Even though a probate court is an official court of the State of Texas, it is still limited to hearing only certain matters. If it rules on matters outside of this scope, its ruling might be worthless. Make sure the probate court can hear the matter you’re arguing before it. Here’s a case that illustrates this point:
Coble Wall Trust v. Palmer, 848 SW.2d 696 (Tex. App. 1991)
Facts of the case: Proceedings
Probate Proceedings: On April 12, 1985, Coble Wall was appointed by the court to be the guardian of the estate of Booney M. Moore who was an elderly and incompetent person. In November of the same year, an attorney named Cluck filed an Application for Order Authorizing the Establishment of an Estate Plan (An establishment of an estate plan determines how an individual’s assets will be managed, preserved, and distributed after death). The application stated Moore was ninety-three years old, in poor health, and his life expectancy was less than thirty days. The estate plan was approved by the court with changes to the original value of Moore’s assets listed. It also provided that Coble Wall organize a corporation called the Estate of Booney M. Moore, Inc., which would acquire by transfer of property all the real property owned by Moore in exchange for stock and general mortgage bonds. In other words, the corporation would own Moore’s real property, and in return would give stock and bonds. It further provided for several remunerations (money for a service) to be paid to Coble Wall. The purpose of the plan was to provide a cash flow for the estate as well as to reduce the substantial estate and inheritance taxes listed. Coble was also authorized to sell the mortgage bonds to the San Antonio Savings Association (SASA) for $2,400,000.00 cash by subsequent order of the court. This meant that both the purchaser of the estate and the full price of the estate had already been determined as part of the approval of the estate plan.
Moore died in December 1985 and Coble Wall was appointed temporary administrator of the estate. A temporary administrator will be appointed by a judge to serve for a fixed period of time as the person who will manage the estate and ensure it is dealt with in accordance with the rules set in the estate plan. One of the specific powers given to the temporary administrator in the probate court’s order was the power to complete the estate plan previously approved by the probate court in the guardianship proceeding. This meant that Coble Wall was in charge of selling the bonds and stocks to SASA. The probate court authorized the sale of the mortgage bonds to SASA by its order entered December 26, 1985. Coble Wall served with Cluck until removed in March 1986 and thereafter William Palmer was appointed to be the independent administrator of the estate.
Palmer, as permanent administrator, found that Coble Wall and Cluck had mishandled the estate and that the estate plan made by Cluck was not effective in the set purpose of reducing taxes. Palmer alleged the plan was needlessly complex, and that it resulted in the state paying excessive fees. Palmer sued in statutory probate court against the estate’s former temporary administrator (Coble Wall) and its president/sole stockholder (Cluck) alleging negligence, gross negligence, and violations of Deceptive Trade Practices Act (DTPA), including breach of fiduciary duty and misrepresentations of estate plan’s characteristics. This issue was tried first against the SASA and then against Coble Wall and Cluck. The court found a verdict in favor of Palmer. On appeal, the Court of Appeals reversed the original verdict of the trial court and held that 1) the probate court lacked subject matter jurisdiction over the suit, and 2) even if the probate court had jurisdiction, the remaining points of error would not be sustained.
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What this Case Means
Subject Matter Jurisdiction of Statutory Probate Courts: State Limited Jurisdiction
This case shows how if a court does not have subject matter jurisdiction to decide a ruling over a case, then any points of contention made by a party are deemed irrelevant and cannot be argued no matter how accurate a court may find them.
Subject matter jurisdiction refers to the court’s ability to hear a particular kind of case. This case was held in a statutory probate court, so it was required to fall into a category of cases that a statutory probate court has the ability to hear. Statutory probate courts may hear cases “appertaining to estates” and “incident to an estate.” The phrase “appertaining to estates” is meant to limit probate court jurisdictions to matters where the controlling (main) issue is the settlement, partition, or distribution of an estate. An action is “incident to an estate” when the outcome will directly affect the assimilation (absorption of the estate), collection, and distribution of a deceased person’s estate.
The court held that the action was neither appertaining to or incident to the estate of Booney Moore therefore the probate court did not have subject matter jurisdiction over the suit and their original ruling is therefore invalid
Remaining Points of contention
Coble Wall and Cluck raised 54 points of contention that can be broken up into 7 topic sections in their appeal, all of which are no longer relevant because of the lack of jurisdiction of the original court; however, some points may have been upheld had jurisdiction not been an issue. Here, the points of contention raised would have all been overruled even if the probate court had the proper jurisdiction.
Improper Notice: Records
In order for a court to proceed with trial the parties must have proper notice of the suit meaning they are aware of the charges and date set for the trial within a certain amount of time before the trial takes place. The points on notice would have been appealed had the court had proper jurisdiction. Wall and Cluck argued that because the case had been called and then reset for a different date that this constituted an abuse of discretion of the court. However, the record showed that Cluck had admitted to being aware of the change of date, and therefore, they could find no abuse of discretion.
Special exceptions: Examples
Cluck and Wall argued that the trial court made an error in refusing to consider certain special exceptions in their case. A special exception in court is a procedural device that allows a party to question the sufficiency of their opponent’s claim. Here, the special exceptions were overruled because it was not shown on the record that Cluck or Wall had urged the court to consider the special exceptions during their original answer, and therefore, they cannot be considered in court.
