The Texas Supreme Court issued a recent opinion regarding submitting issues in the charge (jury questions) in Thota v. Young, No. 09-0079, 2012 Tex. LEXIS...
Read MoreIn Mohseni v. Hartman, the court of appeals determined that an independent executor does not owe a fiduciary duty of care to an unsecured creditor...
Read MoreIn In Re: Frank Kent Motor Company, an employer required an employee to sign a contractual jury waiver. No. 10-0687, 2012 Tex. LEXIS 199 (Tex. March 9, 2012). The employee immediately signed the jury trial waiver when his supervisor warned him that he would lose his job if he failed to do so. Almost a year later, the employer terminated the employee, who sued based on age discrimination. The employer filed a motion to strike the employee’s jury demand due to the contractual jury waiver. The employee argued that the jury waiver was not signed under circumstances that were knowing and voluntary. The trial court denied the motion to strike the jury demand.
The Texas Supreme Court granted mandamus relief. The Court stated that in an at will employment relationship, either party may terminate the relationship for any reason or no reason at all. When an employer notifies an employee of changes in employment terms, the employee can accept the new terms or quit. The Court also noted in comparison that it is not procedurally unconscionable for an employer to require an arbitration agreement just because there was a disparity in bargaining power and the employee’s inability to negotiate terms. The employee argued that the comparison to arbitration should not apply because arbitration is legislatively and judicially favored. He argued that there was no similar policy for waivers of jury trial. The Court disagreed: “There is no reason to treat the effect of the at will employment relationship on a waiver of jury trial differently from its effect on an arbitration agreement.” The Court also stated:
Arbitration removes the case from the court system almost altogether, and is every bit as much of a surrender of the right to a jury trial as a contractual jury waiver. Additionally, refusing to allow the enforcement of jury trial waivers in the context of the at will employment relationship would create a practical problem. Since employers can fire at will employees for almost any reason, employers could result to firing all employees when they wanted to implement new dispute resolution procedures and rehiring only those employees who signed the waiver. Applying the analysis in Halliburton to jury trial waivers will discourage such unnecessary firings.
The Court then held that an employer’s threat to exercise its legal right cannot amount to coercion that invalidates a contract. The Court found that even if the employee’s affidavit statements were true, they did not amount to legal coercion since the employer had the legal right to fire for almost any reason, including an employee’s failure to sign a jury waiver. The Court conditionally granted mandamus relief directing the trial court to grant the motion to strike the jury demand.
In FDIC v. Lenk, Thompson died in January 2000 with about $3,000 on deposit in a Guaranty Bank checking account. No. 08-09-08, 2012 Tex. LEXIS 200 (Tex. March 9, 2012). A few weeks later, Spillman falsely represented to the bank that he was Thompson’s nephew and estate administrator and directed that he be named on Thompson’s account. The bank complied. Spillman then deposited around $167,000 into the account and over the next several months proceeded to withdraw all but a small amount that was used by the bank for service charges. The bank closed the account on December 13, 2001. It was later discovered that Spillman forged letters of administration in dozens of estates like Thompson’s, and in June 2002, he was sentenced to ten years in prison.
In September 2003, Lenk was appointed administrator of Thompson’s estate. In June 2005, Lenk demanded that the bank repay the funds Spillman had withdrawn from Thompson’s account years earlier. The bank refused, and Lenk sued. After both parties filed motions for summary judgment, the trial court granted the bank’s summary judgment, but the court of appeals reversed holding that Lenk’s summary judgment should have been granted. Guaranty Bank chose not to raise a Texas Business and Commerce Code Section 4.406(a) defense in the trial court. Instead, the bank argued that (1) it did not breach the deposit agreement because Thompson’s account was closed when Lenk filed her suit, and (2) it did not substantially cause Lenk’s injuries. The bank argued that it did not breach the deposit agreement when Lenk demanded payment in 2005 because the agreement terminated when the account was closed in 2001. Furthermore, the bank asserted that any cause of action for breach of the deposit agreement would have occurred in 2000 and early 2001 when the bank denied liability by providing statements to Spillman.
The Texas Supreme Court noted that it is well settled that a general deposit creates a debtor-creditor relationship between a bank and its customer. Given its relationship, a bank may only pay out money in accordance with a customer’s order and also bears the burden of demonstrating proper payment. While a bank’s wrongful payment of a general deposit does not breach the deposit agreement, the bank’s refusal to pay such funds to the rightful account holder will.
