in the Estate of Marjorie A. Childs ( 2016 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-15-00623-CV
IN THE ESTATE OF Marjorie A. CHILDS, Deceased
From the Probate Court No. 2, Bexar County, Texas
Trial Court No. 2014-PC-0056
Honorable Tom Rickhoff, Judge Presiding
Opinion By: Luz Elena D. Chapa, Justice
Sitting: Karen Angelini, Justice
Rebeca C. Martinez, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: April 20, 2016
REVERSED AND REMANDED
Pamela Ann Childs McCaskill and Susan Childs Addison appeal the trial court’s summary
judgment in favor of their sister, Mollie Childs. In two issues, Pamela and Susan argue the trial
court erred by declaring their contract with Mollie is unenforceable as a matter of law and by
rescinding the contract. We reverse and remand for further proceedings.
BACKGROUND
Bertha Childs (the parties’ grandmother) bequeathed stock to her daughter (the parties’
mother), Marjorie Childs. Bertha’s will provided:
I give all shares of stock owned by me in Campbell Taggart Associated Bakeries,
Inc. at the time of my death to my daughter, Marjorie Allen Childs, with the request
that she use only the income in cash dividends from said shares during her lifetime
and that on her death she make provision for said shares to be divided equally
among her daughters, or the issue of any deceased daughter. Should it become wise
at any time to sell these shares, it is my desire that the proceeds, or any reinvestment
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of the proceeds, be held and disposed of by my daughter at her death in the same
manner.
In 1992, Marjorie gifted Mollie $190,000 worth of the stock.
In 2008, Marjorie executed a will that suggested she understood Bertha’s will created a life
estate in the stock:
Pursuant to the requirements of the life estate created for my benefit under Section
II of the Will of Bertha Allen, the Anheuser Busch stock, which is derived from the
Campbell Taggart Associated, Inc., stock addressed in the aforementioned Section
II of Bertha Allen’s Will, shall be distributed to my daughters and their descendants,
per stirpes. Furthermore, and also pursuant to the requirement of the life estate
created for my benefit under Section II of Bertha Allen’s Will, if at the time of my
death I no longer own the Anheuser Busch stock, then the proceeds or reinvestment
of the proceeds shall be disctributed [sic] to my daughters and their descendants,
per stirpes.
Marjorie thereafter received cash proceeds for her stock from a stock redemption, and entrusted
Mollie with placing the proceeds into brokerage accounts.
Two separate “transfer on death” brokerage accounts were established. One account, at
Federated Securities Inc., contained two-thirds of the proceeds. Marjorie’s daughters were
designated as the beneficiaries: Mollie (33%), Pamela (34%), and Susan (33%). The other
brokerage account, at Raymond James & Associates, contained the remaining third of the
proceeds. Mollie was designated as the sole beneficiary of the Raymond James account. Mollie
took the account paperwork to Marjorie, who was living in an assisted-living community, and
Marjorie signed the paperwork to set up the accounts.
Pamela and Susan threatened to sue Mollie for abusing her position of power to obtain a
greater-than-equal portion of the stock proceeds. Mollie was asked to sign an agreement that, upon
Marjorie’s death, would divide the accounts equally:
The entire assets subject to the life estate created by the will of Bertha Allen and
referenced in the will of Marjorie A. Childs signed November 20, 2008, are
contained within 2 brokerage accounts . . . . One brokerage account is held . . . at
Federated Securities, the other . . . at Raymond James & Associates. In the event
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Pamela, Susan and Mollie are living at the time of death of Marjorie A. Childs, the
accounts are to be divided and distributed as follows:
The Federated Securities account to be split equally and distributed between Pam
and Susan; the Raymond James account to be distributed in its entirety to Mollie.
After Pamela, Susan, and Mollie signed the agreement, Marjorie passed away.
Mollie sued Pamela and Susan seeking a declaration that the contract was unenforceable.
The trial court granted Mollie’s traditional motion for summary judgment, “find[ing] that the
Agreement . . . is unenforceable and rescinded as a matter of law.” Pamela and Susan appeal,
arguing the trial court improperly granted summary judgment.
