John Lawton v. David W. Lawton, Individually, as Former Independent of the Estate of Joseph G. Lawton, and as Former Agent for Joseph G. Lawton Under a Power of Attorney

Opinion

ACCEPTED 01-15-00193-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 7/8/2015 3:32:00 PM CHRISTOPHER PRINE CLERK

No. 01-15-00193-CV FILED IN IN THE COURT OF APPEALS 1st COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS HOUSTON, TEXAS 7/8/2015 3:32:00 PM AT HOUSTON CHRISTOPHER A. PRINE Clerk

JOHN LAWTON, Appellant, v. DAVID W. LAWTON, Appellee. On Appeal from the County Court at Law No. 1, Fort Bend County, Texas, Trial Court Cause No. 14-CCV-053769

BRIEF OF APPELLANT

ANDERSON PFEIFFER, PC BECK REDDEN LLP Esther Anderson Constance H. Pfeiffer State Bar No. 00792332 State Bar No. 24046627 esther@probateguardianship.com cpfeiffer@beckredden.com 845 FM 517 West, Suite 200 William Peterson Dickinson, TX 77539 State Bar No. 24065901 (281) 488-6535 wpeterson@beckredden.com (281) 614-5205 (Fax) 1221 McKinney, Suite 4500 Houston, TX 77010 (713) 951-3700 (713) 951-3720 (Fax) COUNSEL FOR APPELLANT JOHN LAWTON

Oral Argument Requested IDENTITY OF PARTIES AND COUNSEL Appellant: John Lawton

Appellate Counsel for Appellant: Constance H. Pfeiffer William R. Peterson BECK REDDEN LLP 1221 McKinney Street, Suite 4500 Houston, TX 77010 (713) 951-3700 (713) 951-3720 (Fax)

Esther Anderson ANDERSON PFEIFFER, P.C. 845 FM 517 West, Suite 200 Dickinson, TX 77539 (281) 488-6535 (281) 614-5205 (Fax)

Trial Counsel for Appellant: Esther Anderson ANDERSON PFEIFFER, P.C. 845 FM 517 West, Suite 200 Dickinson, TX 77539 (281) 488-6535 (281) 614-5205 (Fax)

Appellee: David W. Lawton

Counsel for Appellee: N. Kimberly Hoesl J. B. (Trey) Henderson III DOYLE, RESTREPO, HARVIN & ROBBINS, L.L.P. 440 Louisiana Street, Suite 2300 Houston, TX 77002 (713) 228-5100 (713) 228-6138 (Fax)

Trial Court: County Court at Law No. 1 of Fort Bend County, Texas Hon. Ben W. “Bud” Childers, Presiding TABLE OF CONTENTS PAGE

Identity of Parties and Counsel ...................................................................................i

Table of Contents ...................................................................................................... ii

Index of Authorities ................................................................................................... v

Statement of the Case................................................................................................. x

Statement Regarding Oral Argument .......................................................................xi

Issues Presented ...................................................................................................... xii

Introduction ................................................................................................................ 1

Statement of Facts ...................................................................................................... 2

Standard of Review .................................................................................................. 12

Summary of the Argument....................................................................................... 13

Argument.................................................................................................................. 15

I. Closing the Estate Administration Did Not Have the Effect of Claim Preclusion. ............................................................................ 15

A. The trial court’s order overruling John’s objections to closing the estate does not have the effect of claim preclusion. ................................................................................. 16

1. Under the plain text of the Estates Code, closing an independent estate does not relieve the independent executor from liability. ......................... 17

2. Closing the independent estate administration was “purely administrative” and not a final judgment on any merits. ................................................. 19

ii 3. Res judicata cannot apply because no “claims” were filed in the Estate Administration Cause. .............. 22

4. Because John’s current claims were not compulsory counterclaims in the Estate Administration Cause, res judicata does not preclude them.................................................................. 23

B. Res judicata does not apply because John’s previous claims were separated from the Estate Administration Cause. ........................................................................................ 27

C. David’s arguments are unavailing. ........................................... 28

1. David’s res judicata argument rested on the false premise that John filed claims in the Estate Administration Cause. ......................................... 28

2. David’s arguments concerning the power of attorney accounting are unavailing. ................................ 30

II. The Trial Court Erred in Awarding Attorney’s Fees. ......................... 31

A. John’s declaratory judgment was merely incidental to his other claims and not a legal basis for attorney’s fees. ........................................................................................... 32

B. The trial court erroneously denied John a jury determination of whether David’s fees were “reasonable and necessary.”...................................................... 35

C. David’s Application for Fees never argued—and the trial court never found—that the award of fees was “equitable and just.” .................................................................. 37

Conclusion and Prayer ............................................................................................. 39

Certificate of Service ............................................................................................... 41

Certificate of Compliance ........................................................................................ 42

iii APPENDIX TABS

Final Judgment.........................................................................................Tab A

Order Overruling Objections to Closing Affidavit in Cause No. 09-CPR-021945 ..................................................................... Tab B

Opinion and Mandate of the First Court of Appeals, No. 01-12-00932-CV ............................................................................... Tab C

iv INDEX OF AUTHORITIES CASE PAGE(S)

Alcorn v. Vaksman, 877 S.W.2d 390 (Tex. App.—Houston [1st Dist.] 1994, writ denied) .............................................................................. 15

American Tobacco Co. v. Grinnell, 951 S.W.2d 420 (Tex. 1997) .............................................................................. 12

AmeriPath, Inc. v. Hebert, 447 S.W.3d 319 (Tex. App.—Dallas 2014, pet. denied)................................................................................................ 31

Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) .............................................................................. 15

Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992) ........................................................................15, 22

Barshop v. Medina County Underground Water Conservation Dist., 925 S.W.2d 618 (Tex. 1996) .............................................................................. 31

Bocquet v. Herring, 972 S.W.2d 19 (Tex. 1998)...........................................................................36, 37

Bowers v. Taylor, 263 S.W.3d 260 (Tex. App.—Houston [1st Dist.] 2007, no pet.) ..................................................................................... 31

Burke v. Satterfield, 525 S.W.2d 950 (Tex. 1975) ..................................................................20, 24, 25 C/S Solutions, Inc. v. Energy Maint. Services Group LLC, 274 S.W.3d 299 (Tex. App.—Houston [1st Dist.] 2008, no pet.) ..................................................................................... 18

Chandler v. Welborn, 294 S.W.2d 801 (Tex. 1956) .......................................................................... 4, 26

v City of Houston v. Soriano, No. 14-05-00161-CV, 2006 WL 2506388 (Tex. App.—Houston [14th Dist.] Aug. 29, 2006, pet. denied)................................................................................. 38

Danciger Oil & Ref. Co. of Texas v. R.R. Comm’n of Texas, 122 Tex. 243 (1933).............................................................................................. 9

De Ayala v. Mackie, 193 S.W.3d 575 (Tex. 2006) ................................................................................ 3

Devon Energy Prod. Co., L.P. v. KCS Res., LLC, 450 S.W.3d 203 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) ......................................................................34, 35 In re Estate of Canales, 837 S.W.2d 662 (Tex. App.—San Antonio 1992, no writ) ...................................................................................................... 20 Etan Indus., Inc. v. Lehmann, 359 S.W.3d 620 (Tex. 2011) ........................................................................14, 32 Ford Motor Co. v. Chacon, 370 S.W.3d 359 (Tex. 2012) .............................................................................. 38

Garcia v. Shell Oil Co., 355 S.W.3d 768 (Tex. App.—Houston [1st Dist.] 2011, no pet.) ..................................................................................... 12 Hageman/Fritz, Byrne, Head & Harrison, L.L.P. v. Luth, 150 S.W.3d 617 (Tex. App.—Austin 2004, no pet.) ...................................................................................................... 32

Hartford Cas. Ins. Co. v. Budget Rent-A-Car Sys., Inc., 796 S.W.2d 763 (Tex. App.—Dallas 1990, writ denied) ............................................................................................... 33

Heckman v. Williamson County, 369 S.W.3d 137 (Tex. 2012) ................................................................................ 7

vi Henderson v. Shanks, 449 S.W.3d 834 (Tex. App.—Houston [14th Dist.] 2014, pet. denied), petition for cert. filed ............................................................................................ 3

Houtex Ready Mix Concrete & Materials v. Eagle Const. & Envtl. Services, L.P., 226 S.W.3d 514 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ..................................................................................... 15

Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203 (Tex. 1999) ........................................................................23, 24

Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290 (Tex. 2011) .............................................................................. 32

John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90 S.W.3d 268 (Tex. 2002)................................................................................. 32 Kenneth Leventhal & Co. v. Reeves, 978 S.W.2d 253 (Tex. App.—Houston [14th Dist.] 1998, no pet.) .............................................................................34, 35

Knighton v. Int’l Bus. Machines Corp., 856 S.W.2d 206 (Tex. App.—Houston [1st Dist.] 1993, writ denied) .............................................................................. 33 Marshall v. Hous. Auth. of City of San Antonio, 198 S.W.3d 782 (Tex. 2006) ................................................................................ 9

Mayhew v. Dealey, 143 S.W.3d 356 (Tex. App.—Dallas 2004, pet. denied)................................................................................................ 26 McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 1993) ..................................................................12, 23, 37

Mower v. Boyer, 811 S.W.2d 560 (Tex. 1991) .............................................................................. 21

Nall v. Plunkett, 404 S.W.3d 552 (Tex. 2013) .............................................................................. 12

vii Nixon v. Mr. Property Management Co., 690 S.W.2d 546 (Tex. 1985) .............................................................................. 12

Petrello v. Prucka, 415 S.W.3d 420 (Tex. App.—Houston [1st Dist.] 2013, no pet.) ..................................................................................... 36 Rhone Poulenc, Inc. v. Steel, 997 S.W.2d 217 (Tex. 1999) .............................................................................. 12 Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1 (Tex. 1986)................................................................................... 15

In re Serv. Corp. Intern., 355 S.W.3d 655 (Tex. 2011) .............................................................................. 38 Standlee v. Buechler, No. 05-92-00466-CV, 1993 WL 155875 (Tex. App.—Dallas May 14, 1993, no writ) ...................................................... 21 Sw. Guar. Trust Co. v. Hardy Rd. 13.4 Joint Venture, 981 S.W.2d 951 (Tex. App.—Houston [1st Dist.] 1998, pet. denied)............................................................................... 32

Trevino v. American Nat’l Ins. Co., 168 S.W.2d 656 (Tex. 1943) .............................................................................. 36 Universal Printing Co. v. Premier Victorian Homes, Inc., 73 S.W.3d 283 (Tex. App.—Houston [1st Dist.] 2001, pet. denied)............................................................................... 33

Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381 (Tex. 1985) ............................................................13, 16, 27, 28

