Edward A. Copley, as Independent of the Estate of Belton Kleberg Johnson v. Sarah Johnson Pitt ( 2011 )

OPINION
No. 04-08-00079-CV
IN RE ESTATE OF Belton Kleberg JOHNSON, Deceased
From the Probate Court No 1, Bexar County, Texas
Trial Court No. 2001-PC-1819
Honorable Polly Jackson Spencer, Judge Presiding
Opinion by: Catherine Stone, Chief Justice
Sitting: Catherine Stone, Chief Justice
Karen Angelini, Justice
Steven C. Hilbig, Justice
Delivered and Filed: February 16, 2011
AFFIRMED
Appellants’ motion for rehearing is denied. This court’s opinion and judgment dated
December 1, 2010 are withdrawn, and this opinion and judgment are substituted. Our prior
opinion contained an incorrect reference to Laura Johnson serving as co-trustee of a foundation
as opposed to Laura Johnson serving as co-trustee of a management trust. We substitute this
opinion to delete the erroneous factual reference which does not affect this court’s prior analysis.
This appeal arises from a probate proceeding in which a jury found Belton Kleberg
Johnson (“B”) executed certain wills and trusts as a result of undue influence. The jury further
found that the reasonable and necessary fees and expenses for the services of Plaintiffs’ attorneys
in connection with both the will contest and the trust contest were in excess of $6.1 million, plus
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additional attorneys’ fees in the event of an appeal. The trial court entered judgment on the
verdict, denying probate of certain wills and admitting B’s 1997 will to probate. Additionally,
the judgment invalidated certain trust documents. On appeal, the independent executor of B’s
estate, B’s widow, and a co-trustee of a trust created by B, challenge the sufficiency of the
evidence to support the jury’s finding of undue influence. They also raise numerous issues
relating to the attorneys’ fee award. We affirm the trial court’s judgment.
BACKGROUND
A. The Family Members
B was a descendent of famed King Ranch heritage. He and his first wife, Patsy, whom he
divorced in 1987, were the parents of three children: Cecilia McMurrey (“Ceci”), Sarah Pitt
(“Sarah), and Kley Johnson (“Kley”). Kley, who died in a car accident in 1991, was married to
Cecilia Hager (“Hager”). Alice Truehart Johnson and Henry Kleberg Johnson are Kley and
Cecilia’s children. Sarah married Steven Pitt, and Sarah Spohn Kleberg Pitt, Stephen McCarthy
Pitt, Jr., and Allegra Elizabeth McCarthy Pitt are their children. Ceci married Mark McMurrey,
and Harry Bennett McMurrey, Belton Kleberg McMurrey, and Estella Lewis McMurrey are their
children.
Lynne Johnson was B’s second wife. They were married in February of 1991, and Lynne
died of cancer in January of 1994.
Laura Johnson was B’s third wife. B met Laura in Hong Kong in January of 1994 within
days after Lynne’s death. At the time, Laura was still married to her first husband, who also was
her business partner; however, they had been separated for several years. Laura’s divorce from
her first husband was final in January or April of 1996, and she married B on November 8, 1996.
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B. The Estate Planning Documents
Over the course of at least four decades, B engaged in extensive estate planning activity
with the aid of various professionals. The following individuals were involved at varying times
in B’s estate planning: (1) Ed Copley - an estate planning attorney B hired in 1991; (2) Robert
Phelps – a generational planning specialist with J.P. Morgan who was also an attorney; (3) Stacy
Eastland – another estate planning attorney B hired in 1997; and (4) Peter Milton – a loan officer
with J.P. Morgan who subsequently became an investment advisor for B’s foundation.
Following B’s death in 2001, Copley obtained an order admitting to probate B’s 1999
will and 2000 Codicil and was named as the independent executor of B’s estate. B’s children
and grandchildren challenged that order in the suit giving rise to this appeal. A review of B’s
estate planning documents for the decade preceding his death is helpful to understanding the
parties’ claims.
B’s 1991 will created a life estate for his second wife, Lynne, with the remainder going
into trust for B’s grandchildren. The 1991 will listed three specific charities as contingent
beneficiaries in the event all of B’s descendants predeceased him. B’s 1993 will was similar to
his 1991 will; however, a subsequent codicil changed the remainder beneficiaries from B’s
grandchildren to his children. B’s 1995 will left $1 million net of tax in trust to each grandchild
with the remainder going to five specific charities.
