In re Johnson

• Decision Date: 28 May 2021
• Docket Number: No. 20-0424,20-0424
• Citation: 631 S.W.3d 56
• Parties: In the ESTATE OF Dempsey JOHNSON, Deceased
• Court: Texas Supreme Court

631 S.W.3d 56

In the ESTATE OF Dempsey JOHNSON, Deceased

No. 20-0424

Supreme Court of Texas.

Argued February 25, 2021

OPINION DELIVERED: May 28, 2021

Paul R. Leake, Mesquite, W. Bruce Monning, Dallas, for Respondent.

Cynthia C. Hollingsworth, for Petitioner.

Justice Bland delivered the opinion of the Court.

It has long been the rule in Texas that a person cannot accept benefits under a will while contesting its validity.¹ In this case, a beneficiary under a will seeks to circumvent this rule by contending that the bequest she accepted is worth less than the inheritance she would receive should she succeed in nullifying the will. The trial court rejected this argument and dismissed the contestant's suit for lack of standing. The court of appeals reversed.

Once a will contestant establishes an interest in an estate, the will's proponent must establish any affirmative defenses that defeat that interest, including that the contestant is estopped from contesting the will because she has accepted a benefit under it. The contestant may rebut such evidence by showing that her acceptance is consistent with seeking to set the will aside. We reaffirm, however, that a contestant does not defeat an acceptance-of-benefits defense by showing that the benefit she accepted is worth less than a hypothetical recovery should her will contest prevail.

The will's proponent in this case established that the contestant accepted benefits under the will to which she was not otherwise legally entitled. Because the contestant did not rebut this evidence, the trial court properly dismissed the contest. Accordingly, we reverse the judgment of the court of appeals and render judgment dismissing the suit.

I

Shortly before his death, Dempsey Johnson executed a will, in which he devised his estate through specific bequests and left the residuary to his three daughters, Lisa Jo Jones, Tia MacNerland, and Carla Harrison. In addition to MacNerland's residuary interest, Johnson bequeathed to her a mutual fund account and one-half of a bank account. Johnson named Jones the estate's independent executor.

Johnson died in August 2017. In October, Jones applied to probate Johnson's will. In December, Jones transferred to MacNerland the mutual fund account that Johnson had bequeathed to her, and MacNerland assumed ownership of the account. The account's value at the time of the transfer was $143,229.15.

In February 2018, MacNerland sued Jones, as the estate's executor, seeking to set aside Johnson's will. She alleges that Johnson lacked testamentary capacity when he executed the will or did so under Jones's undue influence. Jones answered that MacNerland had no standing to contest the will because MacNerland had accepted benefits under it—namely, the mutual fund account that MacNerland took possession of three months earlier.

MacNerland did not return the mutual fund account to the estate, and in May, Jones filed a sworn inventory of the estate's assets and liabilities.² The inventory valued Johnson's estate at $1,427,209.94, including MacNerland's mutual fund. Jones then moved to dismiss MacNerland's will contest for lack of standing, claiming that MacNerland's acceptance of the account as a bequest under the will estopped her from suing to invalidate it.

In response, MacNerland conceded that she had inherited the mutual fund account through her father's will. Relying on the inventory, however, MacNerland argued that the acceptance-of-benefits doctrine did not deprive her of standing to contest the will because the value of the mutual fund account was "far less" than one-third of her father's $1.4 million estate—the proportionate amount, MacNerland claims, she "would have received" had he died without a will.

The trial court dismissed MacNerland's will contest for lack of standing.

MacNerland appealed, contending that the trial court misapplied the acceptance-of-benefits doctrine. She argued that her contest is consistent with her acceptance of the mutual fund account because, win or lose the contest, she is entitled to more. The benefit that she accepted—the mutual fund account—is not the full amount to which she is entitled under the will, and further, if she succeeds in her will contest, then her intestate share of her father's estate would exceed the account's value. Because Jones did not provide evidence to contradict MacNerland's assertion, MacNerland argued, Jones did not carry her burden to establish that the acceptance-of-benefits doctrine bars her claim.