WaiWai, LLC v. Alvarado, No. 03-13-00540-CV, 2014 WL 6844934 (Tex. App.—Austin Nov. 26, 2014, no pet.) ...................................................... 31

Whiteside v. Griffis & Griffis, P.C., 902 S.W.2d 739 (Tex. App.—Austin 1995, writ denied) ............................................................................................... 34

viii RULES & STATUTES TEX. CIV. PRAC. & REM. CODE § 37.009 ............................................................14, 37

TEX. ESTATES CODE § 256.052............................................................................................................... 2 § 32.001............................................................................................................... 21 § 32.001(d) ............................................................................................................ 3 § 405.003(a) ........................................................................................................ 18 § 405.005............................................................................................................. 20 § 405.007(b) .................................................................................................passim

TEX. PROB. CODE § 149C(a)(2) .......................................................................................................... 4 § 149C(a)(3) .......................................................................................................... 4 § 149E ................................................................................................................. 18 § 151(a) .....................................................................................................6, 19, 20 § 151(b) .....................................................................................................6, 17, 20 § 151(b)(1) ......................................................................................................... xii § 489B(i) ............................................................................................................... 4

TEX. R. CIV. P. 63........................................................................................................................... 5 166a(c) ................................................................................................................ 12

OTHER AUTHORITIES 28 Tex. Jur. 3d Decedents’ Estates § 121 (2015) ...................................................... 3

17 Tex. Prac., Prob. & Decedents’ Estates § 512 (2014) ..................................19, 20 18 Tex. Prac., Prob. & Decedents’ Estates § 621 (2014) .......................................... 3

Restatement (Second) of Judgments § 20...................................................................................................................... 18 § 28, cmt. a ............................................................................................................ 9 § 30...................................................................................................................... 21 § 36...................................................................................................................... 26

ix STATEMENT OF THE CASE Nature of the Case Plaintiff John Lawton alleges that Defendant David Lawton breached his fiduciary duties as independent executor of their father’s estate. Most significantly, because of a conflict of interest, David failed to pursue the estate’s principal asset: its claim against David for breaching his fiduciary duty when exercising a power of attorney.

John sued David for breach of fiduciary duty and also sought a declaratory judgment.

Trial Court County Court at Law No. 1 of Fort Bend County, Texas Hon. Ben W. “Bud” Childers, Presiding

Disposition Below The trial court granted summary judgment for David based on res judicata. Tab A.

x STATEMENT REGARDING ORAL ARGUMENT Appellant requests the opportunity to present oral argument, which will

assist the Court in understanding the complex procedural history.

xi ISSUES PRESENTED 1. John Lawton sued David Lawton, his brother, for breach of fiduciary duty based on David’s mismanagement of their father’s estate. Under Texas law, an independent executor may close an estate by affidavit, but the filing of such an affidavit does “not relieve the independent executor from liability for any mismanagement of the estate.” TEX. ESTATES CODE § 405.007(b); TEX. PROB. CODE § 151(b)(1) (same).

Did closing the estate by affidavit relieve David from liability for mismanagement of the estate under principles of res judicata?

2. John pleaded a claim for a declaratory judgment that was merely incidental to his other claims against David. After refusing to grant declaratory relief for John, the trial court nevertheless awarded attorney’s fees to David.

Can the attorney’s fee award be upheld when:

a. a declaratory judgment claim that is merely incidental to other claims does not provide a legal basis for a fee award; and

b. the trial court denied John his right to a jury determination of whether the attorney’s fees were reasonable and necessary (an issue on which David did not seek summary judgment); and

c. the trial court never found that the fees award were equitable and just?

xii INTRODUCTION All the claims in this lawsuit were disposed of by summary judgment based

on res judicata. Thus, the judgment can only be affirmed if the summary judgment

movant (Appellee) conclusively established the elements of res judicata—i.e., that

a prior final judgment on the merits between the same parties disposed of the same

claims brought in this lawsuit, or that the claims in this lawsuit were required to

have been brought in a prior suit that has reached a final judgment on the merits.

The great tragedy of this case is that the plaintiff has never been able to get a

final merits judgment at all. The plaintiff brought a prior similar suit, albeit in a

different capacity, but the judgment in that suit was ultimately vacated.

Instead of relying on the vacated judgment, the defendant claims that an

order closing an independent estate provides the basis for res judicata. But the

Estates Code forecloses this argument: closing an estate will “not relieve the

independent executor from liability for any mismanagement.” TEX. ESTATES CODE

§ 405.007(b). The claims in this case, brought against an independent executor for

mismanagement of the estate, cannot be barred simply because the estate is closed.

Further, closing the estate disposed of no claims, and no claims were required to be

brought in that purely administrative proceeding.

Despite years of litigation, the plaintiff has never even been able to get

discovery, much less a final judgment on the merits. He has been blocked at every

turn by misguided procedural arguments. Res judicata is the most unsound of all. STATEMENT OF FACTS John Lawton believes that his older brother, David Lawton, first abused his

power of attorney to squander their father’s assets and then exploited his position

as independent executor to conceal this wrongdoing. CR12-13.

John sued David for breaching his fiduciary duty as independent executor of

their father’s estate. CR13-18.

Because the trial court granted summary judgment in this case based on res

judicata, it is necessary to explain the procedural history of earlier proceedings

between the brothers. The earlier proceedings took place in two separate actions,

under two separate cause numbers:

 Cause No. 09-CPR-02145 (“Estate Administration”) involved David’s independent administration and closure of his father’s estate. No claims of any sort were filed in this cause.

 Cause No. 09-CPR-02145-A (“Estate Claims”) involved claims asserted by John against David.

The Estate Administration (Cause No. 09-CPR-021945)

David initiated probate of his father’s estate in County Court of Law No. 1

of Fort Bend, County, where the case was docketed as Cause No. 09-CPR-021945.

David filed an application for probate of his father’s will and for appointment as

independent executor of his father’s estate. See TEX. ESTATES CODE § 256.052

(discussing applications for probate of wills).

2 Administration of an estate is not a traditional lawsuit. It is not initiated by a

petition asserting claims, and beneficiaries of the will do not file “answers.”

Rather, administration of an estate is an in rem proceeding. See 28 Tex. Jur. 3d

Decedents’ Estates § 121 (2015) (citing TEX. ESTATES CODE § 32.001(d)). The

purposes of administration “are the collection and preservation of the assets of the

estate, the payment of debts, and the distribution of the residue to the persons

entitled to receive it.” 18 Tex. Prac., Prob. & Decedents’ Estates § 621 (2014).

Neither John nor David ever filed any affirmative claims for relief against

the other in the Estate Administration.

John Sues on Behalf of the Estate in the Estate Claims Cause When David refused to provide the accounting of the estate that John was

entitled to by statute, John sued David in Cause No. 09-CPR-021945-A.1 See

CR91. John asked for several forms of relief, including:

 An accounting of the estate;

 Removal of David as independent executor; and

 An accounting of David’s power of attorney. CR92-94.

1 This is not uncommon in probate proceedings. See De Ayala v. Mackie, 193 S.W.3d 575, 578 (Tex. 2006) (suggesting severance to avoid the difficulties of multiple final judgments in probate proceedings); Henderson v. Shanks, 449 S.W.3d 834, 841 (Tex. App.—Houston [14th Dist.] 2014, pet. denied), petition for cert. filed (No. 14-1321) (explaining that under the Harris County local rules, “ancillary [probate] matters have a separate file and are given a different cause number from the core matter to which they relate”). David never objected to (or appealed from) John’s claims being filed as a separate cause.

3 There were multiple grounds to remove David as independent executor.

CR93. The first was that “sufficient grounds appear to support belief that the

independent executor has misapplied or embezzled, or that the independent

executor is about to misapply or embezzle, all or any part of the property

committed to the independent executor’s care.” TEX. PROB. CODE § 149C(a)(2).

The second was David’s “fail[ure] to make an accounting which [was] required by

law to be made.” TEX. PROB. CODE § 149C(a)(3).

After their father died, the right to request an accounting of the power of

attorney became vested in his estate. TEX. PROB. CODE § 489B(i). Because of

David’s obvious conflict of interest, John (as a beneficiary of the estate) could

assert the estate’s rights to this accounting. E.g., Chandler v. Welborn, 294 S.W.2d

801, 806 (Tex. 1956).

The Estate Claims lawsuit’s caption makes clear that John sued on behalf of

the estate:

CR91.

4 John expected this lawsuit to proceed in the usual fashion: written discovery,

depositions, and eventually trial. He could not have been more mistaken.

David Seeks Summary Judgment in the Estate Claims Cause David provided an overdue accounting of the estate, then moved for

traditional summary judgment. CR234.

John responded to the motion and also filed an amended petition asserting

additional claims against David. CR97.

The probate court then granted all of David’s requested relief. On David’s

motion, the court dismissed John’s amended petition as untimely. See CR115

(“dismissed for failure to comply with TEX. R. CIV. P. 63”). The probate court then

granted David’s motion for summary judgment and ordered that John’s original

petition be “dismissed with prejudice in its entirely.” CR115.

John filed a motion for a new trial and appealed. CR233.

David Files a Closing Affidavit in the Estate Administration Cause After the grant of summary judgment in the Estate Claims Cause (No. 09-

CPR-021945-A), David then filed an affidavit to close the independent

administration of the estate in the Estate Administration Cause (No. 09-CPR-

021945). CR116. The effect of this affidavit was to “terminate the independent

administration and the power and authority of the independent executor, but [it]

5 shall not relieve the independent executor from liability for any mismanagement of

the estate.” TEX. PROB. CODE § 151(b).

John objected to the affidavit, noting that such an affidavit could only be

filed “when there is no pending litigation.” TEX. PROB. CODE § 151(a). Despite

the pending litigation (in the Estate Claims Cause), the trial court signed an order

overruling John’s objection to the closing affidavit. Here is the full text:

CR116 (Tab B).

This is the order that David now claims is a final judgment entitled to res

judicata effect.

This Court Vacates the Summary Judgment in the Estate Claims Cause

John’s appeal of the order granting summary judgment was assigned to this

Court.

Unable to defend the merits of the summary judgment, David argued that

closing the estate rendered John’s appeal moot. CR235. John argued to the 6 contrary, but this Court, in an opinion written by Justice Jim Sharp, held that the

appeal was moot. CR243 (Tab C).

The opinion considered each of John’s claims for relief. CR243. Because

the estate was closed, removal of David as independent executor was moot.

CR240. The panel held that “it follows that [John’s] claim for recovery of

attorney’s fees incident to removal [was] likewise moot.” CR241. And because

John sought to assert the estate’s rights to an accounting of David’s power of

attorney, closure of the estate made this request moot. See CR242-43 (“[B]ecause

John seeks a power of attorney accounting through the estate and the estate is

closed, such a request . . . is moot.”).