B’s 1997 will left his estate to a 1997 Management Trust. In the 1997 Management
Trust, $1,000,000 net of tax was left in trust for each grandchild. The remainder of the estate
was to be held in trust for Laura for her life. Laura had a power of appointment and could leave
up to one-half of the remaining estate to any or all of B’s descendants, and the other one-half of
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the remaining estate (or the entire remainder if Laura did not exercise the power of appointment)
was to be distributed to the same five specific charities listed in the 1995 will.
In 1989, B created Johnson Properties. B was the general partner of Johnson Properties,
and the trusts of B’s children were limited partners. Johnson Properties owned a limited
partnership interest in SA-2000, which owned the Hyatt Hotel on the San Antonio River Walk.
Upon the dissolution of Johnson Properties in 1998, B and the trusts individually owned the
partnership interests in SA-2000. B formed a new family limited partnership, BKJ Interests, to
which he transferred his King Ranch royalties and the interest in SA-2000 which he formerly
owned through Johnson Properties. The record is replete with evidence that the effect of the
dissolution of Johnson Properties on B’s estate plan was intentionally kept secret from Ceci and
Sarah until B’s death.
Around the same time as the Johnson Properties dissolution, B created the 1998 Family
Trust, which eventually obtained a portion of B’s interest in BKJ Interests. B’s 1998 will left his
estate to a 1998 Management Trust. In the 1998 Management Trust, an aggregate of $7 million
was left in trust for B’s grandchildren; however, that amount was offset by the fair market value
of the assets held in the 1998 Family Trust. The remainder of the estate was held in trust for
Laura for her life. Laura then had a power of appointment similar to the power contained in the
1997 will, except the remaining one-half (or the entire remainder if Laura did not exercise the
power of appointment) was distributed to the Belton Kleberg Johnson Foundation. Although the
trust lists some organizations which B desired to be the primary focus of distributions from the
foundation, the trustee of the foundation ultimately controlled the distributions.
B’s 1999 will left his estate to the 1998 Management Trust as amended and restated in
1999. The 1998 Management Trust as restated no longer mentioned a distribution in trust for the
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grandchildren. The entire estate is instead held in trust for Laura for her life, and the provisions
upon her death regarding the remainder were unchanged from the 1998 Management Trust.
C. The Attorneys and the Claims
The Lawter Firm represented the following plaintiffs during the course of the underlying
controversy: (1) B’s daughter Sarah, individually and as a beneficiary of her 1962, 1970, 1976,
and 1990 trusts; (2) B’s daughter Ceci, individually and as a beneficiary under her 1962, 1970,
1976, and 1996 trusts; (3) B’s daughter-in-law Hager, individually, as successor-in-interest to
Kley, as executrix of Kley’s estate, as co-trustee of Kley’s 1970 trust, and as beneficiary of the
trusts created under Kley’s will; (4) B’s granddaughter Alice, individually and as next friend for
her brother Henry; (5) Houston Trust Co., as trustee of the 1962 trusts of Sarah and Ceci and
their descendants, as co-trustee of the 1970 trusts for Sarah and Ceci and their descendants, and
as trustee of the 1990 and 1996 management trusts; and (6) Carper Capt, as co-trustee of the
1970 trust for Hager and Kley’s descendants. The Hartnett Firm represented all of B’s
grandchildren with the exception of Alice and Henry.
Each of the individual plaintiffs and all of the trustee plaintiffs sued B for breach of his
fiduciary duties in relation to the children’s trusts and the dissolution of Johnson Properties.
Each of the individual plaintiffs also sued B’s widow Laura for tortiously interfering with their
inheritance rights and contested the validity of the will and codicil admitted to probate. They
further sought to probate several alternative wills and codicils. B’s grandchildren also sued J.P.
Morgan for breaching its fiduciary duties arising from the 1998 Family Trust. Finally, Sarah and
Ceci contested the management trusts. All of the plaintiffs will collectively be referred to herein
as “Appellees.”
