Koval v. Henry Kirkland Contractors, Inc., No. 01-06-00067-CV (Tex. App. 2/15/2008)
| Decision Date | 15 February 2008 |
| Docket Number | No. 01-06-00067-CV.,01-06-00067-CV. |
| Parties | LINDA KOVAL, ADMINISTRATRIX OF THE ESTATE OF GRANT LYNN KOVAL, DECEASED, Appellant, v. HENRY KIRKLAND CONTRACTORS, INC., Appellee. |
| Court | Texas Court of Appeals |
Panel consists of Justices ALCALA, HANKS, and WILSON.
Linda Koval ("Mrs. Koval"), administratrix of the estate of Grant Lynn Koval ("Koval"), appeals a summary judgment rendered in favor of Henry Kirkland Contractors, Inc. ("Kirkland") regarding a previous judgment of a bankruptcy court relevant to the estate. The trial court additionally found and awarded attorney's fees and costs to Kirkland. We affirm.
Robert and Judy Newey's home was damaged in June 2001 by Tropical Storm Allison which caused approximately five billion dollars of damage to area homes and businesses. The Neweys filed a notarized claim with the National Flood Insurance Program to repair the dwelling.
In June 2001, Koval was an independent contractor associated with Kirkland. His mother, Mrs. Koval, was an office manager and bookkeeper for Kirkland during this time. Koval, on behalf of Kirkland, entered into a Representation and Repair Agreement with the Neweys to make repairs to their home. After signing the agreement, the Neweys delivered a check to Kirkland as a deposit for the repairs.
At some point after the agreement was signed, but before repair work began, the Neweys and Kirkland agreed to modify their contract. Instead of providing repair work in exchange for the Newey's insurance proceeds, Kirkland agreed to refund the deposit amount and to allow the Neweys to keep the insurance proceeds in exchange for the Neweys' agreement to sell their home ("the Newey home") to Kirkland in its damaged state. Kirkland planned to remodel the home and either to rent or to sell it. Kirkland provided Koval with a check that returned the Neweys' deposit and directed him to memorialize the renegotiated deal on behalf of the company. Koval returned the money, but signed an agreement with the Neweys that gave himself, not Kirkland, the right to lease the home with an option to purchase it at a later date. In November 2001, Koval became a tenant in the Newey home and began making lease payments to the Neweys. Around the same time, restoration work began on the home, with Koval acting as foreman of the project purportedly on behalf of Kirkland. Koval ordered supplies and materials using Kirkland charge accounts which Kirkland paid in addition to all of the labor costs. Mrs. Koval tracked all of the expenses on the Newey home project in her role as office manager.
Work on the home continued at a rapid pace until March 2002, when both Koval and Mrs. Koval ended their respective and formal relationships with Kirkland. However, after leaving Kirkland, Koval continued to charge supplies against the company's accounts at local stores. Shortly after learning of these charges, Kirkland filed suit against both Koval and Mrs. Koval. During discovery, Kirkland uncovered the agreement between Koval and the Neweys. Based on this new information, Kirkland further claimed that Koval had used its credit to make improvements on what became Koval's own home.
In August 2002, Mrs. Koval moved into the Newey home, and Koval exercised his option to purchase it. The next month, the Neweys signed a deed conveying the home to Koval.
On December 25, 2002, Koval committed suicide. He died intestate, unmarried, and childless. Mrs. Koval filed an application to determine heirship, naming herself and Koval's half-brother, Shane Michael Kovalski, the sole heirs of the estate. The court named Mrs. Koval the administratrix of the estate and declared her and Shane the sole heirs.
Kirkland filed a claim as a creditor against the estate for the labor and materials used to improve the Newey home. Mrs. Koval, as an individual, designated the Newey home as her homestead and, in her capacity as administratrix, rejected Kirkland's claim.
Kirkland filed suit in probate court on its rejected claim. On the exact same day this suit was filed, Mrs. Koval filed a voluntary petition for bankruptcy in her individual capacity. In her deposition testimony, her sworn bankruptcy petition, and her homestead designation, Mrs. Koval asserted she owned fee simple title to the home.
