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Mayfield v. Peek

Court of Appeals of Texas, Eighth District, El Paso

February 28, 2017

LINDA MAYFIELD, Appellant,
v.
GARY BRUCE PEEK, EXECUTOR OF THE ESTATE OF DOROTHY PEEK, Appellee.

         Appeal from 271st District Court of Wise County, Texas (TC # CV12-04-254)

          Before McClure, C.J., Rodriguez, and Hughes, JJ.

          OPINION

          ANN CRAWFORD McCLURE, Chief Justice

         At its core, this case involves two siblings fighting over an inheritance from their parents. The two principal issues before us are not so much the merits of the dispute, but whether one sibling has standing to complain of the other's actions, and in what court this fight should take place. Appellant Linda Mayfield claimed in part that her brother, Appellee Gary Bruce Peek, (Bruce)[1] prevailed upon their mother to remove assets from a revocable trust at a time when their mother allegedly lacked the mental capacity to do so. Bruce convinced the district court below that Mayfield lacked standing to make that claim. He also claimed that another court should hear that sort of claim, because by the time of this suit, his mother had passed away and her will was in probate. We conclude that: (a) Mayfield has standing to challenge the trust transaction at issue; (b) the trial court was never presented with a proper basis establishing that another court had acquired dominant jurisdiction over the trust issue raised here; (c) the district court would have properly declined to hear matters exclusive to a guardianship proceeding or a will contest; and (d) that it was an abuse of discretion to summarily exclude all of the evidence pertinent to a pleaded cause of action (based on a perceived lack of subject matter jurisdiction) and then to make findings on the merits of that claim. We accordingly reverse in part the judgment below.

         FACTUAL SUMMARY

         Russell and Dorothy Peek were the parents of Mayfield and Bruce. During their lifetime, Russell and Dorothy set up the Peek Family Revocable Trust (2000), a revocable trust that would benefit Bruce, Mayfield, and several other relatives.[2] Several real properties and other assets were placed in the trust. The trust was to become irrevocable on the death of either Russell or Dorothy. Russell and Dorothy were trustees until January 2010 at which time Mayfield's daughter, Lannie Latshaw, and Bruce were appointed as trustees. Latshaw was asked to resign as trustee in October 2012.

         By the time Dorothy and Russell were in their nineties, the record reflects significant family discord. Bruce and Mayfield, though brother and sister, had not spoken to one another in thirty years. Several family members claimed that Dorothy and Bruce had restricted access to Russell, who at times was in an assisted living center, and at times lived in a house that Bruce had built right next to his own residence. For the time Russell was in the assisted living center, the facility excluded visits from most family members, and disallowed Russell access to a phone.[3] A locked gate restricts access to Bruce's property. Some family members called the police and adult protective services, questioning whether Russell was being held against his will. Conversely, Dorothy alleged that a disinherited relative had made death threats against her, and others were taking advantage of Russell's diminished mental capacity for financial gain.

         In 2011, Dorothy was appointed as guardian of Russell. After her death on November 20, 2012, Bruce was appointed Russell's guardian. Russell passed away on May 12, 2014.

         PROCEDURAL SUMMARY

         The suit before us was first filed on April 20, 2012, by Dorothy against her niece, Michael Belinda Presswood, and her granddaughter, Regina Dill Peek. After Dorothy passed away, Bruce was named independent executor to her estate and continued the lawsuit in both his representative and individual capacity. The last live petition, which added Mayfield as a defendant, asserted claims of libel, slander, and intentional infliction of emotional distress. These claims largely arose out of the defendants' alleged calls to the authorities expressing concern for how Russell was being treated by Dorothy, and later by Bruce.

         All of the defendants filed counterclaims against Bruce alleging three claims germane to this appeal, which we categorize as the Trust Claim, the Guardianship Claim, and the Will Claim:

• Bruce, as trustee of The Peek Family Revocable Living Trust (2000), violated his fiduciary duties to the trust's beneficiaries by using undue influence over Russell and Dorothy to amend and ultimately terminate the trust, to remove all other beneficiaries except for himself and to transfer all of the trust property to another trust. The suit alleges this as a violation of his duties as trustee (the 'Trust Claim').
• Mayfield asserts that Bruce and a non-party attorney applied to make Dorothy guardian of Russell knowing she was not qualified or capable, or alternatively, they learned that while she was guardian, and took advantage of the situation to take for themselves trust and estate assets. Mayfield also makes a similar claim against Bruce in his capacity as guardian of Russell's person (the 'Guardianship Claim').
• Bruce participated in a joint enterprise with a non-party attorney to use undue influence over Dorothy to change her will to disinherit Mayfield (the 'Will Claim').[4]

         Mayfield sought an accounting from the original trust, and the later trust that Bruce set up, along with restitution of financial gains to Bruce and return of any property removed. The suit also sought removal of Bruce as trustee, and appointment of a successor trustee and receiver to take possession of the trust assets.

