Appeal from the Probate Court No. 2 Harris County, Texas
Trial Court Cause No. 137, 506-403
consists of Chief Justice Frost and Justices Christopher and
dispute between siblings concerning the administration of
their mother's testamentary trust, a sister appeals trial
court rulings (1) removing her as trustee, (2) appointing a
receiver, (3) approving the receiver's application for
approval of a settlement agreement with the sister's
brother, and (4) denying the sister's motion to continue
the hearing on the receiver's application. We conclude
that the statutory probate court's orders are not void
for lack of jurisdiction, and that the court did not abuse
its discretion in approving the settlement agreement or in
denying the motion for a continuance. We accordingly affirm
the trial court's judgment.
Pillot Lee Barnhart died in 1975, and under the terms of her
will, most of her estate passed into a testamentary trust
("the Trust"). Barnhart's children Ronald E.
Lee Jr. ("Ronald") and Susan Camille Lee
("Susan") are beneficiaries of the Trust, as are
Ronald's daughter Katherine Lee Stacy ("Stacy")
and Susan's daughter Susan Gibson ("Gibson").
The trustee is required to make quarterly distributions of
one-sixth of the Trust's current net income to Ronald and
one-sixth to Susan. If this amount, together with funds
available from other sources, is insufficient to provide for
either Ronald's or Susan's health, maintenance, and
support, then the Trust must distribute additional amounts to
that person from the remaining two-thirds of the Trust's
current net income. The remainder of the Trust's current
net income must be distributed at least semi-annually to
Stacy and Gibson. On the death of Ronald and Susan, the
remainder of the Trust estate is to be transferred to new,
separate trusts for Stacy and Gibson.
First Lawsuit: Susan's Suit Against Ronald
years after Barnhart's death, Ronald, the executor of his
mother's estate and original trustee of the Trust, had
made no distributions and had not responded to Susan's
repeated demands for an accounting. Susan, individually and
on behalf of the Trust, sued Ronald in a statutory probate
court for breach of fiduciary duty and asked the trial court
to remove him as executor and as trustee.
jury found that Ronald breached his fiduciary duties to the
Trust by expending large amounts on a later-abandoned real
estate development project, unreasonable office expenses, and
excessive executor's fees. The trial court reduced the
amount of the damages assessed by the jury for excessive fees
and declined to remove Ronald as executor or trustee. The
parties agreed that each side's reasonable and necessary
attorney's fees were $1.5 million for attorney's fees
through trial, an additional $300, 000 in the event of an
appeal to an intermediate appellate court, and a further
$100, 000 in the event of an appeal to the Texas Supreme
Court. The trial court ordered the Trust to pay for each
side's attorney's fees.
appealed. See Lee v. Lee, 47 S.W.3d 767 (Tex.
App.-Houston [14th Dist.] 2001, pet. denied) (corr. op. on
reh'g) ("Lee I"). We concluded that
the trial court erred in reducing the damages assessed by the
jury; in failing to remove Ronald as trustee; and in refusing
to require Ronald to reimburse the Trust for Susan's
attorney's fees. See id. at 801. Although Ronald
had paid the judgment rendered by the trial court, the
decision in Lee I left Ronald owing the Trust-of
which Susan was now the trustee-more than $1.5 million as
reimbursement for his excessive executor's fees and $1.9
million as reimbursement for Susan's attorney's fees.
The parties agree that as of February 28, 2002, pre-and
post-judgment interest brought this amount to $6, 128,
Lawsuit: Ronald's Suit Against Susan
years after Susan became trustee, she too had failed to make
any distributions to Ronald or his daughter; however, there
is evidence that Susan made distributions to herself and her
own daughter. In the summer of 2014, Ronald sued and
requested a Trust accounting so he could calculate the extent
to which his outstanding debt to the Trust was offset by the
Trust's withholding of the required distributions to him.