The panel therefore never considered the merits of the summary judgment.

CR243. Because the appeal was moot, this Court vacated the summary judgment.2

CR243. But the opinion expressly acknowledges that the closing of the estate

“does not foreclose John from potentially pursing a breach of fiduciary duty claim

against David that alleges mismanagement of the estate.” CR242.

John Sues in District Court, Which Dismisses for Lack of Jurisdiction Consistent with the Probate Code and this Court’s opinion, John sued David

for breach of fiduciary duty alleging mismanagement of the estate. CR117; see

2 “If a case is or becomes moot, the court must vacate any order or judgment previously issued and dismiss the case for want of jurisdiction.” Heckman v. Williamson County, 369 S.W.3d 137, 162 (Tex. 2012).

7 also CR121-26 (alleging breaches of fiduciary duty based on David’s

mismanagement of the estate).

John filed suit in district court in Fort Bend County. On David’s motion, the

district court dismissed the case for lack of subject matter jurisdiction. CR129.

John Files This Suit in County Court at Law John was thus forced to return to the same county court at law (and judge)

that granted summary judgment in the Estate Claims Cause. CR8. In the new

lawsuit, John sought a declaratory judgment and asserted several different theories

of breach of fiduciary duty against David:

 Refusing to provide an accounting. CR13.

 Closing the estate while litigation was pending. CR13.

 Failing to disclose all material facts to John. CR14-15.

 Failing to timely distribute estate assets. CR13, CR16.

 Converting estate assets and misusing them for his personal benefit. CR13, CR16.

 Conflicts of interest with the estate. CR16-17.

John sought damages and disgorgement of money that David improperly received

from the estate. CR17-18.

David Seeks Sanctions and Summary Judgment Simultaneously with filing his answer, David filed a motion for summary

judgment. CR55. David threatened sanctions against John and his counsel,

8 CR244, and devoted more of his motion for summary judgment to arguing for

sanctions than to explaining the merits. See CR67-77.

David raised two arguments in his motion for summary judgment. First,

David asserted that John’s claims were barred by res judicata. CR59-64. David

contended that “the September 4, 2012 closing of the Estate of Joseph G. Lawton,

Deceased [Cause No. 09-CPR-021945] constituted a final judgment on the merits,

with preclusive effect.” CR60; see also CR116.

To his credit, David did not argue either claim or issue preclusion based on

the judgment in the Estate Claims Cause (No. 09-CPR-021945-A), which this

Court vacated.3 But David did rely on these claims in another way, incorrectly

asserting that John had filed claims in the Estate Administration Cause (No.

09-CPR-021945). See, e.g., CR61.

Second, David argued that John’s request for an accounting of David’s

power of attorney was barred by limitations and moot. CR64-65. David

acknowledged that these arguments would not support a full summary judgment;

3 The purpose of vacating the underlying judgment when an appeal becomes moot is to avoid the effect of doctrines such as res judicata. See Marshall v. Hous. Auth. of City of San Antonio, 198 S.W.3d 782, 788 (Tex. 2006) (“One purpose of vacating the underlying judgment if a case becomes moot during appeal is to prevent prejudice to the rights of parties when appellate review of a judgment on its merits is precluded.”); Danciger Oil & Ref. Co. of Texas v. R.R. Comm’n of Texas, 122 Tex. 243, 245 (1933) (vacating so that the parties “may not be prejudiced in any subsequent proceeding by a judgment which this court has refused to consider on its merits”). The Restatement also acknowledges this practice. See Restatement (Second) of Judgments § 28, cmt. a (noting that “some jurisdictions, in order to avoid the impact of issue preclusion,” require “that the appellate court reverse or vacate the judgment below”).

9 he merely requested “judgment as a matter of law on the POA accounting claims.”

CR65; see also CR66 (same).

John Responds to David’s Motion and Files an Amended Petition In his response, John correctly explained that the closing of the estate “is not

a determination on the merits” of any claims, rights, or interest. CR342. Further,

John’s claims in the Estate Claims Cause could not be a basis for res judicata

because there was no final judgment on the merits with respect to those claims.

CR345-46. Res judicata was therefore not a bar to John’s then current claims.

CR348.

With respect to the power of attorney accounting, John explained that he was

not asserting an independent claim but merely sought discovery in support of his

breach of fiduciary duty claim. CR348-49.

In reply, David repeated his argument that John’s claims about his

mismanagement of the estate were “raised and defeated in the probate proceeding.”

CR410.

The Court Grants Summary Judgment

The trial court granted David’s motion for summary judgment,

simultaneously dismissing John’s claims with prejudice and ordering that John

take nothing on the claims. CR555. The trial court also ordered that David would

recover attorney’s fees and costs but did not determine an amount. CR555.

10 David filed an “Application for Fees and Costs,” requesting attorney’s fees

on the basis that John had sought a declaratory judgment. CR584. In response,

John asserted his right to a jury determination of whether David’s fees were

“reasonable and necessary.” See CR618-19; CR621-22. The trial court, without

explanation, denied John’s request for a jury, 2RR:20-21, and stated that the court

would “do this by submission.” 2RR:16.

The trial court entered a final judgment in favor of David, awarding him all

of the fees requested. CR788.

This appeal followed. CR1161.

11 STANDARD OF REVIEW A grant of summary judgment is reviewed de novo. Nall v. Plunkett, 404

S.W.3d 552, 555 (Tex. 2013). The court takes as true all evidence favorable to the

non-movant and indulges every reasonable inference in the non-movant’s favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 549 (Tex. 1985).

Summary judgment must “stand or fall on the grounds expressly presented

in the motion.” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341

(Tex. 1993). The movant has the burden of showing that there is no genuine issue

of material fact and that he is entitled to judgment as a matter of law. TEX. R. CIV.

P. 166a(c). The burden of proof is on the movant, and all doubts as to the

existence of a genuine issue of fact are resolved against the movant. Nixon, 690

S.W.2d at 548-49.

Res judicata is an affirmative defense, which the proponent has the burden

to plead and prove. Garcia v. Shell Oil Co., 355 S.W.3d 768, 773 (Tex. App.—

Houston [1st Dist.] 2011, no pet.). To be entitled to summary judgment on an

affirmative defense such as res judicata, a defendant must conclusively establish

each element as to each claim. See American Tobacco Co. v. Grinnell, 951 S.W.2d

420, 425 (Tex. 1997); Rhone Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.

1999).

12 SUMMARY OF THE ARGUMENT The order overruling John’s objections to the closing of the estate is not a

“final judgment on the merits” that has the effect of claim preclusion. The easiest

way to resolve this case is the plain language of the Estates Code: “The closing of

an independent administration by filing of a closing report or notice of closing

estate . . . does not relieve the independent executor from liability for any

mismanagement of the estate . . . .” TEX. ESTATES CODE § 405.007(b).

The result compelled by the statute is consistent with general principles of

res judicata. Closing an estate is a purely administrative matter, not a final

judgment on the merits. No “claims” are asserted by anyone in such a proceeding.

It is not an adjudication that might have the effect of res judicata.

Independently, res judicata would not apply because John’s prior claims

were proceeding separately from the estate administration. See Van Dyke v.

Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985). John had

filed (and was pursuing) his claims on behalf of the estate under a different cause

number, the Estate Claims Cause, and the judgment on those claims was vacated.

David’s res judicata argument to the trial court was indisputably incorrect.

It rested on the false premise that John had filed claims in the Estate

Administration Cause. See, e.g., CR61. Without this premise, David’s arguments

fail. The trial court erred in granting summary judgment based on res judicata.

13 The trial court also erred in awarding attorney’s fees to David. If the

summary judgment as a whole is reversed, the fee award should be vacated. But

even if the summary judgment were affirmed, the fee award should still be

reversed.

Because John’s declaratory judgment was merely incidental to his other

claims for relief, it could not serve as a basis for attorney’s fees. See Etan Indus.,

Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011). Neither John nor David could

properly recover fees based on an incidental declaratory judgment claim.

Even if fees could have been awarded, the trial court applied the wrong

process and the wrong standard in awarding them. For reasons not apparent from

the record, the trial court denied John his right to a jury determination of whether

David’s fees were “reasonable and necessary.” John properly invoked his right to

a jury determination, and David never sought summary judgment on the amount of

fees. Denying John a jury determination was error.

Moreover, the trial court may award only “equitable and just” attorney’s fees

in a declaratory judgment. TEX. CIV. PRAC. & REM. CODE § 37.009. David’s fee

application did not argue—and the trial court did not find—that the fee award was

“equitable and just.” In the absence a determination that the fees were “equitable

and just,” the attorney’s fee award cannot stand.

14 ARGUMENT I. Closing the Estate Administration Did Not Have the Effect of Claim Preclusion. Res judicata precludes relitigation of claims that have been finally

adjudicated, or that arise out of the same subject matter and that could have been

litigated in the prior action. Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628

(Tex. 1992). “It requires proof of the following elements: (1) a prior final

judgment on the merits by a court of competent jurisdiction; (2) identity of parties

or those in privity with them; and (3) a second action based on the same claims as

were raised or could have been raised in the first action.” Amstadt v. U.S. Brass

Corp., 919 S.W.2d 644, 652 (Tex. 1996); see also Houtex Ready Mix Concrete &

Materials v. Eagle Const. & Envtl. Services, L.P., 226 S.W.3d 514, 519 (Tex.

App.—Houston [1st Dist.] 2006, no pet.). Texas courts have followed the

Restatement (Second) of Judgments. See Barr, 837 S.W.2d at 631; Scurlock Oil

Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986).

David, the party asserting res judicata, “ha[d] the burden to present evidence

establishing that res judicata should apply.” Alcorn v. Vaksman, 877 S.W.2d 390,

396 n.1 (Tex. App.—Houston [1st Dist.] 1994, writ denied). David failed to carry

this burden.

David’s motion asserted a single theory of res judicata: “[T]he September 4,

2012 closing of the Estate of Joseph G. Lawton, Deceased constituted a final

15 judgment on the merits, with preclusive effect.” CR60; see also CR411 (“[A]ll of

John’s claims are barred because this Court’s ruling in Cause No. 09-CPR-021945

. . . was made a final ruling on the merits by the closing of the Estate.”).

This theory is meritless. Under both the Estates Code and principles of res

judicata, an order closing an independent estate administration does not preclude

claims against the independent executor for mismanagement of the estate. Closure

of an independent estate is a purely administrative matter, not contested litigation

in which claims are asserted.

Further, John asserted claims on behalf of the estate claims in a separate

cause from the Estate Administration Cause. A judgment in the Estate

Administration Cause could not preclude them. See Van Dyke v. Boswell,

O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985).