         The case was set for a non-jury trial. On the first day of trial, Bruce filed a "Motion in Limine, Supplemental Motion to Strike and Motion for Proof." That motion first claimed that a contingent or remainder beneficiary of a revocable trust has no vested interest in the trust property, such that Mayfield lacked standing to complain of Dorothy's transfer of assets as the settlor of the trust. The motion secondarily claimed that Mayfield failed to properly notify all the beneficiaries of the proceeding, which acts as a bar under the Property Code. As the parties argued the merits of the motion, Bruce also claimed that the trust, guardianship, and will issues belonged in either the court that probated Dorothy's will, or the guardianship proceeding that had been set up for Russell.

         The trial court granted the motion with respect to the standing issue, and denied it as to the notice issue. As a result, the trial court consistently denied the admission of any evidence pertaining to the mental condition of Dorothy, and excluded evidence regarding the trust, including the trust document itself, and any specific trust transactions, including the alleged removal of assets from one trust and the creation of another. The trial court also disallowed a bill of exceptions by Mayfield as to the excluded questions on these topics.[5]

         At the conclusion of the trial, the court denied the relief that both parties had sought. It ruled against Bruce's libel, slander, and intentional infliction claims, and denied all relief to Mayfield. The trial court issued findings of fact and conclusion of law that outline each of Mayfield's pleaded theories, set out the elements of each claim, and then made findings of fact and conclusions of law for each. As to Mayfield's Trust Claim, the trial court found:

Counsel for Defendants and Mayfield admitted the Peek Family Revocable Living Trust (2000) was a revocable trust at the time of any transfer complained of by Mayfield and Defendants.
Counsel for Defendants and Mayfield admitted that any transfers from Peek Family Revocable Living Trust (2000) occurring before Dorothy Peek's death were made by the Settlor, Dorothy Peek, to herself.
Any influence by Bruce Peek, if any, was not of a nature that would overpower or subvert the wills of Russell and Dorothy Peek, as Settlors, to make independent decisions to amend or transfer assets from the Peek Family Revocable Living Trust (2000).
Any influence by Bruce Peek, if any, on Russell and Dorothy Peek was not so great that the decision to amend or transfer assets from the Peek Family Revocable Living Trust (2000) would not have occurred but for such influence, if any.
Bruce Peek did not act in bad faith or violate any duties owed to the beneficiaries and pursued the best interests of the trust's beneficiaries during the period when any transfers occurred.

         Based on these fact findings, the trial court concluded that Mayfield had no interest in the trust at the time of any transfer and thus no standing to contest any transfer or transaction by Dorothy.

With respect to the Guardianship Claim, the trial court found:
A court of competent jurisdiction determined Dorothy Peek was a qualified guardian and issued an order appointing her as Guardian in that capacity and the Court finds that such appointment of Dorothy Peek as Guardian appears to be regular in all respects.
Counsel for Defendants and Mayfield admitted that the Peek Family Revocable Living Trust (2000) was a revocable trust, at the time of any alleged transfer or attempted transfer of assets from the trust as complained by Mayfield and Defendants.
Any influence of Bruce Peek or Dorothy Peek, if any, or Russell Peek, if any, was not of a nature that such influence would overpower or subvert their will to make independent decisions in relation to the trust or any other matters.
Any influence of Bruce Peek on Dorothy Peek or Russell Peek, if any, was not so great that the decision to amend or make transfers from the Trust would not have occurred but for such influence.

         Based on these fact findings, the trial court concluded as a matter of law that Mayfield had no vested interest and thus no standing to complain of any transfer by Dorothy. The trial court also concluded that Bruce did not exercise undue influence on Dorothy or Russell in relation to either of them in any decision to transfer assets from the Peek Family Revocable Living Trust (2000).

As to the Will Claim, the trial court found:
Dorothy Peek's Will was admitted to probate in a court of competent jurisdiction by an order that appears regular in all respects.
Any influence of Bruce Peek, if any, was not so excessive as to overpower or subvert the mind of Dorothy Peek to make an independent decision to change her prior Will or execute her final Will.
Any influence of Bruce Peek, if any, was not so great that Dorothy Peek's decision to execute her final Will would not have occurred but for such influence. Based on these fact-findings, the trial court concluded that Mayfield 'failed to prove undue influence by Bruce Peek or any other party over any alleged changes that Dorothy Peek may have made in her will.'

         ISSUES ...


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