Holmes v. Beatty
| Decision Date | 14 August 2007 |
| Docket Number | No. 14-05-00474-CV.,14-05-00474-CV. |
| Citation | 233 S.W.3d 494 |
| Parties | Harry HOLMES II, Individually and as Independent Executor of the Estate of Thomas J. Holmes, Deceased, and as Trustee of any Trust Named as a Legatee in the Will of Thomas J. Holmes, Sr., Deceased, Appellant v. Douglas G. BEATTY, Individually and as Independent Executor of the Estate of Kathryn V. Holmes, Deceased, Appellee. |
| Court | Texas Court of Appeals |
Jack W. Lawter, Jr., Dianne Whitehorn Lawter, Jennifer Bruch Hogan, Richard P. Hogan, Houston, TX, for appellants.
Joseph S. Horrigan, Linda C. Goehrs, Noel Lane Stout, Rudolph Michael Culp, Houston, TX, for appellees.
Panel consists of Justices HUDSON, FOWLER, and SEYMORE.
In this appeal, and in companion case number 14-03-00663-CV, we must address several issues of first impression and determine whether Thomas J. Holmes, Sr. and Kathryn V. Holmes, a husband and wife, both deceased, owned certain brokerage accounts and securities held in certificate form with a right of survivorship. In this case, appellant, Harry Holmes, II, Individually and as Independent Executor of the Estate of Thomas J. Holmes, Deceased, and As Trustee of Any Trust Named as a Legatee in the Will of Thomas J, Holmes, Sr., Deceased ("Holmes"), and appellee, Douglas G. Beatty, Individually and as Independent Executor of the Estate of Kathryn V. Holmes, Deceased ("Beatty"), filed cross-motions for summary judgment. On appeal, Holmes challenges the trial court's order denying his motion for partial summary judgment and granting Beatty's motion for partial summary judgment, thereby ruling the spouses did not own with a right of survivorship a First Southwest Company account, a Raymond James & Associates, Inc. account, and certain securities in certificate form. We reverse and render with respect to the Raymond James & Associates, Inc. account. We affirm the remainder of the order.
Thomas and Kathryn Holmes were married in 1972. Kathryn died on July 22, 1999. Beatty, Kathryn's son from a previous marriage, was appointed independent executor of her estate. Thomas died on May 4, 2000, about nine months after Kathryn's death. Holmes, Thomas's son from a previous marriage, was appointed independent executor of his estate. During the marriage, Kathryn and Thomas placed a significant amount of their community property into brokerage accounts.1 When Kathryn died, some brokerage accounts were in existence and held securities. Kathryn and Thomas also held some securities in certificate form that had been issued out of brokerage accounts. The property that is the subject of these appeals has a multi-million dollar value.
Beatty sued Holmes, seeking a declaratory judgment that certain accounts and securities in certificate form were not owned by Kathryn and Thomas with a right of survivorship, and thus did not pass to Thomas upon Kathryn's death. Instead, Beatty claimed that Kathryn's one-half interest in this community property became an asset of her estate upon her death. Holmes filed a counterclaim, alleging the property was owned by Kathryn and Thomas with a right of survivorship. Therefore, Holmes sought an adjudication that the accounts and securities became the sole property of Thomas upon Kathryn's death and subsequently became assets of Thomas's estate upon his death.