David’s res judicata argument to the trial court rested on a

mischaracterization of the past proceedings: the incorrect assertion that John had

filed his claims in the Estate Administration Cause. See CR61. With this false

premise exposed, David’s res judicata argument lacks any foundation.

A. The trial court’s order overruling John’s objections to closing the estate does not have the effect of claim preclusion. The trial court’s grant of summary judgment on the basis that an order

closing an estate has res judicata effect on claims in a separate lawsuit is erroneous

and unprecedented. Research failed to uncover any Texas case in which an order 16 overruling objections to closure of an independent estate under Section 151 was

given res judicata effect.

There are good reasons no other court has committed this error. Under the

plain language of the Probate Code (now the Estates Code),4 closing the

independent estate did not release David from liability. Moreover, closure of the

independent estate administration by affidavit is a purely administrative matter, not

a final judgment on the merits.

1. Under the plain text of the Estates Code, closing an independent estate does not relieve the independent executor from liability. The easiest way to resolve this appeal is the plain text of the Estates Code,

which provides that closure of an independent estate administration does not

immunize the independent executor from personal liability:

The closing of an independent administration by filing of a closing report or notice of closing estate terminates the power and authority of the independent executor, but does not relieve the independent executor from liability for any mismanagement of the estate . . . .

TEX. ESTATES CODE § 405.007(b); accord TEX. PROB. CODE § 151(b) (“shall not

relieve the independent executor from liability for any mismanagement of the

estate . . . .”). If an independent executor seeks to be discharged from liability, he

4 On January 1, 2014, the Texas Estates Code replaced the Texas Probate Code. There are no material differences for the purpose of this appeal, but we have generally provided parallel citations.

17 must follow a different process. See TEX. PROB. CODE § 149E; TEX. ESTATES

CODE § 405.003(a). It is undisputed that David did not follow this process.

David’s only res judicata argument is that “the September 4, 2012 closing of

the Estate of Joseph G. Lawton, Deceased” relieved him from liability for any

mismanagement of the estate through principles of res judicata. CR60.

The statute says exactly the opposite: Closing the estate does not relieve

independent executors from liability. The plain text of the statute is controlling.

In the trial court, without explanation or authority, David argued that

principles of res judicata somehow trump the statute. See CR412 n.5 (arguing that

the statute is “inapplicable” because of res judicata).

This is incorrect: principles of claim preclusion cannot override the

unambiguous text of a statute. See, e.g., C/S Solutions, Inc. v. Energy Maint.

Services Group LLC, 274 S.W.3d 299, 310 (Tex. App.—Houston [1st Dist.] 2008,

no pet.) (“This statute modifies the common law so that res judicata bars only those

claims that were actually litigated in the limited-jurisdiction court.”). The

Restatement also acknowledges that statutes can limit rules of claim preclusion:

“A personal judgment for the defendant, although valid and final, does not bar

another action by the plaintiff on the same claim: . . . [w]hen by statute . . . the

judgment does not operate as a bar to another action on the same claim . . . .”

Restatement (Second) of Judgments § 20 (1982).

18 Indeed, this Court acknowledged the statute in the previous appeal: “We

agree that under section 151(c)(2) the closing of the estate does not foreclose John

from potentially pursuing a breach of fiduciary duty claim against David that

alleges mismanagement of the estate.” CR242.

David offered no valid reason for the trial court to ignore the plain text of the

statute, and there is none. Closing the estate did not relieve David of liability from

John’s claims for David’s mismanagement of the estate.

2. Closing the independent estate administration was “purely administrative” and not a final judgment on any merits. There is good reason that closing an estate does not relieve an independent

executor from liability. Closing an estate (technically, closing the independent

administration) by affidavit is merely an administrative matter, not a “final

judgment on the merits” to which res judicata might apply.

The Texas Practice Series treatise explains the history of this procedure:

“Under the old statutes the probate court had no jurisdiction to close an

independent administration. The estate was in fact closed and the authority of the

independent executor was terminated by his distribution, but this could not be

made to appear of record.” 17 Tex. Prac., Prob. & Decedents’ Estates § 512

(2014). To avoid the resulting uncertainty and inconvenience, Section 151(a) of

the Probate Code thus provided “a simple, inexpensive method for closing an

19 independent administration,” which allows an independent executor “to make a

formal closing of the estate appear of record.” Id.

Under Section 151(a), an independent executor could file a closing report

verified by affidavit. TEX. PROB. CODE § 151(a); see also TEX. ESTATES CODE

§ 405.005. The effect was to “terminate the independent administration and the

power and authority of the independent executor.” TEX. PROB. CODE § 151(b);

TEX. ESTATES CODE § 405.007(b).

“Section 151 is purely administrative in nature, providing simply a method

whereby the closing of an independent administration can be made a matter of

record.” Burke v. Satterfield, 525 S.W.2d 950, 953 (Tex. 1975); see also 17 Tex.

Prac., Prob. & Decedents’ Estates § 512 (“[T]he closing of an independent

administration by the filing of an affidavit is a purely administrative procedure.”).

The sole issue that a court can decide regarding closing the estate is whether

“the ‘Affidavit Closing Estate’ on its face met the requirements of § 151.” In re

Estate of Canales, 837 S.W.2d 662, 669 (Tex. App.—San Antonio 1992, no writ)

(emphasis added). A court cannot inquire into “the accuracy of the accounting or

whether the estate has been properly administered.” Id.; see also Burke, 525

S.W.2d at 953 (holding that Section 151 does not provide a probate court with

jurisdiction over “the substance of the accounting in an effort to determine whether

it is accurate or whether the executor has properly administered the estate”).

20 No “merits” were at issue in the “purely administrative proceeding” to close

the independent estate administration. The order overruling John’s objections is

not a “final judgment on the merits” that would preclude John’s claims.

This conclusion is consistent with the treatment of in rem proceedings in the

Restatement (Second) of Judgments:

A valid and final judgment in an action based only on jurisdiction to determine interests in a thing: . . . (2) Does not bind anyone with respect to a personal liability . . . . Restatement (Second) of Judgments § 30; see also TEX. ESTATES CODE § 32.001

(“The entire proceeding is a proceeding in rem.”).

David has never cited any authority suggesting that an order overruling

objections to an estate closure constitutes a “final judgment on the merits.” He

cited two cases to the trial court, CR60, but these cases have nothing to do with

applying principles of claim preclusion to closure of an estate. See Mower v.

Boyer, 811 S.W.2d 560, 563 (Tex. 1991) (preventing collateral attack on a merits

adjudication by a probate court); Standlee v. Buechler, No. 05-92-00466-CV, 1993

WL 155875, at *7 (Tex. App.—Dallas May 14, 1993, no writ) (holding that

“settlement agreements constituted final judgments on the merits” and were

“entitled to preclusive effect”).

21 To be entitled to the affirmative defense of res judicata, David bore the

burden to prove a “final judgment on the merits” exists, and he failed to meet it.

Summary judgment was improper.

3. Res judicata cannot apply because no “claims” were filed in the Estate Administration Cause. This conclusion—that principles of claim preclusion do not apply to an order

closing an estate—is further bolstered by noting that res judicata is premised on

“claims” being filed in the earlier proceeding.

The Texas Supreme Court has prescribed how courts must apply the

“transactional approach” for res judicata: “A determination of what constitutes the

subject matter of a suit necessarily requires an examination of the factual basis of

the claim or claims in the prior litigation.” Barr v. Resolution Trust Corp. ex rel.

Sunbelt Fed. Sav., 837 S.W.2d 627, 630 (Tex. 1992). “A subsequent suit will be

barred if it arises out of the same subject matter of a previous suit and which

through the exercise of diligence, could have been litigated in a prior suit.” Id. at

631.

Thus, to determine whether John’s claims were barred by the order

overruling objections to the closing affidavit in the Estate Administration Cause,

the trial court needed to examine “the factual basis of the claim or claims” in that

suit. But there were no “claims” filed by anyone in the Estate Administration

Cause (No. 09-CPR-021945). 22 Trying to apply res judicata to an order closing an estate is like trying to fit a

square peg in a round hole—it simply does not work.

4. Because John’s current claims were not compulsory counterclaims in the Estate Administration Cause, res judicata does not preclude them. Even if closure of the estate were a final judgment on the merits, res judicata

would not bar John’s claims. Because John did not assert an affirmative claim for

relief in the Estate Administration Cause, res judicata could apply only to John’s

“compulsory counterclaims.” See Ingersoll-Rand Co. v. Valero Energy Corp., 997

S.W.2d 203, 207 (Tex. 1999) (“Res judicata, however, does not bar a former

defendant who asserted no affirmative claim for relief in an earlier action from

stating a claim in a later action that could have been filed as a cross-claim or

counterclaim in the earlier action, unless the claim was compulsory in the earlier

action.”).

David failed to prove—or even argue—that John’s current claims were

“compulsory counterclaims” to the estate closure. See CR59-64. David bore the

burden, and his failure to meet it, standing alone, is enough to reverse the summary

judgment. See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 338

(Tex. 1993) (“[T]he specific grounds for summary judgment must be expressly

presented in the motion for summary judgment itself . . . .”).

23 In any event, John’s claims against David were not compulsory

counterclaims. Holding that mismanagement claims against an independent

executor must be raised in response to closure of independent estate administration

would conflict with the plain text of the Estates Code: “The closing of an

independent administration by filing of a closing report or notice of closing estate

. . . does not relieve the independent executor from liability for any

mismanagement of the estate.” TEX. ESTATES CODE § 405.007(b). Classifying

claims based on mismanagement as compulsory counterclaims would nullify this

text.

In addition, a counterclaim is compulsory only if: “(1) it is within the

jurisdiction of the court; (2) it is not at the time of filing the answer the subject of a

pending action; (3) the claim is mature and owned by the defendant at the time of

filing the answer; (4) it arose out of the same transaction or occurrence that is the

subject matter of the opposing party’s claim; (5) it is against an opposing party in

the same capacity; and (6) it does not require the presence of third parties over

whom the court cannot acquire jurisdiction.” Ingersoll-Rand, 997 S.W.2d at 207.

For several reasons, John’s claims were not compulsory. First, the trial court

lacked jurisdiction over them in response to the closing affidavit. See Burke, 525

S.W.2d at 953 (Section 151 does not provide a probate court with jurisdiction “to

determine whether . . . the executor has properly administered the estate”).

24 Second, some of John’s claims were the subject of a pending action in the Estate

Claims Cause (No. 09-CPR-021945-A).5 Third, to the extent David’s attempt to

close the independent administration constitutes a “claim” (as discussed above, it

does not), the subject matter of David’s “claim” to close the estate was the “purely

administrative” question of the facial validity of his affidavit. Burke, 525 S.W.2d

at 953. It did not involve the propriety of David’s management, which is the

subject of John’s claims in this lawsuit.