The Court concluded that the bank breached the deposit agreement by refusing to pay general deposit funds to the rightful holder (Lenk). The Court then turned to when that claim accrued. The court stated, “A cause of action for denial of deposit liability on a deposit contract . . . does not accrue until the bank has denied liability and given notice of the denial [by providing an account statement] to the account holder.” Id. (citing TEX. FIN. CODE ANN. § 34.301(b)). Thus, as a general matter, a bank’s refusal to pay funds on a customer’s demand commences the accrual of a demand-based cause of action.
The bank argued that the cause of action for breach of the deposit agreement accrued when it denied liability by sending account statements to Spillman in 2000. The Court disagreed and held that a bank may not deny liability by providing account statements to an imposter estate administrator when the Texas Finance Code specifically provided that a bank must provide statements “to the account holder.” The Court held that the bank denied liability by retaining the statements on file once Lenk was appointed administrator in 2003. “At that point, Lenk would have had the opportunity to review any statements for the account prior to its closing and bring a timely demand based claim.” Id.
The Court specifically noted that the bank had not raised the statute of repose defense as stated in Texas Business and Commerce Code section 4.406. Because the bank did not raise a viable defense, the Court held that the bank breached the deposit agreement and affirmed the court of appeals’s judgment. Justice Hecht and Justice Green filed a dissenting opinion stating that they would have found that Lenk had not stated a claim. They stated, “Allowing a bank customer to create a cause of action merely by writing a demand letter, as Lenk contends, would circumvent all time limitations on claims for unauthorized withdrawals.”
In Rachal v. Reitz, a beneficiary sued a trustee for failing to provide an accounting and otherwise breaching fiduciary duties. 347 S.W.3d 305 (Tex. App.—Dallas 2011, pet. filed). The trustee filed a motion to compel arbitration of those claims due to an arbitration provision in the trust instrument. After the trial court denied that motion, the trustee appealed. The court of appeals affirmed. The court held that arbitration is a matter of contract law, and that the trustee had the burden to establish the existence of an enforceable arbitration agreement. The court noted that it was undisputed that neither the trustee or the beneficiary signed the trust document, and that the trust document solely expresses the settlor’s intent. The court noted: “Rachal did not establish how the settlor's expression of intent satisfied all of the required elements of a contract or how this expression of the settlor's intent transformed the trust provision into an agreement to arbitrate between Rachal and Reitz.” Id. at 309-10. Moreover, whether a provision stating the settlor's intent that disputes involving the trust be resolved by arbitration is enforceable as in a contract was an issue of first impression in Texas. The court of appeals noted that only two jurisdictions in the country have considered a similar issue, and both had concluded that a trust is not a contract and that a beneficiary of a trust cannot be compelled to arbitrate disputes arising under the trust.
Winstead and the Tarrant County Bankers Association are pleased to present the 2012 Financial Services Seminar! Banking professionals are invited to join us in Fort Worth on Thursday, April 26, to discuss the following topics:
The half-day event will close with a luncheon featuring guest speaker William Moncrief, Senior Associate Dean and the Charles F. and Alann P. Bedford Professor of International Business at Texas Christian University, speaking on the state of the world in 2020, looking at markets, world politics, world leaders and issues.
Continuing education credits are available, including Texas CLE, CPE and CFP.
For complete details and to register, contact Jenny Curtis at jcurtis@winstead.com.
The Houston First Court of Appeals enforced a contractual jury waiver even though it was not conspicuous in In re Key Equipment Finance Inc., No. 01-11-00618-CV, 2012 Tex. App. LEXIS 1601 (Tex. App.—Houston [1st Dist.] February 27, 2012). In 2007 Austin contracted with ABM to lease and service copiers and other business equipment as it had done on multiple earlier occasions. The 2007 lease agreement appears on the front and back of a single sheet of paper. The front of the first page contains several blocked spaces for certain information. Near the bottom was a space for the customer to sign, and the text above the space provided in part: “all conditions and terms of this agreement have been reviewed and acknowledged.” The back of the first page contained eighteen numbered paragraphs that filled about three quarters of the page. A line space appeared between each paragraph. The text was all printed in the same size font and began each paragraph with a heading written in all capital letters. The heading for paragraph fifteen stated “consent to law, jurisdiction, and venue.” The last sentence of this lengthy paragraph stated “you waive trial by jury in any action between us.” This provision was identical to those in the ten prior lease agreements that Austin and ABM had executed.
