

On May 10, 2001, after a hearing at which all parties appeared, the district court

granted a temporary injunction. It restrained Andrews and Parkhurst from disposing, selling, or

hiding any of the personal property listed in Smith’s petition. It restrained them from transferring,

disposing, conveying, or moving funds held in the name of LCS Trust which originated from Baska.

It also restrained them from taking possession of, exercising control over, transferring, or conveying

the real estate. The court ordered them to surrender Baska’s personal property to Smith in his role

2 The original petition stated that “Plaintiff is the Estate of William F. Baska, Deceased, represented herein by and through TIMOTHY C. SMITH, Independent Executor . . . .” Smith, acting as independent executor for the Estate, later replaced the Estate as named plaintiff.

2 as executor by May 11, 2001, and ordered Smith to preserve the property during the pendency of this

suit. It also ordered Andrews to account, by May 24, 2001, for all of Baska’s funds deposited in the

accounts.

Alleging that Andrews did not comply with the order to turn over the personal

property, Smith sought to enforce the injunction. After she failed to appear at the June 14, 2001

hearing, the district court on June 21, 2001 signed an order of attachment of her person for a hearing

on July 2, 2001 regarding contempt charges. On June 29, 2001, however, Andrews filed a notice of

interlocutory appeal from the June 21 order of attachment.

While her interlocutory appeal of the order of attachment was pending, the district

court proceeded to consider the merits of the underlying cause. The judgment recites that both

Andrews and Parkhurst were duly and properly notified of the trial, but neither appeared. The district

court rendered a default judgment in favor of Smith. The court found the following:

< that the LCS Trust was null and void and did not exist by law;

< that Andrews was in a fiduciary relationship with Baska and that she committed constructive fraud by breaching that relationship;

< that Andrews and Parkhurst converted personal property belonging to Baska;

< that any property held in the name of the LCS Trust that originally belonged to Baska was actually subject to the legal control of Smith, as executor of Baska’s estate;

< that a power of attorney from Baska held by Andrews was void; and

< that any documents by which Andrews purported to use that power to convey Baska’s property were void.

3 The court accordingly set aside the deed transferring real estate from Baska to the LCS Trust and

declared a list of personal property (that the court had previously ordered Andrews and Parkhurst to

surrender to Smith as independent executor) belonged to the Estate. The court ordered Andrews to

pay $47,332.44 to Smith as independent executor. It awarded Smith, as independent executor, $8400

in attorney’s fees owed jointly by Andrews and Parkhurst, with additional fees for appeals. The court

awarded Smith, as independent executor, $200,000 from Andrews and $10,000 from Parkhurst in

exemplary damages. The judgment also contained various provisions for its enforcement.

Andrews and Parkhurst then filed notices of appeal from the final judgment.

DISCUSSION AND CONCLUSIONS

Generally, a motion for new trial is a prerequisite to challenging a post-answer default

judgment. See Tex. R. Civ. P. 324(b)(1). In that motion, the defendant must show (1) that her

failure to appear at trial was not intentional, or the result of conscious indifference on her part, but

was due to a mistake or accident; (2) that she has a meritorious defense; and (3) that the granting of

her motion will occasion no delay or otherwise work an injury to the plaintiff. American Paging of

Tex., Inc. v. El Paso Paging, Inc., 9 S.W.3d 237, 240 (Tex. App.—El Paso 1999, no pet.); see also

Cliff v. Huggins, 724 S.W.2d 778, 778 (Tex. 1987); Craddock v. Sunshine Bus Lines, Inc., 133

S.W.2d 124, 126 (Tex. 1939). The clerk’s record in this case does not contain a motion for new trial

directed at the default judgment. The reporter’s record from the trial does contain a signed receipt

of certified mail containing notice informing Andrews of the trial setting. Andrews does not attempt

to prove that her failure to appear at the trial setting was due to mistake or accident.

Andrews instead challenges the jurisdiction of the district court. Such fundamental

errors can be raised for the first time on appeal. See Central Educ. Agency v. Burke, 711 S.W.2d 7,

4 8 (Tex. 1986). Andrews contends that Smith’s claims were incident to an estate and that accordingly

the probate court, not the district court, had jurisdiction over the Estate’s claims.

But for the involvement of the Estate, the district court undisputedly would have

jurisdiction and would be the proper court for this action. “District Court jurisdiction consists of

exclusive, appellate, and original jurisdiction of all actions, proceedings, and remedies, except in cases

where exclusive, appellate, or original jurisdiction may be conferred by this Constitution or other law

on some other court, tribunal, or administrative body.” Tex. Const. art. 5, § 8. The Texas

Constitution confers exclusive jurisdiction on justice courts for suits in which the amount in

controversy is $200 or less. See Tex. Const. art. 5, § 19. This leaves the district courts with

jurisdiction over suits in which the amount in controversy is more than $200. See Arteaga v. Jackson,

994 S.W.2d 342, 342 (Tex. App.—Texarkana 1999, pet. denied). The district court clearly had

subject matter jurisdiction over the suit. The question is whether the filing of the will for probate in

the county court made the county court the exclusive forum for all actions related to the probate of

the will.