Perhaps most significantly, John’s claims are now against David in a

different capacity. In the Estate Administration Cause, David, as independent

executor, sought to close the estate. See CR116 (overruling objections to “Closing

Affidavit of David W. Lawton, Independent Executor of the Estate of Joseph G.

Lawton”). But John has now sued David, individually, for breach of fiduciary

duty. CR8. These claims, which are against David in a different capacity, were

not compulsory counterclaims to David’s closure of the independent estate

administration.

5 The fact that John did not file an “answer” in Cause No. 09-CPR-021945 is only further confirmation that it is simply not the type of proceeding to which res judicata would apply.

25 John’s change in capacity is also significant. In the earlier proceeding, John

sued David as a beneficiary6 on behalf of the estate. CR91. This Court held that

when David closed the estate, John could no longer act in this capacity and his

claims became moot. See CR242 (“[B]ecause John’s authority to request such an

accounting derives from his relationship to the estate as a beneficiary, once closed,

the estate ceases as an entity, as does any authority John had derivative from or on

behalf of the estate.”).

But now that the estate has closed, John has sued David directly. See CR8.

This difference in capacity is material:

A party appearing in an action in one capacity, individual or representative, is not thereby bound by or entitled to the benefits of the rules of res judicata in a subsequent action in which he appears in another capacity.

Restatement (Second) of Judgments § 36. Any claims raised by John on behalf of

the estate in the Estate Claims Cause would not preclude him from now raising

claims as an individual now that the estate has closed. In this case, David has now

changed from an independent executor to individual and John from beneficiary to

individual.

6 Much like minority shareholders can raise derivative claims on behalf of a corporation, beneficiaries can raise claims on behalf of an estate when the executor has a conflict of interest. See, e.g., Chandler v. Welborn, 294 S.W.2d 801, 806 (Tex. 1956); Mayhew v. Dealey, 143 S.W.3d 356, 371 (Tex. App.—Dallas 2004, pet. denied).

26 B. Res judicata does not apply because John’s previous claims were separated from the Estate Administration Cause. There is another reason that res judicata does not apply: John’s previous

claims against David were separated from the Estate Administration Cause (No.

09-CPR-021945) and filed in the Estate Claims Cause (No. 09-CPR-021945-A), in

which the final judgment was vacated.

Because John’s claims proceeded separately from the Estate Administration

Cause, a final judgment in that cause cannot preclude them: “[T]he res judicata

effects of an action cannot preclude litigation of claims that a trial court explicitly

separates or severs from that action.” Van Dyke v. Boswell, O’Toole, Davis &

Pickering, 697 S.W.2d 381, 384 (Tex. 1985).

In Van Dyke, following trial in a divorce case, lawyers who formerly

represented one party intervened with a claim for fees. Id. at 382. The party then

asserted malpractice as a counterclaim. Id. The trial court severed these claims

from the divorce, then ordered separate trials on the fees and malpractice claims.

Id. at 384. After holding a trial on the fees claim, however, the trial court then

granted summary judgment on the malpractice counterclaim “based on ‘res

judicata and/or collateral estoppel.’” Id. at 383.

The Texas Supreme Court held that this was error: “[T]he res judicata

effects of an action cannot preclude litigation of claims that a trial court explicitly

separates or severs from that action. Since the trial court granted separate trials for 27 the intervention claim for fees and the malpractice counterclaim, the res judicata

effects of the action on the intervention claim for fees cannot preclude the

malpractice counterclaim.” Id. at 384.

This rule governs this case. John’s claims on behalf of the estate proceeded

separately from the Estate Administration Cause, in which the closure of the

independent estate administration occurred. Because the claims were proceeding

separately in the Estate Claims Cause, a final judgment in the Estate

Administration Cause “cannot preclude litigation” of John’s separate claims. Van

Dyke, 697 S.W.2d at 384.

C. David’s arguments are unavailing. 1. David’s res judicata argument rested on the false premise that John filed claims in the Estate Administration Cause. The res judicata argument in David’s motion for summary judgment rested

on an incorrect description of the earlier proceedings. David incorrectly claimed

that John’s claims had been filed in the Estate Administration Cause (No. 09-CPR-

021945). See CR61.

David’s motion defined the term “Probate Case” as “Cause No. 09-CPR-

021945, In the Estate of Joseph G. Lawton, Deceased.” CR56. The motion

repeatedly (and incorrectly) claims that John had filed claims in the “Probate

Case”:

28  “[T]he claims asserted in the Current Petition are the same as asserted in the Probate Case . . . .” CR61.

 “And in that case [the Probate Case], in fact, John actually did assert all the Current Petition Claims . . . .” CR61.

 “John could (and did) assert these claims in the Probate Case . . . .” CR62.

 “[T]he claims in the Current Petition here are barred by res judicata because they were, or should have been if John acted diligently, asserted in the Probate Case. . . . .” CR64.

These incorrect statements were the sole basis for David’s arguments that he was

entitled to summary judgment based on res judicata.

John did not file any claims against David in Cause No. 09-CPR-021945,

what David labeled the “Probate Case.” To the contrary, the main probate

proceeding and the proceeding in which John’s claims were filed had two separate

cause numbers and two separate files. John’s claims against David were all filed in

a different cause: 09-CPR-021945-A. See CR91. This is the same cause number

in which summary judgment was granted by the trial court. CR114. And this is

the same cause number in which John appealed:

CR232 (emphasis added).

Indeed, this Court expressly noted the different proceedings: “[T]he

administration of the estate—including the closing affidavit, John’s objection, and 29 the order overruling John’s objections—is Cause No. 09-CPR-021945.” CR239

n.6. This Court vacated the summary judgment in Cause No. 09-CPR-021945-A.

CR243.

David’s res judicata arguments rested on the false premise that John filed

claims in Cause No. 09-CPR-021945. With that false premise exposed, David’s

summary judgment based on res judicata cannot stand.

2. David’s arguments concerning the power of attorney accounting are unavailing. In the trial court, David also raised two arguments concerning John’s request

for an accounting of David’s power of attorney, arguing that it was “barred by

limitations” and “moot.” CR64-65.7 At best, these arguments would support a

partial summary judgment. They are not a basis to affirm the full summary

judgment entered by the trial court.

In any event, as John clarified, his request for an accounting of David’s

power of attorney is not a freestanding claim but is a “discovery issue.” CR348.

John’s theory is that David breached his fiduciary duty as independent executor by

failing to pursue the estate’s chief asset: its breach of fiduciary duty claim against

7 David’s “mootness” argument simply misreads this Court’s previous opinion, which held that John’s assertion of a right to seek an accounting on behalf of the estate became moot once David closed the estate. Compare CR65 (David’s argument) with CR242 (“[B]ecause John’s authority to request such an accounting derives from his relationship to the estate as a beneficiary, once closed, the estate ceases as an entity, as does any authority John had derivative from or on behalf of the estate.”). In this suit, John is seeking the accounting personally, not “on behalf of the estate.”

30 David for abusing his power of attorney. CR349. To support this claim, John

sought discovery concerning of the validity of the underlying breach of fiduciary

duty claim.

David’s arguments about the scope of available discovery are not a basis for

affirming the summary judgment entered by the trial court.

II. The Trial Court Erred in Awarding Attorney’s Fees. The award of attorney’s fees should be reversed with the rest of the

summary judgment. See Barshop v. Medina County Underground Water

Conservation Dist., 925 S.W.2d 618, 637-38 (Tex. 1996) (vacating and remanding

attorney’s fees under the Declaratory Judgment Act after reversing a declaratory

judgment).8 The fee award cannot stand independently, so if the Court reverses the

judgment, it need not address the other deficiencies in the fee award. But even if

the rest of the judgment were affirmed, the award of attorney’s fees should be

8 See Bowers v. Taylor, 263 S.W.3d 260, 268-69 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (“Having determined that the trial court erred by granting summary judgment in favor of Taylor in the declaratory judgment action, we reverse and remand the trial court’s award of attorney’s fees to Taylor that were entered in accordance with that declaratory judgment for further proceedings not inconsistent with this opinion.”); see also WaiWai, LLC v. Alvarado, No. 03-13- 00540-CV, 2014 WL 6844934, at *5 (Tex. App.—Austin Nov. 26, 2014, no pet.) (“When a declaratory judgment is reversed on appeal, however, the trial court’s original award of attorney’s fees and costs may no longer be equitable and just.”); AmeriPath, Inc. v. Hebert, 447 S.W.3d 319, 344-45 (Tex. App.—Dallas 2014, pet. denied) (“However, our opinion in this case significantly changes the trial court’s final judgment, and we cannot discern whether the trial court would still consider its award of fees to be equitable and just in light of those changes.”).

31 The sole basis for the attorney’s fees awarded was John’s declaratory

judgment. See CR66 (requesting attorney’s fees under the Declaratory Judgment

Act because “John . . . sought a declaratory judgment”).9 The fee award is flawed

in several respects.

A. John’s declaratory judgment was merely incidental to his other claims and not a legal basis for attorney’s fees. It is black-letter law that “an award of attorney’s fees under the DJA is

unavailable if the claim for declaratory relief is merely incidental to other claims

for relief.” Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex.

2011) (citing John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90

S.W.3d 268, 289 (Tex. 2002)). In other words, “simply repleading a claim as one

for a declaratory judgment cannot serve as a basis for attorney’s fees.” Etan

Indus., Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011).

9 Although David initially sought fees under both the Declaratory Judgment Act and as sanctions, CR66-78, he later non-suited his request for sanctions. CR756. This left the Declaratory Judgment Act as the only basis for the fee award. See CR586 (Application for Fees: “David is entitled to recover his attorneys’ fees and costs of court under . . . the Texas Declaratory Judgment Act.”). In his answer, David phrased his fee request as a “counterclaim.” CR44. The trial court’s judgment apparently denies the “counterclaim,” CR789, and such a counterclaim is not a proper invocation of the Declaratory Judgment Act. See Sw. Guar. Trust Co. v. Hardy Rd. 13.4 Joint Venture, 981 S.W.2d 951, 956 (Tex. App.—Houston [1st Dist.] 1998, pet. denied) (“A declaratory judgment action may not be used solely to obtain attorney’s fees that are not otherwise authorized by statute or to settle disputes already pending before a court.”); see also Hageman/Fritz, Byrne, Head & Harrison, L.L.P. v. Luth, 150 S.W.3d 617, 627 (Tex. App.—Austin 2004, no pet.) (“It is an abuse of discretion, therefore, to award attorney’s fees under the UDJA when the statute is relied upon solely as a vehicle to recover attorney’s fees.”).