Susan refused to respond. Six months later, Ronald received
notice of the impending foreclosure of one of the Trust's
real properties for nonpayment of taxes. Susan allowed a
default judgment to be taken against the Trust, but redeemed
the property before it was sold.
sued Susan, individually and in her capacity as trustee, in
the same statutory probate court in which the earlier case
was tried. He asserted claims for breach of fiduciary duty,
violations of the Trust's terms and of the Texas Trust
Code, and asked for an accounting, Susan's removal as
trustee, and attorney's fees. Stacy intervened in the
action, seeking the same relief on the same grounds.
finding that Susan had breached the terms of the Trust and of
the Texas Trust Code, and that the Trust was at risk of
further imminent harm from Susan's failure to pay taxes
on Trust real property, the trial court removed Susan as
trustee on June 18, 2015 and appointed Legacy Trust Company,
N.A. ("Legacy") as the Trust's receiver. The
trial court directed Legacy to, among other things, pay
Ronald's attorney's fees; "[c]ollect,
compromise, or settle all debts owed to the Trust";
"[p]rosecute, defend, and/or settle all legal
proceedings . . . brought by or against the Trustee of the
Trust"; and "[i]nstitute such legal proceedings as
the Receiver deems necessary or advisable to obtain
constructive or actual possession of assets of the Trust or
to recover damages suffered by the Trust." The trial
court also granted the receiver "discretion not to
pursue litigation against [Susan] that is undertaken by
beneficiaries of the Trust for the benefit of the
Trust." The trial court ordered Susan to provide to
Legacy, within seven days, copies of all records in her
possession, custody, and control sufficient to identify (1)
all real and personal property owned by the Trust, or by
Susan as trustee, at any time while Susan was trustee; and
(2) all of the Trust's distributions and expenditures
during that time. Susan did none of these things.
Susan was removed as trustee, Ronald paid Legacy $8 million
toward his debt to the Trust and asked to negotiate a
settlement. Legacy informed Susan's attorney Thomas Zabel
that it was negotiating a settlement with Ronald. Legacy also
attempted to contact Susan directly by phone, email, letter,
and finally by having a Legacy employee fly with Zabel to
Florida, where Susan resides, but Susan refused to respond.
months of negotiation, Legacy and Ronald reached a settlement
agreement and Legacy filed an application for the trial
court's approval. Susan filed a response and objections
to the application. A week before the hearing on the
application, Susan moved for a continuance of at least ninety
days to conduct discovery. At the hearing on both matters,
the trial court stated that it would hear the description of
the settlement first, and that Susan could move for a
continuance afterward if she still believed discovery was
president and chief executive officer Edward "Ned"
Naumes testified in support of the settlement agreement, as
did Ronald. At the close of the evidence on the application
for approval of the settlement, the parties presented their
arguments on Susan's motion for a continuance to perform
discovery. The trial court denied the motion, approved the
settlement, and informed counsel that the court would hold
another hearing on the application in two weeks if Susan
moved for a rehearing. Susan did not do so.
days after Susan filed her notice of appeal, Legacy and
Ronald closed on the settlement agreement. In accordance with
the agreement's terms, Ronald deeded his interest in
certain property to Legacy, in its capacity as the
Trust's receiver. Ronald also executed and delivered a
promissory note and other agreements and made the first
payment toward the cash portion of the settlement. In
exchange for this and other consideration, Legacy sold to
Ronald the Trust's judgment against him.
first issue, Susan asserts that the statutory probate court
could exercise jurisdiction over the claims and requests
raised in this case only if there were a pending probate
proceeding. She asserts that there was no pending probate
proceeding when the trial court removed her as trustee and
appointed a receiver in June 2015, or when the trial court
approved Legacy's settlement agreement with Ronald in
March 2016. She therefore reasons that these rulings are void
for want of jurisdiction. In her second issue, Susan contends
that if the trial court had jurisdiction, then the trial
court abused its discretion in approving the settlement
agreement. She argues in her third issue that the trial court
abused its discretion in denying her motion to continue the
hearing on Legacy's application for approval of the
This Court's Jurisdiction
judgment or order by a court without the power or
jurisdiction to render it is void. See Urbish v. 127th
Judicial Dist. Court, 708 S.W.2d 429, 431 (Tex. 1986)
(orig. proceeding). All courts accordingly are obliged
"to ascertain that subject matter jurisdiction exists
regardless of whether the parties have questioned it."
