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describing nature of appellate court's de novo review of trial court's summary judgment
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No. 14-10-00006-CV.
May 5, 2011.
Appeal from the Probate Court No. 2, Harris County, Michael James Wood, J.
Sarah Patel Pacheco, C. Henry Kollenberg, Houston, TX, for Appellants.
Richard F. Callaway, Jr., Douglas Edward Markham, Robert Dubose, Houston, TX, for Appellee.
Panel consists of Justices BROWN, BOYCE, and JAMISON.
OPINION
Robert R. Doggett, Florence E. Pollard, Paul R. Doggett, Paul Randolph Doggett, Jr., Mark Edward Doggett, and Matthew Joseph Doggett appeal the trial court's summary judgment in favor of Mary Robinson, as independent executor of the estate of John M. Robinson. We reverse and remand.
BACKGROUND
I. John Doggett's Will
John Doggett executed a will prepared by attorney John M. Robinson. John Doggett was married to his second wife, Sylvia, when he executed the will in 1983. John had four children from his first marriage — John III, Robert, Florence, and Paul. Sylvia had one child from a prior marriage — Beverly Longuet.
John's will directs that Sylvia receive his personal effects and distributes his remaining assets to two trusts: the Unlimited Marital Deduction Trust ("Marital Trust") and the Family Trust. The will names John M. Robinson as the trustee of both trusts.
In the trial court, Robinson's estate disputed whether John M. Robinson acted as a trustee in connection with the matters giving rise to this litigation. The parties assume for purposes of this appeal that John M. Robinson was acting as trustee of the Marital Trust and the Family Trust, and we do so as well. We express no opinion on the merits of this issue.
The will directs that Marital Trust income be paid to Sylvia during her lifetime, with the principal available for her support if necessary. Section 3.4 of John's will grants Sylvia testamentary power of appointment over the Marital Trust principal by "specific reference" in Sylvia's will. John's will provides in section 3.6 that any unappointed Marital Trust assets will be distributed upon Sylvia's death as specified:
Section 3.4 states in full: "My wife shall have the special testamentary power to appoint (outright, in trust or otherwise) all or any part of the principal of this trust to any one or more of my descendants provided, however, she shall not have the power to appoint trust principal to herself, her estate, her creditors or the creditors of her estate. This power shall be exercisable only by specific reference in my wife's Will."
Paul Randolph Doggett, Jr., Mark Edward Doggett, and Matthew Joseph Doggett are John's grandchildren.
With respect to both the Marital Trust and the Family Trust, John's will places an express limitation on Sylvia's power of appointment. Section 3.4 of John's will, which governs the Marital Trust, states that Sylvia "shall not have the power to appoint trust principal to herself, her estate, her creditors or the creditors of her estate." Section 4.3 of John's will, which governs the Family Trust, states that Sylvia "shall not appoint trust property to herself, her creditors, her estate, or the creditors of her estate."
John Doggett died in 1987. His will was probated, and Sylvia was appointed executor of his estate. It is alleged that neither trust was funded during Sylvia's lifetime or after her death. John M. Robinson died in 2002.
II. Sylvia Doggett's Will
Sylvia executed a will in 2002. After she died in 2006, her will was admitted to probate and Beverly was appointed executor of Sylvia's estate.
This appeal focuses in significant part on sections 2.1 and 2.4 of Sylvia's will. These sections provide as follows:
2.1 I give, devise and bequeath all of my property, real, personal and mixed, of every kind and character and description, and wherever situated, and any other property over which I may have a power of appointment or power of testamentary disposition, according to the provisions of this Article II.
* * *
2.4 I give, devise and bequeath all the rest, residue, and remainder of my estate and property to my daughter, Beverly Ann Longuet.
Sylvia's will also provides in section 2.3 for the distribution of Sylvia's personal effects, and makes three monetary bequests in section 2.2 to persons other than John's children, John's grandchildren, or Beverly.