STANDARD OF REVIEW
“We review a summary judgment de novo.” City of San Antonio v. San Antonio Exp.-News,
47 S.W.3d 556, 561 (Tex. App.—San Antonio 2000, pet. denied). To prevail on a traditional
motion for summary judgment, the movant must show “there is no genuine issue as to any material
fact and the [movant] is entitled to judgment as a matter of law.” TEX. R. CIV. P. 166a(c); accord
Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). A plaintiff moving for summary
judgment on her claim must conclusively prove all the elements of her cause of action as a matter
of law. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). To determine whether a
plaintiff-movant has met her burden, we examine the evidence presented in the motion and
response. Jacobs v. Huser Const., Inc., 429 S.W.3d 700, 702 (Tex. App.—San Antonio 2014, no
pet.). Once the movant has established a right to summary judgment, the burden shifts to the
respondent to present evidence that would raise a genuine issue of material fact. City of Houston
v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
We take as true all evidence favorable to the nonmovant, resolve all conflicts in the
evidence in the non-movants’ favor, and “indulge every reasonable inference and resolve any
doubts in the nonmovant’s favor.” Rhône-Poulenc, Inc., 997 S.W.2d at 223; City of San Antonio,
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47 S.W.3d at 561. We view the evidence in the light most favorable to the party against whom the
summary judgment was rendered, “crediting evidence favorable to that party if reasonable jurors
could, and disregarding contrary evidence unless reasonable jurors could not.” Mann Frankfort
Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
ENFORCEABILITY OF THE AGREEMENT
Pamela and Susan argue the trial court erred by granting Mollie’s summary judgment and
declaring the contract unenforceable as a matter of law. Mollie raised two traditional grounds for
summary judgment: lack of consideration and mutual mistake. The trial court’s order contained its
substantive ruling that the contract was unenforceable as a matter of law, and this is the question
we must decide on appeal. However, because the trial court did not specify the underlying basis
for its ruling, we must affirm if either ground supports the trial court’s ruling. See Merriman v.
XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013); see also TEX. R. APP. P. 47.1.
A. Lack of Consideration
In support of her “lack of consideration” ground for summary judgment, Mollie argued
Pamela and Susan “gave up no right and suffered no detriment.” Consideration is necessary to
have a valid enforceable contract. Marx v. FDP, LP, 474 S.W.3d 368, 378 (Tex. App.—San
Antonio 2015, pet. denied.). “Consideration is a bargained-for exchange of promises or return
performance and consists of benefits and detriments to the contracting parties.” Id. “The surrender
of a legal right constitutes valid consideration to support a contract.” Id. “The compromise of
doubtful and conflicting claims is good and sufficient consideration to uphold a settlement
agreement.” Garza v. Villarreal, 345 S.W.3d 473, 483 (Tex. App.—San Antonio 2011, pet.
denied). “To constitute valid consideration, forbearance to sue must be upon a right asserted in
good faith, and as to a contention which the party relying on the forbearance had reasonable
grounds for believing would be upheld.” S.A. Dome, L.L.C. v. Maloney Dev. P’ship, Ltd., No. 04-
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04-00586-CV, 2005 WL 1398106, at *3 (Tex. App.—San Antonio June 15, 2005, no pet.) (mem.
op.). The party alleging lack of consideration has the burden to rebut the presumption that a written
contract is supported by consideration. Doncaster v. Hernaiz, 161 S.W.3d 594, 603 (Tex. App.—
San Antonio 2005, no pet.).
Because the record establishes the agreement was in writing, Mollie had the burden to rebut
the presumption that the agreement is supported by consideration. See id. Mollie argues the only
possible consideration is the exchange of promises contained in the agreement, but Pamela and
Susan obtained a greater interest in the Federated Securities account without giving Mollie any
benefits under the agreement.
However, the agreement does not state the writing is the entire agreement of the parties;
there were no other promises, agreements, or warranties; or all prior communications were
superseded unless expressly incorporated therein. Pamela and Susan argue other communications
between the parties show they would forbear their right to sue Mollie if Mollie signed the
agreement. In response to Mollie’s motion, Susan produced an affidavit to which she swore:
Pam threatened to sue Mollie if she did not sign the. . . Agreement. Mollie
responded, ‘Pam please don’t do this . . . I don’t want or need your money. I will
not take your money . . . if you want me to sign something you draft reassuring you
I don’t want and will not want the . . . life estate I will do so.’ Shortly after this and
in response . . . Mollie edited, drafted, and signed the . . . Agreement.
In response to Mollie’s motion, Pamela also produced an affidavit to which she swore Mollie was
entrusted to set up the brokerage accounts and did so even though “[Marjorie] was consistently
clear . . . that each of us would have an equal share of her assets.” Pamela also produced an email
exchange between her and Mollie, and in the emails Pamela explained Susan consulted with an
attorney about suing Mollie and stated she was “thinking about and also seeking advice on this.”
