Darlene Ann Hoffpauir v. Robert P. Cormier ( 2019 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-18-00358-CV
__________________
DARLENE ANN HOFFPAUIR, Appellant
V.
ROBERT P. CORMIER, ET AL, Appellees
__________________________________________________________________
On Appeal from the 60th District Court
Jefferson County, Texas
Trial Cause No. B-201,069-A
__________________________________________________________________
MEMORANDUM OPINION
Robert P. Cormier, individually, and Robert P. Cormier and David Olson, in
their positions as co-trustees to the Paul J. Cormier Family Trust for the benefit of
Robert P. Cormier and the Paul J. Cormier Family Trust GST Exempt for the benefit
of Robert P. Cormier, filed a Petition for Modification of Trust Agreement.1 Robert
1
Because multiple individuals have the surname “Cormier,” we refer to
Robert P. Cormier, Paul J. Cormier, and Carlene Cormier by their first names. In the
record, Robert is referred to alternatively as “Bobby.”
1
sought to modify the terms of the trust agreement created by Paul Cormier on
November 12, 1993, and each of the subtrusts created thereunder pursuant to Texas
Property Code section 112.054(a). See Tex. Prop. Code Ann. § 112.054(a) (West
Supp. 2018). Co-trustees of Trusts for the benefit of Carlene Cormier subsequently
intervened seeking modification consistent with Robert’s requested relief and sought
a declaratory judgment to that effect. Following a hearing, the trial court granted the
requested modification. Darlene Ann Hoffpauir, a beneficiary of the trusts, appeals
the trial court’s Order Directing the Modification of Trust Agreement. We affirm the
trial court’s Order Directing the Modification of Trust Agreement.
Background
On November 12, 1993, Paul Cormier created the “Paul J. Cormier Family
Trust.” Paul established the trust for the benefit of his three children, Carlene Ann
Swensen, Darlene Ann LeFleur (Hoffpauir), and Robert P. Cormier. Paul named
Robert and W.T. Edgar co-trustees. The original trust agreement divided the initial
Trust Estate into three equal shares, “one for the benefit of each Beneficiary.” The
terms of the original trust agreement provided that ten years after the end of the
month in which Paul died, the principal and income of the trust should be delivered
to the beneficiaries. Paul died on October 30, 2009, and thereafter, additional assets
were added to the corpus of the Trust and the Trust Estate was split into six separate
2
subtrusts for tax purposes in satisfaction of the trust terms. These subtrusts are as
follows:
1. Paul J. Cormier Family Trust fbo Robert P. Cormier;
2. Paul J. Cormier GST Exempt fbo Robert P. Cormier;
3. Paul J. Cormier Family Trust fbo Carlene A. Cormier;
4. Paul J. Cormier GST Exempt fbo Carlene A. Cormier;
5. Paul J. Cormier Family Trust fbo Darlene Hoffpauir; and
6. Paul J. Cormier GST Exempt fbo Darlene Hoffpauir.
In their Petition for Modification of Trust Agreement, Appellees contended
there were two specific and material purposes of the Trust. First, they argued that
the Grantor created the trust to provide spendthrift and creditor protection for the
trust estate. They point out that those provisions are designed to ensure the assets
held by the Trustees are safeguarded from creditor claims and are available to
provide for the support, maintenance, medical care, education and welfare of the
primary beneficiaries, initially being the Grantor’s children.
Second, Appellees argued that the Grantor created the Trust, and in particular
directed an extended ten-year term for the Trust after death of the Grantor, for the
purpose of continuing business operations and the management of the Trust’s real
estate investments. Specifically addressing the issue of the need for a period of
3
continued joint management after Grantor’s death, Appellees pointed to Section 2.2
of the Trust Agreement providing that “[t]en years after the end of the month in
which the Grantor dies[,] the Trustee shall convey and deliver to any child of Grantor
then living the principal and accumulated income of his trust.” 2 Appellees also
asserted in their Petition that the same section of the Trust Agreement further
provides specific instructions and language describing the overriding intent of the
Grantor:
It is the desire of the Grantor that a child who receives distribution of
his trust hereunder continue to operate any business being operated by
the Trustee prior to termination, with respect to business assets thus
distributed, as a partner in partnership with the Trustee and/or with his
brother and sisters, or in such other form as may be appropriate for the
operation of such business enterprise. Grantor has devoted a great deal
of effort in establishing business enterprises and accumulated assets
therefor during his lifetime and such business enterprises have
supported the family well. It is the hope of Grantor that the trustee can
carry on such business enterprises and that after the termination of all
trusts herein created the descendant of Grantor can continue to carry on
such business enterprises for their mutual benefit and profit.
