Court of Appeals of Texas, Second District, Fort Worth
Appeal from Probate Court No. 1 Tarrant County, Texas Trial
Court No. 2013-PR00717-2-1-A.
Kerr, J., and Gonzalez, J. 
Elizabeth Kerr Justice.
Priscilla Stegall's husband died in 2013, she was
appointed independent executor of his estate. In that
capacity, she sold her late husband's law firm, which
included a title company, to the two attorneys who had been
working at the firm when he died. After the sale, Priscilla
continued to work at the law firm as its office manager and
as an escrow officer. The firm's new owners fired her
several months later, and she sued them, the law firm, and
the attorneys who had represented her and the estate in the
sale of her late husband's firm. The probate court
granted summary judgment against her on all claims and
entered a take-nothing judgment. In five issues, Priscilla
challenges the probate court's subject-matter
jurisdiction and the propriety of its summary-judgment
rulings. We will reverse and remand in part and affirm in
was married to Randall Cross "Randy" Stegall, an
attorney and the sole manager and member of The Stegall Firm,
PLLC. The Stegall Firm had offices in Southlake and Flower
Mound and operated both a law firm and a fee office for a
title company. Priscilla, a nonlawyer, worked for the Stegall
Firm as its office manager and as an escrow officer.
According to her, most of the Stegall Firm's revenue came
from the its title business. Attorneys Matthew Schultz and
Dustin Kellar started working for the Stegall Firm shortly
before they became licensed in November 2012.
February 27, 2013, Randy died unexpectedly. His will named
Priscilla as the estate's executor and sole beneficiary.
Tarrant County Probate Court Number Two appointed Priscilla
as the independent executor of Randy's estate.
Randy's death, his estate became the Stegall Firm's
sole member. But because Priscilla is not an attorney, no
ownership interest in the firm could pass to her. In her
independent-executor capacity, she approached Schultz and
Kellar about buying the Stegall Firm; they expressed
interest, and the parties began discussing sale terms and how
the business would operate moving forward.
parties agreed on a purchase price of $50, 000, plus all
proceeds from the planned sale of the firm's Flower Mound
office, in exchange for the estate's ownership interest
in the Stegall Firm. But according to Priscilla, the firm was
actually valued at about $1, 000, 000 because of her pending
closings, book of business, experience, skill, and contacts.
She claimed that an accountant advised her that it would save
her and the firm significant tax liability if part of the
purchase price was paid to her as salary for her continued
employment. She thus intended to use an employment agreement
to "capture the value of the title business and
the sale negotiations, the parties discussed an employment
agreement to be entered into between Priscilla and the firm.
Priscilla claims that in March 2013, everyone agreed to a
ten-year employment agreement, with Priscilla being a
"silent partner" receiving an annual salary of
$150, 000 plus a percentage of the monthly title premiums and
early May 2013, Priscilla hired Dustin Sparks, an attorney
with Geary, Porter, and Donovan, P.C., to represent her
individually and as executor of Randy's estate in the
sale of the Stegall Firm to Schultz and Kellar. Schultz and
Kellar retained their own counsel, Phil Ruais.
and Ruais worked together to prepare the sale documents, and
they discussed a possible employment agreement for Priscilla.
But as the May 28, 2013 closing date approached,
employment agreement's terms remained in flux, and
Priscilla claims that on closing day, the parties agreed to
reduce the employment agreement's duration to a five-year
term. The sale closed as scheduled, but Priscilla and the
firm-now known as Schultz and Kellar, PLLC (the SK
Firm)-never signed an employment agreement. Even so,
Priscilla continued to work there.
September 2013, Priscilla was unhappy with the way Schultz
and Kellar were running the firm. Worried that she could be
fired, Priscilla met with Sparks that month regarding the
employment agreement. Sparks advised her that because there
was no written employment agreement, she was free to work
elsewhere, but Priscilla decided to stay at the SK Firm.
months later, in March 2014, the SK Firm fired Priscilla. A
little over a year later, Priscilla-in her individual
capacity only-sued Schultz, Kellar, and the SK Firm
(collectively, the SK Defendants) in Tarrant County District
Court for claims arising from her termination and from the
sale of the Stegall Firm to Schultz and Kellar.
Defendants' answer included a verified denial challenging
Priscilla's ability to recover in her individual capacity
and an affirmative defense challenging her standing to sue.
The SK Defendants also specially excepted to Priscilla's
pleadings, and the district court ordered her to amend her
petition to "set forth distinctively the claims and
damages [she was] asserting against Defendants in her
individual capacity and the claims and damages [she was]
asserting against [them] as the Execut[or] of the Estate of
Randall Stegall." In response, Priscilla amended her
pleadings to assert claims against the SK Defendants also in
her capacity as executor of Randy's estate: breach of
contract, fraudulent inducement, fraud, negligent
misrepresentation, and breach of informal fiduciary duty.
