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In re Estate of Hernandez

Court of Appeals of Texas, Fifth District, Dallas

January 24, 2018

IN RE ESTATE OF PATRICIA ANN HERNANDEZ, DECEASED

         On Appeal from the County Court at Law No. 1 Grayson County, Texas Trial Court Cause No. 2002-1-40P

          Before Justices Lang, Evans, and Schenck

          MEMORANDUM OPINION

          DOUGLAS S. LANG JUSTICE

         David Pena appeals the trial court's final judgment[1] in favor of Eric H. Farley. Pena raises one issue on appeal arguing "the trial court erred by finding that the clauses in Patricia Hernandez's will conveyed a life estate [to her husband, Efrin Arturo Hernandez]." Based on the argument in his brief, we construe Pena to contend the trial court's final judgment, as a matter of law, is erroneous because: (1) Patricia Hernandez's will was unambiguous and conveyed her property in "fee simple [absolute]"[2] to Arturo Hernandez; and (2) in the alternative, if the will was ambiguous, as a matter of law, the first person to take under the will should be granted the greatest estate the grant is capable of passing, i.e., a fee simple absolute. The trial court erred when it concluded the will was ambiguous. However, we disagree with the parties' characterization of the estate devised to Arturo Hernandez as, on the one hand a fee simple absolute, or on the other hand, a life estate. We conclude that Arturo Hernandez received a fee simple determinable in the property that passed to him from his wife Patricia Hernandez's estate. Further, we conclude Eric Farley, as the executory interest holder, received a fee simple absolute interest in the property Arturo Hernandez still held at the time of his death which he received from his wife's estate. The trial court's final judgment is reversed and rendered, in part, and affirmed, in part.

         I. FACTUAL AND PROCEDURAL CONTEXT

         Jack Farley was a businessman who made his living through agriculture and his "interest in a bank in Whitewright." Jack Farley died in 1999. His will provided that his real property was to be divided as follows: (1) one half of his property was to go to his son, John Farley; (2) one quarter of his property was to go his daughter, Patricia Hernandez née Farley; and (3) one quarter of his property was to go to his grandson, Eric Farley, who is Patricia Hernandez's son from her first marriage. After several family meetings, the family members reached an agreement about the division of the specific parcels of land. As a result of the agreement, Patricia Hernandez's inheritance included parcels of land designated as Fannin County Appraisal District Nos. 76854, 79937, and 113857.

         Patricia Hernandez married Arturo Hernandez, her second husband, in 1973. "[F]or a while, " David Pena, Arturo Hernandez's second cousin, lived with them. Arturo Hernandez and Pena made saddles, "worked the cattle, " and "did all the farming" on Patricia Hernandez's land. On April 13, 2000, Patricia Hernandez executed a will that was prepared with the aid of legal counsel. She died on January 15, 2001.

         Pursuant to Patricia Hernandez's will, Arturo Hernandez was appointed the executor. Paragraph IV of the will made the following devise:

         IV.

The rest and residue of my estate, both real, personal and mixed property of every kind and character whatsoever I may own or have any interest in at my death, is hereby bequeathed to my husband, ARTURO HERNANDEZ, to do with as he desires. Upon the death of my husband, ARTURO HERNANDEZ, I give, devise and bequeath any of the rest and residue of my estate both real, personal and mixed property of every kind whatsoever that he may own or have any interest in to my son, ERIC H. FARLEY.

Patricia Hernandez's estate included several tracts of land, which she previously inherited from Jack Farley, including the parcels of land designated as Fannin County Appraisal District Nos. 76854, 79937, and 113857.

         As indicated above, the will stated it initially devised the property of Patricia Hernandez to Arturo Hernandez. However, on July 18, 2002, Arturo Hernandez, as executor of her estate, executed a general warranty deed conveying some of the real property in her estate, specifically, tracts 1-12, to himself for $10.00 consideration.[3]

         On November 29, 2004, Arturo Hernandez, as executor, filed an inventory and appraisal of the estate. In that inventory, he listed tracts 1-12 and identified an appraised value for each as follows:[4]

Tract No.