City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex.
2013) (per curiam) (quoting In re United Servs. Auto.
Ass'n, 307 S.W.3d 299, 306 (Tex. 2010) (orig.
proceeding)). The requirement that a court must determine
whether it has subject-matter jurisdiction applies to
appellate courts just as it does to trial courts. See
Pidgeon v. Turner, No. 15-0688, -S.W.3d-, 2017 WL
2829350, *6 (Tex. June 30, 2017); Thai Xuan Vill. Condo.
Ass'n, Inc. v. Hien Luu, No. 14-15-00873-CV, 2016 WL
6887344, *2 (Tex. App.-Houston [14th Dist.] Nov. 22, 2016, no
pet.) (mem. op.). Thus, before we can reach the merits of the
trial court's challenged rulings, we first must determine
whether we have jurisdiction to do so.
Finality of the Trial Court's Order Approving the
of Susan's first issue, she challenges the trial
court's March 2, 2016 order approving the settlement-or
more precisely, Legacy's sale of the judgment against
Ronald-both on the merits and on the ground that the trial
court lacked jurisdiction over the case. We have appellate
jurisdiction only over final judgments and over statutorily
authorized interlocutory appeals. See Ogletree v.
Matthews, 262 S.W.3d 316, 318 n.1 (Tex. 2007). This is
not a statutorily authorized interlocutory appeal, nor do the
parties contend otherwise. We therefore lack jurisdiction to
review the March 2, 2016 order unless it is a final order.
there is only one final judgment in a case. See Ventling
v. Johnson, 466 S.W.3d 143, 149 (Tex. 2015) (citing
Tex.R.Civ.P. 301). As a rule, a judgment must dispose of all
legal issues between or among all parties to be a final
judgment. See Jack B. Anglin Co. v. Tipps, 842
S.W.3d 266, 272 (Tex. 1992) (orig. proceeding),
superseded by statute on other grounds as stated in In re
Santander Consumer USA, Inc., 445 S.W.3d 216, 218 (Tex.
App.-Houston [1st Dist.] 2013, orig. proceeding). Because
Ronald's and Stacy's claims against Susan remain
pending, the trial court's order approving the settlement
of the Trust's judgment against Ronald does not
constitute a final order by this definition. There are,
however, exceptions to the general rule that a final,
appealable judgment must dispose of all issues and all
Texas Supreme Court held in Huston v. F.D.I.C.,
"a trial court's order that resolves a discrete
issue in connection with any receivership has the same force
and effect as any other final adjudication of a court, and
thus, is appealable." 800 S.W.2d 845, 847 (Tex. 1990)
(op. on reh'g). Because the trial court's order
approving the receiver's sale to Ronald of the
Trust's judgment against him resolved this discrete
issue, the order is a final, appealable judgment. See
id. at 848 (discussing the policy reasons for concluding
that a trial court's approval and confirmation of a
receiver's sale of property is a final appealable
remainder of Susan's first issue, she argues that the
trial court lacked jurisdiction to render its June 2015 order
removing her as trustee and appointing a receiver. Ronald
states that Susan's attempted appeal of that ruling is
untimely, and thus, we lack jurisdiction to review
See Gibson v. Cuellar, 440 S.W.3d 150, 155 (Tex.
App.-Houston [14th Dist.] 2013, no pet.). However,
Susan's only complaint about the June 2015 order is that
the trial court lacks jurisdiction over the entire case,
which is the same jurisdictional argument she makes in her
timely appeal of the trial court's March 2016 order. If
Susan is correct and the trial court lacked jurisdiction over
the case, then all of the trial court's actions are void.
