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Yost v. Fails

Court of Appeals of Texas, First District

June 13, 2017

BERNICE YOST, SPECIAL CONSERVATOR FOR GEORGIA COX, Appellant
v.
JAMES FAILS, Appellee

         On Appeal from the Probate Court No. 3 Harris County, Texas Trial Court Case No. 412, 338

          Panel consists of Justices Massengale, Brown, and Huddle.

          OPINION

          Rebeca Huddle Justice.

         A jury found that Sara McGowan signed a 2011 will as a result of undue influence and that James Fails, her nephew and the primary beneficiary of the 2011 will, lacked good faith and just cause when he sought to probate the will. The jury also found that Fails tortiously interfered with the inheritance rights of McGowan's sister, Georgia Cox, who was the beneficiary under McGowan's earlier will, and awarded damages in the amount of $525, 000. But the probate court granted Fails's motion for judgment notwithstanding the verdict and admitted the 2011 will to probate. Bernice Yost, as special conservator for Cox, appeals, contending that the probate court erred by rendering a judgment notwithstanding the jury's verdict because all of the jury's findings are supported by sufficient evidence.

         We agree with Yost, in part, and conclude that the probate court erred in setting aside the jury's findings of undue influence and lack of good faith and just cause. With respect to Cox's tortious interference with inheritance claim, however, we conclude that insufficient evidence supports the jury's award of $525, 000. Accordingly, we (1) vacate the probate court's order admitting the 2011 will to probate; (2) affirm the portion of the judgment awarding Yost the attorney's fees she incurred in the will contest; (3) reverse the remainder of the trial court's judgment; (4) reinstate the jury's findings that McGowan signed her 2011 will as a result of undue influence and that Fails did not act in good faith and with just cause in trying to probate the 2011 will; and (5) remand this cause to the probate court with instructions to conduct any further necessary probate proceedings and for further proceedings consistent with this opinion.

         Background

         Sara McGowan was in her nineties and lived alone when she fell and had to be hospitalized. In January 2011, after her discharge and brief convalescence at a rehabilitation center, she moved in with her nephew, James Fails. McGowan granted Fails power of attorney, and he began managing her finances and using McGowan's money to enrich himself. Ten months later, in November 2011, McGowan signed a new will naming Fails her primary beneficiary. McGowan died in hospice care shortly thereafter, in March 2012.

         Fails applied to probate McGowan's 2011 will, but McGowan's niece, Bernice Yost, opposed the application on behalf of her mother, Georgia Cox, who is McGowan's sister. As special conservator for Cox, Yost alleged that the 2011 will was invalid because McGowan signed it as a result of Fails's undue influence. Yost filed a cross-application to probate McGowan's 1979 will, under which Cox was the sole beneficiary. Yost also alleged that Fails tortiously interfered with Cox's inheritance rights.

         Both the will contest and the tortious interference claim were tried to a jury, which found that:

• McGowan signed the 2011 will as a result of undue influence;
• Fails did not act in good faith and with just cause in seeking to have the 2011 will admitted to probate;
• Yost acted in good faith and with just cause in seeking to have McGowan's 1979 will admitted to probate; and
• Fails tortiously interfered with Cox's inheritance rights.

         The jury awarded Yost $133, 000 in attorney's fees in connection with the will contest as well as conditional fees for any appeal. It awarded $525, 000 in damages for tortious interference with Cox's inheritance rights.

         Fails moved to disregard the jury's findings regarding undue influence, his lack of good faith and just cause, and tortious interference. See Tex. R. Civ. P. 301. The probate court granted Fails's motion and entered judgment denying Yost any relief on her claims of undue influence and tortious interference with inheritance. It also admitted the 2011 will to probate.

         On appeal, Yost challenges the judgment notwithstanding the verdict. Because we are called upon to evaluate the legal sufficiency of the evidence supporting the jury's findings, we begin by summarizing the evidence at trial.