Acreage

Appraisal

1

54.4

$57, 000

2

48.886

$49, 000

3

25

$25, 000

4

185.82

$30, 000

5

46.519

$47, 000

6

78.951

$79, 000

7

36.782

$37, 000

8

10

$10, 000

9

1.464

$1, 500

10

50

$50, 000

11

75.5

$76, 000

12

39.91

$40, 000

         On December 1, 2004, the trial court signed an order approving the inventory and appraisement.

         On June 18, 2009, Arturo Hernandez, individually, executed a general warranty deed conveying tracts 11 and 12 to A.H. Farms L.L.C. for $10.00 consideration.[5]

         Litigation commenced among Arturo Hernandez, Eric Farley, and Chris Farley (the surviving spouse of John Farley). That case was settled through a Rule 11 Agreement, which was filed in the trial court on April 2, 2013. The Rule 11 Agreement does not mention the tracts of land designated as Fannin County Appraisal District Nos. 76854, 79937, and 113857.

         Arturo Hernandez died on October 3, 2013. According to Eric Farley, at the time of his death, Arturo Hernandez owned 100% of A.H. Farms L.L.C.[6] Pena was the executor of Arturo Hernandez's estate.

          On October 22, 2014, Eric Farley filed an application requesting to be appointed successor independent executor of the Patricia Hernandez estate because it had not been closed and issues remained concerning the property owned by Patricia Hernandez. On December 4, 2014, Pena filed an application requesting that he be appointed the successor independent administrator and an application to close the independent administration.

         On February 17, 2015, Eric Farley filed his first petition for a declaratory judgment and construction of the will. In part, he requested a declaration that under Paragraph IV of the will Arturo Hernandez acquired a life estate, which then passed to Eric Farley in fee simple absolute. On March 31, 2015, Pena filed a counter-petition for declaratory judgment. Pena argued that the Rule 11 Agreement precluded Eric Farley from arguing that the properties were not Arturo Hernandez's and the property had already be distributed so there was nothing remaining in the estate for Eric Farley to inherit.

         On March 27, 2015, Eric Farley filed his motion for traditional summary judgment arguing he was entitled to judgment, as a matter of law, because there was no issue of material fact necessary to establish that the will created a life estate in Arturo Hernandez. Pena responded, in part, that Patricia Hernandez's will left her property to Arturo Hernandez in fee simple absolute when she stated he could "use the property however he wishes . . . . and [he] did just that when he deeded the property to himself." Further, Pena asserted that the property was distributed and nothing remains to be distributed to Eric Farley.[7] On October 27, 2015, the trial court signed an order denying Eric Farley's motion for summary judgment and in the order the trial court stated the reason for the denial was the will was ambiguous. On May 18, 2016, Eric Farley filed a motion for reconsideration, arguing, in part, that Patricia Hernandez's will was not ambiguous, which the trial court denied.

         On September 20-21, 2016, the case was tried to a jury. During the trial, Aubrey Myrick, Patricia Hernandez's uncle through marriage, testified that around the time she was contemplating having a will drafted, she confided in him that she wanted all of her estate to go to Arturo Hernandez to use during his lifetime and at the end of his life, anything that was left to go to Eric Farley. Also, Eric Farley testified his mother told him that she wanted Pena to have a house and 25 acres, Arturo to get a life estate of the property, and upon Arturo Hernandez's death, the property was to go to him "because it had been in the family since it was deeded from the State of Texas to the family." However, Pena testified that John Farley and Eric Farley were trying to get Patricia Hernandez to draft her will to give Arturo Hernandez a life estate, but she was worried about Arturo Hernandez not being able to sell anything. The jury charge asked a single question: "Did Patricia Ann Hernandez intend to bequeath a life estate to Arturo Hernandez by her Last ...


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