Two years after signing the 2007 lease agreement, Austin informed ABM that it intended to terminate the agreement. ABM disputed Austin’s right to terminate the contract after two years. Austin filed the underlying suit in district court as against ABM and sought a jury trial. ABM had assigned the lease agreement to Key Equipment Finance, and Key answered and served a counterclaim seeking declaratory relief and financial recovery under an unjust enrichment theory. Key twice moved for continuance stating it needed to take additional discovery. Following the trial court’s rulings continuing the trial, ABM and Key moved to strike Austin’s jury demand. The trial judge denied the motion. After a new judge succeeded the former judge, ABM and Key moved in the trial court reconsider that ruling. The trial court again denied the motion.
Key and ABM filed a petition for writ of mandamus to challenge the trial court’s refusal to invoke the jury waiver provision. Austin contended that ABM and Key had waived their right to assert the contractual jury waiver by failing to exercise diligence in challenging Austin’s jury demand. The two essential elements of laches are: 1) unreasonable delay by one having legal or equitable rights, and 2) a good faith change in position by another to its detriment because of the delay. The court of appeals discussed two Texas Supreme Court cases dealing with a laches defense to a party seeking to enforce the jury waiver. The court stated that Austin did not articulate any detrimental change in position resulting from any alleged delay. Therefore, the court of appeals found that laches did not bar ABM’s and Key’s invocation of the contractual jury waiver.
The court then discussed the enforceability of the contractual jury waiver, and noted the Texas Constitution guarantees the right to a jury trial. Parties may nevertheless agree to waive that right. Contractual jury waivers do not violate public policy and are enforceable as long as the waiver is voluntary, knowing, and intelligent, and with full awareness of the legal consequences. The court held that “In light of the strong public policy favoring freedom of contract, contractual jury waivers deserve no more scrutiny than agreements to waive a judicial forum entirely and arbitrate any future dispute.”
The court held that the jury waiver clause in the contract was not conspicuous in comparison to any other provision. The court noted that a conspicuous jury waiver provision is evidence of a knowing, voluntary waiver and shifts the burden to the opposing party to rebut it. The court then noted that the Texas Supreme Court had intimated that, while a case is established with proof of a conspicuous jury waiver provision, a lack thereof does not foreclose its enforcement altogether. Rather, the court held that the burden remains on the party seeking to enforce the provision to show that the waiver was knowingly and voluntarily made. Because the provision was not conspicuous, Key and ABM had the burden to show that Austin willingly accepted it.
The court found that Key and ABM met that burden. First, Texas courts presume that a party who signs a contract knows its contents. The court noted that the jury waiver provision in the lease agreement was no less or more conspicuous than any other contractual provision and was as legible as every other provision. The court also noted that the lease was a brief two pages, with relatively few contractual provisions with each provision set apart by line and numbered individually and included substitutive bolded introductions. The court also noted that the jury waiver language itself was direct and to the point. The court also noted the contract was between sophisticated parties who had an established course of commercial dealings with each other. The parties’ history of signing lease agreements containing the same jury waiver language evidenced an understanding of the provision and willingness to be bound by it. Austin also had a practice of submitting contracts such as this to in-house counsel to review. Finally, nothing in the record indicated any disparate bargaining power between the parties or a lack of Austin’s ability to negotiate the inclusion of a jury waiver provision. Therefore, the court concluded that although the jury waiver in the case was not conspicuous, ABM and Key adduced evidence that Austin knowingly accepted it and Austin offered no evidence to the contrary. Thus, the court of appeals found that the trial court erred in failing to enforce the jury waiver provision and granted the petition for writ of mandamus.
The Fourth Court of Appeals held that an executor’s claim for conversion and constructive trust as against a bank was barred by the statute of limitations in In the Estate of Melchior, No. 04-11-00052-CV, 2012 Tex. App. LEXIS 1233 (Tex. App.—San Antonio February 15, 2012, no pet. history).
A former Bexar county employee misappropriated the assets of an estate by forging a will and obtaining letters of administration for the estate. The employee then opened an investment account and margin account with the bank using the estate’s assets. After the fraud was discovered, the trial court entered an order probating the decedent’s true will and offering letters testamentary to the correct executor. The trial court issued an order distributing the estate’s assets including assets held by the bank. The bank then filed an answer and plea in intervention seeking to determine that the debt incurred by the Bexar county employee from one of the accounts was valid and secured by the estate’s assets. The trial court issued an amended order on March 3, 2004 finding the estate owned the stock in the investment account and ordered the bank to sell it within three days of the order. The trial court authorized the bank to offset the balance due on the margin account against the stock in the investment account. After the bank charged its reasonable and customary fees associated with the sale of the assets, it was ordered to pay the remaining revenue to the estate and to provide all monthly statements on the investment accounts.