Specifically, Priscilla-as-executor alleged that Schultz and
Kellar used the promise of an employment agreement to induce
her to sell the Stegall Firm to them for less than its fair
market value and that the estate was thus injured.
Firm then counterclaimed against Priscilla in her capacity as
executor for breach of contract and conversion, claiming that
the estate had failed to deliver all the assets that the SK
Firm had purchased from the Stegall Firm. In June 2016, the
SK Defendants successfully moved to transfer the case to
Tarrant County Probate Court Number Two, the court in which
Randy's will was probated.
in March 2016, Priscilla, individually, sued Sparks and the
Geary Porter firm (collectively, the GPD Defendants) in
Dallas County District Court for legal malpractice in
representing her in the sale of the Stegall Firm. In July
2016, Priscilla amended her petition to also sue the GPD
Defendants in her estate-executor capacity, claiming that
they were also negligent in representing the estate in the
sale. Priscilla then successfully moved to transfer the
legal-malpractice case from Dallas County District Court to
Tarrant County Probate Court Number Two and to consolidate it
with the case against the SK Defendants. Soon after, the
presiding judge of Tarrant County Probate Court Number Two
recused herself on her own motion, and the consolidated case
was assigned to Tarrant County Probate Court Number One.
December 2016, the SK Firm filed an amended pleading
abandoning its counterclaims against Priscilla in her
capacity as executor. See Tex. R. Civ. P. 62, 65.
The following month, Priscilla amended her petition for the
eighth time. Individually and in her capacity as executor,
she alleged (1) a breach-of-contract claim against the SK
Defendants; (2) claims against Schultz and Kellar for
fraudulent inducement, fraud by nondisclosure, fraud by
partial disclosure, negligent misrepresentation, and breach
of informal fiduciary duty; and (3) a legal-malpractice claim
against the GPD Defendants.
Defendants and the SK Defendants all moved for summary
judgment. The GPD Defendants moved for summary judgment on
limitations, arguing that the two-year statute of limitations
barred Priscilla's legal-malpractice claim because that
claim accrued in either May or September 2013 but Priscilla
did not sue until March 2016, well after limitations had run.
The SK Defendants moved for summary judgment only on
Priscilla's breach-of-contract claim, arguing that there
was no valid and enforceable employment agreement because the
parties never had a meeting of the minds on its material
terms and, alternatively, the alleged agreement was
unenforceable under the statute of frauds. The probate court
granted both motions without stating the grounds on which it
relied for its rulings.
then amended her petition for the ninth time to seek a
declaration that she rather than the estate owned "all
claims, property, assets[, ] and anything of value that was
formerly owned by Randy Stegall or his Estate" and that
"she individually is the proper party to assert any and
all claims that could have ever belonged to the estate or
Randy Stegall as the sole devisee of his Last Will and
that last amendment, Schultz and Kellar moved for summary
judgment on Priscilla's remaining claims: fraudulent
inducement, fraud by nondisclosure, fraud by partial
disclosure, negligent misrepresentation, and breach of
informal fiduciary duty. With respect to the fraud-based and
negligent-misrepresentation claims, Schultz and Kellar argued
that Priscilla unjustifiably relied on their representations.
They also argued that no informal fiduciary relationship
existed. The trial court granted the motion, found that
Priscilla's declaratory-judgment action was thereby moot,
and signed a final take-nothing judgment against her.
has appealed and raises five issues: (1) the probate court
lacked jurisdiction over the case when it transferred the
case from district court; (2) even if the probate court had
jurisdiction at the time of transfer, it lost jurisdiction
when the SK Firm nonsuited its claims against the estate; (3)
the trial court erred by granting the GPD Defendants'
summary-judgment motion on their limitations defense; (4) the
trial court erred by granting summary judgment for the SK
Defendants on Priscilla's breach-of-contract claim; and
(5) the trial court erred by granting summary judgment for
Schultz and Kellar on Priscilla's remaining tort claims.
we address Priscilla's appellate complaints, we must
consider our jurisdiction. The GPD Defendants have moved to
dismiss this appeal, arguing that we lack jurisdiction
because Priscilla's notice of appeal was untimely filed.
The GPD Defendants contend that Priscilla's appellate
deadline ran from August 16, 2017-the date the trial court
signed an order granting Schultz and Kellar summary judgment
on Priscilla's last remaining claims-because that order
was a final judgment. Priscilla responds that her deadlines
started to run from August 29, 2017-the date the trial court
signed its final judgment-because that judgment modified the
August 16 order. See Tex. R. Civ. P. 329b(h).