III. Suit by John Doggett's Children and Grandchildren
John's surviving children — Robert Doggett, Florence Doggett Pollard, and Paul R. Doggett — sued Beverly individually and in her capacity as executor of Sylvia's estate in 2007. They alleged, among other things, that (1) Sylvia failed to establish and operate the trusts properly; and (2) Beverly failed to provide an accounting of the assets in Sylvia's estate and information about assets that should have been used to fund the trusts. Three of John's grandchildren — Paul, Mark, and Matthew Doggett — filed a petition in intervention. We refer collectively to the original plaintiffs and intervenors as the "Doggett claimants."
John Rentz Doggett III died without descendants in 2006. The Marital and Family Trust provisions direct that his share pass to his survivors or be "distributed in the original proportions to the remaining heirs." Robert and Paul Doggett were appointed successor trustees of the Marital and Family Trusts; in that capacity, they also filed a petition in intervention.
The Doggett claimants also sued Mary Robinson in her capacity as executor of John M. Robinson's estate. The Doggett claimants alleged that John M. Robinson accepted appointment as trustee of the Marital Trust and the Family Trust under John's will. They further alleged, among other things, that John M. Robinson failed to fulfill his obligations as trustee; assisted Sylvia in taking assets belonging to the trusts; failed to require assets to be segregated; made misrepresentations; and breached his fiduciary duties as trustee. The Doggett claimants contend that, as a result of this alleged conduct, Beverly improperly obtained trust property intended for them under John's will. The Doggett claimants sought actual damages, punitive damages, costs and attorney's fees, interest, the imposition of a constructive trust, and declaratory relief.
Beverly settled with the Doggett claimants on behalf of herself and Sylvia's estate in 2008, leaving Robinson's estate as the only defendant.
Robinson's estate filed a traditional summary judgment motion under Rule 166a(c), arguing that it was not liable to the Doggett claimants because Sylvia in her will properly exercised her power of appointment in favor of Beverly. The Doggett claimants also filed a traditional summary judgment motion, arguing that (1) John's will authorized Sylvia to exercise her power of appointment only in favor of John's "descendants" as that term is defined in section 9.3 of John's will; and (2) Beverly is not among John's defined "descendants."
The trial court granted partial summary judgment in favor of Robinson's estate and denied the Doggett claimants' motion. The trial court held: "As a matter of law, Sylvia Doggett validly exercised her power of appointment in favor of John Doggett's descendant, Beverly Longuet; and . . . [b]ecause of the valid exercise of the power of appointment, [the Doggett claimants'] claims fail as a matter of law." The summary judgment was interlocutory because attorney's fees were not adjudicated.
After a one-day bench trial, the trial court signed a final judgment on November 4, 2009 that (1) incorporated its prior partial summary judgment; and (2) awarded attorney's fees to Robinson's estate. Robinson's estate filed a motion to modify the final judgment, which the trial court granted in part and denied in part. The trial court signed an amended final judgment on December 1, 2009, and the Doggett claimants timely appealed.
ANALYSIS
This appeal turns on the interplay between John's will and Sylvia's will. The Doggett claimants contend that the trial court erred by denying their motion for summary judgment, and by granting summary judgment based on the trial court's conclusion that Sylvia properly exercised her power of appointment in favor of Beverly. In their first issue, the Doggett claimants assert that Sylvia's will did not validly exercise the power of appointment under sections 3.4 and 4.3 of John's will. In their second issue, the Doggett claimants contend that Beverly is not among the defined "descendants" to whom Sylvia was allowed to appoint trust property under section 9.3 of John's will. They also challenge the award of attorney's fees in their third issue. Robinson's estate raises one issue on cross-appeal, arguing that the trial court should have awarded costs and post-judgment interest in the final judgment.
I. Standard of Review
An appellate court applies de novo review to a traditional summary judgment under Rule 166a(c), using the same standard that the trial court used in the first instance. Duerr v. Brown, 262 S.W.3d 63, 68 (Tex.App.-Houston [14th Dist] 2008, no pet.) (citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005)).