32 Here, John’s request for a declaratory judgment did not provide a legal basis

for an award of fees because it restated John’s other claims. In his answer, David

conceded this point. See CR44 (claiming that John “reclassifie[d] some of his

claims in the guise of a declaratory judgment”).

David is correct that John repleaded his claims as claims for declaratory

judgment. The only declarations requested by John were incidental to his other

causes of action. See CR12. They “would add nothing to what would be implicit

or express in a final judgment for the enforceable remedy.” Universal Printing Co.

v. Premier Victorian Homes, Inc., 73 S.W.3d 283, 296 (Tex. App.—Houston [1st

Dist.] 2001, pet. denied). Accordingly, John’s request for a declaratory judgment

could not serve as a basis for attorney’s fees for either party.

A declaratory judgment will provide a basis for fees only when the statute

has been “properly invoked.” See Knighton v. Int’l Bus. Machines Corp., 856

S.W.2d 206, 210 (Tex. App.—Houston [1st Dist.] 1993, writ denied) (“When a

claimant . . . has properly invoked the declaratory judgment statute, either party

may plead for and obtain attorney’s fees.”); Hartford Cas. Ins. Co. v. Budget Rent-

A-Car Sys., Inc., 796 S.W.2d 763, 771 (Tex. App.—Dallas 1990, writ denied)

(“[W]here a claimant or a counter-claimant has properly invoked the declaratory

judgment statute, either party may plead for and obtain attorney’s fees.”).

33 The Austin Court of Appeals explained, “Although attorney’s fees are

permissible when a party defends against a claim under the Declaratory Judgments

Act, one of the parties must properly invoke the statute.” Whiteside v. Griffis &

Griffis, P.C., 902 S.W.2d 739, 747 (Tex. App.—Austin 1995, writ denied).

In Kenneth Leventhal & Co. v. Reeves, 978 S.W.2d 253 (Tex. App.—

Houston [14th Dist.] 1998, no pet.), a plaintiff attempted to “use declaratory relief,

identical to his breach of contract claim, simply to pave the way to recover

attorney’s fees not otherwise available.” Id. at 259. Thus, Reeves, the plaintiff,

was not entitled to attorney’s fees based on his claim for declaratory relief. Id. at

260.

The defendant (like David) argued that he should have been awarded

attorney’s fees. The Fourteenth Court of Appeals squarely rejected the argument:

“Having found no legal basis for awarding attorney’s fees to Reeves we likewise

find no legal basis for awarding such fees to Leventhal.” Id. at 260.

Here is how the Fourteenth Court of Appeals later described this holding:

“In other words, having concluded that the plaintiff improperly invoked the UDJA

to request the same relief already sought under his breach of contract claim, the

court held that the UDJA was not a proper procedural vehicle to award either party

attorney’s fees.” Devon Energy Prod. Co., L.P. v. KCS Res., LLC, 450 S.W.3d

203, 220 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).

34 This rule controls the award of fees. Because John invoked the Declaratory

Judgment Act to request relief already sought in or incidental to his other claims, it

was “not a proper procedural vehicle” to award David fees, Devon Energy, 450

S.W.3d at 220, and there was “no legal basis” for the fee award. Kenneth

Leventhal & Co., 978 S.W.2d at 260.

To receive attorney’s fees, David needed to establish that John properly

invoked the Declaratory Judgment Act. Because David failed to do so, even if this

Court were to affirm the summary judgment, it should render judgment that David

recover no attorney’s fees from John.

Alternatively, there are two additional errors in the award of fees, both of

which lead to a remand.

B. The trial court erroneously denied John a jury determination of whether David’s fees were “reasonable and necessary.” For reasons not apparent from the record, the trial court denied John his right

to have a jury determine whether David’s fees were “reasonable and necessary.”

This was error.

David’s motion for summary judgment did not include any evidence

regarding the amount of fees. See CR66 n.13 (David’s motion for summary

judgment proposing that “David will submit evidence establishing his costs and

reasonable attorney’s fees for this case.”).

35 Instead, after summary judgment was granted, David filed an “Application

for Attorneys’ Fees and Costs.” CR584. John responded, asserting his right to a

jury trial and tendering the jury fee. See CR618-19; CR621-22.

At a hearing, the trial court denied John’s demand for a jury trial, 2RR:20-

21, and stated that it would “do this by submission.” 2RR:16. The trial court later

entered a final judgment awarding David all of the attorney’s fees he requested.

Compare CR786 (final judgment) with CR584 (application for attorney’s fees).

Denying John his right to a jury determination of this issue was error. It is

black-letter law that that the reasonableness and necessity of attorney’s fees

awarded under the Declaratory Judgment Act “is a question of fact for the jury’s

determination.” Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998) (quoting

Trevino v. American Nat’l Ins. Co., 168 S.W.2d 656, 660 (Tex. 1943)). John had a

right to a jury determination, and the trial court erred by denying John that right.

Admittedly, like other fact issues, the reasonableness and necessity of

attorney’s fees can be resolved on summary judgment. E.g., Petrello v. Prucka,

415 S.W.3d 420, 431 (Tex. App.—Houston [1st Dist.] 2013, no pet.). But David

never sought summary judgment regarding the amount of fees. Neither his

“Application for Fees and Costs,” CR561, nor his “Motion for Entry of Final

Judgment,” CR741, argue that “there is no genuine issue of material fact” or cite to

Rule 166a. They cannot be construed as requesting summary judgment. See

36 McConnell, 858 S.W.2d at 341 (Tex. 1993) (“A [summary judgment] motion must

stand or fall on the grounds expressly presented in the motion.”).

C. David’s Application for Fees never argued—and the trial court never found—that the award of fees was “equitable and just.” The award of attorney’s fees is deficient for another reason: only “equitable

and just” attorney’s fees may be awarded under the Declaratory Judgment Act, and

the trial court did not find that these fees were equitable and just:

[T]he Declaratory Judgments Act entrusts attorney fee awards to the trial court’s sound discretion, subject to the requirements that any fees awarded be reasonable and necessary, which are matters of fact, and to the additional requirements that fees be equitable and just, which are matters of law.

Bocquet, 972 S.W.2d at 21; see also TEX. CIV. PRAC. & REM. CODE § 37.009 (a

court may award “reasonable and necessary attorney’s fees as are equitable and

just”).

David’s Application for Fees never argued that an award of fees under the

Declaratory Judgment Act was “equitable and just.” Instead, David erroneously

asserted that as a prevailing party, he was entitled to receive attorneys’ fees. See

CR588 (“David prevailed against John’s declaratory judgment action.

37 Accordingly, David is entitled to recover his reasonable attorneys’ fees and

costs.”).10

Consistent with David’s fee application, the trial court did not find that the

award of attorney’s fees was “equitable and just.” Instead, the judgment merely

finds that the fees were “reasonable”:

CR788 (emphasis added). Without concluding that the fees were “equitable and

just,” the trial court could not award them. And without any argument about this

standard in David’s fee application or mention of it in the award, there is no basis

to assume the trial court applied the correct “equitable and just” standard.

By granting attorney’s fees to David without considering whether the fees

were “equitable and just,” the trial court acted “without regard to guiding legal

principles.” Ford Motor Co. v. Chacon, 370 S.W.3d 359, 362 (Tex. 2012). This

was an abuse of discretion. See id.; In re Serv. Corp. Intern., 355 S.W.3d 655, 658

10 David is also incorrect that a “prevailing party” is “entitled to” attorney’s fees. See, e.g., City of Houston v. Soriano, No. 14-05-00161-CV, 2006 WL 2506388, at *6 (Tex. App.—Houston [14th Dist.] Aug. 29, 2006, pet. denied) (“The Declaratory Judgment Act does not require an award of attorney’s fees to the prevailing party, but merely provides that a court may award them.”).

38 (Tex. 2011) (“When a trial court errs in determining the law or in applying the law

to the facts, it has abused its discretion.”).

CONCLUSION AND PRAYER This is a straightforward appeal, answered by the plain text of the statute:

closing an estate by affidavit does not relieve the independent executor from

liability for mismanagement. Appellant respectfully requests that this Court

reverse the judgment in its entirety.

39 Respectfully submitted,

BECK REDDEN LLP

By: /s/ William R. Peterson Constance H. Pfeiffer State Bar No. 24046627 cpfeiffer@beckredden.com William R. Peterson State Bar No. 24065901 wpeterson@beckredden.com 1221 McKinney, Suite 4500 Houston, TX 77010-2010 (713) 951-3700 (713) 951-3720 (Fax)

Esther Anderson State Bar No. 00792332 esther@probateguardianship.com ANDERSON PFEIFFER, PC 845 FM 517 West, Suite 200 Dickinson, TX 77539 (281) 488-6535 (281) 614-5205 (Fax)

COUNSEL FOR APPELLANT JOHN LAWTON

40 CERTIFICATE OF SERVICE I hereby certify that on July 8, 2015, a true and correct copy of the above and foregoing Brief of Appellant was forwarded to all counsel of record by the Electronic Filing Service Provider, if registered, otherwise by email, as follows:

N. Kimberly Hoesl J. B. (Trey) Henderson III DOYLE, RESTREPO, HARVIN & ROBBINS, L.L.P. 440 Louisiana St #2300 Houston, TX 77002 khoesl@drhrlaw.com thenderson@drhrlaw.com

Counsel for David W. Lawton

/s/ William R. Peterson William R. Peterson

41 CERTIFICATE OF COMPLIANCE 1. This brief complies with the type-volume limitation of Tex. R. App. P. 9.4 because it contains 8,789 words, excluding the parts of the brief exempted by Tex. R. App. P. 9.4(i)(2).

2. This brief complies with the typeface requirements of Tex. R. App. P. 9.4(e) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2007 in 14 point Times New Roman font.

Dated: July 8, 2015.