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UNDUE INFLUENCE – SUFFICIENCY OF THE EVIDENCE
A. Standard of Review
When reviewing a legal sufficiency or “no evidence” challenge, we determine “whether
the evidence at trial would enable reasonable and fair-minded people to reach the verdict under
review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We view the evidence in
the light favorable to the verdict, crediting favorable evidence if reasonable jurors could and
disregarding contrary evidence unless reasonable jurors could not. Id. Appellate courts will
sustain a legal sufficiency or “no evidence” challenge when: (a) there is a complete absence of
evidence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight
to the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is
no more than a mere scintilla; or (d) the evidence conclusively establishes the opposite of the
vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). By contrast,
when reviewing a factual sufficiency challenge, we consider all the evidence supporting and
contradicting the finding. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989).
We set aside the finding only if the evidence is so weak or the finding is so against the great
weight and preponderance of the evidence that it is clearly wrong and unjust. Dow Chem. Co. v.
Francis, 46 S.W.3d 237, 242 (Tex. 2001). “Jurors are the sole judges of the credibility of the
witnesses and the weight to give their testimony.” City of Keller, 168 S.W.3d at 819. “They
may choose to believe one witness and disbelieve another.” Id. “Reviewing courts cannot
impose their own opinions to the contrary.” Id. “Courts reviewing all the evidence in a light
favorable to the verdict thus assume that jurors credited testimony favorable to the verdict and
disbelieved testimony contrary to it.” Id.
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B. Law on Undue Influence
“[U]ndue influence implies the existence of a testamentary capacity subjected to and
controlled by a dominant influence or power.” Rothermel v. Duncan, 369 S.W.2d 917, 922 (Tex.
1963). “Rothermel v. Duncan, 369 S.W.2d 917, 919 (Tex. 1963), [is] the seminal Texas will
contest case” in which the Texas Supreme Court established a three-part test to determine
whether undue influence exists. Estate of Davis v. Cook, 9 S.W.3d 288, 292 (Tex. App.—San
Antonio 1999, no pet.). To prevail on an undue influence claim, the contestant must prove: (1)
the existence and exertion of an influence; (2) the effective operation of such influence so as to
subvert or overpower the mind of the testator at the time of the execution of the testament; and
(3) the execution of a testament which the maker thereof would not have executed but for such
influence. Rothermel, 369 S.W.2d at 922; Estate of Davis, 9 S.W.3d at 292-93. The burden of
proving undue influence is upon the party contesting its execution. Rothermel, 369 S.W.2d at
922; Estate of Davis, 9 S.W.3d at 293. It is, therefore, necessary for the contestant to introduce
some tangible and satisfactory proof of the existence of each of the three elements. Rothermel,
369 S.W.2d at 922; Estate of Davis, 9 S.W.3d at 293.
Not every influence exerted by a person on the will of another is undue. Rothermel, 369
S.W.2d at 922; Estate of Davis, 9 S.W.3d at 293. Influence is not undue unless the free agency
of the testator was destroyed and a testament produced that expresses the will of the one exerting
the influence. Rothermel, 369 S.W.2d at 922; Estate of Davis, 9 S.W.3d at 293. One may
request or even entreat another to execute a favorable dispositive instrument, but unless the
entreaties are shown to be so excessive as to subvert the will of the maker, they will not taint the
validity of the instrument with undue influence. Rothermel, 369 S.W.2d at 922. “Influence that
was or became undue may take the nature of, but is not limited to, force, intimidation, duress,
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excessive importunity[,] or deception used in an effort to overcome or subvert the will of the
maker of the testament and induce the execution thereof contrary to his will.” Id.
The exertion of undue influence is usually a subtle thing, and by its very nature usually
involves an extended course of dealings and circumstances. Id. Undue influence may be shown
by direct or circumstantial evidence, but will usually be established by the latter. Id.; Estate of
Davis, 9 S.W.3d at 293. “[A]ll of the circumstances shown or established by the evidence should
be considered; and even though none of the circumstances standing alone would be sufficient to
show the elements of undue influence, if when considered together they produce a reasonable
belief that an influence was exerted that subverted or overpowered the mind of the testator and
resulted in the execution of the testament in controversy, the evidence is sufficient to sustain
such conclusion.” Rothermel, 369 S.W.2d at 922. Circumstances relied on as establishing the
elements of undue influence must be of a reasonably satisfactory and convincing character, and
they must not be equally consistent with the absence of the exercise of such influence. Id.;
Estate of Davis, 9 S.W.3d at 293. “This is so because a solemn testament executed under the
formalities required by law by one mentally capable of executing it should not be set aside upon
a bare suspicion of wrongdoing.” Rothermel, 369 S.W.2d at 922-23.
