Opinion
NO. 01-15-00693-CV
05-23-2017
ELMA GARZA GONZALEZ, Appellant v. NORMA GARZA MARTINEZ, RICARDO GARZA GONZALEZ, ALBINO GARZA GONZALEZ, HUGO GARZA GONZALEZ, DANNY GARZA GONZALEZ, YESENIA QUIJANA, JULIO CESAR GARZA GONZALEZ, AND RAUL GARZA, Appellees
On Appeal from the 333rd District Court Harris County, Texas
Trial Court Case No. 2014-32788
MEMORANDUM OPINION
Appellant Elma Garza Gonzalez was sued by her eight siblings for fraud, breach of fiduciary duty, and conversion in connection with the disposition of their late father's assets. The trial court granted summary judgment against Elma, awarding damages to her siblings and declaring void a gift of real property.
On appeal, Elma raises two issues, arguing that the court lacked subject-matter jurisdiction and that her siblings' claims were barred by res judicata and collateral estoppel. We conclude, under long-standing Texas precedent, that her siblings lacked standing to sue absent an allegation and proof that administration of the estate was either closed or unnecessary. We therefore reverse and render judgment dismissing the case for lack of jurisdiction.
Background
Albino Garza was the father to nine children, who are the parties to this appeal. He had a sixth-grade education, spoke Spanish, and did not read, write, or understand English. When he was 77 years old, he lost the ability to manage his affairs due to dementia and a severe hearing impairment. His daughter, appellant Elma Garza Gonzalez, lived next door to him. She obtained power of attorney for him in January 2011, and she used that power to add herself as a signatory and joint owner of his existing Wells Fargo checking account, which had a balance at that time of $239,584.87. In April 2012, she persuaded her father to execute a gift deed transferring to her all of his real property, including six duplexes in Harris County. She recorded the deed in the real-property records of Harris County. By August 2012, the Wells Fargo checking account had been reduced to $109.
Appellee Norma Martinez filed an application to be appointed guardian of the person and the estate of Albino. She alleged that Albino was mentally incapacitated and that since Elma had taken over his financial affairs, she had taken more than $200,000. In connection with that proceeding, Albino was examined by a physician, who concluded that he was totally incapacitated. Norma obtained a temporary restraining order against Elma, but it was later dissolved, and that case was dismissed without prejudice.
Albino died intestate in December 2013. Elma thereafter held herself out as the owner of the real property, which she leased. She did not share the rent with her siblings. Approximately six months after their father died, Elma's siblings sued her to set aside the gift deed and to recover damages for breach of fiduciary duty, common-law fraud, and conversion or misappropriation of property. They also sought a declaration that the power of attorney and gift deed were void because their father lacked mental capacity when he signed those documents.
In their petition, Elma's siblings alleged that they and she were Albino's only children and heirs-at-law, and that he died intestate. They sought a determination of "their share and interest in the property," specifically the real property which had been gifted to Elma and the money she took from the Wells Fargo checking account. The petition did not mention whether an administration was pending, necessary, or had been completed, nor did it mention whether Albino had any debts at the time of his death.
Representing herself, Elma answered the lawsuit, asserting a general denial without pleading any affirmative defenses. Her answer did not mention anything about whether an administration of Albino's estate was pending, necessary, or had been completed.
Elma's siblings filed a traditional motion for summary judgment, which addressed all of the causes of action pleaded in their original petition. Like the original petition, the motion for summary judgment asserted that Albino died intestate in December 2013, but it made no mention of any pending or completed administration, nor did it argue that administration of his estate was unnecessary. Instead, Elma's siblings attached summary-judgment evidence that supported their claims on the merits. They attached requests for admissions, which they contended were deemed admitted because Elma failed to respond despite being properly served. Among other things, Elma judicially admitted:
47. That [she] and Plaintiffs are the sole children and heirs-at-law of the Decedent.None of the admissions mentioned administration of the estate or whether Albino had any debt.
48. That as lawful heirs of the Decedent, Plaintiffs are entitled to have their share and interest in the property determined by a court of law.
Elma's siblings also attached an affidavit from Norma, in which she averred that if not "for Elma's actions," her "father's estate would have remained intact," and she and her siblings "would not have been deprived" of their rightful interests in his real and personal property. Like the other documents, Norma's affidavit stated that her father died intestate in December 2013 and that the nine parties to this case are his only children. Her affidavit did not mention whether Albino left any debt or anything about an administration of his estate.
Elma did not respond to the motion for summary judgment. On June 4, 2015, the trial court granted summary judgment in favor of Elma's siblings, voiding the gift deed and declaring that they and Elma jointly owned the real property in nine equal shares. The court also awarded actual damages in the amount of $239,584.87, exemplary damages of $25,000, pre- and postjudgment interest, attorney's fees of $25,091.75, and costs of suit.
