In re Estate of Downing

• Decision Date: 25 February 2015
• Docket Number: No. 08–14–00030–CV,08–14–00030–CV
• Citation: 461 S.W.3d 231
• Parties: In the Matter of the Estate of Vernon Lee Downing, Deceased.
• Court: Texas Court of Appeals

461 S.W.3d 231

In the Matter of the Estate of Vernon Lee Downing, Deceased.

No. 08–14–00030–CV

Court of Appeals of Texas, El Paso.

February 25, 2015

Mark McCraw, McCraw Gantt PLLC, McKinney, TX, for Appellant.

Jameson J. Watts, Winston & Strawn LLP, Houston, TX, James C. Fling, Adkins & Fling, Shamrock, TX, for Appellees.

Before McClure, C.J., Rodriguez, and Hughes, JJ.

OPINION

STEVEN L. HUGHES, Justice

When Vernon Lee Downing died in 2010 and granted his second wife, Ruth June Downing, a life estate in his house, cars, and IRA, he likely did not suspect that she, his children, and the bank holding the mortgage would become involved in a complicated dispute involving foreclosure, a will contest, and accusations of fraud and waste of estate assets. In the end, the probate court declared the will Vernon signed in 2000 was valid and the life estate it granted had terminated, allowed the bank to foreclose on the house, ordered Ruth June Downing to turn over the cars and IRA to the children, and awarded the children $135,000 in damages and attorney's fees. Ruth June Downing appeals. We affirm in part and reverse and render in part.

FACTUAL AND PROCEDURAL SUMMARY

Vernon Lee Downing died on May 23, 2010. He was survived by his second wife, Appellant Ruth June Downing, and by his four children, the Appellees Denise Downing, Katrina Fling (Downing), and Resa Downing, and another child, Devona Menix (Downing). Appellees Denise, Katrina, and Resa filed an application to admit to probate Vernon's will dated February 23, 2000, which the probate court admitted as a muniment of title on July 19, 2010. Vernon's will devised to Ruth Downing his automobiles, IRA, and house “for so long as she lives in the house and does not cohabit with any other man,” and provided that “[i]n either of these occurrences, the house and automobiles shall be immediately sold and the IRA account liquidated ... and the net proceeds will be divided equally among my four daughters[.]” Ruth Downing, claiming the estate was governed by a subsequent will, filed a petition for bill of review and a motion to set aside the judgment admitting the 2000 will to probate. No action was taken on these contested matters.

On August 2, 2012, Appellee Bank of America filed an original petition in Dallas district court to foreclosure its lien on Vernon's residence in Garland, Texas.

Denise, Katrina, and Resa appeared and filed an answer, a counterclaim against the Bank, and a cross-claim against Ruth Downing.¹ Ruth Downing and Devona Menix (Downing) failed to appear and answer. The Bank, Denise, Katrina, and Resa filed an agreed motion to transfer the foreclosure case to the probate court as required by law, and the district court signed an agreed order transferring the case to the probate court on January 23, 2013.

After the transfer, Denise, Katrina, and Resa filed a motion to deem admissions that had previously been served on Ruth Downing in the original probate proceeding. The admissions were deemed admitted by order of the probate court dated March 1,2013. On August 1,2013, the Bank filed a motion for default judgment on its foreclosure claim.

A bench trial was held by the probate court on all matters on August 27, 2013. Ruth Downing did not appear at trial. The deemed admissions were submitted into evidence, and the probate court took judicial notice of the court's entire file. The only witness at trial was Katrina Fling, who testified briefly concerning the matters contained in her affidavit, which was admitted into evidence. Katrina testified that her affidavit concerned some of the damages sustained by her and her sisters “as a result of Ms. Downing's failure to comply with a lot of different things[.]”

Katrina's affidavit stated that Ruth Downing terminated her life estate on September 28, 2011, when she moved from the residence without notice to the children listed as remaindermen in Vernon's will. Her affidavit stated that on that date, Vernon's Cadillac Sedan Deville had a fair market value of $8,000, his GMC Sierra pickup had a fair market value of $23,000, Vernon's IRA had a fair market value of $18,000, and the residence had a fair market value of $123,000 with a mortgage of approximately $98,000, leaving a net equity of $25,000, all of which should have been transferred to the remaindermen.