On September 28, 2008, the estate first filed suit against the bank requesting a declaratory judgment based on conversion and sought imposition of a constructive trust. The estate alleged that the bank improperly withheld the offset funds and improperly used estate money to pay the employee’s debts, and improperly permitted the employee to withdraw cash from the accounts knowing the funds had been fraudulently obtained. The bank filed a motion for summary judgment based on the statute of limitations. The estate argued that, because that order allowing the bank to act with regard to the funds was interlocutory, the statute of limitations had not accrued.
Limitations begins to run when a cause of action accrues, and the date of accrual is a question of law. A cause of action generally accrues when the alleged wrongful act affects an injury. The court of appeals noted that the alleged wrongful act in this case was the bank’s withholding of funds due the estate. If that wrongful act occurred, it occurred no later than March 4, 2004, the date that the summary judgment evidence showed the bank retained the money and delivered the documents relating to the accounts to the estate. Thus, the court of appeals held that the estate’s claims accrued on March 4, 2004. The court then found that the two-year statute of limitations for conversion had already run by the time the estate filed suit against the bank. The court also found that the four-year statute of limitations for constructive trust also had run. The court of appeals affirmed the trial court granting of summary judgment for the bank.
The Sixth Court of Appeals held that a homeowner cannot raise defenses to a foreclosure in a subsequent forcible detainer suit for possession in Wilson v. HSBC Bank USA, National Trust Company, as Trustee, No. 06-11-00106-CV, 2012 Tex. App. LEXIS 1344 (Tex. App.—Texarkana February 22, 2012, no pet. history).
After defaulting on their mortgage, the Wilson’s house was sold at foreclosure, and HSBC Bank purchased the house. After the sale, the Wilsons did not move out, and the bank filed a forcible entry and detainer action. The trial court awarded the bank possession of the residence, and the Wilsons appealed. They argued that the trial court erred in awarding possession to the bank because there was no landlord-tenant relationship. The court found that there was a landlord-tenant relationship based upon the terms of the deed of trust: “if the property is sold pursuant to this paragraph 18 . . . the borrower shall immediately surrender possession of the property to the purchaser at that sale. If possession is not surrendered, borrower . . . shall be a tenant-at-severance and may be removed by a writ of possession of other court proceeding.”
The Wilsons argued that the landlord-tenant relationship must exist between the parties and complained that the bank that authorized the foreclosure was not the beneficiary of the deed of trust. They disputed the substitute trustee’s right to act. The court of appeals found, however, that “any defects in the foreclosure process or with the purchaser’s title to the property may not be considered in a forcible detainer action. Such defects must be pursued, if at all, in a separate suit for wrongful foreclosure or to set aside the substitute trustee’s deed.” Because the trustee’s deed stated that the foreclosure sale was conducted under the terms of the deed of trust and because there was no dispute that the bank was purchaser at the foreclosure sale, the bank was entitled to a judgment as to possession. The court of appeals affirmed the trial court’s judgment.
The Sixth Court of Appeals reversed a judgment awarding damages to beneficiaries of a trust as against their trustee in Martin v. Martin, No. 06-10-00005-CV, 2012 Tex. App. Lexis 2146 (Tex. App.—Texarkana March 20, 2012, no pet. history). In so doing, the court found that, although a exculpatory clause in the trust document was not enforceable, the beneficiaries did not have sufficient evidence of damages.
R.S. Martin founded a company in the energy industry. This company was jointly managed for over 20 years by Ruben Martin and Scott Martin, sons of the founder. The two sons purchased the shares of the company belonging to their nephew, and shortly thereafter they each created an irrevocable trust for the health, education, and welfare of their children and grandchildren. The brothers were the trustees of each other’s trust. Thereafter, a power struggle over the control of the company arose between Ruben and Scott.
In late 2007, Ruben’s children asked Scott to resign as trustee of their trust. Thereafter, one of the children made a request to Scott for disbursement to pay for medical costs, but she never received a response. Scott also placed the trust in a potential default situation when he refused to make payment to the nephew for the purchased stock unless the children agreed to indemnify him. Ruben was forced to borrow money to make the payment on behalf of the trust. The company attempted to arrange a $40 million equity offering and attempted to secure additional $100 million line of credit. Before closing, Scott filed a lawsuit against the company and its directors. The directors attempted to convince Scott to dismiss his lawsuit and informed him that the lawsuit could adversely affect the financing deals and the value of the company stock. Scott refused to withdraw his lawsuit. Ultimately the equity offering and line of credit increase were cancelled, and the company failed to obtain additional financing. The company was forced to sell assets to secure capital to pay for the capital expenditures and forced to shut down programs.
