Archer v. Moody

• Court: Texas Court of Appeals
• Writing for the Court: William J. Boyce, Justice
• Citation: Archer v. Moody, 544 S.W.3d 413 (Tex. App. 2017)
• Decision Date: 14 December 2017
• Docket Number: NO. 14-15-00945-CV,14-15-00945-CV
• Petition History: pet. denied
• Parties: Edna ARCHER, Haden Beardsley, and Sarah Kathryn Pacheco, Appellants v. Janice MOODY, Linda Moody, Elizabeth Moody, W.L. Moody, V, and Moody National Bank, as Trustee, Appellees

544 S.W.3d 413

Edna ARCHER, Haden Beardsley, and Sarah Kathryn Pacheco, Appellants

v.Janice MOODY, Linda Moody, Elizabeth Moody, W.L. Moody, V, and Moody National Bank, as Trustee, Appellees

NO. 14-15-00945-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed December 14, 2017.

Joseph S. Horrigan, Thomas C. Wright, Bradley Wayne Snead, Houston, TX, Van Henry Archer III, San Antonio, TX, Charles Grigson, Austin, TX, for Appellants.

Gregory N. Jones, Sarah Patel Pacheco, Scott Morrison, Houston, TX, Howard David Hughes, Austin, TX, for Appellees.

Panel consists of Justices Boyce, Jamison, and Brown.

OPINION

William J. Boyce, Justice

Three remainder beneficiaries of a trust challenge the Galveston County Probate Court's final judgment interpreting the trust instrument.

The probate court concluded that the trust instrument directed a per capita distribution of the trust estate to the remainder beneficiaries upon the trust's termination and applied a per stirpes distribution to the descendants of a deceased remainder beneficiary. We reverse and remand because the trust instrument's distribution of the trust estate upon termination "in equal shares per stirpes" contemplates a distribution to the remainder beneficiaries based on their deceased ancestors' shares. Because the beneficiaries descend from three siblings, the trust instrument directs that the trust estate initially must be divided into three shares; the beneficiaries' shares are computed based upon the 1/3 interest of each of the three siblings from whom the beneficiaries are descended.

BACKGROUND

The litigants in this declaratory judgment action are remainder beneficiaries of a trust that W.L. Moody, Jr. created in 1934. The trust corpus is a 15,000-acre ranch located about 100 miles northwest of San Antonio near Junction, Texas. See generally Myrick v. Moody Nat'l Bank , 336 S.W.3d 795, 796-97 (Tex. App.—Houston [1st Dist.] 2011, no pet.).

W.L. Moody, Jr.'s son was W.L. Moody, III, who in turn had three children. The last surviving child was W.L. Moody, IV ("Bill Moody"). The parties agree that the trust terminated when Bill Moody died in 2014.

Bill Moody had four children. His two siblings were Edna Moody and Virginia Moody, each of whom had two children.

The appellants come from the Edna and Virginia wings of the Moody family. Edna Archer is Edna Moody's daughter.¹ Sarah Kathryn Pacheco is Virginia Moody's daughter; Haden Beardsley is the son of Virginia Moody's other daughter, who is deceased. We refer to them collectively as the "Edna and Virginia Moody Appellants."

The appellees are Bill Moody's four children: Janice Moody, Linda Moody, Elizabeth Moody, and W.L. Moody, V. We refer to them collectively as the "Bill Moody Appellees."²

The family tree relevant to this appeal appears as follows:

The remainder beneficiaries are W.L. Moody, III's grandchildren: David Myrick, Edna Archer, Virginia Beardsley (deceased and survived by Haden Beardsley), Sarah Kathryn Pacheco, Janice Moody, Linda Moody, Elizabeth Moody, and W.L. Moody, V (deceased). The legal dispute focuses on how to calculate the fractional shares of the trust estate allocable to the remainder beneficiaries when the trust terminated in 2014.

The Edna and Virginia Moody Appellants interpret the trust instrument to distribute the trust estate equally in 1/3 shares among Edna Moody, Virginia Moody, and Bill Moody. Under this interpretation, the Edna and Virginia Moody Appellants each receive a 1/6 undivided interest from Edna Moody's and Virginia Moody's respective 1/3 shares, computed as 1/3 multiplied by 1/2; the Bill Moody Appellees each receive a 1/12 undivided interest in the trust estate from Bill Moody's 1/3 share, computed as 1/3 multiplied by 1/4.

In contrast, the Bill Moody Appellees interpret the trust instrument to distribute the trust estate equally upon termination so that each of the remainder beneficiaries receives a 1/8 undivided interest in the trust estate.

The probate court interpreted the operative trust instrument language on cross-motions for traditional summary judgment under Texas Rule of Civil Procedure 166a(c). It granted summary judgment in favor of the Bill Moody Appellees and held that the remainder beneficiaries each receive an equal 1/8 undivided interest in the trust estate. The Edna and Virginia Moody Appellants challenge the probate court's grant of summary judgment in favor of the Bill Moody Appellees and the denial of the appellants' cross-motion for summary judgment.³

ANALYSIS

The Edna and Virginia Moody Appellants raise two issues on appeal contending that the probate court should have granted summary judgment in their favor and adopted their interpretation of the operative trust instrument language. In practical terms, adopting the appellants' interpretation means that their individual share size increases from 1/8 to 1/6 and the share size received by each of the Bill Moody Appellees decreases from 1/8 to 1/12.