Two weeks after the court rendered summary judgment, Elma filed a plea to the jurisdiction. She argued that the court lacked subject-matter jurisdiction because her siblings lacked standing, and because a statutory probate court had exclusive jurisdiction under the probate code, making the district court's judgment void. For the first time, Elma asserted that an administration of Albino's estate was necessary. She also argued that res judicata and collateral estoppel barred her siblings' claims relating to Albino's alleged lack of capacity because they were raised in Norma's prior guardianship proceeding.
The trial court did not rule on the plea to the jurisdiction. Elma appealed.
Analysis
I. Appellate jurisdiction
While this appeal was pending, Elma's siblings filed a motion to dismiss, challenging this court's appellate jurisdiction. They argued that Elma's notice of appeal was untimely and deprived this court of jurisdiction.
The filing of a notice of appeal invokes the appellate court's jurisdiction. TEX. R. APP. P. 25.1(b). In general, a notice of appeal must be filed within 30 days after a final judgment is signed. TEX. R. APP. P. 26.1. If a timely motion to modify the judgment is filed, a notice of appeal may be filed up to 90 days after the judgment is signed. TEX. R. APP. P. 26.1(a)(2); TEX. R. CIV. P. 329b(g). A court of appeals "lacks jurisdiction over an appeal when the notice of appeal is not timely filed." Penny v. Shell Oil Prods. Co., 363 S.W.3d 694, 697 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (citing TEX. R. APP. P. 25.1).
Summary judgment was entered on June 4, 2015. The notice of appeal was filed 68 days later on August 11, 2015. The notice of appeal, thus, would be untimely unless the plea to the jurisdiction extended the trial court's plenary power and the appellate deadlines. See TEX. R. CIV. P. 329b(g). Elma's siblings contend that a plea to the jurisdiction informs the court that "any orders that it might sign are void and of no legal import, not that any judgment or order that has already been signed should be altered in any way." They contend that the plea to the jurisdiction did not seek a substantive change to the final judgment, and therefore it did not extend the appellate deadlines. Elma argues that she sought a substantive change in the trial court's judgment by asking the court to vacate it.
In Lane Bank Equipment Co. v. Smith Southern Equipment, Inc., 10 S.W.3d 308 (Tex. 2000), the Court held that any "timely filed postjudgment motion that seeks a substantive change in an existing judgment qualifies as a motion to modify under Rule 329b(g), thus extending the trial court's plenary jurisdiction and the appellate timetable." Id. at 314; see Gomez v. Tex. Dep't of Criminal Justice, Inst. Div., 896 S.W.2d 176, 176-77 (Tex. 1995) (holding that filing of document entitled "bill of review" was sufficient to extend appellate deadlines because it "assailed the trial court's judgment").
More recently, the Supreme Court has stressed the need for courts to look to the substance of a pleading to determine the relief sought. In re J.Z.P., 484 S.W.3d 924, 925 (Tex. 2016) (per curiam). In J.Z.P., a father moved to modify a child-custody arrangement, and when the mother and former wife failed to respond, the trial court entered judgment. 484 S.W.3d at 924. After the expiration of the trial court's plenary jurisdiction, the mother filed a "Motion to Reopen and to Vacate Order," which the trial court denied. Id. at 924-25. The court of appeals dismissed the mother's appeal for want of jurisdiction because the notice of appeal was untimely filed. Id. at 925. But the Supreme Court considered the substance of the "Motion to Reopen and to Vacate Order" as a Rule 306a motion which extended postjudgment appellate deadlines because it sought relief on the grounds that the mother had not been served with citation or promptly notified of the judgment. Id.
Rule 329b(g) provides that a motion to modify, correct, or reform a judgment "shall extend the trial court's plenary power and the time for perfecting an appeal in the same manner as a motion for new trial." In this case, although Elma's plea asked the court to vacate the judgment in favor of her siblings, the relief sought was in the nature of a correction because it alerted the court to a perceived error of law—the rendition of a judgment in the absence of jurisdiction. Subject-matter jurisdiction may be raised at any time. See Rusk State Hosp. v. Black, 392 S.W.3d 88, 95 (Tex. 2012).