August 16, 2017 "Order Granting Defendant's Motion
for Partial Summary Judgment on All Remaining Claims,"
the trial court recited that it had reviewed "all timely
filed pleadings, the Motion, Plaintiff's Response, and
the evidence and arguments of counsel" and dismissed
with prejudice the "remaining causes of action for
fraudulent inducement, fraud by nondisclosure and partial
disclosure, negligent misrepresentation[, ] and breach of
informal fiduciary duty." The order stated that
"[t]his is a final judgment and disposes of all parties
and all claims and is appealable." See In re
Elizondo, 544 S.W.3d 824, 827-28 (Tex. 2018) (orig.
proceeding) (concluding that an order or judgment not
following a trial on the merits is final if it disposes of
all pending claims and parties or if it clearly and
unequivocally states that it does).
August 29, 2017, the trial court signed a "Final
Judgment." In this order, the trial court recited that
it had granted the SK Defendants' two summary-judgment
motions. The trial court also found that Priscilla's only
remaining claim, for a declaratory-judgment, was moot because
the trial court had dismissed her other claims with
prejudice. The trial court ordered a take-nothing judgment,
and the judgment closed by stating that "[t]his JUDGMENT
is final, disposes of all claims and parties, and is
appealable" and by ordering execution to issue.
court retains plenary power to vacate, modify, correct, or
reform its judgment for 30 days after it signs the judgment.
Tex.R.Civ.P. 329b(d). If the trial court modifies, corrects,
or reforms the judgment "in any respect" during
that time, "the time for appeal shall run from the time
the modified, corrected, or reformed judgment is
signed." Tex.R.Civ.P. 329b(h). "[A]ny change,
whether or not material or substantial, made in a judgment
while the trial court retains plenary power, operates to
delay the commencement of the appellate timetable until the
date the modified, corrected or reformed judgment is
signed." Check v. Mitchell, 758 S.W.2d 755, 756
(Tex. 1988); see Arkoma Basin Expl. Co. v. FMF Assocs.
1990-A, Ltd., 249 S.W.3d 380, 391 (Tex. 2008)
("Thus, appellate deadlines are restarted by an order
that does nothing more than change the docket number or deny
all relief not expressly granted."); Lane Bank
Equip. Co. v. Smith S. Equip., Inc., 10 S.W.3d 308, 313
(Tex. 2000) ("[A]ny change made by the court under
subpart (h) prior to losing jurisdiction, even a clerical
change, will restart the appellate timetable.").
trial court's August 29 judgment-signed during the trial
court's plenary power-modified the August 16 judgment by
expressly finding Priscilla's declaratory-judgment claim
moot and dismissing it with prejudice, as well as by
expressly entering a take-nothing judgment and ordering
execution to issue. See Tex. R. Civ. P. 329b(d). The
August 29 judgment thus restarted the appellate
timetable. See Tex. R. Civ. P. 329b(h);
see also Tex. R. App. P. 4.3(a); Arkoma Basin
Expl., 249 S.W.3d at 391; Lane Bank Equip., 10
S.W.3d at 313; Check, 758 S.W.2d at 756. On
September 27, 2017, Priscilla timely moved for a new trial,
see Tex. R. Civ. P. 329b(a), thereby extending her
deadline to file her notice of appeal to November 27, 2017,
see Tex. R. App. P. 26.1(a)(1). Priscilla timely
filed her notice of appeal on November 13, 2017. See
Priscilla timely filed her notice of appeal, we hold that we
have jurisdiction over this appeal. See id. We
therefore deny the GPD Defendants' dismissal motion.
Probate Court's Jurisdiction
first and second issues, Priscilla argues that the probate
court lacked subject-matter jurisdiction when it transferred
the SK Defendants' case from district court to itself and
that even if the probate court had jurisdiction at the time
of transfer, it lost jurisdiction when the SK Firm nonsuited
its breach-of-contract and conversion claims against the
The probate court's transfer power
parts of her first two issues, Priscilla challenges the
probate court's transferring her suit against the SK
Defendants to itself.
