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Kinsel v. Lindsey

Supreme Court of Texas

May 26, 2017

Virginia O. Kinsel, as Attorney-in-Fact for J. Frank Kinsel, J. Frank Kinsel, Jr., Carole K. Edwards, and Catherine K. Collins, Petitioners and Cross-Respondents
v.
Jane O. Lindsey, Individually and as Co-Trustee of the Lesey B. Kinsel Trust, and Robert N. Oliver, Respondents and Cross-Petitioners, and Keith Branyon and Jackson Walker, LLP, Respondents

          Argued February 16, 2017

         On Petition for Review from the Court of Appeals for the Seventh District of Texas

          Justice Lehrmann did not participate in the decision.

          OPINION

          Jeffrey V. Brown Justice

         We are asked in this case to recognize tortious interference with an inheritance as a viable cause of action in Texas. Petitioners and cross-respondents, the Kinsels, argue we already did so more than sixty years ago. We disagree. Although some of our courts of appeals have recognized the tort, we have not. And because the Kinsels have an adequate remedy in this case-a constructive trust imposed on the disputed inheritance-we are not persuaded to consider it here. For that reason and others explained below, we affirm the court of appeals' judgment and remand the case to the trial court for further proceedings consistent with this opinion.

         I

         This case arises out of the sale of a family-owned ranch. Lesey Kinsel owned 60% of the ranch, and her step-children and step-grandchildren owned various shares of the other 40%. Lesey deeded her share of the ranch to her intervivos trust in 1996. Under the trust's terms, her 60% interest in the surface and minerals would pass to certain of her step-children and step-grandchildren, some of whom already owned interests in the ranch.

         Lesey's inheritance allocation changed over time. Under a third amendment to her trust executed in 2004, her 60% share would be split between J. Frank Kinsel, Jeff Kinsel, Carole Edwards, and Cathy Collins. Her estate-planning documents were silent as to what would happen if the ranch were sold during her lifetime. So by default, any ranch-sale proceeds would pass to the trust's residual beneficiary-Lesey's only niece, Jane Lindsey.

         Jeff, Carole, Cathy, and Virginia Kinsel, acting on behalf of the late J. Frank Kinsel (the Kinsels), would eventually sue Jane, Lesey's nephew Bob Oliver, attorney Keith Branyon, and his firm, Jackson Walker LLP, over their role in the sale of the ranch a month before Lesey died. The Kinsels argue they were misled by Jane, Bob, and Keith to believe Lesey was running out of money and needed to liquidate the ranch to cover the growing costs of her care. In reality, Lesey had around $1.4 million in marketable securities at her disposal. But if the ranch were sold and the Kinsels' inheritance adeemed, Jane would receive Lesey's share of the ranch-sale proceeds as the trust's residual beneficiary. The Kinsels who owned shares in the ranch argue they would not have agreed to sell if they did not believe it necessary to support Lesey.

         The Kinsels argue the scheme to co-opt their inheritance began in 2005 when, at age 92 and losing her eyesight, Lesey moved from her longtime home of Beaumont to an assisted-living facility in Fort Worth. Jane and Bob, Lesey's only living blood relatives, lived in Fort Worth, and the record shows Jane apparently was Lesey's primary caretaker outside of the 24-hour home care she received beginning in 2006. Jane and Bob also began helping Lesey with her finances; Jane wrote checks from Lesey's account to cover her expenses, and Bob began opening her mail and reading financial statements to her.

         In August 2006, Jane wrote to Floyd McSpadden, Lesey's longtime estate-planning attorney in Beaumont. The letter mostly covered housekeeping issues regarding Lesey's estate. But she also inquired "whether or not the [ranch] minerals are separate from the land in the case of [Lesey] willing her share of the ranch to some of the Kinsels." In a letter addressed to Lesey, McSpadden responded that the mineral and surface estates had not been severed. On January 24, 2007, Jane indicated in a letter to McSpadden that Lesey wished to separate the mineral estate in her share of the ranch and gift it equally to Jane and Bob. Jane advised McSpadden that Lesey was "thoroughly informed" and "requested [the changes] be implemented by you." If McSpadden had any questions, Jane wrote that he should "contact Lesey by phone."

         McSpadden drafted an updated will and a fourth amendment to Lesey's trust. Because Lesey now lived in Fort Worth, he recommended she retain a local attorney to handle their execution. Bob contacted his son-in-law, an attorney with Jackson Walker, who in turn referred Lesey to Keith, an estate-planning attorney in Jackson Walker's Fort Worth office. McSpadden sent the documents to Keith and, because Lesey could no longer read, instructed him to read them aloud to her.

         Jane and Bob drove Lesey to Keith's office on February 23, 2007, to execute the fourth amendment. Keith testified it was his first time to meet any of them. Jane and Bob waited in the lobby while Keith met with Lesey for an hour and a half. Keith testified he spent that time evaluating Lesey's mental capacity through conversation, reading the pertinent documents aloud to her, and ensuring she understood and desired the proposed changes. In a letter to McSpadden following execution of the fourth amendment, Keith wrote that Lesey "knew all of the people that she had chosen to benefit and she asserted over and over that she was comfortable with the terms."

         Sometime after Lesey moved to Fort Worth, various owners of the ranch broached the idea of selling. There does not appear to be any evidence that the idea originated with Jane, Bob, or Keith, none of whom owned an interest in the ranch. Paul Prince, a part-owner who was in charge of the ranch's upkeep, testified that he, Cathy, and Joe Bob Kinsel, Jr., another part-owner, initially decided to sell. Paul and Joe Bob are not parties to this case, but Cathy testified she only agreed to sell because Jane told her Lesey was running out of the money.