The defendant as movant must disprove at least one essential element of each of the plaintiffs causes of action in order to prevail on summary judgment. Wright v. Greenberg, 2 S.W.3d 666, 670 (Tex.App.-Houston [14th Dist.] 1999, pet. denied) (citing Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991)). This burden requires the movant to show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Id. (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985)). In determining whether a material fact issue exists to preclude summary judgment, evidence favoring the nonmovant is taken as true, and all reasonable inferences are indulged in favor of the nonmovant. Id.
II. Exercise of the Appointment Power
All rules of will construction must yield to the basic intention and purpose of the testator as reflected by the entire instrument. Wright, 2 S.W.3d at 672 (citing Shriner's Hosp. for Crippled Children of Tex. v. Stahl, 610 S.W.2d 147, 151 (Tex. 1980)). The testator's intent must be ascertained from the language used within the four corners of the instrument. Id. The question is not what the testator intended to write, but the meaning of the words actually used. Id. In the absence of ambiguity, we must construe the will based on the express language used. Id. If the court can give a certain or definite meaning or interpretation to the words of an instrument, it is unambiguous and the court may construe it as a matter of law. Id., (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)). If, however, the meaning of the instrument is uncertain or reasonably susceptible to more than one meaning, it is ambiguous. Id. at 671. If it is ambiguous, then its interpretation presents a fact issue precluding summary judgment. Id. A. Standards Governing Exercise of the Appointment Power
The interpretation issue addressed in this appeal focuses on a power of appointment. It is helpful to describe at the outset what the power of appointment entails.
"A power of appointment is a power of disposition given to a person over property not his own, by [someone] who directs the mode in which that power shall be exercised by a particular instrument." Republic Nat'l Bank of Dallas v. Fredericks, 155 Tex. 79, 283 S.W.2d 39, 46 (1955) (internal quotation omitted). "It is an authority to do an act which the owner granting the power might himself lawfully perform." Id. (internal quotation omitted). This power enables the donee to designate, within such limits as the donor may prescribe, the transferees of the property or the shares in which it shall be received. Id.
It also is helpful to describe what the power of appointment is not. "A power of appointment is neither property nor an estate, but is a mere right or power." Krausse v. Barton, 430 S.W.2d 44, 47 (Tex.Civ.App.-Houston [1st Dist.] 1968, writ ref'd n.r.e.). "The authority given to the donee of a power of appointment does not vest in him any estate, interest, or title in the property which is the subject of the power." Id.
To exercise the appointment power granted in sections 3.4 and 4.3 of John's will, Sylvia's will "must refer to the power of appointment or the property subject to such power;" alternatively, Sylvia "must have owned no other property to which the will could have attached and thus the will have been a vain and useless thing except it be held to be an exercise of such power." Republic Nat'l Bank of Dallas, 283 S.W.2d at 47. Robinson's estate does not rely on the second or third bases to argue that Sylvia validly exercised her power of appointment in favor of Beverly. Therefore, we address the reference in Article II of Sylvia's will to a power of appointment and examine whether Article II validly exercises the power granted in John's will.
The inquiry in this case goes beyond the mere existence of a reference to the appointment power. "The general rule is that in order for a will or deed to constitute the exercise of a power of appointment the intent to exercise such power must be so clear that no other reasonable intent can be imputed under the will." Id. "`If, from the circumstances or the instrument executed, it be doubtful as to whether it was the intention to execute the power possessed by the grantor, then it will not be held that by such act or conveyance that power was in fact executed.'" Id. (quoting Hill v. Conrad, 91 Tex. 341, 43 S.W. 789, 791 (1897)).
We note another hurdle that must be cleared in this particular case. Sections 3.4 and 4.3 of John's will provide that Sylvia's testamentary power of appointment over Marital Trust and Family Trust assets must be exercised by " specific reference. " Robinson's estate contends that Sylvia exercised this power by "specific reference" in sections 2.1 and 2.4 of Sylvia's will. The Doggett claimants contend that Article II's reference to "any other property over which I may have a power of appointment" is not precise enough to be a "specific reference."
With these standards as a backdrop, we examine whether Sylvia's will validly exercised the appointment power granted in John's will.
