In re Estate of Hoskins

• Decision Date: 08 September 2016
• Docket Number: NUMBER 13-15-00487-CV
• Citation: 501 S.W.3d 295
• Parties: Estate of Lee Roy Hoskins, Sr., Deceased
• Court: Texas Court of Appeals

501 S.W.3d 295

Estate of Lee Roy Hoskins, Sr., Deceased

NUMBER 13-15-00487-CV

Court of Appeals of Texas, Corpus Christi-Edinburg.

Delivered and filed September 8, 2016

Melanie L. Fry, C. David Kinder, San Antonio, TX, for Appellants.

Kevin Philip Kennedy, Attorney at Law, Christopher Hodge, Joyce W. Moore, Langley & Banack, Royal B. Lea III, Bingham & Lea P.C., Glen A. Yale, Yale Law Firm, P.C., Ezra Johnson, Uhl, Fitzsimons, Jewett & Burton PLLC, David L. Ylitalo, Ylitalo Law Firm, Brendan Holm, David William Navarro, San Antonio, TX, David Charles Bakutis, R. Dyann McCully, Bakutis McCully & Sawyer PC, Fort Worth, TX, George Morrill III, Morrill & Morrill, PLLC, Beeville, TX, James J. Hartnett Jr., The Hartnett Law Firm, Dallas, TX, Audrey Mullert Vicknair, Law Office of Audrey Mullert Vicknair, Corpus Christi, TX, for Appellees.

Before Chief Justice Valdez and Justices Rodriguez and Garza

OPINION

Opinion by Justice Rodriguez

This appeal involves the appointment of Marcus P. Rogers as receiver in a dispute over the estate of Lee Roy "Cowboy" Hoskins Sr. (Cowboy). Cowboy's will was probated in 1985. Thirty years later, many of Cowboy's family members are still involved in litigation to determine the fate of Cowboy's estate assets. In the present suit, appellees Rogers, Lee Roy Hoskins Jr., Lee Roy Hoskins III, Lee Ann Hoskins Kulka, Andrea Clare Jurica, Leonard K. Hoskins, Daniel Kenton Hoskins, and William Rex Hoskins all moved for the probate court to name Rogers as receiver for two trusts created by Cowboy's will.¹ Appellees asked the probate court to grant Rogers the authority to pursue the present lawsuit on behalf of the trusts. The probate court granted the motion in part, naming Rogers "receiver," but assigning him only the limited duty of creating a report on the current status of Cowboy's estate assets.

Appellants Clifton Hoskins and Hoskins, Inc.—whom we refer to collectively as "Cliff"² —raise three issues on appeal. By his first and second issues, Cliff contends that appellees offered no evidence which would justify the appointment of a receiver under the applicable law and that the probate court therefore abused its discretion by appointing any receiver. By a third issue, Cliff contends that the probate court erred by appointing Rogers in particular, alleging Rogers has bias which disqualifies him as a proper candidate. In response, appellees contend that this Court is without jurisdiction, because the probate court's order was not subject to an interlocutory appeal. In the alternative, appellees argue that the probate court based its order on a sufficient foundation of fact and selected an appropriate candidate, and therefore the court did not abuse its discretion. Because we agree with appellees' alternative contentions, we affirm.

I. BACKGROUND

Cowboy died testate in 1985. According to his will, Cowboy created two trusts—the Marital Deduction Trust and the Residuary Trust. The will identified Cowboy's wife Hazel as the sole beneficiary of the Marital Deduction Trust. The will further identified Hazel, his three sons—Clifton, Leonard, and Lee Roy Jr.—and his seven grandchildren as beneficiaries of the Residuary Trust. Cowboy named Hazel as independent executor of his estate and as a trustee of each trust.³

It is undisputed that the family has been embroiled in litigation for decades. The lawsuits involve allegations that Hazel transferred several pieces of property from Cowboy's estate to Clifton, in violations of the trusts. In one such dispute, Leonard sued Clifton and Hazel. The dispute proceeded to arbitration, at the order of the United States Bankruptcy Court of the Southern District of Texas.⁴ See Hoskins v. Hoskins , 497 S.W.3d 490, 491, No. 15–0046, 2016 WL 2993929, at *1 (Tex. May 20, 2016). The arbitrator awarded summary judgment in favor of Cliff on all of Leonard's claims, and the bankruptcy court confirmed the award. Id. at 492-93, 2016 WL 2993929, at *2.