This dispute arrives on appeal by way of cross-motions for traditional summary judgment. We review summary judgments de novo. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005). In a traditional motion for summary judgment, the movant must show there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c) ; Cantey Hanger, LLP v. Byrd , 467 S.W.3d 477, 481 (Tex. 2015). When both parties move for summary judgment and the trial court grants one motion and denies the other, we review both sides' summary judgment evidence. S. Crushed Concrete, LLC v. City of Houston , 398 S.W.3d 676, 678 (Tex. 2013). We may affirm the judgment, reverse and render a judgment for the other side if appropriate, or reverse and remand for further proceedings. Drake Interiors, L.L.C. v. Thomas , 433 S.W.3d 841, 847 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) ; see also In re Estate of Rhoades , 502 S.W.3d 406, 416-18 (Tex. App.—Fort Worth 2016, pet. filed) (concluding that the trial court's interpretation of a will devise was in error; court reversed the trial court's judgment and remanded the case for further proceedings consistent with its opinion).

I. Standards Governing Interpretation of the Trust Instrument

"We interpret trust instruments the same way as wills, contracts, and other legal documents." Myrick , 336 S.W.3d at 802 (citing Lesikar v. Moon, 237 S.W.3d 361, 366 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) ).

We look to the four corners of the trust instrument to ascertain the settlor's intent. Id. (citing Hurley v. Moody Nat'l Bank of Galveston , 98 S.W.3d 307, 310-11 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ). We presume the settlor placed nothing superfluous or meaningless in the trust instrument and that the settlor "intended every part, sentence, clause, and word to have a meaning and to play a part in the disposition of his property." Marlin v. Kelly , 678 S.W.2d 582, 587 (Tex. App.—Houston [14th Dist.] 1984), aff'd , 714 S.W.2d 303 (Tex. 1986) ; see also PopCap Games, Inc. v. MumboJumbo, LLC , 350 S.W.3d 699, 708 (Tex. App.—Dallas 2011, pet. denied) ("The use of different language in different parts of a contract generally means that the parties intended different things.").

The court's construction of a trust instrument should not "add to, subtract from, amend, correct, reform, revise, or rewrite" the language used in the instrument. Parker v. Parker , 131 S.W.3d 524, 531 (Tex. App.—Fort Worth 2004, pet. denied) ; see also Kettler v. Atkinson , 383 S.W.2d 557, 561 (Tex. 1964) ("[t]his court is not disposed to rewrite the will of the testatrix").

"The construction of a will or a trust instrument is a question of law for the trial court." Hurley , 98 S.W.3d at 310 (citing Nowlin v. Frost Nat'l Bank, 908 S.W.2d 283, 286 (Tex. App.—Houston [1st Dist.] 1995, no writ) ). The goal in construing both wills and trusts is to ascertain the maker's intent. Id. (citing Jewett v. Capital Nat'l Bank of Austin , 618 S.W.2d 109, 112 (Tex. Civ. App.—Waco 1981, writ ref'd n.r.e.) ). Unambiguous trust language that expresses the settlor's intent makes it unnecessary to construe the instrument because it speaks for itself. Id. (citing Jewett, 618 S.W.2d at 112 ).

"A court should determine the intention of the testator from the language in the instrument." Id. (citing Rekdahl v. Long, 417 S.W.2d 387, 389 (Tex. 1967) ). "A court should give effect to every part of the instrument if the language is reasonably susceptible to a harmonious construction." Id. (citing O'Malley v. Stratton, 831 S.W.2d 35, 37 (Tex. App.—El Paso 1992, no writ) ).

We now apply these precepts to the disputed trust language.

II. Applying the Standards

Resolution of this appeal focuses primarily on Article II and Article III of the trust instrument. Article II governed distribution of the trust's net income to W.L. Moody, III, his children, and his grandchildren before the trust terminated. Article III governs distribution of the trust estate after it terminated in 2014 upon the death of W.L. Moody, III's last surviving child, Bill Moody.

Under Article III, W.L. Moody, III's grandchildren are remainder beneficiaries entitled to share in the trust estate at the trust's termination upon Bill Moody's death. Article III distributes the trust estate upon termination as follows:

... [T]he Trustee shall, upon the termination of the Trust, distribute the Trust Estate in equal shares per stirpes to the then living grandchildren of William Lewis Moody, III, and the surviving issue of his deceased grandchildren.

(emphasis added). Our task is to determine the meaning of the phrase "in equal shares per stirpes" in Article III.

The Edna and Virginia Moody Appellants assert that this phrase in Article III requires an initial division of the trust estate into thirds among W.L. Moody, III's three children: Edna Moody, Virginia Moody, and Bill Moody. In turn, W.L. Moody, III's grandchildren share equally in the 1/3 interest of...