B. Application of the Standards to Sylvia's Will
According to Robinson's estate, Article II of Sylvia's will exercised the appointment power granted to her in sections 3.4 and 4.3 of John's will. Robinson's estate contends in its appellate brief that Article II of Sylvia's will "bequeathed to her daughter `any other property over which I may have a power of appointment.'" To make this argument, Robinson's estate reads sections 2.1 and 2.4 of Sylvia's will together.
Section 2.1 states Sylvia's intent to give, devise, and bequeath "all of my property . . . and any other property over which I may have a power of appointment." This language by itself does not appoint property to any identified recipient. Therefore, Robinson's estate cannot rely solely upon section 2.1 as the vehicle by which Sylvia appointed trust property to Beverly.
Robinson combines this language from section 2.1 with language from a residuary clause in section 2.4 to formulate an appointment of trust property to Beverly. Section 2.4 states, "I give, devise and bequeath all of the rest, residue and remainder of my estate and property to my daughter, Beverly Ann Longuet."
The formulation posited by the Robinson estate's brief — under which Sylvia "bequeathed to her daughter `any other property over which I may have a power of appointment'" — omits section 2.4's reference to " my estate and property. " As discussed more fully below, this omitted phrase is significant.
The Doggett claimants contend as a threshold matter that section 2.1's language does not constitute the "specific reference" demanded by John's will because section 2.1's language does not explicitly refer to John's will, the power granted in John's will, or the trusts. We assume without deciding that Sylvia's stated intent in section 2.1 to dispose of "any other property over which I may have a power of appointment" satisfies the "specific reference" requirement in sections 3.4 and 4.3 of John's will. But that is only the first hurdle.
The Doggett claimants urge this court to endorse a distinction between general and special powers of appointment. See Restatement (Second) of Property § 17.1 cmt. b (1986). According to the Restatement, "The donor may want to make certain that the donee does not inadvertently exercise this power; and to avoid this possibility, specific reference to the power may be required in order for it to be effectively exercised." Id. "Failure by the donee to comply with the formal requirements imposed by the donor in regard to the exercise of power may prevent an effective exercise of it even though the intention of the donee to exercise the power is otherwise clearly manifested." Id. We do not decide whether the "specific reference" requirement in John's will demands more explicit language than is found in section 2.1 of Sylvia's will. We also do not decide whether the Restatement's distinction between general and special powers of appointment comports with existing Texas law. We resolve the appeal on other grounds.
Even with this threshold assumption, Robinson's estate still must establish that section 2.1's reference to "any other property over which I may have a power of appointment" can be read in conjunction with section 2.4's residuary clause to accomplish a valid exercise of the appointment power in favor of Beverly. Evaluating this latter proposition requires a close examination of the phrase " my estate and property " because that is what Sylvia gave "all of the rest, residue and remainder of to Beverly in section 2.4.
Both sides cite and discuss section 58c of the Texas Probate Code, entitled "Exercise of Power of Appointment," which was adopted in 2003 after Sylvia's will was executed. See Tex. Prob. Code Ann. § 58c (Vernon Supp. 2009). Because this provision does not apply to Sylvia's will, we do not rely upon it.
Ordinary grammar and usage precepts teach that section 2.4's reference to "my estate and property" means Sylvia's "estate" and Sylvia's "property." See McIntyre v. Ramirez, 109 S.W.3d 741, 746 (Tex. 2003) (interpreting phrase "a person who would ordinarily receive or be entitled to receive" in statute to mean a person who would "ordinarily receive" or "ordinarily be entitled to receive"); Cent. Power Light Co. v. Bradbury, 871 S.W.2d 860, 863-64 (Tex.App.-Corpus Christi 1994, writ denied) (interpreting phrase "ambulatory devices and services" in statute to mean "ambulatory devices" and "ambulatory services"); see also S P Consulting Eng'rs, PLLC v. Baker, 334 S.W.3d 390, 401-02 (Tex.App.-Austin 2011, no pet.) (acknowledging authority "preferring [the rule] that a single adjective preceding a list of nouns modifies each of the nouns" in statutory interpretation cases); Bonilla v. State, No. 14-08-00289-CR, 2010 WL 2195440, at *9 n. 18 (Tex.App.-Houston [14th Dist] June 3, 2010, no pet.) (mem. op.) (interpreting phrase "written order or grant of permission" in criminal statute to mean "written order" or "written grant of permission" according to "rules of grammar and common usage"). Robinson's estate did not argue otherwise in the trial court.