Thus, if we can reach Susan's argument that the March
2016 order is void for lack of jurisdiction, then our
disposition of that argument applies equally to the trial
court's June 2015 order. First, however, we must address
Ronald's and Legacy's remaining challenges to our own
and Legacy next contend that we lack subject-matter
jurisdiction to review the order approving the settlement
because the issue was rendered moot when the settlement
closed. See Matthews ex. rel. M.M. v. Kountze Indep. Sch.
Dist., 484 S.W.3d 416, 418 (Tex. 2016) ("The
mootness doctrine applies to cases in which a justiciable
controversy exists between the parties at the time the case
arose, but the live controversy ceases because of subsequent
events."); Kessling v. Friendswood Indep. Sch.
Dist., 302 S.W.3d 373, 384 n.9 (Tex. App.-Houston [14th
Dist.] 2009, pet. denied) (explaining that courts lack
subject-matter jurisdiction over a moot claim). Ronald
further contends that because Susan's appeal of the order
approving the settlement is moot, her challenge to the trial
court's denial of her motion to continue the hearing on
the application for approval similarly is moot.
to Ronald, Susan's appeal of the order approving the
settlement became moot when the settlement agreement closed
because he conveyed to the Trust his interests in two
properties, one of which has been leased to a third party.
Ronald also signed a promissory note and made the first
payment of the cash portion of the settlement. Finally, the
receiver filed a satisfaction of judgment. These facts,
however, do not indicate that the appeal is
appeal is rendered moot when there ceases to be a live
controversy between the parties such that appellate relief
would be futile. See Marshall v. Hous. Auth. of City of
San Antonio, 198 S.W.3d 782, 787 (Tex. 2006). The
conveyance of property can moot an appeal. For example, in
Mitchell v. Turbine Resources Unlimited, Inc., No.
14-15-00417-CV, -S.W.3d-, 2017 WL 1181228, at *5 (Tex.
App.-Houston [14th Dist.] Mar. 30, 2017, pet. filed), the
appellant sought reversal of the trial court's order
authorizing a receiver to sell vehicles in which the
appellant claimed an ownership interest. The appeal became
moot when the appellant herself sold the vehicles and thereby
eliminated her claim that she owned them. See id.
the facts in Mitchell, however, the parties in this
case continue to have a live controversy for which appellate
relief potentially is available. The promissory note can be
rescinded; money paid can be refunded; and a
"satisfaction of judgment" can be set aside.
Cf. Brown v. Enter. Recovery Sys., Inc., No.
02-11-00436-CV, 2013 WL 4506582, *1 (Tex. App.-Fort Worth
Aug. 22, 2013, pet. denied) (mem. op.) (reversing in part and
remanding, despite the filing of a notice of satisfaction of
judgment). As for the conveyance of real property, the
settlement resulted in conveyances only from Ronald to
Legacy, in its capacity as the Trust's receiver, and if
Susan should prevail, these transactions can be reversed.
Although Ronald implies that the property was leased after he
conveyed it, the record shows that the opposite is true: the
lease was effective on July 1, 2015, nearly nine months
before Ronald conveyed the property.
the evidence before us does not indicate that anything has
been done that cannot be undone, or that the parties'
dispute about the settlement has ceased to be a live
controversy, we conclude that Susan's appeal of the order
approving the settlement is not moot.
Denial of Susan's Motion for a Continuance
addition to asserting the mootness argument addressed above,
Ronald contends that we lack jurisdiction to review the
denial of Susan's motion to continue the hearing on
Legacy's application for approval of the settlement
agreement because Susan (1) failed to reduce the trial
court's ruling to writing, and (2) failed to list the
denial of her motion for a continuance in her notice of
Susan's Failure to Reduce the Trial Court's Ruling to
contends that we lack jurisdiction to address this issue
because Susan did not have the denial reduced to a written
order, and he asserts that "[c]ourts dismiss for lack of
jurisdiction appeals of oral orders." In support of this
position, Ronald cites Archer v. Tunnell, No.