C. Evidence on Elements of Undue Influence
Although the parties cite cases in support of their respective positions, no two cases
involving undue influence are alike, and each case must stand or fall depending upon the
sufficiency of the facts proven. Id. at 921. Attempting to analyze each item of evidence relied
upon by the parties would unnecessarily lengthen an opinion. Id. That is especially true in this
case which took four months to try and resulted in a voluminous record. Although we do not
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attempt to summarize all of the evidence, we discuss at length some of the evidence supporting
the jury’s finding as to each of the three elements necessary to prove undue influence.
1. Overpowering the Testator’s Mind
Where there is competent evidence of the existence and exercise of undue influence, the
issue as to whether undue influence was effectually exercised necessarily turns the inquiry and
directs it to the state of the testator’s mind at the time of the execution of the testament, since the
question as to whether free agency is overcome by its very nature comprehends such an
investigation. Id. at 923. “The establishment of the subversion or overpowering of the will of
the testator is generally based upon an inquiry as to the testator’s mental or physical incapacity to
resist or the susceptibility of the testator’s mind to the type and extent of the influence exerted.”
Id. “Words and acts of the testator may bear upon his mental state.” Id. “Likewise, weakness of
mind and body, whether produced by infirmities of age or by disease or otherwise, may be
considered as a material circumstance in establishing this element of undue influence.” Id.
Conflicting expert testimony was presented regarding B’s susceptibility to undue
influence. The evidence established that B was an alcoholic, and psychological and medical tests
showed that the alcohol had an adverse effect on his mental state. Although B received both in-
patient and out-patient alcohol rehabilitation services several times before his marriage to Laura,
the record contains no evidence that Laura made any effort to stop B’s drinking, which he
admitted was on-going when he was hospitalized in 2000 and diagnosed with pancreatic cancer.
Dr. Christopher Ticknor, a psychiatrist called by the Appellees, met B while Dr. Ticknor
was treating B’s son, Kley. Ticknor described the medical tests performed on B in 1990 during
one of his rehabilitation efforts. The tests showed organic brain syndrome/memory dysfunction.
Hospital records from 1997 showed a history of continued drinking, including a two-week binge
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just a few days before the hospitalization. The 2000 medical records also included evidence of
an on-going history of drinking. Although the psychiatrist who saw B in 2000 did not
recommend in-patient treatment, his notes reflect a concern about B’s drinking, recommending B
stop drinking or seek treatment.
Richard Coons, another psychiatrist called by the Appellees, testified that B feared
abandonment, having lost his mother while he was young. Dr. Coons opined that B feared
abandonment by Laura. Dr. Coons further opined that B’s permanent cognitive defects,
continued drinking, and personality features caused him to be vulnerable to undue influence.
Finally, William Dailey, a neuropsychologist called by the Appellees, testified that the
1990 tests showed B had significant memory deficit. Dailey opined that the testing was valid
and that the decline in B’s cognitive function increased his vulnerability to undue influence.
Richard Fulbright, a clinical neuropsychologist called by the Appellants, did not provide
an opinion on undue influence. Edgar Nace, a psychiatrist called to testify by the Appellants,
testified that B was not unduly influenced. Nace’s testimony, however, did not differentiate
between an expert medical opinion regarding undue influence and a jury’s finding of undue
influence. An expert’s medical opinion is based on a person’s mental susceptibility to undue
influence independent of the facts, while a jury’s finding of undue influence takes into
consideration the actual facts of the case in determining whether a person was, in fact, unduly
influenced. Moreover, at his deposition, Nace was asked hypothetically whether Laura could
have unduly influenced B by putting a gun to his head. In his deposition, Nace responded that he
was unsure; however, at trial, Nace testified the gun example would be an example of undue
influence based on common sense. The jury could consider these conflicts in Nace’s testimony
in weighing his credibility.