         Paul testified he then asked Jane to run the proposal to sell by Lesey. He had spoken with Jane about two months earlier, he testified, and heard her concerns over Lesey's growing expenses. Paul told Jane it was a "perfect time to sell the ranch." He testified that Jane called him back about a week later while she was with Lesey and said Lesey had agreed to sell the ranch. Paul testified he then spoke directly to Lesey on the phone and that she told him that although she was conflicted by her sentimental attachment to the ranch, she acknowledged she could no longer visit and it was time to sell.

         With Lesey's agreement, a majority of the ranch's ownership was prepared to sell. Paul ordered an appraisal of the ranch and secured a broker who in turn produced a buyer. Most of the co-owners readily agreed to the offer. With a sales contract Paul signed on the owners' behalf in place, Keith was again contacted in February 2008 to help execute the sale. Keith testified he could not recall who initially brought him into the transaction, but that someone delivered to him a copy of the sales contract and appraisal. His billing records reflect he met with Bob and Jane in February 2008 to review documents regarding the sale. Keith sent letters to all the ranch owners to confirm their respective interests, notify them of the offer, and gauge their desire to sell. In these letters, dated February 15, 2008, Keith stated:

I represent Lesey Kinsel and the trustee of her living trust with regard to [the ranch]. As you may know, Ms. Kinsel's living expenses, including the care she receives at her home, have increased substantially of late. As we have investigated the various possibilities available to her in raising some additional cash, she has made the decision that she would like to sell the referenced property in Atascosa County.

         Keith testified he then met with Lesey at her apartment on February 19, 2008, to discuss the ranch sale. Lesey told him she had grown weary of shouldering the ranch's expenses without help from the other owners, that she was physically unable to visit, and that the offer was too good to pass up.

         Keith testified he read the terms of the sales contract to her and that she understood them. He further testified he discussed with Lesey the tax consequences of selling during her lifetime as well as the other substantial assets at her disposal. But Lesey wanted to sell.

         Meanwhile, and despite earlier indications that the Kinsels were coalescing behind the sale, J. Frank Kinsel's family, which included Virginia, Jeff, and Carole, showed signs of holding out. In an e-mail to Virginia and Carole dated February 19, 2008, Jeff wrote that he had urged Keith to "consider putting any monies from [Lesey's] 60% in a separate trust" and that he doubted Virginia would be willing to sell J. Frank's interest "unless she feels that 'we' are protected." Carole responded that she had met with a lawyer who advised her that "we need to find out where the 60% will go and who will control the 60%." Cathy similarly testified that "we were all concerned that if the ranch were sold and everything was converted to cash, that that cash had to be separated between Jane Lindsey's inheritance and our inheritance instead of mingled."

         In early March 2008, Jeff visited Lesey at her apartment. He testified she was "scared to death she was running out of money" and "did not know what was going on." Jeff told Lesey that Keith would not speak with him about her affairs and drafted a letter for Lesey to sign authorizing Keith to discuss her estate planning with Jeff. The letter purportedly is signed by Lesey with just her initials, which, according to Jeff, "was all Lesey was able to sign at that time in her life."

         Keith testified that he had a phone conversation with Jeff in which Jeff expressed concern about what would happen with Lesey's share of the ranch-sale proceeds. According to Keith, Jeff "threatened to cause [J. Frank Kinsel] not to join in the sale unless I somehow caused Lesey to change her estate planning documents to protect the proceeds for he and his family." Keith testified he would consult with Lesey. But he reminded Jeff that the buyer was willing to purchase Lesey's 60% interest even if others were unwilling to sell.

          Keith testified he visited with Lesey the next day about her estate planning as it applied to the ranch-sale proceeds. Lesey said that Keith was not authorized to discuss her plans with Jeff or members of his family. She further told Keith she was "upset" with the Kinsels and that Jeff and his wife were visiting her "all the time, trying to make sure that she was going to leave them their portion of the proceeds." Keith testified Lesey gave him permission to discuss her estate planning only with Jane and Bob. Lesey also told him that she did not want to make any changes to her estate planning at that time.

         Virginia eventually agreed to the sale on J. Frank's behalf, and the deal closed in July 2008. Lesey's trust received $3, 056, 120.65 for Lesey's share, Cathy received $509, 067.96, and Virginia received $509, 279.44 for J. Frank's interest.[1] Shortly after the ranch sold, Lesey and Keith met to discuss another amendment to Lesey's trust. Keith testified he presented her with a proposed fifth amendment that would have devised the ranch-sale proceeds to the Kinsels in proportion to the trust's ranch-interest bequests under the fourth amendment. But Lesey rejected that draft, opting instead to leave Jeff and Carole $25, 000 in cash each. She made no specific bequest to Cathy because, as Keith recollected, "she had just received $509, 000 and she felt like Cathy . . . had received her interest." According to Keith, Lesey "was still bothered by all of the contacts, the visits, the phone calls that she received from the Kinsels during the process of the sale of the ranch." Keith prepared the fifth amendment as Lesey had instructed, which included deleting from the trust all references to the ranch. Lesey executed it on August 12, 2008. Keith testified he honored Lesey's request to not share news of the amendment with anyone else. She died ten days later.

         II

         The Kinsels sued Jane, Bob, Keith, and Jackson Walker, arguing they unduly influenced Lesey and that she lacked capacity to execute the fourth and fifth amendments to her trust or to sell her share of the ranch. They sought damages for tortious interference with their inheritances; statutory and common-law fraud; and conspiracy. The Kinsels also sought imposition of a ...


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