Since Lane Bank, the Austin court of appeals considered whether a postjudgment pleading entitled "Objection to Motion for New Trial; Demand for an Order Setting Aside Judgment; and Motion Pursuant to Texas Rules of Civil Procedure, Rule 18a" extended the trial court's plenary power and the appellate timelines when it expressly asked the court to "vacate and set aside" its judgment nihil dicit. Kashan v. McLane Co., No. 03-11-00125-CV, 2012 WL 2076821, at *2 (Tex. App.—Austin June 7, 2012, no pet.) (mem. op.). In that case, the appellant had appeared pro se and had asserted the court's lack of personal jurisdiction prior to entry of judgment, and again in a postjudgment pleading. Id. at *1. Because the "character of a motion is judged by its substance rather than by its form or caption," the court of appeals concluded that a request to vacate the trial court's judgment "clearly assailed" it and "would have resulted in a substantive change in the judgment if it had been granted." Id. at *2.
Elma's postjudgment plea to the jurisdiction in this case expressly asked the trial court to vacate the summary judgment and dismiss her siblings' suit with prejudice. This assailed the judgment by seeking a substantive change from an award in favor of Elma's siblings to a dismissal of their suit. We therefore conclude that the plea to the jurisdiction was a postjudgment motion that extended the trial court's plenary power and the appellate timetable. See Lane Bank, 10 S.W.3d at 314; see also J.Z.P., 484 S.W.3d at 925; Kashan, 2012 WL 2076821, at *2.
Elma had 90 days from the date the trial court entered summary judgment to file her notice of appeal, and she filed her notice of appeal 68 days after entry of summary judgment. Accordingly her notice of appeal was timely filed and properly invoked this court's jurisdiction.
We overrule Elma's siblings' motion to dismiss the appeal.
II. Trial court jurisdiction
In her first issue, Elma argues that the trial court lacked subject-matter jurisdiction for two reasons. "As a general proposition, before a court may address the merits of any case, the court must have jurisdiction over the party or the property subject to the suit, jurisdiction over the subject matter, jurisdiction to enter the particular judgment, and capacity to act as a court." State Bar of Tex. v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994). In the absence of subject-matter jurisdiction, a court must dismiss the case. Heckman v. Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012). Elma identifies two jurisdictional flaws: she asserts that her siblings lacked standing to sue, and she argues that the case was improperly brought in a district court when the statutory probate court had exclusive original jurisdiction.
Standing is a component of subject-matter jurisdiction, which appellate courts review de novo. RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 429 (Tex. 2016); Heckman, 369 S.W.3d at 149-50. Standing focuses on who may bring a cause of action. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 502 (Tex. 2010); M.D. Anderson Cancer Ctr. v. Novak, 52 S.W.3d 704, 708 (Tex. 2001). It is "never presumed," and it "cannot be waived." Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443-44 (Tex. 1993). The concept of standing requires that a real controversy exists between the parties which actually will be determined by the judicial declaration sought. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005); Wheelbarger v. City of El Lago, 454 S.W.3d 55, 58-59 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). "The parties must be properly situated to be entitled to a judicial determination." Wheelbarger, 454 S.W.3d at 59.
The well-settled general rule is that "heirs cannot sue in their own right as heirs for property of the estate; the executor or administrator must sue." Giddings v. Steele, 28 Tex. 732, 748 (1866); accord Shepherd v. Ledford, 962 S.W.2d 28, 31-32 (Tex. 1998). "Property of the estate" means all of the decedent's real and personal property, including estates and interests in land, as well as goods, money, chattel, evidence of debt, and any actual or potential cause of action. E.g., TEX. EST. CODE § 22.012 (defining "Estate"); id. § 22.030 (defining "Real property"); id. § 22.028 (defining "Personal property"); TEX. GOV'T CODE § 311.005(4) (a statutory reference to "Property" generally "means real and personal property"). An exception to this general rule arises when an heir alleges and proves that an administration has been closed, or when no administration is necessary. See, e.g., Shepherd v. Ledford, 962 S.W.2d 28, 31-32 (Tex. 1998).
Whether an administration is necessary is a question for the probate court, which it determines based on proof. TEX. EST. CODE § 306.002(c); see King v. Estate of Balshaw, No. 01-89-00370-CV, 1990 WL 11977, at *3 (Tex. App.—Houston [1st Dist.] Feb. 15, 1990, no writ) (mem. op., not designated for publication). Generally, the "necessity of administration is presumed in every case unless facts are shown that make the case an exception to the general rule." Eastland v. Eastland, 273 S.W.3d 815, 829 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (citing Davis v. Cayton, 214 S.W.2d 801, 804 (Tex. Civ. App.—Amarillo 1948, no writ)). A court will find that administration is necessary if:
(1) there are two or more debts against the estate;TEX. EST. CODE § 306.002(c); see Pratho v. Zapata, 157 S.W.3d 832, 840 (Tex. App.—Fort Worth 2005, no pet.). "The party opposing administration of the estate has the burden of proving that no necessity for administration exists." King, 1990 WL 11977, at *3.