The Legislature has conferred on county courts the general jurisdiction of a probate

court. Tex. Prob. Code Ann. § 4 (West Supp. 2002). The county court “shall . . . transact all

business appertaining to estates subject to administration, including the settlement, partition, and

distribution of such estates.” Id. In county courts, “appertaining to estates” includes “all claims by

or against an estate.” Id. § 5A(a). In counties such as Burnet in which there is no statutory court

exercising probate jurisdiction, “all applications, petitions, and motions regarding probate and

administrations shall be filed and heard in the county court,” except when the county court elects to

transfer contested proceedings to a district court. See id. § 5(b). Testators appointing independent

5 executors may do as Baska did and direct that no action be had in county court in relation to the

settlement of the estate other than the probating and recording of the will and the return of a statutory

inventory, appraisement, and list of claims of the estate. See id. § 145(b). That section goes on to

provide that, when an independent executor has been appointed, “further action of any nature shall

not be had in the county court except where this Code specifically and explicitly provides for some

action in the county court.” Id. § 145(h).

We have interpreted the Code to mean that the district and county courts have

concurrent jurisdiction, with the county court having dominant jurisdiction. See Green v. Watson,

860 S.W.2d 238, 242-43 (Tex. App.—Austin 1993, no pet.) (considering statutory county and

probate courts). But see Estate of Torrance v. State, 812 S.W.2d 393, 396 (Tex. App.—El Paso

1991, no writ) (no concurrent jurisdiction between district and county courts for matters dealing with

probate). When faced with similar assertions that the district court lacked jurisdiction to adjudicate

a dispute because of the pendency of a probate proceeding in a constitutional county court, the

Corpus Christi court held that the district court had jurisdiction. See Carroll v. Carroll, 893 S.W.2d

62, 66 (Tex. App.—Corpus Christi 1994, no pet.) (original suit regarding land title appropriately filed

in district court); Cf. Herbst v. Sheppard, 995 S.W.2d 310, 313-14 (Tex. App.—Corpus Christi 1999,

pet. denied) (suit regarding claim against estate tried in district court after transfer from county court

not barred by Probate Code section 145).

Because this suit was filed in the district court and pertained to the estate being

independently administered in the county court, the county court had dominant jurisdiction. The

district court also had jurisdiction, but might have had to defer to the county court’s dominant

6 jurisdiction had a plea in abatement asserting such been filed in this suit.3 See Curtis v. Gibbs, 511

S.W.2d 263, 267 (Tex. 1974). Under the doctrine of dominant jurisdiction, “[a]ny subsequent suit

involving the same parties and the same controversy must be dismissed if a party to that suit calls

the second court’s attention to the pendency of the prior suit by a plea in abatement.” Id. (emphasis

added). There is no plea in abatement in the clerk’s record. Even assuming that the county court had

dominant jurisdiction over this suit, the district court did not err by exercising its jurisdiction because

Andrews never invoked the county court’s dominant jurisdiction by filing a plea in abatement.

Andrews also argues that the court never obtained power over the property because

it was owned by the LCS Trust, which was not a party to this suit. As discussed above, the district

court had subject-matter jurisdiction. Venue was proper in Burnet County based on the location

alleged for the real estate, the conversion, and the breach of fiduciary duty. See Tex. Civ. Prac. &

Rem. Code Ann. §§ 15.002(a)(1) (“lawsuits shall be brought: (1) in the county in which all or a

substantial part of the events or omissions giving rise to the claim occurred”) & 15.011 (“Actions for

recovery of real property or an estate or interest in real property . . . to remove encumbrances from

the title to real property . . . shall be brought in the county in which all or a part of the property is

located.”) (West Supp. 2002). The removal of the personal property from Burnet County pursuant

to the alleged wrongdoing did not invalidate venue in Burnet County. The district court in Burnet

County had jurisdiction and was the proper venue. Contrary to Andrews’s contention, the district

court accordingly had jurisdiction to issue a temporary restraining order.

3 This is true, even though the county court could have transferred the proceeding back to the district court under Probate Code section 5(b) and might have had to transfer it under Probate Code section 145(b) in order for the case to come to trial.

7 Andrews argues that the substitution of Smith for the Estate in the style of the case

dismissed the Estate. An estate, however, cannot sue or be sued except through its representative.

Price v. Estate of Anderson, 522 S.W.2d 690, 691 (Tex. 1975). Smith participated from the outset

of the case in his capacity as executor of the Estate, validating the inception and conduct of the suit

by the Estate; the restyling of the case merely adopted the proper style. See Dueitt v. Dueitt, 802

S.W.2d 859, 861 (Tex. App.—Houston [1st Dist.] 1991, no pet.). The replacement of the Estate as

a party by Smith in his representative capacity in the style of the case did not, as Andrews contends,

negate the cause of action.

