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.
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.