In re Estate of Matthews

• Decision Date: 31 August 2016
• Docket Number: No. 04-15-00461-CV,04-15-00461-CV
• Citation: 510 S.W.3d 106
• Parties: ESTATE OF William H. MATTHEWS III, Deceased
• Court: Texas Court of Appeals

510 S.W.3d 106

ESTATE OF William H. MATTHEWS III, Deceased

No. 04-15-00461-CV

Court of Appeals of Texas, San Antonio.

Delivered and Filed: August 31, 2016

Rehearing of Petition for Review Denied June 9, 2017

Darby Riley, Charles Riley, Riley & Riley, San Antonio, TX, for Appellant

Gordon Wayne Slade Jr., The Slade Law Firm, Raymond K. Leach, Law Offices of Ray Leach, San Antonio, TX, for Appellee

Sitting: Karen Angelini, Justice, Rebeca C. Martinez, Justice, Patricia O. Alvarez, Justice

OPINION

Opinion by: Patricia O. Alvarez, Justice

This appeal arises from the trial court's judgment voiding a marriage between a former in-home health aide and a patient she cared for—a disabled veteran with physical and mental health issues who committed suicide ten weeks after they married. The putative widow argues, inter alia, (1) the trial court lacked jurisdiction because the executor had no standing and there was no live controversy, and (2) the evidence was neither legally nor factually sufficient for the trial court to set aside a Rule 11 settlement agreement or for the jury to find the veteran lacked capacity to consent to marriage.

We conclude the evidence was sufficient for the trial court to set aside the Rule 11 agreement, the executor's capacity challenge was waived, there was a live controversy to decide, and the evidence was sufficient to support the jury's finding that the disabled veteran lacked the mental capacity to consent to marriage. Therefore, we affirm the trial court's judgment.

BACKGROUND

In the underlying suit, William H. Matthews Jr. petitioned the trial court to annul his deceased son's marriage to Katherine Sanchez Matthews, and he sued Katherine for civil claims. We briefly review the relevant facts.

A. Billy's History, Marriage to Katherine

William Henry Matthews III (Billy), an Army veteran of Operation Iraqi Freedom, was medically discharged as 100% disabled after he developed multiple sclerosis

. Along with MS, he was treated for depression, Attention Deficit Hyperactivity Disorder, and Post-Traumatic Stress Disorder. He also had an ongoing history of marijuana and alcohol abuse.

Katherine Sanchez Matthews met Billy in 2007 when she served as his home health aide. According to Katherine, they developed a romantic relationship and Billy proposed to her in 2008. It is undisputed that they married on June 1, 2010.

On August 8, 2010, Billy died of a self-inflicted gunshot wound

.

B. Katherine's Claim, William's Petition

Billy's will devised all his property to his father, William H. Matthews Jr. (William), and named his father as executor of his estate. After Billy's death, William applied to probate Billy's will. Later, and allegedly not knowing Billy had a will, Katherine filed an application to determine heirship, and she claimed an interest in Billy's real property. William then petitioned the court to annul Billy's marriage to Katherine. He alleged Billy lacked the capacity to enter into a marriage and Katherine exercised undue influence over Billy to consent to the marriage. William's second amended petition also sought a determination of Katherine's homestead rights in Billy's house, a determination that Katherine had breached her fiduciary duty to Billy's estate and converted certain funds, and attorney's fees.

C. Rule 11 Settlement Agreement

Initially, William and Katherine reached a Rule 11 agreement to settle their dispute. The agreement required Katherine to return a number of Billy's items to William and to reimburse Billy's estate for $3,000. Additionally, Katherine was to "waive and surrender all claims against [Billy's estate], including all claims derived by virtue of [her] marriage to [Billy], any claims of reimbursement, and homesteads rights in the Estate's real property and any claims for spousal allowance of any kind as of [the date of the agreement]." In return, William was to "dismiss with prejudice or agree to a take nothing judgment ... for any and all claims challenging [Katherine]'s marriage to [Billy] as well as any claims by the estate against [Katherine]."

D. Settlement Agreement Set Aside, Jury Trial

A few months after the Rule 11 agreement was signed, William learned Katherine had not returned some items of Billy's personal property that were listed in the settlement agreement. Additionally, a neighbor told William she saw some of Billy's property in the garage of Durgal Jamon Pipes, Katherine's ex-boyfriend. William moved to have the Rule 11 agreement set aside on the basis of misrepresentation and fraud. He also asked the court to reinstate all the claims in his second amended petition, including his application to annul Billy and Katherine's marriage.

After a hearing, the trial court set aside the agreement. The claims in William's petition were reinstated, and the case proceeded to trial. A jury found that Billy did not have the mental capacity to consent to marriage and Katherine exercised undue influence on Billy to consent to the marriage. The trial court annulled the marriage and declared it void. William filed a motion to modify the judgment to include an award of attorney's fees, but after a hearing, the trial court denied the motion. Katherine appeals the trial court's judgment.