As to fraud, Katrina's affidavit stated that Ruth Downing vacated the residence on September 28, 2011, without notice, and defaulted on the mortgage payments, thereby “wasting an asset of the estate and knowingly and intentionally perpetrating fraud on the remaindermen,” and that Ruth had someone living in the house who had not paid the mortgage or rents to the estate or the remaindermen. The affidavit also stated that Ruth Downing “purportedly transferred” the Cadillac Sedan Deville after Vernon's death, at a time Vernon could not have signed the title or transfer document and when the probate proceedings showed the owners of the vehicle were Katrina, Denise, Resa, and Devona. The affidavit then states: “Damages for Fraud—$100,000.00.”

The probate court signed an “Agreed Judgment and Default Judgment” on August 27, 2013. The judgment recited that Ruth Downing failed to appear and answer in the foreclosure suit although duly cited, and failed to continue her suit in the probate case, and “wholly made default.” In the foreclosure action, the court granted foreclosure to the Bank on its lien on the residence, finding that the Bank, Denise, Katrina, and Resa had agreed to the foreclosure, while all the other interested parties to the foreclosure had defaulted by failing to appear and answer.

In the probate action, the court denied Ruth Downing's petition for bill of review and motion to set aside and decreed that Vernon's February 23, 2000 will previously admitted to probate as a muniment of title was confirmed and declared to be Vernon's last will. The court decreed that pursuant to Paragraph III of the will,² Ruth Downing's life estate terminated on September 28, 2011, when she stopped living in the residence without notice to the remaindermen, and that under the terms of the will, the residence, and the Cadillac Sedan Deville, the GMC Sierra pickup, and Vernon's IRA “or the fair market value of same ($50,000.00),” were now jointly owned by Denise, Resa, Katrina, and Devona.

The court ordered that pursuant to the terms of the will, the two vehicles be sold and that Vernon's IRA be liquidated, and that the net proceeds be divided equally between the four children. The judgment stated that “[i]n the event the vehicles have been sold to third parties and the Individual Retirement Account depleted, ... judgment is hereby given to [the four children] for the fair market value of the Cadillac Deville Sedan and GMAC [sic] pickup truck in the amount of ... $50,000[.]”

The judgment awarded $25,000 to Denise, Katrina, Resa, and Devona because Ruth Downing as life tenant had failed to keep up the mortgage payments, taxes, and insurance on the residence and thereby committed waste as to that estate asset. The judgment also decreed that Ruth Downing “had committed fraud” and awarded $100,000 “for such fraud” to Denise, Katrina, and Resa. Finally, the judgment awarded Denise, Katrina, and Resa “reasonable attorney's fees” of $10,000.

DISCUSSION

Ruth Downing brings essentially six issues on appeal.³ She contends the trial court abused its discretion in taking judicial notice of its entire file, that there was no evidence to support a finding of waste, that Appellees cannot recover actual damages because they agreed to the foreclosure on the residence, that awarding both actual damages and a monetary award for fraud violated the one-satisfaction rule, that the judgment is not definite and thus not final, and that there is no evidence of attorney's fees.⁴

Finality of the Judgment

We address Downing's Issue VII first because it implicates our jurisdiction over this appeal. In her seventh issue, Downing contends the judgment is not final because it is indefinite. The judgment decreed that under the terms of Vernon's will, Ruth Downing's actions caused her life estate to terminate and consequently the four children, Denise, Resa, Katrina, and Devona, now owned not only the residence, but also the 2003 Cadillac Sedan Deville, the GMC Sierra pickup, and Vernon's IRA, “or the fair market value of same ($50,000.00).” The judgment ordered that pursuant to the terms of the will, the two vehicles be sold and the IRA liquidated, and that the net proceeds of the sale and liquidation be divided equally between the four children. The judgment provided an alternative recovery: “In the event the vehicles have been sold to third parties and the Individual Retirement Account depleted ... a judgment is hereby given to [the four children] for the fair market value of the Cadillac Deville Sedan and GMAC [sic] pickup truck in the amount of ... $50,000[.]” Ruth Downing contends that this alternative recovery is vague and indefinite because it fails to specify how much will be owed if only one of the vehicles has been sold or if the IRA has been only partially depleted. Downing asserts that to be definite for finality purposes, the judgment was required to set out separate values for each vehicle and for the IRA, and set out a method to determine a lesser recovery if only one vehicle was sold or if the IRA was not completely depleted.

We apply the same rules in construing the language in a judgment as we apply in construing the language in other written documents. Azbill v. Dallas Cnty. Child Protective Servs. Unit of Tex. Dep't of Human and Regulatory Servs., 860 S.W.2d 133, 136 (Tex.App.–Dallas 1993, no writ) (“Courts construe orders and judgments under the same rules of interpretation as those applied to other written instruments”). We first look to the actual language used in the judgment to determine its meaning. See El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805–06 (Tex.2012). If the...