Regions Bank, Trustee of the Section 1301 Management Trust for Samantha Lugo v. Newman Law Firm

Court of Appeals of Texas·Decided June 6, 2024·No. 01-22-00936-CV·Published

Opinion

Opinion issued June 6, 2024

In The

Court of Appeals

For The

First District of Texas

issues, the Bank contends that the trial court erred in awarding Newman the attorney’s fees that it incurred in representing Guadalupe.

We affirm.

Background1

Samantha is an adult who has been “completely incapacitated” since a medical incident that occurred when “she was less than one year old.” The medical incident left her with brain damage that caused mental and physical disabilities, “inhibit[ed] her ability to speak,” and “cause[d] her [to have] seizures.” In “settlement of a medical malpractice claim, Samantha received [a] substantial settlement payment” and a lifetime annuity, which are in a trust managed by the Bank.

Samantha requires constant “supervision and care” and “will be incapacitated for the rest of her life.” Since infancy, Samantha has lived with her mother, Guadalupe, who is her “primary caregiver and supporter.” Guadalupe attends to Samantha’s “daily needs, which include bathing, feeding, self-care, medication, all activities of daily living, selection of physicians, and handling of all medical appointments.”

1 As none of the Bank’s issues on appeal challenge the trial court’s findings of fact, we draw on them to describe the events relevant to this appeal. We note that this is not the first time that this case and the parties have been before this Court. See In re Guardianship of Lugo, No. 01-22-00438-CV, slip. op. at 1–20 (Tex. App.—

Houston [1st Dist.] June __, 2024, no pet. h.) (mem. op.); In re Guardianship of Lugo, No. 01-21-00403-CV, 2022 WL 17835520, at *1–12 (Tex. App.—Houston [1st Dist.] Dec. 22, 2022, no pet.) (mem. op.).

On August 30, 2016, the trial court appointed Samantha’s older sister and Guadalupe’s daughter, Guadalupe Leticia Lugo (“Tish”), “as permanent guardian” of Samantha’s person. On June 25, 2020, the Bank filed a motion to remove Tish as guardian of Samantha’s person. “Tish resigned as guardian,” and “[o]n December 22, 2020, Newman filed a notice of appearance on behalf of [Guadalupe].” Guadalupe then “announced her intention to apply for the role of successor guardian” of Samantha’s person.

Acting on behalf of Guadalupe, Newman filed an application for Guadalupe’s appointment as successor guardian of Samantha’s person. In it, Guadalupe “request[ed] [that she] be appointed as [s]uccessor [g]uardian” of Samantha’s person. Guadalupe explained that she was Samantha’s mother, “live[d] with [her] and ha[d] been providing daily care and life decisions for [Samantha] since [her] infancy.” Guadalupe also noted that she “ha[d] priority to serve” as Samantha’s guardian, “[wa]s qualified[,] and [wa]s not disqualified from accepting letters of guardianship.” The application was accompanied by an affidavit executed by Guadalupe, in which she attested that “such [a]pplication contain[ed] a correct and complete statement of the matters to which it relate[d] and all the contents thereof [were] true, complete and correct.”

Newman filed a motion to withdraw as counsel for Guadalupe on November 12, 2021, which the trial court granted. In March 2022, Newman filed an application

for payment of attorney’s fees and expenses incurred in representing Guadalupe (the “application”). “In support of the application, Newman attached a [v]erification and invoices supporting accrued fees and expenses totaling $135,912.37.” The Bank filed an objection to the application but did “not file a controverting affidavit or offer any evidence in response to the [a]pplication.”

On August 19, 2022, Ginger Lott, a paid private professional guardian who had been appointed successor guardian of Samantha’s person, filed a response and objection to the application. But “Lott did not file a controverting affidavit or offer any evidence in response at the time.”

On August 22, 2022, Newman, through its counsel, filed an amended application for attorney’s fees (the “amended application”). In the amended application, Newman specified that it was claiming fees under Texas Estates Code section 1155.054, and it attached affidavits to the amended application “in support of [its] entitlement” to, “and [the] reasonableness/necessity of[,] [its] incurred attorney[’]s fees and costs.” Newman requested payment of $135,912.37 from the trust for attorney’s fees and expenses incurred in the period between December 15, 2020 through November 12, 2021, when Newman was representing Guadalupe.

Newman also attached to the amended application an affidavit executed by Guadalupe, in which Guadalupe attested “to the reasons she hired [Newman] and sought to become guardian” of Samantha’s person. “Specifically, [Guadalupe]

attested that she provide[d] care-giving services and supervision to Samantha” and her intent in hiring Newman was “to help her become the official guardian for Samantha.” Guadalupe explained that she wanted to be Samantha’s guardian because she had “always taken care of Samantha” and wanted Samantha “to always live with [her].”

Lott filed a supplement to her response and objection to the amended application on September 23, 2022. On the same date, the Bank filed its first amended objection to the amended application. The Bank asserted that “reimbursement of attorney[’s] fees and expenses pursuant to [Texas Estates Code] [s]ection 1155.054 would not be warranted” because Guadalupe was found to lack standing. The Bank also alleged that some of the fees that Newman sought were incurred in connection with Newman’s representation of Tish, and not Guadalupe, and thus were not eligible for reimbursement. Further, the Bank maintained that the attorney’s fees sought “to pursue the guardianship application” were not necessary or reasonable, and the hourly rate sought was excessive.

On September 26, 2022, Guadalupe filed a joinder in Newman’s amended application, in which she “join[ed] in, incorporate[d] by reference, and fully adopt[ed] in its entirety the [amended application],” and she explained that she “wanted [Newman] to be paid since she was unable” to pay Newman. Also, on that date, Newman filed its reply in support of its amended application. In it, Newman

pointed out that Texas Estates Code section 1055.001(b) prohibited persons with an adverse interest from filing an application to create a guardianship, contesting the creation of a guardianship, contesting the appointment of a guardian, or contesting an application for complete restoration or modification of a ward’s guardianship, and it did not apply to an application for the appointment of a guardian.

On September 27, 2022, Regions Bank filed a supplement to its first amended objection, and Newman filed its notice of the Bank’s failure to file controverting affidavits on the reasonableness and necessity of attorney’s fees. At the time of the hearing on Newman’s amended application, no party “had filed any affidavit to rebut [Guadalupe]’s [a]ffidavit,” making her affidavit “the only filed pleading in evidence in the record of [Guadalupe]’s honesty of intention and her reasonable belief in the propriety of the application she filed.” No other party “had filed any opposition or objection to [Guadalupe]’s [a]ffidavit.”

At the September 27, 2022 hearing on the amended application, the trial court heard testimony from David Cook, the Bank’s expert witness. Cook opined that Guadalupe “wouldn’t be entitled to any attorney’s fees under [Texas Estates Code section] 1154.054” because, after she filed her application “to be appointed as a successor guardian” of Samantha’s person, she “was found to have an adverse interest and so, her application was never ruled upon.”

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Regions Bank, Trustee of the Section 1301 Management Trust for Samantha Lugo v. Newman Law Firm, (Tex. Ct. App. 2024).

Regions Bank, Trustee of the Section 1301 Management Trust for Samantha Lugo v. Newman Law Firm (Regions Bank, Trustee of the Section 1301 Management Trust for Samantha Lugo v. Newman Law Firm) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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