Kirkland discovered Mrs. Koval's pending bankruptcy and filed an adversary proceeding with the bankruptcy court to determine whether Kirkland had a valid constitutional lien against the property. See Tex. Const. art. XVI, § 37. The bankruptcy court found that Kirkland had a valid lien in the amount of $100,047.04, plus all taxable costs. The judgment from the bankruptcy court did not mention attorney's fees. Mrs. Koval did not appear in the bankruptcy proceeding in her capacity as administratrix of the estate.
Kirkland filed a "request to certify judgment and allow claim" with the probate court to certify the judgment of the bankruptcy court and to enter its claim as a preferred debt owed by the estate. Kirkland filed for traditional and complete summary judgment on its claim, stating that the doctrines of res judicata and collateral estoppel prohibited the re-litigation of the facts and legal issues surrounding its constitutional lien against the real property. Kirkland sought final judgment in the amount of $100,047.04, plus all costs incurred in prosecuting its claim and attorney's fees under the Probate Code.
In a supplemental motion for summary judgment, Kirkland focused on its claim for attorney's fees. Additional grounds were alleged for recovery of attorney's fees. No response was filed to this supplemental motion. In this motion, Kirkland asked for attorney's fees under Texas Civil Practice and Remedies Code section 38.001 (1), (2), and (3), under the theory that Kirkland had "provided services, performed labor and furnished material with respect to the property of the deceased for which the claim was established. . . ."
In reply to Kirkland's motion for summary judgment, Mrs. Koval asserted that there were genuine issues of material fact regarding both the constitutional lien and the application of res judicata, that Kirkland had not sufficiently proven its attorney's fees under the Probate Code, and that there were various procedural defects to Kirkland's claim. Mrs. Koval claimed that the bankruptcy court did not have proper jurisdiction to determine issues related to the Newey home because she did not have legal title to the property until the administration was complete.
Kirkland filed more than forty pages of documents with the trial court detailing the costs it incurred to prosecute its claim. Kirkland alleged more than $37,000 in attorney's fees and $3,000 in court costs made necessary following Mrs. Koval's refusal, in her capacity as administratrix, to honor the claim. Mrs. Koval challenged Kirkland's claim for attorney's fees, arguing they were not authorized by section 315 of the Probate Code and claiming that Kirkland was attempting only to enforce, rather than to prosecute, its judgment through the probate court.
On December 19, 2005, the probate court determined that res judicata barred re-litigation of the lien and granted Kirkland's motion for summary judgment. In addition to determining Mrs. Koval wrongfully rejected Kirkland's claim and finding in favor of Kirkland for a $100,047.04 lien, the court also granted Kirkland $40,971.13 in attorney's fees and court costs under the Probate Code.
On appeal, Mrs. Koval argues that the trial court erred in entering judgment in favor of Kirkland because: (1) res judicata cannot apply offensively; (2) Kirkland failed to meet all the requirements to establish res judicata; (3) attorney's fees should be excluded from the calculation of costs under section 315 of the Probate Code; and (4) Kirkland cannot recover costs because it failed to establish its claim "in the court of original probate jurisdiction as mandated by Section 313."
Kirkland seeks affirmation of the summary judgment and requests that this Court tax the costs of this appeal against Mrs. Koval. Kirkland further requests that we remand the case to the trial court to calculate attorney's fees and costs incurred for this appeal.
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Under the standard of review for traditional summary judgment, the moving party must establish that no material fact issue exists and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). Once the movant produces evidence warranting summary judgment, the nonmovant must present evidence that raises a fact issue. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996). In an appeal from a take-nothing summary judgment, the reviewing court should view all evidence in the light most favorable to the nonmovant and indulge every reasonable inference in the nonmovant's favor. Id. A summary judgment may be affirmed on any of the movant's theories which has merit. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 627 (Tex. 1996).
Mrs. Koval generally contends Kirkland should be barred from applying the doctrine of res judiciata in the probate proceeding. In this case, the trial court's extensive order granting summary judgment stated inter alia," The undisputed summary judgment evidence before the Court demonstrates that Bankruptcy Court for the United States District Court for the Southern District of Texas has fully decided all issues of fact and law regarding Kirkland's claim against property of the Estate at a trial during which the administrator, in her individual capacity, fully participated. The evidence before the Court, coupled with...
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