HBA Appellate Practice Section
May 21, 2009
SELECTED CASE SUMMARIES
April 16, 2009 – May 21, 2009
Sean J. Yan
Judicial Intern to Justice Kem Thompson Frost
Texas Fourteenth Court of Appeals
SUPREME COURT OF TEXAS
Kappus v. Kappus, No. 08-0136, 2009 WL 1383716 (May 15, 2009) (Willett, J.) (unanimous).
Significance: An independent executor’s conflict of interest, either actual or potential, is not a ground for removal under the Probate Code.
Holding: The court of appeals erred in removing John Kappus from his position as independent executor of his brother’s estate. A good-faith disagreement between an executor and the estate over the percentage division and valuation of estate assets is not a ground for removal as a matter of law. Such a development would (1) depart from the specific grounds for removal listed in the statute, (2) frustrate the testator’s choice of executor (particularly the common practice of appointing spouse-executors), and (3) impede the broader goal of supporting the independent administration of estates with minimal costs and court supervision.
Facts: James and John Kappus inherited Kappus Farm from their father and became 50/50 cotenants. Throughout the time that they owned Kappus Farm, James and John individually made several improvements to the farm. John and his wife, Sandra, also made improvements together. In 2004, James and Sandra divorced, and Sandra received an equitable lien on Kappus Farm for her half of the community improvements. After the divorce was final, James executed a new will creating a testamentary trust for his two children and naming John as the trustee and independent executor. Shortly thereafter, James died. As part of the administration of the estate, John intended to pay off James’s debts by selling Kappus Farm and splitting the proceeds equally between the estate and himself. Sandra, on behalf of her children, opposed John’s proposal, and asserted that the estate was owed more than 50% of the proceeds due to the improvements that James had made to the property. Sandra obtained an injunction and sought to remove John as independent executor and trustee of the testamentary trust, alleging, among other things, a conflict of interest. The trial court divided Kappus Farm equitably but refused to remove John as independent executor and trustee. On appeal, the court of appeals affirmed the division of property, but reversed the trial court’s decision on removal of John in his capacity as independent executor.
City of El Paso v. Heinrich, No. 06-0778 (May 1, 2009) (Jefferson, J.).
Significance: A suit brought against a government actor concerning retroactive changes to pension benefits is not barred by sovereign immunity when the defendants are sued in their official capacity and the relief sought is equitable or injunctive, rather than monetary.
Holding: While governmental immunity generally bars suits for retrospective monetary relief, it does not preclude prospective declaratory and injunctive relief in official-capacity suits against government actors alleging statutory or constitutional violations.
Facts: Lilli Heinrich is the widow of Charles Heinrich, a member of the El Paso Police Department who died while serving in the line of duty. Pursuant to the bylaws of the El Paso Firemen & Policemen’s Pension Fund’s Board of Trustees, Ms. Heinrich was entitled to a two-thirds portion of her husband’s pension; the other third would be paid to her on behalf of her then-minor child. Notwithstanding the bylaws, the Board voted and approved awarding Ms. Heinrich 100% of the pension benefits. Accordingly, when in 2002 the Board reduced the monthly payments to Ms. Heinrich by one-third after her son turned 23, Ms. Heinrich sued, seeking declaratory relief and alleging that the Board acted without legal authority by retroactively reducing her benefits. On appeal from the trial court’s determination it has jurisdiction over the claims, the Board contended that although Heinrich requested declaratory and equitable relief, her claim is essentially for past and future money damages, and that governmental immunity therefore bars her suit. The court of appeals disagreed, holding that “a party may bring a suit seeking declaratory relief against state officials who allegedly act without legal or statutory authority and such suit is not a ‘suit against the state.’” The supreme court affirmed in part and reversed in part. It held that Heinrich’s retrospective damages claims must be dismissed as barred by governmental immunity. However, the remaining claims alleged against the Board members in their official capacity were remanded to the trial court for further proceedings.
FIRST DISTRICT COURT OF APPEALS
Haden v. David J. Sacks, P.C. d/b/a Sacks & Associates, No. 01-03-00025-CV, 2009 WL 1270372 (May 7, 2009) (Radack, J.).
Significance: Section 31.002(e) of the Civil Practice & Remedies Code (the turnover statute) may be used to recover post-judgment attorney’s fees incurred by a judgment creditor for work done in bankruptcy court resulting from a judgment debtor’s post-judgment bankruptcy filing.
Holding: The trial court did not abuse its discretion by interpreting section 31.002(e) as authorizing recovery of reasonable costs and attorney’s fees incurred by a law firm in its efforts to secure turnover relief and to seek and obtain dismissal of judgment debtor’s personal bankruptcy petition.
Facts: Sacks & Associates (“Sacks”) obtained a judgment against Charles Haden for breach of contract and attorney’s fees. When Haden did not supersede the judgment pending the appeal, Sacks initiated proceedings to discover nonexempt assets. Sacks requested relief authorized by section 31.002(e) to (1) issue a turnover order, (2) appoint a receiver, and (3) grant injunctive relief to prevent post-judgment transfer of assets by Haden. Although the trial court granted all of its requests, Sacks obtained only partial satisfaction before Haden filed a bankruptcy petition in federal court. Sacks, appearing through independent bankruptcy counsel in Haden’s bankruptcy case, asserted its rights as a judgment creditor and challenged Haden’s declaration of bankruptcy. The bankruptcy court dismissed Haden’s bankruptcy filing with prejudice. Once the bankruptcy proceedings concluded, Sacks sought to recover reasonable costs and attorney’s fees incurred as a consequence of Haden’s bankruptcy petition. The trial court granted Sacks’s request, and Haden appealed. The First Court of Appeals affirmed.