Estate Administration

Jurisdiction

Foreclosure After Estate Closed

Texas Commerce Bank—Rio Grande Valley v. Correa, 28 S.W.3d 723 (Tex. App.—Corpus Christi 2000, pet. denied).

 

Testator’s will was admitted to probate in county court and an independent administration was opened. Seven years later, the county court entered an order approving the final account and the resignation of Administrator. Creditor subsequently filed a petition in district court seeking to foreclose on real property Administrator used as collateral for a loan. The district court approved the foreclosure and Creditor purchased the property at a sheriff’s sale. Two years later, Creditor sued Administrator seeking damages and indemnification for environmental contamination. Administrator claimed Creditor never acquired ownership of the property because the foreclosure suit was a matter incident to the estate and thus the county court had exclusive subject matter jurisdiction. Accordingly, Administrator asserted that the foreclosure and sheriff’s sale were void. The trial court agreed with Administrator.

The appellate court reversed. The administration of Testator’s estate was closed at the time Creditor brought the foreclosure action. The county court has jurisdiction over matters incident to the estate only when a probate matter proceeding related to the incident matter is already pending. Because no probate proceeding was ongoing or pending when Creditor brought the foreclosure action, the district court had jurisdiction.

Moral: Once an estate is closed, the district court may have jurisdiction over matters that otherwise would have been the province of the probate court as matters incident to the estate.

 

Estate Administration

Independent Administration

Closing

Texas Commerce Bank—Rio Grande Valley v. Correa, 28 S.W.3d 723 (Tex. App.—Corpus Christi 2000, pet. denied).

 

Administrator filed a “Final Account and Exhibit.” The document was verified and included a list of undistributed estate assets. Administrator also requested approval of the account and exhibit as well as Administrator’s resignation. The court approved the requests.

The appellate court rejected the argument that the estate nonetheless remained open. The court held that the documents were sufficient to qualify as a closing report under Prob. Code § 151. The court did, however, recognize that the probate court actually has no power to approve or disapprove a final account. The court also explained that the estate was actually closed even without the closing report because an independent administration is considered closed after the debts have been paid, the property distributed, and there is no more need for administration.

Moral: The independent personal representative should seriously consider seeking a judicial discharge rather than relying on a closing report or a “natural” closing. The 1999 Legislature added Probate Code §§ 149D, 149E, 149F, and 149G to establish a procedure for the independent executor to obtain a discharge from liability for matters relating to the past administration of the estate that have been fully and fairly disclosed.



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