Estate of Nunu, 542 S.W.3d 67 (Tex. App.—Houston [14th Dist.] 2017, pet. denied).
Brother and Sister battled over Mother’s estate.
Sister, the independent executor, used estate funds to pay her attorneys
using the authority in Estates Code § 404.0037. Brother claimed Sister
is not entitled to the fees because her attorneys committed malpractice
and breached duties owned to Sister and the estate. See Burrow v.
Arce, 997 S.W.3d 229 (Tex. 1999). The trial court held that this fee
payment was proper and Brother appealed.
The appellate court first addressed whether Brother
could assert a fee forfeiture claim. The record did not show that
Brother pled for a fee forfeiture against her attorneys. Even if Brother
had so pled, he lacked standing to assert the claim because Brother was
not the attorneys’ client. The court also rejected Brother’s assertion
that as a beneficiary of the estate, he could seek fee forfeiture under
Texas Civil Practice and Remedies Code § 37.005. Brother has no claim
against the attorneys who represented Sister.
Brother also argued that Sister should not be
allowed to use estate funds to pay the fees because she did not plead
for fees, defend the lawsuit to remove her as executor in good faith,
and the fees were not reasonable and necessary. The court held that
Sister’s amended answer prayed for the legal fees and that Sister was in
good faith. However, Sister paid the fees without a court finding that
the fees were both necessary and reasonable. Estates Code § 404.0037
does not permit the executor to pay the fees without a proper court
finding. Thus, the court remanded to the trial court for a determination
of the amount of the reasonable attorneys’ fees.
Moral: Before an executor pays attorney
fees from estate funds for fees incurred for estate litigation to which
the executor is a party, a finding that the fees are reasonable and
necessary is first needed.
Brother and Sister battled over Mother’s estate.
Brother petitioned the court two times for an accounting and
distribution of the estate from Sister who was Mother’s independent
executrix. See Estates Code § 405.001. The trial court denied Brother’s
request and he appealed.
The appellate court affirmed with regard to the
first petition. The court held that the trial court’s denial of the
petition was not an abuse of discretion. The trial court had sufficient
basis for its determination that a necessity for the continuation of the
administration of Mother’s estate existed.
However, the appellate court reversed with regard
to Brother’s second petition. After reviewing the pleadings, the court
determined that no necessity for administration existed after Brother
had nonsuited his claims against Sister. Thus, the court reversed and
remanded to the trial court to resolve remaining issues regarding the
amount of expenses and attorneys’ fees and then to order distribution of
the estate. The court pointed out that Brother could specify neither how
the estate assets are to be divided nor the date on which estate
composition is to be determined.
Moral: A personal
representative should distribute estate property as soon as possible and
be careful about asserting creative excuses for not doing so.