E. Katherine Appeals

On appeal, Katherine raises five issues. She argues (1) the trial court lacked subject matter jurisdiction because William was not an interested person in a suit to void a decedent's marriage and there was no live controversy; and the evidence is neither legally nor factually sufficient to support (2) the trial court setting aside a Rule 11 agreement or (3) the jury finding of lack of capacity to consent to marriage.

She also argues (4) undue influence is not a valid basis for a post-mortem annulment under the Texas Estates Code and (5) the evidence is neither legally nor factually sufficient to support the jury's finding of undue influence.

RULE 11 SETTLEMENT AGREEMENT

Because Katherine's challenge to the trial court's subject matter jurisdiction requires us to determine whether the trial court could set aside the Rule 11 agreement, we address the Rule 11 agreement first. Katherine argues the trial court erred in setting aside the Rule 11 agreement because the evidence was neither legally nor factually sufficient to support its decision. We briefly recite the standard of review and applicable law.

A. Standard of Review

"When a party seeks to set aside a settlement agreement, a reviewing court generally reviews the trial court's decision ... for an abuse of discretion." Arizola v. Tutle & Tutle Trucking, Inc. , No. 04–11–00067–CV, 2012 WL 2335995, at *2 (Tex.App.–San Antonio June 20, 2012, pet. denied) (mem. op.); accord Davis v. Davis , No. 01–12–00701–CV, 2014 WL 890899, at *4 (Tex.App.–Houston [1st Dist.] Mar. 6, 2014, no pet.) (mem. op.); In re C.H., Jr. , 298 S.W.3d 800, 804 (Tex.App.–Dallas 2009, no pet.). "Where a party challenges the sufficiency of the evidence to support a discretionary decision, courts often employ a two-pronged analysis: ‘(1) Did the trial court have sufficient information upon which to exercise its discretion; and (2) Did the trial court err in its application of discretion?’ " W. Wendell Hall et al., Hall's Standards of Review in Texas , 42 ST. MARY'S L.J. 3, 18 (2010) (quoting Lindsey v. Lindsey , 965 S.W.2d 589, 592 (Tex.App.–El Paso 1998, no pet.) ); see Ford Motor Co. v. Garcia , 363 S.W.3d 573, 578 (Tex.2012) ("A trial court abuses its discretion by ruling (1) arbitrarily, unreasonably, or without regard to guiding legal principles; or (2) without supporting evidence.").

B. Applicable Law

"If the parties reach a settlement agreement and execute a written agreement disposing of the dispute, the agreement is enforceable in the same manner as any other written contract." TEX. CIV. PRAC. & REM. CODE ANN. § 154.071(a) (West 2011); accord Garza v. Villarreal , 345 S.W.3d 473, 479 (Tex.App.–San Antonio 2011, pet. denied) ("A settlement agreement is a contract, and its construction is governed by legal principles applicable to contracts generally." (quoting Donzis v. McLaughlin , 981 S.W.2d 58, 61 (Tex.App.–San Antonio 1998, no pet.) ). A settlement agreement may be rescinded based on fraudulent misrepresentations made to induce the other party to enter into the agreement. See Schlumberger Tech. Corp. v. Swanson , 959 S.W.2d 171, 178 (Tex.1997). "Promises made without intention of fulfillment, in order to induce others to make contracts, are as culpable and as harmful as are willful misrepresentations of existing facts. Hence contracts may be avoided alike for such fraudulent promises and for such misrepresentations." Id. (quoting Edward Thompson Co. v. Sawyers , 111 Tex. 374, 234 S.W. 873, 874 (1921) ). "Since intent to defraud is not susceptible to direct proof, it invariably must be proven by circumstantial evidence." Spoljaric v. Percival Tours, Inc. , 708 S.W.2d 432, 435 (Tex.1986).

"While breach of the contract alone is not evidence that a party did not intend to perform, ‘breach combined with "slight circumstantial evidence" of fraud’ is some evidence of fraudulent intent, enough to support a verdict." Aquaplex, Inc. v. Rancho La Valencia, Inc. , 297 S.W.3d 768, 775 (Tex.2009) (quoting Spoljaric , 708 S.W.2d at 435 ).

C. Analysis

At the hearing on the motion to set aside the Rule 11 agreement, William and Katherine both testified.

1. William's Testimony

William testified to the following facts. Shortly after Billy's death, Katherine changed the door locks on Billy's house and William no longer had access to it. William relied on Katherine's representations as the basis for him to agree to the settlement. He relied on her promises that she would return Billy's property and restore William's access to Billy's house. When a neighbor later told William she saw some of Billy's property in Pipes's garage, William obtained a writ of sequestration. In executing the writ, the searchers discovered boxes of Billy's property in Pipes's garage. Katherine...