Counsel for Appellant, John Lawton

42 No. 01-15-00193-CV IN THE COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS AT HOUSTON

JOHN LAWTON, Appellant, v. DAVID W. LAWTON, Appellee. On Appeal from the County Court at Law No. 1, Fort Bend County, Texas Trial Court Cause No. 14-CCV-053769

APPENDIX TO BRIEF OF APPELLANT

TAB

A Final Judgment

B Order Overruling Objections to Closing Affidavit in Cause No. 09-CPR- 021945

C Opinion and Mandate of the First Court of Appeals, No. 01-12-00932-CV TAB A Final Judgment NO. 14- CCV-053769

JOHN LAWfON, § IN THE COUNTY COURT Plaintiff, § § v. § AT LAW NO. ONE § DAVIDW. LAWTON, INDIVIDUALLY, § AS FORMER INDEPENDENT EXECUTOR § OF THE ESTATE OF JOSEPH G. § LAWTON, DECEASED, AND AS FORMER § AGENT FOR JOSEPH G. LAWfON § UNDERAPOWEROF ATTORNEY, § Defendant § FORT BEND COUNTY, TEXAS

FINAL JUDGMENT

On this date came on to be considered the Motion for Entry of Final Judgment

("Motion") of Defendant David W. Lawton. After considering the Motion, any response

thereto, the pleadings, the arguments of counsel, if any, and all other matters properly before

it, and having previously rendered summary judgment on all causes of action asserted by

Plaintiff John Lawton, and having disposed of all other pending claims in this matter, the Court

is of the opinion that the Motion should be GRANTED. It is accordingly

ORDERED, ADJUDGED, AND DECREED that John Lawton talce nothing by any and

all of his claims against David W. Lawton. It is further

ORDERED, ADJUDGED, AND DECREED that all of John Lawton's claims asserted

in this matter are hereby dismissed with prejudice. It is further

ORDERED, ADJUDGED, AND DECREED that David W. Lawton, as prevailing

party, have and recover from John Lawton his reasonable attorneys' fees incurred in defending

this lawsuit in the amount of$ 3t.!:S. cro for services rendered through the trial of

this case. It is further

EXHIBIT B 788 ORDERED, ADnJDGED, AND DECREED that David W. Lawton have and recover

from John Lawton the further sum of $25,000.00 as his reasonable attorneys' fees if appeal is

taken unsuccessfully by John Lawton to the Court of Appeals. It is further

ORDERED, ADnJDGED, AND DECREED that David W. Lawton have and recover

from John Lawton the further sum of $10,000.00 as his reasonable attorneys' fees if either

party petitions the Texas Supreme Court for review, and David W. Lawton prevails. It is

further

ORDERED, ADnJDGED, AND DECREED that David W. Lawton have and recover

from John Lawton the further sum of $25,000.00 as his reasonable attorneys' fees if a petition

for review is granted or briefing on the merits is requested by the Texas Supreme Court and

David W. Lawton prevails. It is further

ORDERED, ADnJDGED, AND DECREED that post-judgment interest on the above

amounts (including attorneys' fees but excluding attorneys' fees on appeal) shall accrue at the

rate of five percent (5%) per annum, compounded annually pursuant to TEx. FJN. CODE

§ 304.006, from the date of this judgment until paid. It is further

ORDERED, ADJUDGED, and DECREED that all costs are taxed against John

Lawton. It is further

ORDERED, ADnJDGED and DECREED that this is a final judgment disposing of all

claims still pending in this matter and all parties in this cause. All relief not expressly granted

herein is denied. It is further

789 ORDERED, ADWDGED and DECREED that execution is issued for this Final

Judgment. David W. Lawton is allowed such writs and processes as may be necessary in the

enforcement and collection of this Final Judgment

This Final Judgment is final and appealable.

SIGNED this ~day of

790 TAB B Order Overruling Objections to Closing Affidavit in Cause No. 09-CPR-021945 N().09-CPR..021945

ESTATE()F §· . IN mE COUNTY COURT § J()SEPH G. LAWTON t § AT LAW NUMBER ONE (1) OF § DECEASED § FORT BEND COUNTY, TEXAS

ORDER On this date, the Court considered Plaintiff 1ohn Lawton's "Objection to Closing

Affidavit of David W. Lawton, Independent Executor of the Estate of Joseph G. Lawton"

("Objection"). After considering the Objection, the responses. if any, any further replies or

responsive pleadings, the pleadings and discovery on file, the evidence, and tho argum~nts of . . counsel, if any, the Court hereby OVERRULES the Objection. It is hereby

ORDERED that John Lawton's Objection to Closing Affidavit of David W. Lawton,

Independent Executor of tho Estate of Joseph G, Lawton is OVERRULED.

,2~012,; m-~ -~-----~~~~· ., ' .->

AS PER ORIGINAL

EXHIBIT6

116 TAB C Opinion and Mandate of the First Court of Appeals, No. 01-12-00932-CV Opinion issued July 10, 2014

In The

~ourt of appea1' For The

jfirst •iBititt of tlttxu

NO. 01-12-00932-CV

JOHN LAWTON, Appellant v. DAVID W. LAWTON, INDIVIDUALLY, AS INDEPENDENT EXECUTOR OF THE ESTATE OF JOSEPH G. LAWTON, DECEASED, AND AS FORMER AGENT FOR JOSEPH G. LAWTON UNDER A POWER OF ATTORNEY, Appellee

On Appeal from the County Court at Law No. 1 Fort Bend County, Texas Trial Court Case No. 09-CPR-02194SA

MEMORANDUM OPINION ON REHEARING 1

We originally issued our opinion in this appeal on March 6, 2014. Appellee, David W. Lawton, individually, as independent executor of the estate of Joseph G.

EXHIBIT IO

232 John Lawton challenges the portion of the trial court's June 29, 2012 order

granting summary judgment against him on his claims asserted in his original

petition against David W. Lawton, individually, as independent executor of the

estate of Joseph G. Lawton, deceased, and as former agent for Joseph G. Lawton

under a power of attorney. In three issues, John contends that the trial court erred

in granting summary judgment on his ( l) claim for removal of David as executor

of the estate, (2) request for a power of attorney accounting, and (3) an award of

his attorney's fees. Because we conclude that John's claims in his original petition

are moot, we vacate the portion of the trial court's order granting David summary

judgment on John's claims asserted in his original petition and we dismiss his

original petition.

Background

John and David are the only children of Joseph and Joyce Lawton. On

October 15, 2003, Joseph executed his will and a statutory durable power of

attorney authorizing David to act as his agent for, among other things, estate, trust,

and other beneficiary transactions. Joseph died on March 21, 2009.

Lawton, deceased, and as former agent for Joseph G. Lawton under a power of attorney, filed a motion for rehearing. We deny the motion for rehearing, withdraw our March 6, 2014 opinion, vacate our judgment, and issue this opinion and the related judgment in their stead. David also filed a request in the alternative for reconsideration en bane. In light of the issuance of this opinion, the request for en bane reconsideration is dismissed as moot. See Brookshire Bros., Inc. v. Smith, 176 S.W.3d 30, 40 & n.2 (Tex. App.-Houston [I st Dist.] 2004, pet. denied). 2

233 On June 8, 2009, Joseph's will was admitted to probate and David was

appointed independent executor of Joseph's estate. On August 5, 2009, the court

signed an order approving the estate inventory, appraisement, and list of claims as

well as David's appointment as independent executor.

On June 6, 2011, John submitted a demand letter for an estate accounting

from David pursuant to Probate Code section 149A and, on November 14, 2011,

filed an original petition in the trial court seeking to (1) compel an estate

accounting and distribution and a power of attorney accounting; (2) remove David

as executor; and (3) recover attorneys' fees. David answered on December 21,

2011 and provided John with a verified estate accounting on December 23, 2011.

On March 2, 2012, David filed a motion for summary judgment and

response to John's petition. The trial court set the motion for hearing on June 28,

2012. 2 On the morning of the summary judgment hearing, John filed his first

amended petition seeking a declaratory judgment and adding a claim for breach of

fiduciary duty premised on numerous grounds. John did not file a motion for leave

to file his amended petition but orally requested leave at the hearing. On June 29,

2012, the trial court signed an order granting David's summary judgment motion,

2 After John filed a motion requesting a status conference on March 5, 2012, the trial court canceled all motion settings (including the original March 26, 2012 hearing date on David's summary judgment motion) and scheduled a status conference for March 26, 2012, at which time the trial court re-set the summary judgment motion for hearing on June 28, 2012. 3

234 denying and dismissing with prejudice John's original petition, and dismissing

John's amended petition for failure to comply with Texas Rule of Civil Procedure

63 .

On July 11, 2012, David filed a closing affidavit to tenninate the

administration of Joseph's estate. On August 10, 2012, John filed an objection to

the closing affidavit and, on July 31, 2012, he filed a motion for new trial. On

September 4, 2012, the trial court signed orders overruling John's objection to the

closing affidavit and denying his motion for new trial. On September, 19, 2012,

John timely filed this appeal.

Discussion

John contests the trial court's order granting summary judgment on (1) his

claim for removal of David as the executor of the estate, (2) the request for a power

of attorney accounting, and (3) an award of his attorneys' fees. David contends

that John's issues are moot because the estate is closed and John did not appeal the

closing of the estate, thus depriving the trial court of jurisdiction. He also asserts

that the trial court properly granted summary judgment on all of John's claims.

Jurisdiction

Whether a trial court has subject matter jurisdiction is a question of law that

we review de novo. See Tex. Natural Res. Conservation Comm 'n v. IT Davy, 74

S.W.3d 849, 855 (Tex. 2002). Although courts generally do not lose subject

235 matter jurisdiction once it attaches, a probate court is a specialized court that can

lose jurisdiction over matters incident to an estate if it loses jurisdiction over the

probate matters. See Goodman v. Summit at West Rim, Ltd., 952 S.W.2d 930, 933

(Tex. App.-Austin 1997, no pet.). In other words, once an estate closes, incident

claims are pendent or ancillary to nothing, and the probate court loses jurisdiction.

Id.; see also Schuld v. Dembrinski, 12 S. W.3d 485, 487 (Tex. App.-Dallas 2000,

no pet.) {''the pendency of a probate proceeding is a requisite for a court's exercise

of jurisdiction over matters related to it"); Garza v. Rodriguez, 18 S.W.3d 694, 698

(Tex. App.-San Antonio 2000, no pet.) ("before a matter can be regarded as

incident to an estate ... a probate proceeding must actually be pending").

The record reflects that the trial court granted David's summary judgment

motion on June 29, 2012. On July 11, 2012, David filed a Notice of Filing of

Closing Affidavit and Closing Affidavit pursuant to Probate Code section 151.3

On August 10, 2012, John filed an Objection to Closing Affidavit, which was

overruled by written order on September 4, 2012.

Probate Code section 151 provides, in relevant part, as follows:

§ 151. Closing Independent Administration by Closing Report or Notice of Closing Report.

3 We note that section 151 of the Probate Code has been repealed and recodified, effective January I, 2014, as section 405.004 of the Estates Code. See TEX. ESTATES CODE ANN.§ 405.004 (West 2013).

236 (a) Filing of Closing Report or Notice of Closing Estate. When all of the debts known to exist against the estate have been paid, or when they have been paid so far as the assets in the hands of the independent executor permit, when there is no pending litigation, and when the independent executor has distributed to the persons entitled thereto all assets of the estate, if any, remaining after payment of debts, the independent executor may file with the court a closing report or a notice of closing of the estate.

(c)Effect of Filing Closing Report or Notice of Closing Estate. (1) The independent administration of an estate is considered closed 30 days after the date of the filing of a closing report or notice of closing estate unless an interested person files an objection with the court within that time. If an interested person files an objection within the 30-day period, the independent administration of the estate is closed when the objection has been disposed of or the court signs an order closing the estate.