In response was Mollie’s email stated, “Pam please don’t do this,.. [sic] I don’t want or need your
money.”
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The evidence, viewed in a light most favorable to Pamela and Susan, raises a genuine issue
as to whether Mollie entered into the agreement to avoid a lawsuit over her establishing the
brokerage accounts. Reasonable inferences from the summary judgment evidence are that (1)
Marjorie intended her stock proceeds to be divided equally among her daughters; (2) Mollie acted
unlawfully, unfairly, or negligently in helping Marjorie establish the brokerage accounts; (3) if
Mollie was not negligent, Mollie’s intent was to obtain a larger share of Marjorie’s stock proceeds
at Pamela and Susan’s expense; and (4) the parties believed the agreement, which ensured all
parties would obtain equal shares of the stock proceeds upon their mother’s death, would prevent
litigation about Mollie’s acts in establishing Marjorie’s brokerage accounts. We must draw these
inferences. See Rhône-Poulenc, 997 S.W.2d at 223.
Mollie argues the only possible consideration for the agreement was that Pamela and Susan
gave up their interest in the Raymond Jones account, in which they actually had no interest, and
thus she received no benefit from the agreement. Initially, Mollie’s affidavit testimony, “I received
no value or benefit from executing this Alleged Agreement,” is conclusory and not competent
summary judgment evidence. See Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984)
(recognizing testimony stating no more than a legal conclusion is conclusory and is insufficient
for summary judgment purposes). Moreover, Pamela and Susan stated in their depositions they
believed they gave up their interest in the Raymond James account, but they did not state this was
the only consideration for the contract. Pamela and Susan also did not admit their forbearance to
sue Mollie for her role in establishing the brokerage accounts was not part of the consideration for
the agreement. See TEX. R. CIV. P. 166a(c).
Mollie further argues Pamela and Susan did not assert their right to sue in good faith. Mollie
does not cite to any summary judgment evidence to support this argument. We conclude Mollie
did not meet her burden to conclusively establish the lack of consideration. See id.
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B. Mutual Mistake
In support of her “mutual mistake” ground, Mollie argued the parties were mutually
mistaken that Bertha’s will gave Marjorie only a life estate in the stock. Pamela and Susan argue
“the mistake—if there was one—is a mistake of law (the interpretation of language in a Will), not
a mistake of fact” and there are fact issues as to whether Mollie was actually mistaken, whether
the mistake was mutual, and whether the mistake was material.
“The elements of mutual mistake are . . . (1) a mistake of fact, (2) held mutually by the
parties, and (3) which materially affects the agreed-upon exchange.” City of The Colony v. N. Tex.
Mun. Water Dist., 272 S.W.3d 699, 735 (Tex. App.—Fort Worth 2008, pet. dism’d). “It is the
general rule that a mutual mistake of law will not furnish grounds for avoiding a contract.” Harris
v. Sanderson, 178 S.W.2d 315, 320 (Tex. Civ. App.—Eastland 1944, writ ref’d w.o.m.). “When
[a will] is not ambiguous, the intentions of a party to it, particularly as to the thing or estate reserved
or conveyed, is a question of law.” Warner v. Patton, 19 S.W.2d 1111, 1112 (Tex. Civ. App.—
Amarillo 1929, writ ref’d).
If Mollie, Pamela, and Susan were mistaken that Bertha’s will created a life estate, then the
mistake is not one of fact, it is one of law. Before granting Mollie’s summary judgment declaring
the contract unenforceable, the trial court had determined there was no dispute about the language
of Bertha’s will and that, as a matter of law, Bertha’s will did not create a life estate. Furthermore,
Pamela and Susan produced some evidence showing their mistaken belief that Bertha’s will
created a life estate was neither mutual nor material. Mollie believed that because Bertha’s will
created a life estate, the transfer-on-death designations on the brokerage accounts were not
effective. Pamela and Susan’s evidence that they would pursue legal action against Mollie for how
she helped establish the brokerage accounts showed they believed the transfer-on-death
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designations were effective despite the life estate. We therefore hold Mollie did not meet her
burden to conclusively establish a mutual mistake of fact. See TEX. R. APP. P. 166a(c).
CONCLUSION
Mollie did not conclusively establish either the lack of consideration or a mutual mistake
of fact. We therefore hold the trial court erred by granting summary judgment that the contract was
enforceable and rescinded as a matter of law. We reverse the trial court’s order granting summary
judgment and remand for further proceedings.
Luz Elena D. Chapa, Justice
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