The court of appeals agreed, relying on precedent from that court.³ The court held that Jones "failed to satisfy her burden, as the Will's proponent, by failing to demonstrate that [MacNerland] accepted greater benefits than those to which she was entitled under the Will or intestacy laws."⁴

Jones petitioned for review. Once she established that MacNerland had accepted benefits under the will, Jones argues, it became MacNerland's burden to produce some evidence that her acceptance of the mutual fund account is consistent with claiming that the will is invalid.⁵ We granted review.

II

A

Under the Estates Code, any "person interested in an estate" may contest its administration in probate court.⁶ A "person interested" in an estate is "an heir, devisee, spouse, creditor, or any other having a property right in or claim against an estate being administered."⁷

To have standing to contest a will, a person must first establish this interest. As we held in Logan v. Thomason , "the burden is on every person contesting a will, and on every person offering one for probate, to allege, and, if required, to prove, that he has some legally ascertained pecuniary interest, real or prospective, absolute or contingent, which will be impaired or benefited, or in some manner materially affected, by the probate of the will."⁸ "In the absence of such interest a contestant is a mere meddlesome intruder."⁹

In a will contest, a probate court addresses the standing question first. When a party challenges a contestant's interest in an estate, the trial court hears that issue during an in limine proceeding before hearing the contest itself.¹⁰ At the in limine hearing, the court decides whether the contestant has a legal or equitable interest in the estate. During that hearing, the contestant must establish an interest in the underlying estate.¹¹ At that point, the burden shifts to the will's proponent to adduce evidence of any affirmative defense that precludes the contestant from proceeding with her claim.¹² Thus, the will's proponent bears the burden to establish that the contestant voluntarily accepted benefits under the will. Absent any evidence rebutting it, competent evidence showing that the contestant accepted benefits under the will is sufficient to bar the contestant from proceeding to the merits of her claim.¹³

B

The acceptance-of-benefits doctrine bars a party from contesting the validity of a will while enjoying its benefits.¹⁴ It arises out of equity's aversion to a claimant who seeks to exploit irreconcilable positions. Equity does not permit the beneficiary of a will to grasp benefits under the will with one hand while attempting to nullify it with the other.¹⁵

A contestant may rebut the doctrine's applicability by showing that she did not accept the benefit through the will. The law does not deprive a contestant of standing when she otherwise has a present legal right to the benefit. That is, if the contestant is otherwise presently entitled to the accepted benefit, then her acceptance of it is not inconsistent with suing to set aside the will.¹⁶ For example, a contestant who accepts a bank account payable to the contestant upon the decedent's death or as an assertion of her interest in a community estate does not act inconsistently with a will contest because she does so through means other than the will.¹⁷ In such a case, there is no inconsistent position justifying estoppel because the contestant does not seek to nullify the will while she simultaneously enjoys its benefits.

In examining the application of these principles, we review questions of standing de novo.¹⁸ In applying a de novo standard of review, we "construe the pleadings in the plaintiff's favor, but we also consider relevant evidence offered by the parties."¹⁹ Because MacNerland did not request findings of fact or conclusions of law, we imply all findings necessary to support the trial court's judgment.²⁰

III

The operative facts in this case are largely undisputed. The parties agree that MacNerland is a "person interested" in her father's estate because she is a devisee under her father's will.²¹ MacNerland concedes that she accepted the mutual fund account from Jones as part of the distribution of the estate. Nevertheless, MacNerland proposes—and the court of appeals agreed—that her assertion of an entitlement to greater benefits under her father's will or, hypothetically, as an intestate heir, defeats Jones's defense of estoppel by acceptance of benefits.²² MacNerland draws support for her position from Holcomb v. Holcomb , a court of appeals decision suggesting that a contestant may challenge the will if the benefits she accepted are worth less than those to which she is entitled under the challenged will or intestate laws.²³

In addition to the court of appeals in this case, two other courts of appeals have examined Holcomb 's novel interpretation. In In re Estate of McDaniel , the Texarkana Court of Appeals expressly disagreed with Holcomb , describing it as "an inaccurate statement" of this Court's precedent.²⁴ In In re Meeker , a divided panel of the Fort Worth Court of Appeals endorsed Holcomb —at least in principle—by allowing a beneficiary to pursue pre-suit discovery under Texas Rule of Civil Procedure 202 to determine whether the beneficiary would receive greater benefits than those he had accepted either under an alternative will or intestate laws.²⁵ As the dissent observed, however, even the pursuit of pre-suit discovery was...