In re Wells

• Docket Number: 12-23-00066-CV
• Decision Date: 08 November 2023
• Parties: IN THE MATTER OF THE ESTATE OF HELEN GAYLE WELLS, DECEASED
• Court: Texas Court of Appeals

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IN THE MATTER OF THE ESTATE OF HELEN GAYLE WELLS, DECEASED

No. 12-23-00066-CV

Court of Appeals of Texas, Twelfth District, Tyler

November 8, 2023

Appeal from the County Court at Law No 3 of Smith County, Texas (Tr.Ct.No. 42,565P)

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

MEMORANDUM OPINION

Greg Neeley, Justice

Kelcey Melissa Wells appeals the trial court's grant of six interlocutory motions for partial summary judgment in the proceeding below. In seven issues, she challenges the trial court's rulings on exercise of special appointment power assignment of inheritance rights, fraudulent inducement Kelcey's standing to bring seventeen claims and affirmative defenses, breach of fiduciary duty, residuary trust distributions, and the award of attorney's fees. We affirm in part, reverse and render in part, and reverse and remand in part.

Background

Don Wells and Helen Wells were married in 1948 and subsequently had two children, Kevin Wells and Karen Donnell Wells. Kelcey is Kevin's daughter. In 1994, Don and Helen executed "mirror image" wills. Don's will, in relevant part, left almost his entire estate to the trustee of a Residuary Trust created for the benefit of "(1) my spouse; (2) one or more of my children; and (3) one or more of my descendants, whether the parents of such descendants are living or dead." Don named Helen as trustee of the Residuary Trust, named Kevin as first alternate trustee, and granted Helen a power of appointment over the Residuary Trust, which reads in relevant part:

Testamentary Power of Appointment. Upon the death of my spouse, the then remaining principal and undistributed income of the trust estate shall be distributed in such proportions and in such manner to or for the benefit of any one or more persons included in the group consisting of my descendants or spouses of my descendants, as my spouse may appoint by specific reference in my spouse's last will and testament, or codicil thereto, (admitted to probate). The power herein granted shall in no event be exercised by my spouse in favor of my spouse, my spouse's creditors, my spouse's estate or creditors of my spouse's estate . . To the extent that my spouse shall not exercise the foregoing testamentary power of appointment, then upon my spouse's death the then existing corpus and undistributed income of such trust estate shall be held and distributed as hereinafter provided, in all respects as if such power of appointment had not been granted.

Don's will contained additional instructions regarding exercise of testamentary powers of appointment:

Exercise of Testamentary Power of Appointment. Each testamentary power of appointment granted in this Will shall be exercised by a Will or any codicil thereto which (i) is executed in accordance with the formalities required at the time of the exercise of the power by the laws of the state of the donee's domicile and (ii) specifically refers to such power of appointment. . . .

If Helen did not exercise this power of appointment, then upon Helen's death, the assets of the Residuary Trust would be distributed equally to Kevin and Karen. In November 2010, Don and Helen each executed a codicil to their respective 1994 wills which named Karen as first alternate trustee of the Residuary Trust in place of Kevin. Don died on November 17 2012.

On January 7, 2013, Helen signed a new will, drafted by Karen. On the same day, Helen signed a document wherein she resigned as trustee of the Residuary Trust, causing the first alternate trustee, Karen, to become trustee. In the same document, Helen renounced her position as executrix of Don's estate in favor of Karen. As trustee of the Residuary Trust, Karen never funded the trust, did not keep any records related thereto, and did not provide any type of accounting to the trust beneficiaries. Kelcey alleges that Karen never sent Kevin a copy of Don's will, never notified Kevin that he was a beneficiary of the Residuary Trust, and never made any distributions from the Residuary Trust to Kevin.

