in Re: White Intervivos Trusts ( 2009 )

MEMORANDUM OPINION
No. 04-09-00040-CV
IN RE WHITE INTER VIVOS TRUSTS
From the 229th Judicial District Court, Duval County, Texas
Trial Court No. DC-08-64
Honorable Alex William Gabert, Judge Presiding
Opinion by: Rebecca Simmons, Justice
Sitting: Rebecca Simmons, Justice
Steven C. Hilbig, Justice
Marialyn Barnard, Justice
Delivered and Filed: August 31, 2009
AFFIRMED
In this attorneys’ fees dispute, Appellants Larry and David White (Trustees) appeal the
trial court’s judgment awarding guardian ad litem fees to Appellee Jon West for services
prosecuting an appeal. Because West could and did properly present evidence on his claim for
appellate attorneys’ fees at the trial on the Trustees’ equitable bill of review, we affirm the
judgment of the trial court.
BACKGROUND
In the mid-1990s, grantors J.D. and Connie White created irrevocable trusts for their
grandchildren and appointed their sons, Larry and David White, as trustees. In February 2006,
the Trustees sought to terminate their minor children’s irrevocable trusts (the Trusts Case). Jon
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West, the court-appointed guardian ad litem, represented the minor grandchildren—the inter
vivos trusts’ beneficiaries. In September 2006, the trial court terminated the minors’ trusts and
awarded West attorneys’ fees for his services at trial. A few days after the Trusts Case judgment
was signed, West submitted an application for guardian ad litem fees to represent the minors on
appeal. In November 2006, apparently without notice to the Trustees or an evidentiary hearing,
the trial court signed an Order Granting Fees to West for $35,000.00, payable by the Trustees,
for West’s services to prosecute an appeal. The Trustees later claimed not to have notice of this
Order.
West filed a notice of appeal in December 2006 of the Trusts Case judgment. On
November 14, 2007, this court reversed the trial court and reinstated the minors’ trusts. 1
Approximately one year after the Order was signed, West presented the trial court’s Order
Granting Fees to the Trustees for payment. In response, the Trustees filed an equitable bill of
review urging the trial court to vacate its Order Granting Fees and dismiss West’s application for
compensation. West counterclaimed in the bill of review proceeding for the appellate attorneys’
fees. After the trial on the bill of review issues, the trial court vacated its original Order Granting
Fees, but awarded West $27,405.00 for attorneys’ fees in appealing the Trusts Case pursuant to
West’s counterclaim. The Trustees appeal the attorneys’ fees award.
STANDARD OF REVIEW
Neither party complains of the trial court’s vacating of the original Order Granting Fees.
The Trustees complain of the trial court’s subsequent award of fees to West in the bill of review
proceedings. Generally, an appellate court reviews an award of guardian ad litem fees for an
abuse of discretion. Holt Tex., Ltd. v. Hale, 144 S.W.3d 592, 594–95 (Tex. App.—San Antonio
2004, no pet.) (citing Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex. 1999)); see generally W.
1
See In re White Intervivos Trusts, 248 S.W.3d 340 (Tex. App.—San Antonio 2007, no pet.).
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Wendell Hall, Standards of Review in Texas, 38 ST. MARY’S L.J. 47, 226–27 (2006). We give
appropriate deference to the trial court’s factual determinations, but we review questions of law
de novo. Pony Express Courier Corp. v. Morris, 921 S.W.2d 817, 820 (Tex. App.—San Antonio
1996, no writ) (citing Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992)).
PROCEDURES CONTROLLING GUARDIAN AD LITEM COMPENSATION
A trial “court must appoint a guardian ad litem for a party represented by a next friend
. . . [where] the next friend or guardian appears to the court to have an interest adverse to the
party.” TEX. R. CIV. P. 173.2(a). The guardian ad litem may file an application for
compensation with the court. TEX. R. CIV. P. 173.6(b); Land Rover U.K., Ltd. v. Hinojosa, 210
S.W.3d 604, 607 (Tex. 2006) (citing TEX. R. CIV. P. 173.6(a)). The guardian ad litem bears the
burden of proving his fees. Magna Donnelly Corp. v. DeLeon, 267 S.W.3d 108, 113 (Tex.
App.—San Antonio 2008, no pet.) (citing Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10
(Tex. 1991)). “Unless all parties agree to the application, the court must conduct an evidentiary
hearing to determine the [fees award].” See TEX. R. CIV. P. 173.6(b); Magna Donnelly, 267
S.W.3d at 112.
EQUITABLE BILL OF REVIEW
The Trustees contend in their only issue that West’s claims for attorneys’ fees was barred
by res judicata or claim preclusion because West should have sought his appellate attorney fees
before the Trusts Case appeal became final. According to the Trustees, West’s original attempt
to obtain appellate fees through a trial court order without ensuring the fees award was included
in the final judgment precludes him from obtaining attorneys’ fees based on his counterclaim in
the bill of review proceeding. In order to determine whether West’s claim was barred by res
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judicata or claim preclusion, we must examine the effect of the bill of review proceeding on the
request for fees.