05-15-00459-CV, 2016 WL 519632, at *3 (Tex. App.-Dallas Feb.
9, 2016, no pet.) (mem. op.). We are not bound by
Archer, but even if we were, we would consider
Ronald's reliance on Archer misplaced.
Archer, the Fifth Court of Appeals held that it
lacked jurisdiction to review the denial of a
summary-judgment motion and a motion to dismiss or abate.
See id. at *2. The trial court orally denied one of
the appellant's summary-judgment grounds, but did not
rule, orally or in writing, on the appellant's other
summary-judgment grounds or the motion to dismiss or abate.
See id. Our sister court held that it lacked
jurisdiction to review the trial court's alleged denial
of the summary-judgment motion and the motion to dismiss or
abate because "an interlocutory appeal may be perfected
only from a written order, not an oral ruling."
Id. at *3.
not decide whether we agree with the Archer
court's reasoning, because the facts in this case are
distinguishable. Here, the trial court announced on the
record that it denied Susan's motion to continue the
hearing on Legacy's application for approval of the
settlement. The ruling was not required to be reduced to
writing; the oral pronouncement was sufficient. See Dunn
v. Dunn, 439 S.W.2d 830, 832 (Tex. 1969); see
also Tex. R. Civ. P. 306a(2) ("Judges, attorneys
and clerks are directed to use their best efforts to
cause all judgments, decisions and orders of any kind to be
reduced to writing and signed by the trial judge with the
date of signing stated therein." (emphasis added)). The
interlocutory ruling denying Susan's motion for
continuance was merged into the written final judgment
approving the settlement. See Roccaforte v. Jefferson
County, 341 S.W.3d 919, 924 (Tex. 2011) ("The final
judgment necessarily replaced the interlocutory order, which
merged into the judgment . . . ."); In re
Newsome, Nos. 14-12-01083-CV and 14-12-01084-CV, 2012 WL
6163124, at *1 (Tex. App.-Houston [14th Dist.] Dec. 11, 2012,
orig. proceeding) (per curiam) (mem. op.) ("An
interlocutory order is appealable when it has merged into a
subsequent final, appealable order.").
Susan's Failure to List the Denial of the Motion for
Continuance in Her Notice of Appeal
also asserts that we lack jurisdiction to review the denial
of Susan's motion for continuance because it is not
listed in her notice of appeal. This argument is contrary to
the Texas Rules of Appellate Procedure and to binding
precedent from both the Texas Supreme Court and our own
is not required to describe in a notice of appeal each
interlocutory ruling to be challenged in the appellate court,
but need only "state the date of the judgment or order
appealed from." See Tex. R. App. P. 25.1(d)(2);
see also Perry v. Cohen, 272 S.W.3d 585, 587 (Tex.
2008) ("We initially note that the shareholders were not
required to state in their notice of appeal that they were
challenging the interlocutory order granting special
exceptions. They were required only to state the date of the
judgment or order appealed from-in this instance the order
dismissing their suit."); Valls v. Johanson &
Fairless, L.L.P., 314 S.W.3d 624, 631 n.7 (Tex.
App.-Houston [14th Dist.] 2010, no pet.) ("A notice of
appeal need not identify every adverse interlocutory ruling
the appellant intends to challenge; instead, the notice must
state only the date of the judgment or order from which he
appeals-in this case, the order granting summary
Susan complied with Texas Rule of Appellate Procedure
25.1(d)(2) by stating in her notice of appeal her intent to
appeal the trial court's final order signed on March 2,
2016, she invoked our jurisdiction not only to review that
order but also to address interlocutory rulings that were
merged into it.
we have jurisdiction to consider Susan's appeal of the
trial court's written order granting Legacy's
application for approval of the settlement agreement and the
trial court's oral ruling denying Susan's motion for
a continuance of the hearing on that application. We now turn
to Susan's first issue, in which she argues that the
statutory probate court's ...