Pertinent to this appeal, Beatty filed an "Amended Motion for Partial Summary Judgment." Holmes filed a "Motion for Partial Summary Judgment" followed by a "Supplemental Motion for Partial Summary Judgment."2
On March 18, 2005, the trial court signed an "Amended Order on [Beatty's] Amended Motion for Partial Summary Judgment and [Holmes's] Motion for Partial Summary Judgment and Supplemental Motion for Partial Summary Judgment." The trial court granted summary judgment in favor of Beatty and denied summary judgment in favor of Holmes as to certain property. Relative to this appeal, the trial court ruled that the following property did not pass to Thomas by right of survivorship at Kathryn's death:
• a First Southwest Company brokerage account;
• a Raymond James & Associates, Inc. brokerage account; and
• Nine securities that had been issued out of a Dain Rauscher Securities account, a Kemper Securities, Inc. account, or the First Southwest account, and were held by Kathryn and Thomas in certificate form.3
Further, the trial court stated the order did not dispose of claims pertaining to the separate or community character of the property or any other allegations concerning the assets. Thus, the trial court ruled only on the dispute regarding whether the assets were held with a right of survivorship, leaving all other issues for later resolution. This order was rendered final and appealable after the trial court severed it from the remainder of the case. Holmes appeals from this order.4
Although their grounds were numbered differently, Beatty and Holmes raised the same issues in their respective motions for summary judgment: (1) whether the account agreements for the brokerage accounts were sufficient to create a right of survivorship under applicable provisions of the Texas Probate Code; and (2) whether the securities in certificate form were held by Kathryn and Thomas with a right of survivorship under the Probate Code. Holmes also raised an additional ground, contending alternatively that the Raymond James account was governed by Florida law, and the account agreement was sufficient to create a right of survivorship under Florida law.
On appeal, Holmes presents four issues challenging the trial court's partial summary judgment order. In his first, second, and fourth issues, he contends: (1) the First Southwest and Raymond James account agreements were sufficient to create a right of survivorship in these accounts under the Texas Probate Code; and (2) the securities which had been issued out of the Dain Rauscher, Kemper, and First Southwest accounts in certificate form were held by Kathryn and Thomas with a right of survivorship because the account agreements created a right of survivorship and continued to govern the character of the securities after they were issued out of the accounts.5 Alternatively, Holmes asserts there is a genuine issue of material fact on whether the accounts and securities in certificate form were held with a right of survivorship. As another alternative, in his third issue, Holmes urges application of Florida law.
Under well-established standards governing a traditional motion for summary judgment, the movant must show there is no genuine issue of material fact and he is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). We review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). We take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Id. When, as in this case, both parties move for summary judgment on the same issues and the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both parties, determine all questions presented, and render the judgment the trial court should have rendered. Id.
Chapter XI of the Texas Probate Code governs non-testamentary transfers of property. See TEX. PROB.CODE ANN. §§ 436-462 (Vernon 2003 & Vernon Supp. 2006). Chapter XI is divided into three parts. See id. Part 1 addresses "Multiple-Party Accounts" in general. See TEX. PROB.CODE ANN. §§ 436-449. Part 2 concerns "Provisions Relating to Effect of Death." See TEX. PROB.CODE ANN. § 450. Part 3 is entitled "Community Property With Right of Survivorship." See TEX. PROB.CODE ANN. §§ 451-462.
As the title indicates, Part 3 includes various provisions governing a right of survivorship in community property. See id. In particular, section 451 provides, "[a]t any time, spouses may agree between themselves that all or part of their community property, then existing or to be acquired, becomes the property of the surviving spouse on the death of a spouse." TEX. PROB.CODE ANN. § 451. Section 452, entitled "Formalities," establishes the requirements for an effective agreement between spouses as follows:
An agreement between spouses creating a right of survivorship in community property must be in writing and signed by both spouses. If an agreement in writing is signed by both spouses, the agreement shall be sufficient to create a right of survivorship in the community property described in the agreement if it includes any of the following phrases:
(1) "with right of survivorship";
(2) "will become the property of the survivor";
(3) "will vest in and belong to the surviving spouse"; or
(4) "shall pass to the surviving spouse."
An agreement that otherwise meets the requirements of this part, however, shall be effective without including any of those phrases.
The party claiming spouses created a right of survivorship under Part 3 bears the burden to prove an agreement complying with section 452. See TEX. PROB.CODE ANN. § 456(a), (b)(3) (); see also Pressler v. Lytle State Bank, 982 S.W.2d 561, 564 (Tex.App.-San Antonio 1998, no writ) (recognizing party claiming to own joint account by right of survivorship under section 439 of Part 1, governing multi-party accounts in general, bears burden to prove the claim).
In this appeal, the parties agree that Part 3 is the controlling portion of Probate Code Chapter XI and specifically, Kathryn and Thomas were required to comply with section 452 to create a right of...
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