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The jury was required to weigh the foregoing expert testimony and determine the
credibility of the testimony based on the experts’ challenges to each others’ opinions and
extensive cross-examination challenging each expert’s opinion. See City of Keller, 168 S.W.3d
at 819 (jurors may choose to believe one witness and not another and determine the weight to be
given the evidence). Based on the expert testimony, the jury could have found that B was
susceptible to undue influence, and given his on-going history of alcoholism, ample opportunity
existed to unduly influence B while he was drinking.
2. Existence & Exertion of an Influence
“[T]he establishment of the existence of an influence that was undue is based upon an
inquiry as to the nature and type of relationship existing between the testator, the contestants[,]
and the party accused of exerting [the] influence.” Rothermel, 369 S.W.2d at 923. Similarly,
establishment of the exertion of such influence is generally predicated upon an inquiry about the
“opportunities existing for the exertion of the type of influence or deception possessed or
employed, the circumstances surrounding the drafting and execution of the testament, the
existence of a fraudulent motive, and whether there has been an habitual subjection of the
testator to the control of another.” Id.
Although several business associates testified that B made his own decisions and could
not be controlled, the vast majority of those business associates testified that B either never drank
or was never intoxicated in their presence. As a result, these associates were unaware of how B
would respond to influence exercised while he was drinking or intoxicated. The jury would have
the right to consider whether in a period of intoxication B’s otherwise strong intellect yielded to
unduly exerted importunities. See Craycroft v. Crawford, 285 S.W. 275, 278 (Tex. 1926).
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Evidence was presented that B drank alcoholic beverages during his taped interviews
with Martin Booth, who was writing a book about B’s life. In one interview excerpt in which the
jury could infer B was intoxicated, the following exchange occurred:
MARTIN BOOTH: You were officially engaged in the eyes of the world.
Everybody knew about it.
LAURA JOHNSON: A tiny — tiny, tiny diamond, as you can see.
MARTIN BOOTH: Yes, a minute diamond. And then you set a wedding date,
presumably.
LAURA JOHNSON: Yes.
MARTIN BOOTH: Which was when?
LAURA JOHNSON: Which was the 8th of November, with 8 being the lucky
Chinese number, 8th of November, nineteen ninety — what year, Darling?
B JOHNSON: What — when was it?
LAURA JOHNSON: When was it Darling?
B JOHNSON: I don’t —
LAURA JOHNSON: You have two strikes and you’re out.
B JOHNSON: It was three — three from ’97, wasn’t it?
LAURA JOHNSON: No. Two strikes and you’re out.
B JOHNSON: ‘96
LAURA JOHNSON: Oh, good boy, you can stay in the game. You can come
home with me.
At trial, this clip was played for Howard Nolan, the president of United Way of San Antonio at
the time B was asked to serve as chair of the United Way campaign. Nolan stated that he was
uncertain if B was drinking during the taping, but it did not sound like the B he knew. The jury
was free to conclude from this taped excerpt that B was intoxicated.
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Several of the employees who worked in B’s office, including Rita Sullivan and
Madeleine Sandefur, testified regarding B’s on-going drinking, as did his daughters and sons-in-
law. Ceci testified that B would disappear for weeks when he was on a binge and could wind up
in a different county, state, or country. Testimony was introduced that any flight B chartered
was stocked with vodka, and in a nine-month period in 1999, B spent almost $7,000 on liquor
and wine. Evidence was also introduced about B’s mental abilities while intoxicated. For
example, several witnesses testified that B would call late at night or early in the morning after
he had been drinking and want to have long, rambling conversations. Rita Sullivan testified that
B called her at 2:00 a.m. to ask her how to use the remote control to the television. Sullivan also
called B’s attorney for advice when B called Sullivan while intoxicated to obtain a $200,000
nonrefundable check to purchase a house. Martin Booth testified that B called him one night
while intoxicated to report an improvement in his health and then called again the following day
and repeated his report. Ceci testified that following his drinking binges, B would be depressed
and contrite. The book written by Booth stated that B’s drinking caused him problems,
recounting that his fellow directors on AT&T’s board of directors became concerned about his
drinking, and B missed a party in his honor after he became intoxicated while drinking on a train
on his way to the party. One time B ordered an employee to purchase tickets to Santiago, Chile,
but when the employee called B about going to the airport, B had no recollection of requesting
the trip. In contrast to this evidence of B’s significant drinking and its effect on his conduct,
Laura denied that B had a drinking problem or was ever intoxicated in her presence.
