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In re Estate of Larson

Court of Appeals of Texas, Fourteenth District

December 7, 2017

IN THE ESTATE OF MARY E. LARSON, DECEASED

         On Appeal from the Probate Court Galveston County, Texas Trial Court Cause No. PR-0075669

          Panel consists of Justices Boyce, Jamison, and Brown.

          OPINION

          Martha Hill Jamison Justice.

         Debbie Ratz, Gwen Patterson, and Wendy Bruney (the "Daughters"), are beneficiaries under the will of their mother, Mary E. Larson. In this appeal from probate proceedings, they challenge the trial court's orders approving the payment out of Mary's probate estate of certain expenses and attorney's fees. The expenses at issue were requested by appellee Robert Larson, as Independent Executor of the Estate of George N. Larson, Jr. (Mary's now-deceased husband) (we will refer to both Robert and George as the "Executor"). The attorney's fees were requested by two lawyers-appellees Catherine N. Wylie and William T. Powell (collectively, the "Lawyers")-who represented the Executor in a prior guardianship proceeding concerning Mary. Mary died about two months after the guardianship was established. George died during the pendency of this case.

         Among their arguments on appeal, the Daughters contend that the Executor failed to timely contest the rejection of the expenses claim by Mary's probate administrator and that the Probate Court lacked authority to order Mary's probate estate to pay the Lawyers' fees incurred in the earlier guardianship proceeding. Because the trial court erred in ordering payment of these expenses and fees from the probate estate, we reverse the trial court's orders and render a take nothing judgment on these claims.

         Background

         In 2013, Mary Larson was 86 years old, in deteriorating physical and cognitive health, and living with one of her daughters, Debbie Ratz.[1] Mary's husband, who also was elderly, was then physically unable to care for Mary.

         On November 12, 2013, the Daughters filed an Application for Guardianship, identifying Mary as the proposed ward and seeking to have Ratz appointed as guardian. The application was assigned to Harris County Probate Court No. 3 (hereinafter, the "Guardianship Court"). The Executor filed an objection to the Daughters' application as well as a cross-application requesting to be named Mary's guardian or, in the alternative, for a neutral third party to be named guardian. The parties reached a mediated settlement agreement, which the Guardianship Court approved on October 14, 2014. Pursuant to the agreement, the parties filed an agreed order to appoint Howard Reiner as Mary's permanent guardian. The parties further agreed, among other things, that all marital property (with certain exceptions not relevant here) was community property and the parties' counsel were to "file their applications for attorney fees with the Court for auditing and approval without objection from the opposing counsel."[2] The parties also agreed to mutual releases of all claims between them related to the guardianship.

         Mary died on December 11, 2014, while living in Galveston County, [3] and the Guardianship Court closed the guardianship estate on February 20, 2015.[4] Prior to closure, Reiner, Mary's attorney-ad-litem, and the Daughters' attorney submitted applications for fees that were approved by the Guardianship Court.[5] The Lawyers, who had represented George in the guardianship proceedings, did not file applications for fees with the Guardianship Court, and no fees were approved on their behalf.

         Mary's will was submitted to probate in the Galveston County Probate Court (the "Probate Court"), which appointed Andrew Lewis as the dependent administrator. Reiner, Mary's attorney-ad-litem in the guardianship case, and the attorney representing the Daughters in the guardianship case submitted claims to Lewis. As mentioned, these claims previously had been approved by the Guardianship Court, and Lewis therefore approved payment of the claims from Mary's probate estate.[6] The Lawyers also submitted claims to Lewis, requesting payment of their fees, even though their fees had neither been submitted to nor approved by the Guardianship Court. An additional claim was submitted to Lewis on behalf of the Executor, requesting payment of other expenses, as will be explained below. Each of these claims indicates that it was filed pursuant to chapter 355 of the Texas Estates Code, which governs the Presentment and Payment of Claims made against probate estates. Tex. Est. Code §§ 355.001-.203.

         In the claim for Wylie's fees, she explains that she represented the Executor in the guardianship case and requested payment of $14, 989.40 for legal fees and expenses out of Mary's probate estate. Powell's claim, seeking payment of $30, 123.33 from Mary's probate estate, also states that it is for services rendered to the Executor in the guardianship case. Both of these claims are supported by billing statements from the respective attorneys.

         In his claim, the Executor requests payment of $17, 704.62 for "Attorney, Mediation, and Guardian's fees" that he states were "paid from George's personal estate on behalf of Mary . . . while she was under Guardianship." The attached "detail" of the requested fees lists eleven separate items. Nine of the items are described as fees paid to an "Attorney for Mary's Children." All nine of these entries are for dates prior to the appointment of a temporary guardian for Mary and most were prior to the Daughters' filing their application for guardianship. The tenth entry states that it was for mediation fees (apparently the mediation that resulted in the settlement agreement in the guardianship proceedings), and the eleventh entry states that it was for guardian fees (apparently, given the dates listed, this was for temporary guardian fees). The Executor's claim was supported by cancelled checks, a receipt, and a bank account statement.

         The three claims were submitted to Lewis as the administrator of Mary's probate estate. Although Lewis initially approved Wylie's claim for payment, he subsequently denied all three claims. None of the three claimants filed suit with the Probate Court to contest the administrator's decision, see Texas Estates Code section 355.064, but all three claims were subsequently brought to the Probate Court's attention for approval. During a hearing on the claims, Lewis and the Daughters urged that the claims could not be paid because (1) the Lawyers and the Executor failed to file suit timely to contest Lewis's decision and (2) the Lawyers and the Executor failed to submit their claims to and have them approved by the Guardianship Court. The probate judge, however, found the requests were requests for fees or reimbursement of expenses and not claims against the probate estate, and on that basis, the judge approved payment of the requests out of Mary's probate estate.

         In the three orders that are the subject of this appeal, each entitled "Order Approving Request for Attorney's Fees, " the Probate Court references its own Standards for Court Approval of Attorney Fee Petitions, [7] which mandate that "fee requests should be filed as applications for payment of fees or for reimbursement and not as claims against the estate." The court then states that considering each request as an application for fees and expenses, such fees and expenses were necessary and should be paid by the estate. The court further noted that Lewis had paid the claims of Reiner, the attorney-ad-litem in the guardianship case, and the Daughters' attorney.[8]

         Issues on Appeal

         In three issues, the Daughters contend that the Probate Court erred in ordering the three claims paid because (1) the Lawyers and the Executor failed to timely file suit contesting the administrator's rejection of the claims as required by Estates Code section 355.064, (2) the Probate Court lacked authority to order Mary's probate estate to pay attorney's fees incurred in the earlier guardianship proceeding, and (3) the claims were not valid debts of the probate estate. We first will consider the Daughters' second issue as applied to the Lawyers' claims; then, we will consider the Daughters' first issue as applied to the Executor's claim. We address the claims in this manner because, as will become clear, the Lawyers' claims are fundamentally different than the Executor's claim. ...


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