(2) there is a desire for the county court to partition the estate among the distributees;
(3) the administration is necessary to receive or recover funds or other property due the estate; or
(4) the administration is necessary to prevent real property in a decedent's estate from becoming a danger to the health, safety, or welfare of the general public.
The causes of action alleged by Elma's siblings were based on the theory that she "fraudently procured all of Decedent's real and personal property and intentionally deprived" them of their rightful interest to his assets. These potential causes of action existed just prior to Albino's death, and they were his potential causes of action. Thus all of Elma's siblings' claims—whether they sought to recover real property, personal property in the form of money previously withdrawn from the joint checking account, or exemplary damages on a claim for breach of fiduciary duty—sought recovery of estate property. Elma argues that her siblings lacked standing to bring these causes of action because there was no determination of heirship by a probate court and there was no application to probate Albino's estate. The lawsuit in this case was filed less than a year after Albino died and within the four-year period for filing an application for letters of administration. TEX. EST. CODE § 301.002(a). Elma's siblings alleged that Albino died intestate, but they did not allege that no estate administration was pending or that none was necessary. The motion for summary judgment did not allege or prove that no administration was pending or that none was necessary. Elma's siblings also did not negate the statutory reasons for granting administration, such as by pleading that there were no debts of the estate. Nothing in the appellate record supports an exception to the general rule that only an administrator can sue to recover estate property.
Elma's siblings did not make any argument against application of the well-settled rule that heirs ordinarily cannot sue by their own right for recovery of estate property. Instead they argue generally that they were injured by Elma's wrongful conduct and have a stake in the subject matter of the controversy.
The underlying lawsuit in this case was brought by Elma's siblings as Albino's heirs, during the time for filing an application for letters of administration, which has not yet expired. They did not plead or prove that an administration was not pending or not necessary. Without such pleading or proof, the general rule barring suit by the heirs to recover property of the estate in their own right applies, and we hold that Elma's siblings, as heirs, lacked standing to sue.
Alternatively, Elma's siblings rely on the Uniform Declaratory Judgments Act to support their assertion of standing. See TEX. CIV. PRAC. & REM. CODE §§ 37.001-.011. They contend that they are entitled to a declaration of their rights with respect to the gift deed and the power of attorney based on the UDJA's general rule, which states:
A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.Id. § 37.004(a). The UDJA does not confer or enlarge a court's jurisdiction, but it is merely a procedural device for deciding cases already within the jurisdiction of the court. Wells Fargo Bank, N.A. v. Murphy, 458 S.W.3d 912, 916 (Tex. 2015). As such, the statute cannot bestow standing upon Elma's siblings to obtain a declaration of rights with respect to the validity of the gift deed or the power of attorney when the right to seek any resulting relief has been bestowed upon the executor or administrator of the estate. Cf. Kennesaw Life & Accident Ins. Co. v. Goss, 694 S.W.2d 115, 118 (Tex. App.—Houston [14th Dist.] 1985, writ ref'd n.r.e.) (UDJA creates no expansion of jurisdiction to subject defendant to damages in suit to remove a cloud on title to property when the defendant would not have been a proper party under statutory procedure governing trespass-to-try-title actions); accord Martin v. Amerman, 133 S.W.3d 262, 267 (Tex. 2004) (declining to authorize UDJA claim for relief governed by trespass-to-try-title statute).
We hold that the district court lacked jurisdiction to enter the final summary judgment, and this lack of jurisdiction cannot be overcome by repleading. To demonstrate that no administration is necessary, Elma's siblings would have to negate the circumstances in Section 306.002(c). They would have to plead and prove that (1) there are not two or more debts against the estate; (2) there is no desire to partition the estate among the distributees; (3) there is no need for administration to recover funds or other property due the estate; and (4) there is no need for administration to prevent real property in the decedent's estate from becoming a danger to the health, safety, or welfare of the general public. See id. § 306.002(c). The central issue in this case is the recovery of funds and other property allegedly owed to Albino's estate. Because of this, Elma's siblings will not be able to maintain their claims and negate Section 306.002(c)(3) by pleading that that there is no need for an administration to recover funds or other property due the estate. This is the essence of their suit. As such, we hold that an administration is necessary as a matter of law.
We sustain Elma's first issue. Having concluded that the district court lacked jurisdiction to enter final summary judgment, we do not need to consider Elma's remaining issue. See TEX. R. APP. P. 47.1.
Conclusion
We reverse the judgment of the trial court, and we render judgment of dismissal for want of jurisdiction.
Michael Massengale
Justice Panel consists of Justices Massengale, Brown, and Huddle.