555 S.W.3d 361
Tex. App.2018Background
- Frances Anderton (decedent) created a revocable trust benefitting sons James and Darrell; James later became sole trustee. Frances named granddaughter Jennifer Green beneficiary of several annuities and joint bank accounts.
- By 2011–2012 Frances manifested dementia: memory loss, hiding items, hallucinations; physician notes described dementia and confusion. She nonetheless had intermittent lucid days in 2012.
- On Oct. 15–16, 2012, Frances (accompanied by Clarence, James, and Sharon) executed paperwork at multiple banks and an attorney’s office removing Jennifer from accounts and signing a power of attorney in favor of James; some bankers and Frances’s physician expressed concern about her capacity.
- Oct. 17–19, 2012: Jennifer discovered the account changes, helped Frances reverse some transactions, and Frances fainted and was hospitalized; James and Sharon then filed for guardianship claiming Frances was incapacitated.
- Frances died Nov. 26, 2012. Trustee/James sued Jennifer for conversion of ~ $750,000 in annuity proceeds; Jennifer counterclaimed and sought declaratory relief that the accounts and Oct. 16 power of attorney were invalid.
- After a bench trial the court declared Frances lacked capacity on or before Oct. 15, 2012 and voided actions taken on/after Oct. 15; it awarded Jennifer attorney’s fees. On appeal the court affirmed the capacity and voiding rulings but reversed and remanded the attorney-fee award for lack of segregation evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether evidence supports finding Frances lacked capacity before Oct. 15, 2012 and until death | Jennifer: testimony, medical notes, and behavior show dementia and incapacity; transactions after Oct. 15 were invalid | James/Trustee: multiple bankers and attorney testified Frances appeared to understand transactions on Oct. 15–16; Frances was competent at those times | Court: Affirmed—sufficient evidence supports finding of incapacity and that actions on/after Oct. 15, 2012 were invalid |
| Whether trial court erred awarding attorney’s fees under Tex. Civ. Prac. & Rem. Code §37.009 against James individually and the Trust | Jennifer: fees are proper under §37.009; defense and declaratory claims were litigated against James in his capacities | James: he was sued only as Trustee, not individually; no live controversy with him personally; not equitable/necessary to award fees against him | Court: Fees may be awarded against James individually and the Trust based on pleadings and evidence—issue decided against appellants |
| Whether Jennifer failed to segregate recoverable vs. nonrecoverable attorney’s fees | Jennifer: work was intertwined with declaratory claim so segregation unnecessary | James/Trustee: no evidence segregating fees; unrecoverable claims mixed in—must segregate per Chapa/Varner | Court: Remanded—trial court abused discretion by awarding fees without adequate segregation evidence; remand to determine recoverable amount |
| Whether appellants waived objection to failure to segregate by raising it late | James/Trustee: timely objected before final judgment; preserved error | Jennifer: objection was too late; should be waived | Court: Did not find waiver on this record and reached merits of segregation argument |
Key Cases Cited
- Catalina v. Blasdel, 881 S.W.2d 295 (Tex. 1994) (standard for reviewing sufficiency of evidence)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (review of factual/legal sufficiency and deference to factfinder)
- Kinsel v. Lindsey, 526 S.W.3d 411 (Tex. 2017) (capacity to execute instruments; remand procedures for fee awards)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (requirement to segregate recoverable attorney’s fees)
- Varner v. Cardenas, 218 S.W.3d 68 (Tex. 2007) (clarifying limits on recovery of intertwined attorney’s fees)
- Jarvis v. Rocanville Corp., 298 S.W.3d 305 (Tex. App.—Dallas 2009) (discretion to award fees under Tex. Civ. Prac. & Rem. Code §37.009)