Under this reading of "my estate and property" as Sylvia's "estate" and Sylvia's "property," section 2.4's residuary clause accomplished an appointment of trust property to Beverly if Sylvia "intended that the appointive estate become part of her residual estate, and that it pass . . . under the terms of her will" to Beverly. See Krausse, 430 S.W.2d at 49. Such a reading comports with an understanding of the appointment power as "neither property nor an estate" by itself, which did not vest in Sylvia "any estate, interest, or title" in the trust property. See id. at 47. The property subject to the appointment power would not become part of Sylvia's "property" or Sylvia's "estate" unless that property first was appointed to Sylvia or to Sylvia's estate. See id. at 49.
In short, the approach illustrated by Krausse contemplates a two-step process. The property first is appointed to the testator's estate and then reaches the recipient named in the residuary clause. See id. This court's decision in Wright illustrates the same two-step process. See Wright, 2 S.W.3d at 673 ("Having found that Jacob did exercise the power of appointment, we further hold that by the terms of his will, Jacob intended that his appointive estate become part of his residual estate, and that the appointive estate under Lurine's will passed to the trustee of the Jacob Greenberg Family Trust."). But this mechanism was not available to Sylvia.
In regard to the Marital Trust, section 3.4 of John's will unambiguously states: "My wife shall have the special testamentary power to appoint . . . provided, however, she shall not have the power to appoint trust principal to herself [or] her estate. . . ." In regard to the Family Trust, section 4.3 of John's will unambiguously states: "My wife shall not appoint trust property to herself . . . [or] her estate. . . ."
If Sylvia could not appoint trust property to herself or to her estate, then section 2.4's residuary clause bequeathing to Beverly "all the rest, residue and remainder" of Sylvia's "estate" and Sylvia's "property" could not capture the trust property. If section 2.4's residuary clause could not capture the trust property, then that clause cannot be read in conjunction with section 2.1 of Sylvia's will to bequeath to Beverly "any other property over which I may have a power of appointment." Such an interpretation impermissibly contravenes the unambiguous limits in sections 3.4 and 4.3 of John's will on Sylvia's exercise of the appointment power. Cf.Kransse, 430 S.W.2d at 48 ("The will of William H. Wilson authorized Mrs. Wilson to appoint her own estate. . . ."). Therefore, as a matter of law, Robinson's estate cannot rely on the two-step mechanism illustrated by Krausse and Wright to establish that section 2.1 of Sylvia's will worked in conjunction with section 2.4's residuary clause to accomplish a valid exercise of Sylvia's appointment power in favor of Beverly.
Wright did not address an additional contention that the appointment power at issue was improperly exercised because the operative language contravened a separate restriction, "which limited the power to appoint the property `free of the trust . . . in favor of his estate.'" Wright, 2 S.W.3d at 673. Wright held that the appellant waived this contention on appeal by insufficient briefing. Id. Therefore, Wright provides no assistance in determining whether the Robinson estate's reliance on the term "my estate and property" in section 2.4's residuary clause contravenes the prohibitions in John's will against appointment of trust property to Sylvia or to Sylvia's estate.
To address the limits established in sections 3.4 and 4.3 of John's will, Robinson's estate contends in a post-argument brief that "the trust principal need not — and does not — pass through Sylvia's estate." Instead, "Sylvia expressed her intent that the power of appointment be exercised and the property given in the same manner as her estate property, but not that it be appointed to her estate." Robinson's estate further argues that "[t]here is no need to treat the trust property as part of Sylvia's estate" when construing sections 2.1 and 2.4.