Ruben’s children filed a lawsuit to remove Scott as the trustee of their trust and alleged breaches of fiduciary duty. Ultimately, the jury found for Ruben’s children and ordered over a million dollars in damages to each of them as against Scott. Scott appealed and argued that he had no fiduciary duty of loyalty based on a provision of the trust releasing Scott of fiduciary duties except those imposed by a statute. Under common law, a trustee has the fiduciary duties to hold and manage the property for the benefit of the beneficiaries and owes a trust beneficiary an unwavering duty of good faith, fair dealing, loyalty, and fidelity over the trust affairs and its corpus. Scott argued that the trust document excused him from the obligation to perform such duties.
The court of appeals held that the general rule from the Texas Trust Code is that the terms of the trust prevail over any provision of the code subject to a few statutory exceptions not applicable to the case. The trust document granted the trustee the right to operate to the same extent and manner as if he were a disinterested person. Further, it recognized that no principle or rule relating to “self-dealing or divided loyalty shall be applied to any act of the trustee but that the trustee shall be held to the same standard of liability” as in transactions with disinterested persons.
The court of appeals first held that the language “transactions” should not be limited to contracts and would apply to the act of Scott’s filing of the lawsuit against the corporation. Thus, the court held that Scott would be accountable for fiduciary responsibility only if the Texas Trust Code expressly prohibited the exculpation clause contained in the trust. The court cited to the Texas Supreme Court’s case styled Texas Commerce Bank v. Grizzle, 96 S.W.3d 240, 249 (Tex. 2002). In that case the Texas Supreme Court held that public policy as expressed by the legislature in the Trust Code allowed relieving a corporate trustee from liability for self-dealing except for what was specified in sections 113.052 and 113.053. Scott argued that pursuant to Grizzle, that the trust agreement waived all fiduciary duties. But the court of appeals found that that argument ignored the statutory changes that had occurred after Grizzle was decided.
The Court of Appeals noted that in response to Grizzle the Texas Legislature repealed section 113.059, added section 111.0035, and added section 114.007. Section 111.0035(b) provides as follows:
The terms of a trust prevail over any provision of this subtitle, except that the terms of a trust may not limit:
(1) the requirements imposed under § 112.031;
(2) the applicability of § 114.007 to an exculpation term of a trust;
(3) the periods of limitation for commencing a judicial proceeding regarding a trust;
(4) a trustee’s duty:
(A) with regard to irrevocable trust, to respond to a demand for accounting made under § 113.151 if the demand is from a beneficiary who, at the time of the demand:
(i) is entitled or permitted to received distributions from the trust; or
(ii) would receive a distribution from the trust if the trust terminated at the time of the demand; and
(B) to act in good faith and in accordance with the purposes of the trust.
TEX. PROB. CODE ANN. § 111.0035.
Section 114.007 provides:
(a) a term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that the term relieves a trustee for liability:
(1) a breach of trust committed: (A) in bad faith; (B) intentionally; or (C) with reckless indifference to the interest of the beneficiary; or
(2) any profit derived by the trustee from a breach of trust.
Id. at § 114.007.
The court of appeals held that Scott owed Ruben’s children the fiduciary duties which, pursuant to sections 111.0035 and section 114.007, cannot be waived. The statutory changes modified the holding of Grizzle.
Scott also argued that the duty to act in good faith and in accordance with the purposes of the trust of section 111.0035(b)(4)(B) only applied in the context of a demand for an accounting. The court of appeals disagreed and found that the two subsections are separate and distinct duties and also found that “in accordance with the purposes of the trust” was a separate duty from the duty of good faith.
The court of appeals held that there was sufficient evidence to support the jury’s finding that Scott had breached his fiduciary duties in filing the lawsuit, which had the effect of terminating the company’s ability to obtain financing.
Scott also argued that another provision of the trust document required reversal: “no individual trustee shall be liable for negligence or error of judgment, but shall be liable only for such trustee’s willful misconduct or personal dishonesty.” The court of appeals found that Scott waived this issue by failing to submit a jury question on it. Even if error had been preserved, the court stated that section 114.007 prohibits liability from being waived if the breach was committed in bad faith, intentionally, or with reckless indifference to the interest of the beneficiaries. The court noted that the jury found that the breach was committed in “an absence of good faith, intentionally or with reckless indifference to the interest of the beneficiaries.” The court found that section 114.007 would prohibit any waiver of liability.
