Hope v. Baumgartner, 111 S.W.3d 775 (Tex. App.—Fort Worth 2003, no pet.).
Testator’s 1995 will was admitted to probate. Contestant asserted
that the 1995 will was invalid because Testator lacked testamentary
capacity and was subject to undue influence. Contestant offered
Testator’s 1972 will for probate in which he was a named beneficiary.
The court determined that the 1995 will was valid. Contestant was
awarded $91,000 in attorney’s fees under Probate Code § 243. A dispute
then arose regarding the proper classification of Contestant’s claim
under Probate Code § 322, that is, is it a Class 2 claim (administration
expenses) or a Class 8 claim (all other claims)? The trial court
determined that it was a Class 2 claim.
Recognizing that this issue was one of first impression in Texas, the
appellate court reversed holding that the claim belongs in Class 8. The
claim did not fit in Class 2 because it was not incurred to preserve,
safekeep, or manage the estate. Instead, Contestant’s expenses resulted
in a burden to the estate and were incurred not for the estate’s benefit
but rather in an attempt to achieve an outcome favorable to him
personally.
Moral: The unsuccessful will contestant who obtains a judgment for
attorney’s fees may have a harder time recovering those fees than
anticipated because the claim has no priority and will share pro rata
with other non-priority claimants if the estate is insolvent.
Note: Section 322 (Class 2) was amended by the 2003 Texas Legislature. I
am not certain, however, whether this amendment would change the result
in the Hope case.
It is true that the amendment adds the phrase "including fees and
expenses awarded under Section 243 of the this code." However, the
limitation in the prior clause still remains, that is, that the expenses
be "incurred in the preservation, safekeeping, and management of the
estate." The court in Hope found that the expenses of the contestant
resulted "in a burden to the estate and not preservation of it."
Accordingly, I think a court could still interpret the section in such a
way to deny Class 2 classification.
Class 2 classification would have been more likely if the legislature
had used the word "and" rather than "including." The term "and" would
have eliminated the restrictions of "preservation, safekeeping, and
management" with regard to § 243 fees and expenses while the term
"including," in my opinion, retains those restrictions.