Andrews argues that Smith lacked standing to make claims on Baska’s behalf. Smith

was not making claims as an individual, but as the representative of Baska’s estate. As personal

representative of the estate,4 Smith was required to “use ordinary diligence to collect all claims and

debts due the estate and to recover possession of all property of the estate to which its owners have

claim or title.” Tex. Prob. Code Ann. § 233(a) (West Supp. 2002). The Code also provides that

“[s]uits for the recovery of personal property, debts, or damages and suits for title or possession of

lands or for any right attached to or growing out of the same or for injury or damage done thereto

may be instituted by executors or administrators appointed in this state . . . .” Id. § 233A. Smith not

only had standing to make claims on behalf of Baska’s estate, his role as independent executor

required that he do so under the circumstances he perceived.

Smith’s role as independent executor defeats Andrews’s claim that she could not be

liable to him because she had no fiduciary duty toward him. Smith does not claim that Andrews owed

4 The definition of personal representative includes independent executor. See Tex. Prob. Code Ann. § 3(aa) (West Supp. 2002).

8 him a duty. He claims on behalf of Baska’s estate that Andrews breached a fiduciary duty owed to

Baska, and thereby deprived Baska (and accordingly the estate) of property. Andrews’s claim that

she owes a fiduciary duty only to the beneficiary of the estate may be true within her role as trustee;

that does not prevent her from also having had a fiduciary responsibility to Baska as his financial

advisor.

Andrews questions whether the affidavit presented to the court supported a temporary

restraining order (“TRO”). This challenge is moot because the temporary restraining order is no

longer in effect. See Hermann Hosp. v. Tran, 730 S.W.2d 56, 57 (Tex. App.—Houston [14th Dist.]

1987, no writ) (TRO expired by its own terms rendered moot). The district court signed the TRO

on April 25, 2001. The TRO was set to expire upon further order of the court or operation of law;

such orders last only fourteen days unless the court extends the time. See Tex. R. Civ. P. 680. The

court did not extend the time. Rather, the court held a hearing and, on May 10, 2001, signed a

temporary injunction. That injunction continued in effect until further order of the court. On August

6, 2001, the court held a trial and, on September 28, 2001, the court signed the final judgment. The

temporary injunction accordingly is moot. Andrews does not assert that any harm from the

temporary restraining order persists; she never complied with it or the temporary injunction. Because

subsequent orders, supported by evidence, supplanted the TRO, Andrews’s complaint about the

evidentiary support for the TRO is moot.

Andrews also asks whether the LCS Trust has claim over the property superior to

Smith’s claim. To prove conversion, a plaintiff must prove that

(1) the plaintiff owned or had legal possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised dominion and control over the property to the exclusion of, or inconsistent

9 with the plaintiff's rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property.

Apple Imports, Inc. v. Koole, 945 S.W.2d 895, 899 (Tex. App.—Austin 1997, writ denied). The

conversion cause of action affects only the personal property, including a truck, several firearms, a

computer, and possibly other items; it does not pertain to the funds, which are covered by the breach

of fiduciary duty claim, or the claim that the deed to the real property should be set aside. Smith

alleged that, after Baska’s death, Andrews and Parkhurst went to Baska’s house and removed the

listed property. Andrews testified and presented a document at the hearing on the temporary

injunction purporting to show that Baska sold all personal property to the LCS Trust for $100. Smith

testified that he believed that the signature on the document was forged. By failing to respond to

requests for admission, Andrews is deemed to have admitted that she forged the signature. See Tex.

R. Civ. P. 198.2(c). She is also deemed to have admitted that Baska owned the property until his

death and that Smith was entitled to inherit it. After Baska’s death, then, the property belonged to

his estate. The evidence supports the court’s conclusion that Andrews converted the Estate’s

property. As discussed above, Smith, as independent executor, was entitled and required to attempt

to recover this property. Based on the judgment, the Estate’s right to possess the personal property

is superior to that of the LCS Trust.

Andrews also questions whether the judgment on the conversion cause of action

enriched Smith. She argues that a court cannot award judgment both for property and for the value

of the property. The judgment in this case does not do that. The money judgment for $47,332.44

relates to funds transferred in bank accounts. The money judgment is not compensation for the

personal property that the court ordered Andrews to return to the Estate. Smith’s claim that the

10 funds and the property taken by Andrews belong to the Estate was unrebutted because Andrews

chose not to appear at the trial to rebut his evidence. The court has not awarded a double recovery

for the property. Although the judgment may eventually increase Smith’s wealth, it does not enrich

him unjustly under the evidence presented.

Andrews argues in the concluding paragraph of her brief that Baska deeded property

to the LCS Trust beginning in 1997 based on an agreement negotiated by Smith’s attorney. She

contends that Baska disinherited Smith after Smith denied Baska access to a truck Baska had assigned

to him. These contentions are not supported by the record.

Because Andrews failed to appear at the trial, the only evidence in the record supports

the judgment regarding the property of the Estate. We resolve all issues in favor of the judgment.

We affirm the judgment.

Jan P. Patterson, Justice

Before Justice Kidd, Yeakel and Patterson

Affirmed

Filed: March 28, 2002

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