Thus, Appellees contended in their Petition for Modification of the Trust Agreement
that the Grantor anticipated the need for an extended period of joint cooperation and
management of the Trust’s investment assets and each of the other trusts created
under the Trust Agreement for the benefit of his children. Appellees asserted that the
2
The parties refer to this as the Termination Date.
4
Grantor assumed a period of ten years would be needed to substantially complete
the management and liquidation of the Trust estate and the Trust terms of Section
2.2 reflect this assumption. Appellees also pointed out that unless modified by the
Court, the Trust was scheduled to terminate on October 31, 2019, and substantial
loss would be incurred by the corpus of the trust.
The Appellees argued in their Petition that unanticipated circumstances
necessitated the modification. Specifically, they pointed to a number of property
interests it held as Cow Bayou Holdings LLC and Cormier Family Partnership and
argued that liquidating those assets required management and could not be profitably
sold under current market conditions. Appellees also argued that if the Trust
terminated on October 31, 2019, it would create a severe hardship on Robert and
Carlene, because Robert had significant business interests apart from the Trust to
attend to and Carlene had limited real estate management experience. Finally,
Appellees contended that Hoffpauir was adjudged partially incapacitated and subject
to a guardianship of her estate to protect her financial assets. Therefore, any assets
distributed to either trust for the benefit of Hoffpauir would be subject to dependent
administration likewise creating a hardship on the court and her guardian. According
to Appellees, those circumstances would significantly increase costs and expenses,
causing a waste of resources which would negatively impact all three primary
5
beneficiaries and could not have been foreseen by Paul when he created the Trust
Agreement in 1993.3
The co-trustees of the Paul J. Cormier Family Trust for the benefit of Carlene
Cormier and the Paul J. Cormier Family Trust GST Exempt for the benefit of Carlene
Cormier subsequently intervened. They desired to exercise joint management of the
assets, property, and business interests. They asserted that Robert retained
management of the limited liability company and family limited partnership as
opposed to all six co-trustees participating in the management. They desired physical
separation of the Trust and Trust assets but contended the current corporate trust
structure did not allow for joint management and that “[m]odifying and extending
the Trust further solidifies the need for a physical separation of the three (3) Trusts
and their assets.” The Intervenors sought a declaratory judgment pursuant to Texas
Civil Practices and Remedies Code section 37.005 to determine:
(a) [w]hether the purposes of the Trust and the requirements of the
Texas Property Code are best met, whether provisions of the Trust
require modifications of the Trust so that Plaintiffs may participate in
the management of the trust businesses and have a separate and distinct
3
In a separate proceeding, we affirmed a jury’s determination that (a)
Hoffpauir lacks the capacity to handle business, managerial, and financial affairs,
(b) it is in Hoffpauir’s best interest that the court appoint a guardian, and (c)
Hoffpauir’s property would be protected by such an appointment. See In re
Guardianship of Hoffpauir, No. 09-16-00152-CV, 2018 WL 1321509, at *1 (Tex.
App.—Beaumont Mar. 15, 2018, pet. denied) (mem. op.).
6
trust, for Carlene Cormier, with separate and distinctive assets for that
Trust; [and]
(b) whether modification of the Trust is appropriate as described in
[Appellees’] petition; Intervenors specifically assert[ed] that they
consent to the action requested by [Appellees] and reserve[d] the right
to take such action as it relates to Carlene Cormier’s Trust, but doing
so at the same time as Trust assets are truly separated in three (3)
distinctive trusts[.]
See Tex. Civ. Prac. & Rem. Code Ann. § 37.005 (West 2015). They also sought a
declaration that the six Trusts are separate and that the terms of the Trusts be
extended for at least 25 years. They also sought to have Hoffpauir named as an
interested party to the proceedings. See id.
The co-trustees of Hoffpauir’s Trust answered; however, the trial court
appointed an attorney ad litem to represent Hoffpauir. Despite the ad litem’s
appointment, Hoffpauir filed a pro se answer asserting a general denial. Hoffpauir
also filed a pro se intervention complaining that Robert acted unlawfully as Trustee
and prevented her from having representation. Hoffpauir’s pro se pleading accuses
multiple parties, institutions, and courts of collusion and other unlawful conduct.