Tux. PROB. CooEANN. § 151(a), (c) (West Supp. 2013) (emphasis added). 4

David argues that the estate is closed and that because John did not appeal

the closing, the trial court lost jurisdiction over the estate and John's appeal is now

moot. John argues that David could not unilaterally close the estate under section

151 because there was pending litigation at the time David filed his closing

affidavit. Specifically, John contends that although the trial court had already

signed a final order granting summary judgment to David, denying his original

4 The amendment in section lSl(c) (fonnerly section 15l(b)) applies to closing reports or notices of closing estate filed on or after the effective date of the Act (i.e., September 1, 2011). See Act of September 1, 2011, 82nd Leg., RS., ch. 1338, § 1.26, 2011 Tex. Gen. Laws 3882, 3898. David's closing affidavit was filed on July 11, 2012.

237 petition, and dismissing his amended petition as untimely, the trial court retained

plenary power to change its judgment at the time David filed his closing affidayit.

Further, as John points out, his notice of appeal was timely filed and, therefore, as

litigation was still pending when John filed his closing affidavit, the estate did not

close.

Probate Code section 151 addresses both when an independent executor may

file a closing report with the court to terminate administration of an estate, and the

effect of such a filing. See TEX. PROB. CODE ANN.§ 151. 5 Subsection (a) provides

that an independent executor may file a closing report when the debts of the estate

have been paid (or paid to the extent possible), there is no pending litigation, and

the independent executor has distributed any remaining assets to those entitled to

receive them. See id at § 151(a). Section 151(c) addresses the effect of such a

filing, see id. at § 151 (c), and specifically provides that an estate "is considered

closed 30 days after the date of the filing of a closing report . . . unless an

interested person files an objection with the court within that time." Id If an

objection is filed within the thirty-day period, "the estate is closed when the

objection has been disposed of ...." Id Here, while John filed an objection to the

s We note that section 151(a) is not mandatory (''the independent executor may file with the court a closing report or a notice of closing of the estate ....") (emphasis added) and that there are other actions which may effectively close an estate. See In re Estate of Teinert, 251 S.W.3d 66, 67 (Tex. App.-Waco 2008, pet. denied) (noting that final distribution of estate's assets after all debts and claims against estate are paid results in closing of estate). See id. at 67 (citation omitted). 7

238 closing affidavit within the thirty-day period, the trial court overruled his objection

on September 4, 2012. Thus, notwithstanding whether David should have filed a

closing affidavit under subsection (a), the language of subsection (c) makes clear

that doing so closed the estate when the court disposed of John's objection.

Further, we note that John's argument that litigation was pending when the

closing affidavit was filed, thus precluding the closure, was not preserved for our

review. Although his objection to the closing affidavit alleged that litigation was

still pending and the filing of a closing affidavit under section 151 was, therefore,

improper, he never appealed the closing of the estate to this court. John's notice of

appeal states that he is appealing

from the final judgment, and from the overruling of his post-trial motion, in Cause No. 09-CPR-021945-A, The Estate of Joseph G. Lawton, Deceased v. David W. Lawton, Individually, and As Independent Executor of the Estate of Joseph G. Lawton, Deceased and As Former Agent for Joseph G. Lawton Under A Power of Attorney, in the County Court at Law No. One (1) of Fort Bend County, Texas. The trial court signed a Final Judgment on June 29, 2012, (Order Denying John Lawton's Petition and Granting Executor's Motion for Summary Judgment)."

Neither John's notice nor his appellate brief speak to an appeal of the

estate's closing or the overruling of his objection to the closing affidavit. 6 As such,

the issue of whether the filing of the closing affidavit was proper is not before us.

6 Further, the administration of the estate-including the closing affidavit, John's objection, and the order overruling John's objection-is Cause No. 09-CPR- 021945. 8

239 Having concluded that the estate is closed, we consider which of John's

claims, if any, survive on appeal. John's first issue concerns the trial court's denial

of his motion to remove David as executor. In In re Estate of Hanau, 806 S.W.2d

900 (Tex. App.-Corpus Christi 1991, writ denied), the court of appeals noted that

the "trial court has power to hear all matters incident to an estate only in those

instances where a probate proceeding, such as the administration of an estate, is

actually pending in the court in which the suit is filed, relating to a matter incident

to that estate." Id at 904. The court concluded that once the estate had closed, the

trial court lost jurisdiction to remove the executrix and appoint a successor

independent executor, and that these issues had become moot. See id. Thus, under

Hanau, John's issue concerning the removal of David as executor of the estate

under Probate Code section 149C(a) is moot. Moreover, John concedes that ifthe

estate is closed, his claim seeking to remove David as executor is moot.

John's second issue challenges the trial court's denial of his claim for

attorney's fees. In his original petition, John sought attorney's fees under Probate

Code section 149C(d), which recites that "[c]osts and expenses incurred by the

party seeking removal incident to removal of an independent executor . . .

including reasonable attorney's fees and expenses, may be paid out of the estate."

Tux. PROB. CODE ANN.§ 149C(d) (West 2013). However, because we concluded

that John's claim for removal of David as executor was rendered moot by the

240 closing of the estate, it follows that his claim for recovery of attorney's fees

incident to removal is likewise moot. See id

Further, John's reliance on Allstate Insurance Co. v. Hallman, 159 S.W.3d

640 (Tex. 2005) is misplaced. 7 In addition to the fact that Hallman did not involve

a probate case or a claim for attorney's fees under section 149C, the trial court in

that case retained jurisdiction over the matter giving rise to the attorney's fees

claim. See id. at 642. Here, in contrast, the closure of the estate deprived the trial

court of jurisdiction over the estate. Thus, we conclude that John's claim for

attorney's fees incurred under Probate Code section 149C(d) is moot.

7 In Hallman, neighboring property owners sued Hallman for damages related to limestone mining on her property. See Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 641 (Tex. 2005). Hallman sought coverage under her homeowners' insurance policy with Allstate Insurance Company, requesting that Allstate defend and indemnify her in the lawsuit. See id. Allstate and Hallman both sought. a declaratory judgment to detennine whether the policy covered the underlying litigation. See id. The trial court granted summary judgment in Allstate's favor but the court of appeals reversed the trial court's judgment and remanded for further proceedings, holding that Allstate had a duty to defend and indemnify Hallman in the limestone mining litigation. See Hallman v. Allstate Ins. Co., 114 S.W.3d 656 (Tex. App.-Dallas 2003), rev'd, 159 S.W.3d 640 (Tex. 2005).

While the declaratory judgment action was on appeal to the Texas Supreme Court, the underlying lawsuit between Hallman and her neighbors concluded with a jury verdict in Hallman's favor. See Hallman, 159 S.W.3d at 642. In considering whether resolution of the underlying litigation mooted the case, the Court concluded that Hallman's remaining interest in obtaining attorney's fees for expenses incurred in defending against Allstate's declaratory judgment action and in pursuing her own declaratory relief prevented the case from being moot. See id at 643. The Court ultimately reversed and rendered judgment for Allstate, concluding that damages to third parties caused by commercial limestone mining conducted on an insured's property fell within the policy's business pursuits exclusion. See id. at 641. 10

241 John's third issue concerns his request for an accounting under Probate Code

section 149B for the time period during which David held power of attorney for

the estate. As a beneficiary, John contends that he could assert this right on behalf

of the- estate because David refused to do so. But because John's authority to

request such an accounting derives from his relationship to the estate as a

beneficiary, once closed, the estate ceases as an entity, as does any authority John

had derivative from or on behalf of the estate.

Nevertheless, John contends that the estate need not be open for him to

pursue his request for a power of attorney accounting because section 151 provides

that David can still be held liable for any wrongdoing revealed by the accounting.

See TEX. PROB. CODE ANN. § 151(c)(2) (stating that closing of estate "shall not

relieve the independent executor from liability for any mismanagement of the

estate or from liability for any false statements contained in the report or notice.").

In his appellate brief, John states that he "seeks an accounting of David's power of

attorney as part of a potential breach of fiduciary duty claim by the estate against

David" (emphasis added). We agree that under section 15l(c)(2) the closing of the

estate does not foreclose John from potentially pursuing a breach of fiduciary duty

claim against David that alleges mismanagement of the estate. However, as

discussed above, because John seeks a power of attorney accounting through the

242 estate and the estate is closed, such a request made pursuant to section 1498 is

moot.

Conclusion

Having concluded that John's claims asserted in his original petition are

moot, we vacate the portion of the trial court's order granting David summary

judgment on John's claims asserted in his original petition and we dismiss John's

Jim Sharp Justice

Panel consists of Justices Jennings, Higley, and Sharp.

243 QC:ourt of appealS .:first JBi~tid of ~exu NO. 01-12-00932-CV

JOHN LAWTON, Appellant

v DAVID W. LAWTON, INDNIDUALL Y, AS INDEPENDENT EXECUTOR OF THE ESTATE OF JOSEPH G. LAWTON, DECEASED, AND AS FORMER AGENT FOR JOSEPH G. LAWTON UNDER A POWER OF AT'JORNEY, Appellee

Appeal fwm the County Court at Law No. l ofFott Bend County. (Tr. Ct. No. 09-CPR-021945A).

TO THE COUNTY COURT AT LAW NO. 1 OF FORT BEND COUNTY, 'INC:S·

Before this Court, on the I Oth day ol"July 2014, the case upon appeal to revise or to reverse your judgment was determined. This Court made its order in these words: Tllis Court today considered a motion for rehca:Jillg illcd by appellee, Davtd w. Lawton, md!v1dually, as independent executor of the estate of Joseph G. Lawton, deceased, and as former agent for Joseph G. Lawton under a power of attorney. The motion for rehearing is denied. Ne'€ li!IGatGd, ~~t aside, and annulled y,r,. further order this Court's opinion of March 6, 2014, withdrawn.

~ I• .... II 10 397 This case is an appeal from H1e order signed by tlle trial eourt on June 29, 2012. After submitting the ease en the appellate record and the arguments properly raised by the patties, the Court holds that appellant's claims asserted in his original petition are moot. Accordingly, the Court vacates the portion of the trial court's order granting summary judgment to appellee on appellant's claims asserted in his original petition and dismisses appellant's original petition.

The Court orders that appellant, John Lawton, pay all a ell ate costs.

The Court orders that this decision be certified below for observance.

Judgment rendered July 10, 2014.

Panel consists of Justices Jennings, Higley, and Sharp. Opinion delivered by Justice Sharp.

WHEREFORE, WE COMMAND YOU to observe the order of our said Court in this behalf and in all things to have it duly recognized, obeyed, and executed.

September 19, 2014

Date CHRISTOPHER A. PRINE CLERK Of THE COURT