Shafqat Ali A/K/A Michael Ali Individually and as Former First Alternate Independent of the Estate of Amjad \"A.J\" Sultan v. Darlene Payne Smith Successor Administrator With Will Annexed of the Estate of Amjad \"A.J.\" Sultan , 554 S.W.3d 755 ( 2018 )

Affirmed and Majority and Dissenting Opinions filed July 10, 2018.
In The
Fourteenth Court of Appeals
NO. 14-18-00003-CV
SHAFQAT ALI A/K/A MICHAEL ALI, INDIVIDUALLY AND AS FIRST
ALTERNATE INDEPENDENT EXECUTOR OF THE ESTATE OF AMJAD
“A.J.” SULTAN, DECEASED, Appellant
V.
DARLENE PAYNE SMITH, SUCCESSOR ADMINISTRATOR WITH
WILL ANNEXED OF THE ESTATE OF AMJAD “A.J.” SULTAN,
DECEASED, Appellee
On Appeal from the Probate Court No. 3
Harris County, Texas
Trial Court Cause No. 448,030-402
DISSENTING OPINION
Smith is a party to the arbitration provision.
It is self-evident that neither Ali nor Smith physically signed Sultan’s will at
the time it was executed. However, it can hardly be said that they are strangers to the
will. Their acceptance of appointments to serve as executors of the will (and all its
provisions) constitutes the assent required to form an enforceable agreement to
arbitrate under the Texas Arbitration Act. See Rachal v. Reitz, 403 S.W.3d 840, 841
(Tex. 2013). Texas jurisprudence regarding non-signatories to an arbitration
agreement, therefore, should not be applied to this dispute.1 Because the majority
has done so, I respectfully dissent.
In his fourth issue, which is dispositive, Ali argues that the trial court erred in
denying his motion to compel arbitration because the arbitration provision is valid.2
I agree. There is nothing in the record to suggest that the arbitration provision is
unconscionable or was the result of undue influence, fraud, or duress. Smith argues
only that she is not a party to the provision.
As noted by the majority, the arbitration provision in Sultan’s will states:
If a dispute arises between or among any of the beneficiaries of my
estate, the beneficiaries of a trust created under my Will, the Executor
of my estate, or the Trustee of a trust created hereunder, or any
combination thereof, such dispute shall be resolved by submitting the
dispute to binding arbitration. It is my desire that all disputes between
such parties be resolved amicably and without the necessity of
litigation.
(Emphasis added). As the majority mentions, Ali argues that Sultan intended for
persons such as Smith and himself to be bound by the arbitration provision.
Both parties to this dispute are or have functioned as executors of Sultan’s
estate, although Smith’s title, successor administrator with will annexed, is a bit
1
There also is no need to analyze direct benefits estoppel.
2
Under the Texas Arbitration Act, a party seeking to compel arbitration must establish the
existence of a valid, enforceable arbitration agreement and that the claims asserted fall within the
scope of that agreement. TMI, Inc. v. Brooks, 225 S.W.3d 783, 791 (Tex. App.—Houston [14th
Dist.] 2007, pet. denied). Here, neither party has argued that the claims asserted in Smith’s petition
against Ali are not within the scope of the arbitration provision. Smith claims that the provision is
not valid because she is not a party to it.
2
different. See Tex. Est. Code § 306.002. The term “Executor” is not a defined term
in Sultan’s will, and certainly is not defined to exclude Smith. Further, article VI.F.
of the will states, “[U]nless another meaning is clearly indicated or required by
context or circumstances, the term ‘Executor’ . . . shall also mean and include . . .
successors.”
Smith concedes that “it would be much more likely” that she would have to
arbitrate if she were a successor executor specifically named in the will, citing In re
Rubiola, 334 S.W.3d 220, 224 (Tex. 2011). In Rubiola, a non-signatory moved to
compel a signatory to arbitration. The non-signatory was held to be included in the
definition of “party” in the arbitration agreement and, thus, permitted to compel
arbitration. The non-signatory was not specifically named in the agreement. Here, it
is disingenuous for Smith to maintain that, though she carries out all the
responsibilities of an executor (albeit with court supervision), she is not an
executor—or a successor to an executor—for the purpose of the arbitration
provision. “Who is actually bound by an arbitration agreement is a function of the
intent of the parties, as expressed in the terms of the agreement.” Bridas S.A.P.I.C.
v. Gov’t of Turkm., 345 F.3d 347, 355 (5th Cir. 2003); see also Sherer v. Green Tree
Servicing LLC, 548 F.3d 379, 382 (5th Cir. 2008) (holding that equitable estoppel
need not be applied to determine whether party identified in the agreement should
be compelled to arbitrate). The arbitration provision clearly tells us who the parties
are. Smith is one.
Smith agreed to her appointment, which was to carry out Sultan’s clearly
expressed intent in his will, including the intention for disputes to be arbitrated. As
Smith’s counsel stated in oral argument, “[The administrator] does not get to re-
write the will.” Exactly.
3
Sultan intended this dispute to be resolved pursuant to the arbitration
provision.
The cardinal rule of will construction is to ascertain the testator’s intent and
to enforce that intent to the extent allowed by law. Knopf v. Gray, 545 S.W.3d 542,
545 (Tex. 2018). The guiding principle for courts in will-construction disputes is to
discern and give effect to the testator’s intent as expressed in the will’s four corners.