Helen Wells died on December 13, 2013. On November 18, 2015, Karen filed an application to probate Don's will and for issuance of letters testamentary. Over one year later, Karen filed an amended application to probate Don's will as a muniment of title. Also on November 18, 2015, Karen filed an application to probate Helen's will and for issuance of letters testamentary, which was subsequently dismissed for want of prosecution. The Last Will and Testament of Don Wells was entered for probate as a muniment of title on March 14, 2017. On October 25, Karen filed an application to probate Helen's will as a muniment of title. The trial court admitted Helen's will to probate as a muniment of title on November 28. However, on December 22, Kelcey moved to modify and requested that the court vacate its November 28 order and instead appoint a personal representative. In an amended motion filed February 26, 2018, Kelcey applied for issuance of letters testamentary and requested that she be appointed personal representative of Helen's estate. The court vacated its November 28, 2017, order on March 9, 2018, and scheduled a hearing for appointment of an executrix. At the hearing on May 1, the court found that Karen was disqualified from serving as executrix because of her previous felony convictions, and appointed Kelcey as the independent executrix of Helen's estate.^[1]

The "Disclaimer" by Kevin Wells

Helen's will provided, in relevant part, that Kevin was to have no ability to interfere in the management of her estate, "except to accept or reject his bequeathment." In a November 24, 2015, letter to Kevin, Karen requested that he provide a "written, signed, witnessed and notarized" statement that he was "rejecting [his] inheritance." Karen stated that if she did not receive this document within a set time, she would "not pay the 2015 taxes on [Kevin's] house," and "the State will also take what Mother left you[.]" Karen followed the letter with an e-mail, sent February 29, 2016, again requesting that Kevin "sign the statement I sent you," and explaining that her lawyer would have to "persuade the judge that you have the right to invoke" "the clause in [Helen's] will giving you the option to accept or reject your inheritance." The email further states that Karen intends to "do what Mother wanted me to do with your part of the money - which is give it to you," but that if Kevin does not provide the requested document, "[his] future is going to be exceedingly bleak" and Karen "will not ever again raise a finger to help [him]." The record contains a notarized and witnessed document, which Karen testified she drafted for Kevin's signature, that appears to have been signed by Kevin on April 4, 2016. The document reads, in relevant part:

I, Kevin Douglas Wells, being of sound mind and having thoroughly read and understand the wording in the last will and testament of my late mother, Helen Brown Wells, wish to invoke the paragraph in her will allowing me to reject the inheritance given to me in her last will and testament. I hereby relenquish and quit any and all claims to any and all parts of the estate of the deceased, Helen Brown Wells. By rejecting any and all heirship in the estate of the late Helen Brown Wells, I am now and forever acknowledging that my sister, Karen Donnell Wells, the only other child of the late Helen Brown Wells is the sole heir to my Mother, the late Helen Brown Wells' entire estate. . . .

I pray that the judge will honour my decision and allow my only other sibling and child of Helen Brown Wells to inherit the complete and unhindered estate of the late Helen Brown Wells in its entire amount.

Kevin died on April 19, 2017, and Kelcey was appointed representative of Kevin's estate.

Kelcey's Claims against Karen

On July 16, 2018, having received information that Karen made transfers from Don's and Helen's accounts to her own personal account, Kelcey filed a lawsuit against Karen for conversion of funds. Kelcey amended her petition numerous times throughout the pendency of the litigation to add additional claims and affirmative defenses (both on her own behalf and on behalf of Kevin's estate), filing her Eighth Amended Petition on November 8, 2021.

On March 12, 2019, Karen moved for partial summary judgment and asked the court to determine that Helen validly exercised the power of appointment she received via Don's will over the assets that would have been part of the Residuary Trust. Kelcey filed a cross-motion, asking the court to find that Helen did not validly exercise the power of appointment. On June 10, the court issued an order granting Karen's motion, denying Kelcey's motion, and specifically finding that Helen validly exercised the power of appointment over the aforementioned assets "and gave them to [Karen]."

On March 6, 2020, Karen moved for partial summary judgment on grounds that the document Kevin signed on April 4, 2016, was an assignment by him to Karen of the bequest to Kevin contained in Helen's will. On March 18, 2021, Karen filed a no-evidence motion for summary judgment on Kelcey's affirmative defense that the document was the product of fraudulent inducement by Karen. On September 28, the court granted Karen's motion for partial summary judgment and found that the document was an assignment by Kevin of his bequest from Helen's will to Karen. That same day, the court granted Karen's no-evidence motion for partial summary judgment and dismissed Kelcey's affirmative defense that the document signed by Kevin was the product of fraudulent inducement.

Karen then filed two additional motions for partial summary judgment related to the claims Kelcey asserted in her Eighth Amended Petition for Damages....