Res Judicata and Collateral Estoppel: Laws
The doctrine of res judicata can be asserted to block a claim from being relitigated or retried in court when a following claim is brought into court upon the same cause of action or retrying issues common to separate causes. Collateral estoppel is different from res judicata as it blocks the re-litigation or retrying, in a subsequent case with a different cause of action, of issues tried in court and issues essential to the previous judgment. Wall and Cluck argue that because this case is a subsequent case of the suit against SASA that it is barred from re-litigation under the doctrine of res judicata and collateral estoppel. However, the court says these claims would be overruled because the case against SASA stems from a different cause of action than the case against Wall and Cluck, and it therefore does not apply.
Statute of Limitations
Wall and Cluck also argue that because the issue they are being tried for was brought on by an action that occurred more than two years prior that it is barred from being tried under the statute of limitations because the statute of limitations here had a bar against cases that are caused by actions that happened over two years prior. However, this is an issue that Wall and Cluck would have had to contest in their original trial. If a party wants to argue that their case is invalid under the statute of limitations, they must bring it up at the trial court level, and because they did not do this (they raised it on appeal), it would be overruled by the court.
One of the claims against Wall and Cluck was the breach of a fiduciary duty. A fiduciary duty is a duty that entails one party acting in the benefit and for the benefit of another party. Palmer argues that Wall and Cluck had a fiduciary duty to act in and for the benefit of the estate, and that they breached it with their actions. Wall and Cluck argue that there was no fiduciary duty to be broken. This would be overruled by the court because Coble Wall, acting as the administrator of the estate, had assumed a legal duty to take care of and manage the estate properly.
Breach of Duty
It being established that a fiduciary duty does exist, Wall and Cluck’s next argument is that there was no breach of said duty. They argue that they cannot be charged with negligence or gross negligence because their actions were not the cause of the damages that Palmer and his party has suffered. However, the court found that Wall and Cluck did not estimate the value of the estate correctly, and because of this the parties bringing suit did suffer loss, and also because of this, the estate plan could not achieve its purpose. The court found that this point would be overruled because the misrepresentation of the estate’s value is exactly the cause of the damages suffered by Palmer and his party.
Deceptive Trade Practices Act
Palmer had claims against Wall and Cluck under a very specific act called the Deceptive Trade Practices Act which protects consumers against false, misleading, and deceptive business practices and breaches of warranty. Wall and Cluck argue that this act does not apply to their actions because they correctly represented a plan to Palmer and the others bringing suit that would minimize taxes substantially in a way that would greatly benefit both the estate and the beneficiaries of the estate. They argued that the other party were consumers who sought to acquire services from Cluck and Wall, and all their actions were in regulation with the DTPA. The court does not address this argument and does not make a judgment call on whether or not it would be overruled. They instead state that finding a lack of jurisdiction of the probate court makes addressing this point unnecessary.
How do you get around probate court? Avoiding probate
Avoiding probate can be as simple as setting up a proper estate plan. In fact, it makes sense to set up a proper estate plan even if you intend on avoiding probate. Why would you want to avoid probate? The cost of probate is often hundreds of thousands of dollars, and it can take years to settle. Estate planning can save the family a lot of time and money. In Texas, the cost of probate is often significantly less than in other states.
What counties in Texas have statutory probate courts?
Statutory probate courts are courts whose jurisdiction was created by Texas law and is governed by the state. Contrast that with a court that has its jurisdiction granted by the constitution or by an act of Congress, such as the federal district courts, federal bankruptcy courts, or a court with exclusive jurisdiction over a subject matter or geographic area, such as the Veterans Court of Texas.
The main difference between a constitutional court and a statutory court is the source of their jurisdiction. A constitutional court gets its power from either the constitution or an act of Congress, while a statutory court’s jurisdiction is created by state law. This means that constitutional courts are bound by federal law, while statutory courts are only bound by state law. Because of this, constitutional courts have more power than statutory courts.
The following list shows Texas counties with statutory probate courts.
- Bexar County
- Collin County
- Dallas County
- Denton County
- El Paso County
- Galveston County
- Harris County
- Hidalgo County
- Tarrant County
- Travis County
What happens in probate court?
Probate court is the court where matters relating to the estate of a deceased person are dealt with. The court has the power to appoint an executor or administrator to deal with the estate, and to distribute the estate among the beneficiaries. The court also has the power to settle any disputes that may arise in relation to the estate.
What is a probate case?
Probate is a legal process in which a court oversees distributions of a person’s estate. It’s more than just settling debts and closing accounts; it includes paying taxes, taking title of property and other postmortem tasks.
On its face, probate can be an intimidating process. It can be expensive and time-consuming, especially if you don’t know the law or if there are challenges to the case, such as a will or creditor claims. That’s where an experienced Texas probate attorney can help.
The experienced probate lawyers at Kreig LLC have years of experience helping people through the process of probate and resolving disputes over estates. From setting up trusts that can help control the distribution of an estate during its administration to protecting personal privacy and ensuring that heirs receive their rightful share, we can help you make sure your loved one’s wishes are followed through to completion.