The ad litem for Hoffpauir filed a brief on her behalf opposing the modification of
the trust agreement. After a hearing, the trial court granted the modification.
Specifically, the trial court ordered that section 2.2 of the Trust Agreement be
modified to read as follows:
7
2.2 Distribution to Beneficiaries. Thirty five (35) years after the end of
the month in which the Grantor dies the Trustee shall convey and
deliver to any descendant of Grantor then living the principal and
accumulated income of his trust or subtrust. It is the desire of the
Grantor that a descendant who receives distribution of his or her trust
hereunder continue to operate any business being operated by the
Trustee prior to termination, with respect to business assets thus
distributed, as a partner in partnership with the Trustee and/or other
family members, or in such other form as may be appropriate for the
operation of such business enterprise. Grantor has devoted a great deal
of effort in establishing business enterprises and accumulated assets
therefor during his lifetime and such business enterprises have
supported the family well. It is the hope of Grantor that the Trustee can
carry on such business enterprises and that after the termination of all
such trusts herein created, the descendants of Grantor can continue to
carry on such business enterprises for their mutual benefit and profit.
Trustee shall convey and deliver to any beneficiary other than a
child of Grantor his proportionate share of the Trust Estate, including
any undistributed income when such beneficiary has become 35 years
of age and thirty five (35) years have elapsed after the end of the month
in which the Grantor dies, whichever event shall last occur.
All references in this Trust Agreement to the “trust term” “prior
to termination” or “termination of the trust” or similar phrases shall
refer to the trust term as reflected in this Section 2.2, as modified, being
the date on which the beneficiary has become 35 years of age and thirty
five (35) years have elapsed after the end of the month in which the
Grantor dies, whichever event shall last occur.
Hoffpauir timely filed a pro se appeal of the trial court’s Order Directing the
Modification of Trust Agreement.4 Hoffpauir did not request preparation of the
reporter’s record of the hearing. Hoffpauir’s appellate brief makes clear that she
4
The trial court severed the Order Directing the Modification of the Trust
Agreement, making it a final appealable order.
8
challenges the trial court’s modification of the Trust Agreement extending the
termination deadline from ten years after Paul’s death to thirty-five years after Paul’s
death. However, we are unable to identify any specific issues forming the basis of
her appeal.
Standard of Review
We review an order modifying the terms of a trust under an abuse of discretion
standard. See Tex. Prop. Code Ann. § 112.054(b) (West Supp. 2018) (“The court
shall exercise its discretion to order a modification[.]”); see also In re Willa Peters
Hubberd Testamentary Trust, 432 S.W.3d 358, 365 (Tex. App.—San Antonio 2014,
no pet.) (citing Conte v. Ditta, 312 S.W.3d 951, 961 (Tex. App.—Houston [1st Dist.]
2010, no pet.); Swantner-Carter v. Frost Nat’l Bank, No. 13-06-00545-CV, 2008
WL 3521253, at *4 (Tex. App.—Corpus Christi Aug. 7, 2008, no pet.) (mem. op.)).
A court that acts unreasonably, arbitrarily or without reference to guiding rules or
principles abuses its discretion. See Downer v. Aquamarine Operators, Inc., 701
S.W.2d 238, 241–42 (Tex. 1985).
Analysis
“The appellate record consists of the clerk’s record and, if necessary to the
appeal, the reporter’s record.” Tex. R. App. P. 34.1. The court reporter is responsible
for timely filing the reporter’s record if: (1) a notice of appeal has been filed; (2) an
9
appellant requests that the reporter’s record be prepared; and (3) the party
responsible for paying for the preparation of the reporter’s record has paid the fee or
made satisfactory arrangements with the reporter to pay the fee. Tex. R. App. P.
35.3(b). While trial courts and appellate courts are jointly responsible for ensuring
the appellate record is timely filed, this duty does not arise until an appellant properly
requests and pays for the record. See Aguero v. Aguero, 225 S.W.3d 236, 237 (Tex.
App.—El Paso 2006, no pet.) (citing Kent v. State, 982 S.W.2d 639, 640–41 (Tex.