See Hysaw v. Dawkins, 483 S.W.3d 1, 4 (Tex. 2016). Sultan clearly expressed his
intent that disputes arising under the will between those acting as executors (which,
reading the will as a whole, clearly includes predecessor executors and successor
executors, despite their actual titles) be handled in arbitration proceedings. Compare
Tex. Est. Code § 305.051 and § 305.052 (providing practically identical forms of
oath for executor and administrator with will annexed).
We know from the text of his will that Sultan wanted “all disputes” to be
“resolved amicably and without the necessity of litigation.”
Even as an administrator with will annexed, Smith must comply with
Sultan’s intent.
Smith does not argue that Sultan did not express an intent to arbitrate this
dispute, but argues that, as a successor administrator with will annexed, she does not
have to follow any of the provisions of the will other than its distributive provisions,
citing Langley v. Harris, 23 Tex. 564 (Tex. 1859). Smith argues that the trial court
that appointed her is free to disregard the provisions in the will: “whether [I have] to
follow any other provisions in the will is completely up to the probate court.”
However, this is not the holding of Langley, in which the supreme court
discussed the inability of an administrator with will annexed that succeeded an
independent executor to act “independently.” The court did not distinguish between
distributive provisions of the will (which were the subject of that case) and other
4
provisions. It held that the “right to obey the will” including all its provisions, is
derived from the court, to whom the administrator must account. In other words,
Smith cannot act absent the court’s appointment and approval for certain actions.
Langley does not permit the trial court to disregard the testator’s clearly expressed
intent.
Smith also cites Frisby v. Withers, 61 Tex. 134 (Tex. 1884), for the
proposition that her appointment as administrator with will annexed did not carry
with it the right to exercise the “discretionary powers” conferred alone upon the
executors named in the will. Notwithstanding its dicta, the Frisby court affirmed a
transfer by deed by a successor administrator with will annexed that was not
authorized by a court order, a power reserved for independent executors. There is
nothing in the provision “such dispute shall be resolved by submitting the dispute to
binding arbitration” that indicates it is discretionary (emphasis added).3 Here, Sultan
did not confer the responsibility to arbitrate disputes solely upon those carrying the
title of executor, but compelled successors as well. Smith is not prevented from
carrying out Sultan’s intent in that regard.
Smith argues that if there is no named executor available—begging the
question of why all the other family members named in Sultan’s will were found by
the trial court to be unsuitable—all the provisions in the will relating to independent
executors and how they must administer the estate are effectively nullified, citing In
Re Grant’s Estate, 53 S.W.372 (Tex. 1899), and other cases. However, the Grant
court was dealing with the conundrum created in the statute in effect at the time that
did not give the trial court the authority to appoint an administrator when the named
independent executors were unable to serve. That issue has been resolved in the
3
The distinction between discretionary and mandatory powers is a false argument, as the
courts have spoken only to the power to act, not the power to pick and choose what actions to take.
5
current Estates Code in sections 304.001 and 361.152, among other provisions.
The cases cited by Smith stand for the proposition that provisions in a will for
independent administration of an estate by its executors will not permit a successor
administrator with will annexed to perform her duties independently of the trial
court’s supervision. However, the cases do not stand for the proposition that the
successor, with the approval of the trial court, may disregard the expressed intent of
the testator.4
Smith is required to arbitrate her claims. To the extent it was convinced
otherwise, the trial court abused its discretion.
An arbitration proceeding does not deprive the probate court of its ability to
supervise a dependent administration.
Smith argues as a matter of public policy that the trial court would be deprived
of its ability to supervise the administration of Sultan’s estate if the arbitration
provision were honored. See Tex. Est. Code § 351.352 (“[P]robate court shall use
reasonable diligence to see that [Smith] perform[s] [her] duties.”). However, the trial
court retains its ability to consider a motion to compel arbitration and a motion to
confirm the arbitration award, among others, therefore discharging its responsibility.
Claims against Ali as predecessor executor are within the scope of the
arbitration provision.
Smith also argues that her initial claims, against Ali for a declaratory
judgment, arise not from the will but from the Estates Code. See Tex. Est. Code §
351.153 (authorizing successor executor or administrator to sue predecessor).5 The
4
Likewise, the case cited by the majority makes the same holding. See Loewenstein v.
Watts, 119 S.W.2d 176, 184–85 (Tex. App.—El Paso 1938) (op. on reh’g) (reversing holding in
original opinion that administrators with will annexed might exercise powers of independent
executors), aff’d, 134 Tex. 660, 137 S.W.2d 2 (1940).
5
It is unclear whether Smith intended this argument to be analyzed only if direct benefits
6
will however, provides that
Each Executor . . . shall have . . . all powers . . . conferred by statute or
common law . . . except for any instance in which such power . . . may
conflict with the express provisions of this Will, in which case the
express provision of this Will shall control.
Smith invoked the will in her original petition. Whether or not Smith would
have standing to sue Ali under the Estates Code without also invoking Sultan’s will,
and whether or not Ali would have liability as a fiduciary to the estate under the code
without also invoking the will, the claim is nevertheless a “dispute arising” under
the terms of the will.
I would sustain Ali’s dispositive issue, reverse the trial court and remand with
order to grant the motion to compel arbitration.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Jamison, Wise, and Jewell (Wise, J., majority).
estoppel is applied.
7