Scott had also challenged the jury’s determination of damages. Ruben’s children had a testifying expert describe that the loss of financing was significant because it limited the ability of the company to conduct ordinary business operations to fund anticipated investments, and to maintain flexibility, including the ability to react to unforeseen circumstances such as the market meltdown that subsequently followed. He explained that there were four reasons for the damages: decline in stock value, increase costs of debt, delayed corporate investment, and lack of liquidity of the stock owned by the trust. The court of appeals held that the general rule that “individual stockholders, or, here, beneficiaries of a trust owning stock of a corporation, cannot recover for the corporate loss even though the stockholder may be injured.” The court then held that the expert’s testimony concerning the damages of the corporate stock value, increased costs of debt, and the delayed investment were all damages incurred by the corporation, and that the beneficiaries had no independent right to recover for these damages for that proportion of the stock owned by the trust. The court found that it could not give any weight to the expert’s opinion about these damages and reversed and rendered for Scott due to the lack of evidence to support the damage awards.
The court also looked at the evidence that was sufficient to support the mental anguish damages on behalf of the children and similarly found that the evidence was lacking to support those damage awards. The children failed to establish a high degree of mental pain and distress that was more than “mere worry, anxiety, vexation, embarrassment, or anger.” Because the court did not sustain any of the actual damage awards, the court also reversed the award of exemplary damages.
The Eleventh Court of Appeals reversed the denial of a bill of review regarding the finding of intestacy assets and the need for an administration in In the matter of the Estate of Richard R. Bloomer, No. 11-10-00021-CV, 2012 Tex. App. Lexis 312 (Tex. App.—Eastland January 12, 2012, no pet.).
Richard Bloomer left a will making specific bequests to his two children and general bequests of $800,000 to his grandchildren. After the will had been admitted to probate and during the administration of the estate, it was determined that Mr. Bloomer died partially intestate because his will did not contain a residuary clause. At the request of one of his children, Nelson, the trial court held an heirship proceeding and determined that the two children were the proper heirs at law and that each were entitled to a fifty percent share. The judgment declaring heirship incorporated an exhibit that specifically listed property that was valued at approximately $2.6 million dollars that passed by intestacy. The judgment also stated that “no necessity exists for the administration of this estate.” Nelson subsequently filed a petition for bill of review to modify the judgment declaring heirship because it effectively disinherited the grandchildren and altered the will’s provision regarding the independent administration of the estate. The other child, Charles, opposed the petition for bill of review.
Texas Probate Code section 31 provides that a bill of review may be filed in a probate court to revise or correct an erroneous decision, order, or judgment rendered by that court. In an appeal from the denial of a statutory bill of review, the appellate court must determine whether an interested person timely filed a bill of review and showed substantial error. The record showed that the administration of Mr. Bloomer’s estate was ongoing, and that, in his will, Mr. Bloomer specifically provided for the independent administration of his estate and designated Nelson as the independent executrix. The court of appeals held that the trial court erred in stating that no administration was necessary because that provision was contrary to the will and also had the effect of entitling Charles to immediately enforce his “right to payment, delivery, or transferred by suit,” even though the testamentary request to the grandchildren had not yet been satisfied.
Moreover, Mr. Bloomer died partially testate, and the judgment declaring heirship should have been limited to intestate matters. Instead, the judgment declaring heirship had the impermissible effect of altering testate matters by specifying that all the property listed in the exhibit passed by intestacy to the heirs at law, even though the testamentary bequests to the grandchildren had not yet been funded. The property listed in the exhibit to the judgment constituted all the property remaining after the specific, testamentary bequests to Charles and to Nelson had been satisfied without regard to the testamentary bequests to the grandchildren or the estate’s various expenses and taxes. This was also error. The court of appeals therefore reversed the trial court’s order denying the petition for bill of review and remanded the case to the trial court so it could revise and correct the judgment.
What are the advantages to including an arbitration provision in a loan document? What are the disadvantages? What factors should be considered when tailoring a provision to meet the specific needs of borrowers and lenders? In about 15 minutes, Brian Vanderwoude discusses those issues and provides a brief update on current law regarding arbitration provisions.
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The Financial Appellate Voice provides important legal news, updates on recently decided and pending case precedent, and commentary to directors, officers, managers, in-house counsel, and other legal officers who serve the financial services industry in Texas...
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