Ceci also testified that before B married Laura the family was traditionally informed of
B’s estate planning. Ceci testified that B did not keep his estate plan a secret, and they
approached the plan as a team. After B met Laura, however, the evidence established that a
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decision was made during the course of the estate planning meetings not to tell Ceci and Sarah
about the dissolution of Johnson Properties or the formation of the 1998 Family Trust. Notes
from estate planning meetings and telephone conferences contained numerous statements by the
estate planning professionals reassuring and encouraging B not to disclose the estate plan to Ceci
and Sarah.
Evidence was admitted that when Stacy Eastland was first considering the family limited
partnership structure for the estate, the children were included in the partnership. However, in
mid-July of 1997, the estate planning notes reflect that Ceci and Sarah were to be left out
because they were “turning against” B. B was admitted to a hospital in Hong Kong on July 23,
1997. The hospital records reflect that B had been on a two-week drinking binge only days
before his admission into the hospital. Around this same time, Eastland testified that B’s
comments during a telephone conference were not ordinary, and he could have been intoxicated,
so they decided to re-do the phone call. Peter Milton from J.P. Morgan previously had told
Eastland to call B in the morning because of his excessive drinking.
Appellees contend the evidence also established a habitual subjection of B to Laura’s
control. Although B had a prenuptial agreement with his second wife, Lynne, Laura refused to
consider a prenuptial agreement, and B expressed concern that his insistence on a premarital
agreement would seriously interfere with their relationship. B discussed his estate plan with
Laura prior to their marriage, and Laura attended numerous estate planning meetings. Although
Laura testified that she did not pay attention and was not engaged during the meetings, other
estate planning professionals at the meetings testified that Laura was attentive and made
comments.
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Laura also tried to suggest to the jury that she was not a businesswoman as a reason for
her lack of involvement, but several witnesses who were B’s business associates testified that she
was a smart businesswoman. Laura owned or co-owned several businesses in Hong Kong before
she met B, and she helped run those businesses. One of those businesses was a pub called Mad
Dogs. B invested with Laura to open a Mad Dogs at the Hyatt in San Antonio, and B loaned the
business $1.4 million. After B died, a settlement was reached in which B’s estate was paid only
approximately $.50 for each dollar loaned and B’s estate relinquished the ownership interest B
had in the business. While negotiating the settlement, Milton sent an email noting the loan was
unsecured. In the email, Milton stated, “Believe me B Johnson screwed this up to a fair-thee-
well as we used to say up east.” In another email, Milton commented, “I am a little annoyed that
I didn’t know how well financed Mad Dogs was. On the other hand I think that we have done
more than B Johnson would have done to protect his assets; he was not good about separating his
love from his assets. That is a direct quote from him.” Although Laura denied negotiating the
compromise with regard to Mad Dogs, another email from Milton to Copley discussing the
negotiation of the compromise refers to a meeting with Laura and another person. In the email,
Milton stated, “B should never have given this kind of money to Mad Dogs of San Antonio. I
think it was love not sense.”
Prior to B and Laura’s marriage, one note by Copley stated that Laura wanted to know
what the children were getting under the estate plan. One letter summarizing certain estate
planning documents had writing in the brown felt tip pen B traditionally used, but also had
writing in a red pen. The jury could infer from the evidence and testimony that Laura had
reviewed the document and made comments.
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On a few occasions, B requested that Copley investigate whether the King Ranch
royalties and a house in Cabo San Lucas could be left to his children, but subsequently called and
stated that he changed his mind. The jury could infer that B changed his mind after discussions
with Laura. With regard to the house in Cabo San Lucas, Laura testified that B immediately
rejected Sarah’s request that the house be left to the daughters/grandchildren for tax reasons;
however, the evidence established that B asked Copley to research the issue and had not made an
immediate decision. With regard to the King Ranch royalties, evidence was presented that B
stated in a conversation with his children in 1999 that the King Ranch royalties were to be kept
in the family, and that Laura, who overheard the discussion, stated she would never take a family
heirloom. By 1999, however, the King Ranch royalties had been transferred to BKJ Interests,
and under the estate plan, the King Ranch royalties would not remain in the family but would
eventually be controlled by the foundation. Evidence was presented that in 2000 B again
broached Copley with the idea of leaving the King Ranch royalties to the children. Copley sent
an email regarding his conversation with B about this request in which Copley stated leaving the
King Ranch royalties to the children “would require an audit of his estate, whereas, at the present
time, it is a non-audit.” At trial, however, Copley stated that a “slight chance” existed that
leaving the King Ranch royalties to the children would enhance “the possibility of an audit.”