App.—Amarillo 1998, pet. ref’d, untimely filed)). “[T]he appellant bears the burden
to supply this Court with a complete record demonstrating the trial court abused its
discretion.” Crown Asset Mgmt., L.L.C. v. Castro, No. 05-07-01305-CV, 2008 WL
3272169, at *1 (Tex. App.—Dallas Aug. 11, 2008, no pet.) (mem. op.) (citing Tex.
R. App. P. 34.5(b); Watkins v. Jones, 192 S.W.3d 672, 674 (Tex. App.—Corpus
Christi 2006, orig. proceeding); Univ. of Tex. at Austin v. Hinton, 822 S.W.2d 197,
202 (Tex. App.—Austin 1991, no writ)); see also Christiansen v. Prezelski, 782
S.W.2d 842, 843 (Tex. 1990) (discussing Tex. R. App. P. 53(d) and noting “[t]he
burden is on the appellant to see that a sufficient record is presented requiring
reversal”). When an appellant’s appeal involves matters omitted from the record, its
actions prevent us from adequately addressing the dispute. See Crown Asset Mgmt.,
L.L.C., 2008 WL 3272169, at *2 (citations omitted).
10
Appellate courts generally presume pretrial hearings are non-evidentiary and
that the trial court only considered evidence filed with the clerk. Michiana Easy
Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 783 (Tex. 2005). However, if the
proceeding’s nature, the trial court’s order, the parties’ briefs, or other indications
show that an evidentiary hearing took place, then the complaining party must present
a record of the hearing to establish harmful error. Id. Here, there are multiple
indicators the trial court conducted an evidentiary hearing on the modification of the
trust agreement. First, Hoffpauir’s pro se brief complains about a witness’s
testimony “on the witness stand[.]” Second, Appellees’ brief mentions that the trial
court conducted a hearing “where the Trial Court heard evidence[.]” Third, the trial
court’s order notes it based its findings “upon the Petition, the testimony, the
evidence presented, and the arguments of counsel[.]” Finally, an order granting the
ad litem’s motion for continuance and resetting the hearing mandated that the
attorneys for the parties and the ad litem appear on the date noted and “present any
testimony, arguments or authorities appropriate for the Court to rule on the requested
modification[.]” All of these indicators in the clerk’s record and briefing lead us to
conclude the trial court conducted an evidentiary hearing on the petition for
modification. See id.
11
When a party fails to make the reporter’s record part of the appellate record,
we presume sufficient evidence was presented to support the trial court’s finding and
judgment. See Curry v. Tex. Dep’t Pub. Safety, 472 S.W.3d 346, 350 (Tex. App.—
Houston [1st Dist.] 2015, no pet.) (citing Bryant v. United Shortline Inc. Assur.
Servs., N.A., 972 S.W.2d 26, 31 (Tex. 1998); Willms v. Ams. Tire Co., 190 S.W.3d
796, 803 (Tex. App.—Dallas 2006, pet. denied)); Green v. Grocers Supply Co., 533
S.W.3d 376, 379 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (citations
omitted). Here, Hoffpauir complains of the trial court’s order allowing for
modification of the trust agreement following an evidentiary hearing, but she has
failed to present us with the reporter’s record of the hearing. Therefore, we presume
the trial court properly conducted the hearing on July 17, 2018, and sufficient
evidence was presented for the trial court to make all necessary findings. See Bennett
v. Cochran, 96 S.W.3d 227, 230 (Tex. 2002) (“The court of appeals was correct in
holding that, absent a complete record on appeal, it must presume the omitted items
supported the trial court’s judgment.”) (quoting Gallagher v. Fire Ins. Exchange,
950 S.W.2d 370, 371 (Tex. 1997)).
Conclusion
In this appeal, Hoffpauir had the burden to show that the trial court abused its
discretion when it entered the Order Directing Modification of Trust Agreement.
12
That responsibility consisted of providing this Court an adequate record on appeal
and necessarily included the reporter’s record of the evidentiary hearing. Because
Hoffpauir failed to provide the appellate court with the reporter’s record of the trial
court’s evidentiary hearing below, we presume sufficient evidence existed to support
the trial court’s findings and judgment. We affirm the trial court’s judgment.
AFFIRMED.
_________________________
CHARLES KREGER
Justice
Submitted on August 21, 2019
Opinion Delivered September 19, 2019
Before McKeithen, C.J., Kreger and Horton, JJ.
13