“A bill of review is an independent equitable action brought by a party to a former action
seeking to set aside a judgment, which is no longer appealable or subject to motion for new
trial.” Baker v. Goldsmith, 582 S.W.2d 404, 406 (Tex. 1979). The judgment may be set aside
“for sufficient cause.” TEX. R. CIV. P. 329b(f); Baker, 582 S.W.2d at 406. The complainant files
a petition “to invoke the equitable powers of the court.” Baker, 582 S.W.2d at 408; In re K.M.S.,
68 S.W.3d 61, 66 (Tex. App.—Dallas 2001), pet. denied, 91 S.W.3d 331 (Tex. 2002) (per
curiam). Generally, the bill of review complainant must prove “‘(1) a meritorious defense to the
cause of action alleged to support the judgment, (2) which he was prevented from making by the
fraud, accident or wrongful act of the opposite party, (3) unmixed with any fault or negligence of
his own.’” Baker, 582 S.W.2d at 406–07 (quoting Alexander v. Hagedorn, 148 Tex. 565, 568–
69, 226 S.W.2d 996, 998 (1950)). If the complainant establishes prima facie proof of a
meritorious defense, the court conducts a trial at which the merits of the underlying issue are
effectively relitigated. Caldwell v. Barnes, 154 S.W.3d 93, 98 (Tex. 2004); Baker, 582 S.W.2d
at 409. During the bill of review trial, “the parties . . . revert to their original status as plaintiff
and defendant with the burden on the original plaintiff to prove his or her case.” Caldwell, 154
S.W.3d at 98; accord Baker, 582 S.W.2d at 407–08. The bill of review defendant—the original
plaintiff—must prove, and may offer evidence to support, “his original cause of action.” Meece
v. Moerbe, 631 S.W.2d 729, 729 (Tex. 1982) (citing Baker, 582 S.W.2d at 409). At the end of
the proceeding, if the fact-finder decides the complainant (the original defendant) has proved his
case to set aside the judgment, the trial court may vacate the prior judgment. See Baker, 582
S.W.2d at 409. And if the bill of review defendant (the plaintiff in the original proceeding)
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proves his original case, the trial court may “substitute a new judgment which properly
adjudicates the entire controversy.” In re J.B.A., 127 S.W.3d 850, 851 (Tex. App.—Fort Worth
2004, no pet.); cf. Jordan v. Jordan, 907 S.W.2d 471, 472 (Tex. 1995) (per curiam) (citing
Tesoro Petrol. v. Smith, 796 S.W.2d 705, 705 (Tex. 1990) (per curiam)).
APPELLATE ATTORNEYS’ FEES
Because West served as the guardian ad litem in the Trusts Case, upon proper
application, West was entitled to be paid. See TEX. R. CIV. P. 173.6(b); Land Rover, 210 S.W.3d
at 607; Youngstown Area Jewish Fed’n v. Dunleavy, 223 S.W.3d 604, 608 (Tex. App.—Dallas
2007, no pet.) (“A guardian ad litem is entitled to a reasonable fee for his services . . . .”). West
submitted an application for compensation for appellate fees to the Trusts Case trial court. The
Trustees assert they told West in a telephone conference that they objected to his fees request. If
so, the Trusts Case trial court was required to hold an evidentiary hearing before awarding fees.
See TEX. R. CIV. P. 173.6(b); Magna Donnelly, 267 S.W.3d at 112. After the Trusts Case
concluded, the Trustees (1) timely filed a bill of review challenging the Order Granting Fees as
void for lack of an evidentiary hearing, and (2) moved for summary judgment on the issue that
West’s counterclaim for fees was barred by res judicata. The trial court denied the Trustees’
motion and ordered a trial on the Trustees’ bill of review issues: (1) the Order Granting Fees, and
(2) West’s attorneys’ fees claim.
At trial, the Trustees bore the burden to prove, and the opportunity to submit evidence to
show, the prior Order Granting Fees was improperly rendered. See Baker, 582 S.W.2d at 409;
Meece, 631 S.W.2d at 729; see also Caldwell, 154 S.W.3d at 97–98. The Trustees submitted
their evidence and the original Order was vacated. But in return, West bore the burden to
prove—and submitted evidence to support—his claim for appellate attorneys’ fees. See
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Caldwell, 154 S.W.3d at 98; Baker, 582 S.W.2d at 409 (burdening the bill of review defendant
with “proving his original cause of action . . . [to ensure] the original, underlying cause of action
is supported by the weight of the evidence”). Because the Trustees were granted a trial on the
propriety of the Order Granting Fees and West’s fees claim, West could and did present evidence
to support his claim for appellate attorneys’ fees. See Caldwell, 154 S.W.3d at 97–98; Baker,
582 S.W.2d at 409.
CONCLUSION
Appellee Jon West’s claim for appellate attorneys’ fees was not barred by res judicata
because West was entitled to present evidence at Appellants Larry and David White’s equitable
bill of review trial in support of his original cause of action for guardian ad litem appellate
attorneys’ fees. Accordingly, we affirm the judgment of the trial court.
Rebecca Simmons, Justice
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