         McGowan becomes dependent on Fails

         Fails testified that he lived with McGowan for part of his childhood, after his mother passed away. He testified that they kept in touch over the years and that he visited her in the hospital after she fell and arranged her subsequent stay at a rehabilitation center. Fails testified that McGowan moved in with him in January 2011 at his suggestion. He said McGowan did not want to return to her home because she already had fallen there twice, and he did not know of anyone else who offered to take in McGowan.

         Other family members testified and disputed Fails's claim that he had a close relationship with McGowan. McGowan's cousin, Elizabeth Moore, testified that she asked McGowan whom to contact about her fall and hospitalization, and McGowan did not want Fails informed. Indeed, Fails testified that he only learned of McGowan's fall by inadvertently calling Yost.

         McGowan was frail and in ill health when she moved in with Fails in early 2011. She had cataracts, a colostomy bag, and hearing poor enough to require hearing aids. McGowan could not drive, cook, bathe, or dress herself, and she used a wheelchair or walker to get around. Fails described her as "totally unable to physically attend to her own needs" from the time that she came to live with him until her death. Yost agreed that, after her late 2011 hospitalization, McGowan "was not able to live alone" and was totally dependent on Fails.

         Moore, her daughter Darlene Hardin, and Yost each testified that they were close to McGowan and remained in contact with her after she moved in with Fails. However, Hardin said that it was not easy to arrange to see McGowan while she lived with Fails. Hardin also testified that McGowan spoke more freely on her cell phone than on the home phone, but McGowan's cell phone service was discontinued at some point. After that, Hardin testified that when she called McGowan it seemed like "she couldn't talk." Yost testified that she spoke with McGowan regularly before her fall, but the frequency of their calls decreased after McGowan moved in with Fails. According to Yost, McGowan became "reserved, and she didn't have much to say on the phone."

         McGowan grants Fails power of attorney and Fails depletes McGowan's assets

         It is undisputed that McGowan granted Fails a power of attorney shortly after she moved in with him. But there was conflicting testimony about how that came to be. Fails testified that McGowan told him to have the document prepared. But Hardin testified that McGowan did not want Fails to control her finances, and both Hardin and Moore testified that Fails told McGowan that executing a power of attorney in his favor was a condition of her coming to live with him.

         It is undisputed that, once the power of attorney was executed, Fails relied on it to transfer significant sums out of McGowan's accounts. And Fails transferred some of McGowan's money to his own checking account and accounts belonging to his girlfriend's grandchildren.

         For example, in January 2011, when McGowan moved in with Fails, Omni Account 9951, for which McGowan and Moore were joint tenants with survivorship rights, held $380, 000. Within three months, Fails transferred $250, 000 from this account to a new account, Chase Account 5339, which was in McGowan's name with Fails as an additional signatory in his capacity as the holder of her power of attorney, and another $100, 000 from the Omni Account 9951 into Chase Bank Account 0374.

         Fails testified that he made these transfers at McGowan's request after some jewelry disappeared from her home. He explained that Moore was the only other person with keys to McGowan's home and that McGowan wanted the funds in her joint account with Moore removed to safeguard them from theft.

         Despite this purported effort to safeguard McGowan's money, Chase Account 5339 was depleted. Bank records showed that in February and March 2012-just before McGowan's death-Fails transferred over $250, 000 from Chase Account 5339 to his own personal checking account. Two days after McGowan's death, he transferred the remaining balance-over $50, 000-to two trust accounts for the grandchildren of his girlfriend, Barbara Dunlavy. Fails claimed that McGowan had instructed him to fund Dunlavy's grandchildren's accounts, but he could not explain why he moved more than $250, 000 from Chase Account 5339 into his personal checking account.

         The story of McGowan's Chase Account 0374 is similar. When Fails became a signatory in March 2011, the account's balance exceeded $60, 000. Later, significant additional funds, including the $100, 000 transfer from Omni Account 9951 mentioned above, and another $60, 000 from McGowan's accounts at Smart Financial Credit Union, were transferred into Chase Account 0374. But just days after McGowan's death, Chase Account 0374 held less than $7, 000. The account ...


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