Although Robinson's estate references section 2.2 in its post-argument brief, we construe this argument as a contention that section 2.1 in conjunction with section 2.4 expresses "Sylvia's intent to give the property subject to her power of appointment in the same manner as Sylvia was giving the property in her estate." Section 2.2 of Sylvia's will does not affect the analysis here because it addresses specific monetary bequests to three persons other than Beverly or the Doggett claimants.
Without expressly saying so, this alternative argument reads the residuary clause's key phrase — "my estate and property" — to bequeath Sylvia's "estate" along with "property [including property over which I have a power of appointment]." This argument does not effectively circumvent the appointment power limits established in John's will for two reasons.
First, the Robinson estate's alternative argument requires this court to perform major surgery on section 2.4's residuary clause by grafting the bracketed phrase [including property over which I have a power of appointment] onto "my estate and property." Cf. Krausse, 430 S.W.2d at 48-9 (residuary clause specifically disposed of all other property "which I may own or claim at the time of my death or over which I then shall have power of testamentary disposition"). We cannot do so because "courts may not redraft the will, vary or add provisions under the guise of construction of the language of the will in order to reflect some presumed intention of the testatrix." Shriner's Hosp., 610 S.W.2d at 151.
Second, the Robinson estate's alternative argument requires choosing between multiple meanings of the word "property" when it is used in section 2.4's residuary clause. As discussed above, the most natural reading of section 2.4 is one in which "my estate and property" means Sylvia's "estate" and Sylvia's "property." Even if the Robinson estate's interpretation is plausible, it is at best an alternative interpretation. Robinson's estate cannot prevail merely by offering an alternative interpretation because the intent to exercise the appointment power "must be so clear that no other reasonable intent can be imputed under the will." Republic Nat'l Bank of Dallas, 283 S.W.2d at 47.
It bears emphasizing that section 2.1 by itself appoints no property to Beverly or to any other identified recipient. The Robinson estate's argument depends on combining section 2.1 with the phrase "my estate and property" in section 2.4's residuary clause. Therefore, the burden of demonstrating a sufficiently "clear" intent to exercise the appointment power must be borne in significant part by section 2.4's residuary clause.
Section 2.1 encompasses at least two distinct types of "property." Sylvia refers to "my property" in section 2.1, which by definition does not include any property over which she had power of appointment. See Krausse, 430 S.W.2d at 47. Sylvia also refers in section 2.1 to "any other property over which I may have a power of appointment." Because section 2.4's reference to "property" reasonably could mean "my property" exclusive of appointive property, Sylvia's intent to exercise the appointment power via section 2.4's residuary clause is not "so clear that no other reasonable intent can be imputed under the will." Republic Nat'l Bank of Dallas, 283 S.W.2d at 47. These circumstances create doubt "as to whether it was the intention to execute the power possessed by the grantor" and militate against a holding that the appointment power "was in fact executed" by "such act or conveyance" in section 2.4. See id. (citing Hill, 43 S.W. at 791).
For these reasons, the trial court erred in granting summary judgment based on a conclusion that "Sylvia Doggett validly exercised her power of appointment in favor of . . . Beverly Longuet." The trial court therefore erred in granting summary judgment based on a conclusion that "[b]ecause of the valid exercise of the power of appointment, [the Doggett claimants'] claims . . . fail as a matter of law." As a matter of law, Robinson's estate cannot establish that Sylvia validly appointed trust property to Beverly via sections 2.1 and 2.4 of Sylvia's will. We sustain the Doggett claimants' first issue with respect to the grant of summary judgment and the award of attorney's fees in favor of Robinson's estate.
The award of attorney's fees was predicated on the partial summary judgment ruling in favor of Robinson's estate. Because we sustained the Doggett claimants' first issue in part and reverse the partial summary judgment ruling in favor of Robinson's estate, we also reverse the award of attorney's fees to Robinson's estate. We do not reach the Doggett claimants' remaining contentions, and we do not address the Robinson estate's crossappeal.
CONCLUSION
We reverse the trial court's final judgment and remand this case for proceedings consistent with this opinion.