Defendants moved to transfer venue from Tarrant County
District Court to Tarrant County Probate Court Number Two in
accordance with Estates Code Section 34.001. See
Tex. Est. Code. Ann. § 34.001. A transfer under this
section is "essentially a specialized form of venue
transfer for matters relating to a probate proceeding pending
in a probate court." In re Estate of Aguilar,
435 S.W.3d 831, 833 (Tex. App.-San Antonio 2014, no pet.);
see Gonzalez v. Reliant Energy, Inc., 159 S.W.3d
615, 622 (Tex. 2005) ("The transfer of a case [under
former Probate Code Section 5B pertains to venue, not
jurisdiction."). Section 34.001 provides that a
statutory probate court may transfer to itself from a district
court (1) "a cause of action related to a probate
proceeding pending in the statutory probate court" or
(2) "a cause of action in which a personal
representative of an estate pending in the statutory probate
court is a party." Tex. Est. Code. Ann. § 34.001(a).
Priscilla contends that the probate court improperly
transferred the case under Section 34.001 because Randy's
estate was closed at the time the SK Defendants moved to
transfer the case, and thus there was neither a probate
proceeding nor an estate pending in the probate court.
See In re John G. Kenedy Mem'l Found., 159
S.W.3d 133, 144 (Tex. App.-Corpus Christi-Edinburg 2004,
orig. proceeding) (determining that "[t]he word
'pending' does not describe a closed estate" and
concluding that an estate must be pending to trigger a
probate court's transfer power under former Probate Code
probate court's jurisdiction attaches at the time the
application for the probate of a will is filed. In re
Blankenship, 392 S.W.3d 249, 257 (Tex. App.-San Antonio
2012, no pet.). Once the probate court's jurisdiction
attaches, it continues until the estate is closed.
noted, Priscilla filed an application to probate Randy's
will and was appointed independent executor of his estate,
which succeeded Randy as the Stegall Firm's sole member
upon his death. Because Priscilla is not an attorney, she
could not own an interest in or share in the profits from the
Stegall Firm. See generally Tex. Disciplinary Rules
Prof'l Conduct R. 5.04, reprinted in Tex.
Gov't Code Ann., tit. 2, subtit. G, app. A (Tex. State
Bar R. art. X, § 9). Randy's will allowed Priscilla,
as executor, to sell estate property for the purpose of
administering the estate. See generally Tex. Est. Code
Ann. §§ 356.002 ("Power of Sale Authorized by
Will"), 402.052 ("Sale of Estate Property
Generally"). As part of her administration of the
estate, Priscilla, as executor, sold the firm to Schultz and
Kellar. Cf. Tex. Disciplinary Rules
Prof'l Conduct R. 5.04(d) ("A lawyer shall not
practice with or in the form of a professional corporation or
association authorized to practice law for a profit if . . .
a nonlawyer owns any interest therein, except that a
fiduciary representative of the estate of a lawyer may hold
stock or interest of the lawyer for a reasonable time during
administration[.]"). Priscilla's claims against the
SK Defendants and the GPD Defendants arise from her sale (in
her capacity as the estate's executor) of the Stegall
Firm to Schultz and Kellar.
independent estate administrations have not been formally
closed in Texas." 2 Thomas M. Featherstone, Jr., et al.,
Texas Practice Guide Probate § 13:1 (2018-19
ed.), Westlaw (database updated Nov. 2018). The Estates Code,
however, allows an independent executor to formally close an
estate by filing a closing report or a notice to close the
[a]ll of the debts known to exist against the estate have
been paid, or when they have been paid so far as the assets
in the independent executor's possession will permit,
when there is no pending litigation, and when the independent
executor has distributed to the distributees entitled to the
estate all assets of the estate, if any, remaining after
payment of debts . . . .
Tex. Est. Code Ann. § 405.004. But an independent
executor is not required to close the administration by
filing a report or notice. See id. § 405.012.
In the absence of a formal estate closing, an independent
administration is considered closed when all debts and claims
against the estate have been paid, the estate's assets
have been distributed, and there is no need for further
administration. See Blankenship, 392 S.W.3d at
257-58; In re Estate of Rowan, No. 05-06-00681-CV,
2007 WL 1634054, at *3 (Tex. App.-Dallas June 7, 2007, no
pet.) (mem. op.); Tex. Commerce Bank-Rio Grande Valley,
N.A. v. Correa, 28 S.W.3d 723, 729 (Tex. App.-Corpus
Christi- Edinburg 2000, no pet.).
Priscilla never formally closed the estate, although while
the SK Defendants' venue-transfer motion was pending, she
filed a notice to close the estate pursuant to Estates Code
Section 405.006. See Tex. Est. Code Ann. §
405.006. But that notice was ineffective, for a simple,
statutory reason: there was litigation pending. See
id. § 405.004 (stating that an independent executor
may file a notice to close the estate "when there is no
pending litigation"); In re Estate of Bean, 206
S.W.3d 749, 759 (Tex. App.-Texarkana ...