Shawn Deane Gruss, as Trustee of the Gallagher Family Trust v. Gary W. Gallagher

Court of Appeals of Texas·Decided February 14, 2023·No. 14-21-00332-CV·Published

Opinion

Dismissed and Memorandum Opinion filed February 14, 2023.

In The

Fourteenth Court of Appeals

NO. 14-21-00332-CV

SHAWN DEANE GRUSS, AS TRUSTEE OF THE GALLAGHER FAMILY TRUST, Appellant

V.

GARY W. GALLAGHER, Appellee

On Appeal from the Probate Court No. 3 Harris County, Texas

Trial Court Cause No. 435,263-402

MEMORANDUM OPINION

The trustee of a family trust seeks to appeal from a probate court’s partial summary judgment and from an order denying a cross-motion for summary judgment in a case filed by one of the trust beneficiaries against the trustee. In neither the judgment nor the order nor the two instruments construed together did the trial court actually dispose of all claims and all parties before the court or state with unmistakable clarity that the instrument is a final judgment. Though the

trustee asserts that this court has appellate jurisdiction under section 32.001(c) of the Estates Code, we conclude that we do not have appellate jurisdiction under this statute because in neither the judgment nor the order nor the two instruments construed together did the trial court dispose of all parties and all issues in a particular phase of the probate proceedings. We dismiss this appeal for lack of appellate jurisdiction.

I. FACTUAL AND PROCEDURAL BACKGROUND

Robert D. Gallagher died on October 8, 2014. Robert’s Last Will and Testament was admitted to probate. Articles V and VI of Robert’s will provided for the creation of the Gallagher Family Trust (the “Trust”). Appellee/plaintiff Gary W. Gallagher is Robert’s son and is one of the beneficiaries of the Trust. Robert’s wife, Maurita Gallagher, survived Robert and was named as the trustee of the Trust. Maurita passed away on August 25, 2015. Under Robert’s will, two of Robert’s friends were designated as successor trustees of the Trust. Both of them declined to serve as trustee. Appellant/defendant Shawn Deane Gruss, Robert’s daughter, was appointed successor trustee of the Trust.

Gary filed suit against Gruss and alleged that though the time was ripe for Gruss to distribute the funds in the Trust to Gary and the other beneficiaries, Gary had received no distribution from the Trust. Gary asserted that, upon information and belief, Gruss had made distributions from the Trust to herself and other beneficiaries, but that Gruss impermissibly refused to make a distribution to Gary. Gary alleged that Gruss refused to comply with her fiduciary obligations to Gary and that Gruss was deliberately, intentionally, and maliciously refusing to make a distribution to Gary. Gary claimed that Gruss was withholding Gary’s rightful distribution to spite him.

Gary asserted a claim against Gruss for breach of trust, contending that

Gruss’s refusal to distribute funds to Gary constituted a breach of trust. Gary cited the parts of Texas Property Code section 114.008(a) that allow a court to remedy a breach of trust by compelling a trustee to perform the trustee’s duty and by compelling the trustee to pay money. Gary asked the trial court to order Gruss to distribute to him “his 1/6 share of the [Trust]” pursuant to Texas Property Code section 114.008(a). Gary also asked the trial court for an order compelling Gruss to remedy her breach of trust by distributing the Trust funds to Gary immediately. Gary also sought to recover actual, consequential, and exemplary damages.

Gary requested the trial court to make declarations under Texas Civil Practice and Remedies Code section 37.005 that Gruss is obligated to distribute Trust funds to Gary and that Gruss’s failure to do so is a breach of trust. Gary sought to recover his costs and reasonable and necessary attorney’s fees under Texas Property Code section 114.064 and under Texas Civil Practice and Remedies Code section 37.009.

In Gruss’s answer, she asserted various defenses and requested reasonable attorney’s fees.

Gary filed a traditional summary-judgment motion. He alleged that Gruss’s failure to distribute his full 1/6 share to him was a breach of the trust agreement and a “breach of trust.” In his summary-judgment motion Gary sought a declaration pursuant to Texas Civil Practice and Remedies Code 37.005 that Gruss’s failure to distribute the Trust funds to Gary was a breach of trust. Gary also asserted that he was entitled as a matter of law to a declaration that he has a right to a distribution of $633,817.81, Gary’s 1/6 share, and an order compelling Gruss to promptly pay this amount to Gallagher. Gary also asked the trial court to rule as a matter of law that he is entitled to recover his costs and reasonable and necessary attorney’s fees under Texas Property Code section 114.064 and Texas

Civil Practice and Remedies Code section 37.009. Gary stated that after the trial court granted his summary-judgment motion, Gary would present evidence as to the amount of his reasonable and necessary attorney’s fees, an issue that Gary said was a fact question. Gary argued that he was entitled as a matter of law to summary judgment as to Gruss’s unclean-hands defense. Gary also asked for a declaration that he is entitled to be treated the same as all other co-beneficiaries of the Trust. Gruss filed a traditional and no-evidence motion for summary judgment. In her motion Gruss argued that she was entitled to summary judgment on her affirmative defense that the Trust is not subject to Gary’s claims because the Trust was not properly funded and is invalid as a matter of law. Gruss also asserted that there is no evidence of a valid trust, which Gruss asserted is an essential element of Gary’s breach-of-trust and declaratory-judgment claims. Gruss also sought to recover attorney’s fees.

On June 1, 2021, the trial court signed an order denying Gruss’s summary-

judgment motion (the “Order”). The trial court also signed a “Partial Summary Judgment,” in which the court granted in part Gary’s summary-judgment motion, without denying any part of the motion (the “Partial Judgment”). The trial court ordered that, pursuant to section 37.005 of the Texas Civil Practice and Remedies Code and section 114.008 of the Texas Property Code, Gary is entitled to “an equalizing distribution of trust funds consistent with those distributions previously made by [Gruss] to other Trust beneficiaries.” The trial court ordered Gruss to make this distribution within seven days of the date of the Partial Judgment. The trial court also ordered that Gary is entitled to recover “those costs and reasonable and necessary attorney’s fees as are equitable and just that were incurred by [Gary] in the prosecution of this action with such amount to be determined upon further application to the Court.” In another order signed on June 1, 2021, the trial court ordered that “the trial in this matter on those claims not the subject of this Court’s

Partial Summary Judgment, signed June 1, 2021, is CONTINUED until further notice of the Court.”

Gruss filed a notice of appeal from the Partial Judgment and the Order. The trial court signed an order in which the trial court (1) allowed Gruss to supersede the Partial Judgment by posting a supersedeas bond or making a cash deposit in the amount of $633,818 and (2) stayed the Partial Summary Judgment for seven days or until Gruss superseded the Partial Summary Judgment, whichever was earlier. Gruss superseded the Partial Judgment by making the cash deposit.

II. ISSUES AND ANALYSIS

Does this court have appellate jurisdiction?

Though no party has asserted that this court lacks appellate jurisdiction, we are obligated to review sua sponte issues affecting our appellate jurisdiction. See M.O. Dental Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004). Thus, we first address whether this court has appellate jurisdiction over this case.

A. Is there a final and appealable judgment under section 51.012 of the Civil Practice and Remedies Code?

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Shawn Deane Gruss, as Trustee of the Gallagher Family Trust v. Gary W. Gallagher, (Tex. Ct. App. 2023).

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