Hazel, however, remained in the arbitration. The arbitrator appointed Rogers as receiver of the assets of the trusts pursuant to the Texas Property Code. See TEX. PROP. CODE ANN. § 114.008(a)(5) (West, Westlaw through 2015 R.S.). The arbitrator ordered Rogers to take "possession of all Trust Property and administer the Trust[s] pursuant to [their] terms," determine "whether Hazel Hoskins is capable of continuing as the Trustee," make "such other recommendations as he may deem appropriate," and deliver "a report to the Arbitrator no later than June 30, 2013." Rogers filed his written report on June 28, 2013. On November 12, 2013, the arbitration was abated pending the outcome of the Hoskins v. Hoskins appeal. See 497 S.W.3d at 491, 2016 WL 2993929, at *1. The arbitrator later resigned.⁵

On October 9, 2013, Rex Hoskins, who is Leonard's son and Cowboy's grandson, initiated the present litigation in Live Oak County Probate Court. Rex took the position that under the terms of Cowboy's will, all of the estate was to go into the Residuary Trust for the benefit of Hazel for life, with discretionary distributions to go to the support of Cowboy's children and grandchildren. Upon Hazel's death, the remainder was to go to Cowboy's descendants, per stirpes. However, according to Rex, Hazel had instead transferred several valuable trust assets directly to herself or Clifton, to the exclusion of the other family-member beneficiaries of the trusts. Rex further alleged that Hazel had also never provided an accounting to the trust beneficiaries, as the terms of the will and the trusts required her to do. Rex sought to remove Hazel as executor of Cowboy's estate and as trustee of the trusts. Hazel filed pleas in opposition to Rex's petition, but the probate court denied Hazel's pleas in May 2014. Hazel resigned as independent executor and as trustee of each trust shortly thereafter.

Rogers had also joined the probate court suit in November 20, 2013. In his petition, Rogers identified himself as the receiver of the two trusts "by Order signed on April 16, 2013, by Thomas J. Smith, arbitrator." He requested confirmation of the arbitration order appointing him as receiver and authorization to take possession of estate and trust property and records. In the alternative, Rogers requested that the probate court appoint him as receiver pursuant to property code section 114.008. See TEX. PROP. CODE ANN. § 114.008. He also sought an accounting from Hazel of both trusts and the estate, pursuant to the property code and the estates code, or in the alternative, that he be tasked with developing a full accounting. See id. § 113.151 (West, Westlaw through 2015 R.S.); TEX. ESTATES CODE ANN. § 404.001 (West, Westlaw through 2015 R.S.). Hazel opposed Rogers's petition. The probate court held a hearing on July 3, 2014, at which it received documentary evidence and testimony from Rogers concerning Hazel's alleged breaches of trust.

Rather than confirming Rogers's appointment or independently appointing him, the probate court appointed Dyann McCully dependent administrator of Cowboy's estate on August 18, 2014. In October 2014, McCully filed a declaratory judgment action naming Rogers, Hazel, the successor trustees, and Cowboy's children, grandchildren, and their associated entities as respondents. McCully asked the probate court to declare whether the estate, the trusts, or any of the beneficiaries of the estate or trusts had any claims against one another and, if so, to identify those claims. Subsequently, the Live Oak County District Court appointed Joe Carter to serve as trustee of the Marital Deduction Trust and George Morrill III as Trustee of the Residuary Trust.⁶

Likewise, rather than ordering Rogers to perform an accounting, on August 1, 2014, the probate court ordered Hazel to file a complete accounting of the estate and each trust from April 1985 to the date of the accounting. The accounting for the trusts was to be "delivered to Marcus Rogers, Receiver," along with all other parties. Hazel filed an accounting for the Marital Deduction Trust only, and Rogers objected to this accounting as being deficient in several ways—chiefly, that it was devoid of detail on individual assets and trust transactions, and also that it contained many unsworn declarations which coincided with Cliff and Hazel's stance in this litigation.

In April 2015, three of Cowboy's grandchildren—Lee Roy Hoskins III, Andrea Clare Jurica, and Lee Ann Hoskins Kulka—filed a motion to appoint Rodgers as receiver over the assets of both trusts. The motion set out that Rogers had previously been appointed by the arbitrator and that the probate court had already made comments and entered orders which impliedly "recognized the standing and role of the Receiver." The motion urged the court to formally appoint Rogers and grant him the authority to pursue this litigation on behalf of the trusts and their beneficiaries, using funds drawn from the estate.

Various other parties filed responses indicating support for Rogers's appointment. Cowboy's son Leonard argued that the appointment would control legal fees and expedite presentation of the case. Morrill, who is the trustee of the Residuary Trust, argued that because Hazel had left the trusts underfunded, he had no resources to pursue litigation; he supported the appointment as a means of controlling expenses and, in the alternative, moved to resign if no receiver or "ad litem" were appointed to pursue litigation in his place. Basic statements of support were also filed by Cowboy's grandsons Rex and Daniel Hoskins as well as Carter, the trustee of the Marital Deduction Trust. On May 11, 2015, Hazel filed her objections to the appointment of Rogers as receiver for the trusts.

On July 15, 2015, the probate court held a hearing on the receivership motion. It heard extensive arguments from counsel, but no evidence was offered or admitted. The probate court asked for additional post-hearing briefing. Cliff joined Hazel in that briefing, arguing against the...