Moreover, in his letter to B regarding the manner in which such a transaction could be structured,
Copley spent considerable time discussing the tremendous tax consequences of the transaction
and concluded, “the tax cost is heavy.” When Eastland was asked, however, whether there
would have been “tax efficient ways” to transfer the King Ranch royalties to the children, he
responded that there were, and he would never have told B not to leave the King Ranch royalties
to the children. Moreover, evidence was presented from which the jury could find that Copley
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represented Laura on several legal matters and could have a conflict of interest in providing
advice that would result in assets being left to the children, thereby diminishing the assets in the
life estate left to Laura.
Laura also retained the family scrapbooks and photo albums, claiming that B did not
want Ceci and Sarah to have them until after Patsy died; however, the evidence established that
Laura did not return the family scrapbooks and photo albums even after Patsy died, but kept
possession of them for the duration of the trial. Evidence also was presented that Laura refused
to give B’s granddaughter, Alice, a silver spoon set that B wanted her to have. Although Laura
testified that the attorneys had told her not to give away any of the estate assets because of the
pending litigation, evidence established that she gave items belonging to the estate to other non-
family members.
Prior to meeting Laura, B was an avid hunter and often hunted with his children and
grandchildren. As the book on B’s life stated, “B lived to hunt.” After meeting Laura, B rarely
hunted. In one of his notes to his employee Madeleine Sandefur, B stated that dove hunting
continued to be a problem for Laura. B was scheduled to hunt on property belonging to his
ranch manager, Claude Johnson; however, the hunt did not occur after Claude expressed his
concerns about offending Laura. Although B issued a press release and was quoted in a
newspaper saying that he purchased Black Creek Ranch intending to continue its commercial
hunting operations, to continue the tradition of South Texas hunting, and to hunt with his
grandchildren, no hunting was permitted on Black Creek after the first year’s commercial
commitments were fulfilled. Although Laura testified that B and she agreed before Black Creek
was purchased to end the hunting, Laura’s testimony was inconsistent with the newspaper
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accounts of B’s remarks. Moreover, a passage in the book about B’s life also states Laura put an
end to the hunting.
B had expressed to Ceci that he was glad Laura was older and would not want children.
The record contains evidence that B underwent sperm testing in 1995 prior to his marriage to
Laura. Laura subsequently underwent in vitro fertilization. The evidence was conflicting as to
whether at some point Laura became pregnant. Laura testified that home pregnancy tests taken
in November of 1998 showed that she was pregnant. Although Laura subsequently went to a
hospital to be checked, the testing did not show anything in her uterus, but a hormone that
becomes elevated during pregnancy was in fact elevated. There was some suggestion, however,
that the elevated level could have been caused by the in vitro procedure. When B called Ceci
and Sarah to tell them they lost a baby, Ceci and Sarah were shocked and reacted negatively.
Ceci sent a letter apologizing, which Ceci testified would normally reopen communications. The
evidence contained a letter that B had drafted accepting the apology; however, the letter that was
actually sent did not accept the apology. 1 Only after a letter was written specifically apologizing
to Laura was communication reopened. Sarah testified that when she met B in his office after
this incident, B told her that he did not want to have a child, but Laura insisted.
One expert testified that relationship poisoning can be a tool to unduly influence a
person, including making negative remarks about a person’s children and re-interpreting
historical events in a negative manner. Although several people were interviewed for the book
about B’s life, Ceci, Sarah, and Hager were not interviewed. Instead, Laura was extensively
1
The letter that was sent stated, “Both Laura and I are truly sad that our choices and decisions in our life together
have not pleased you. But they remain our choices, our decisions, and this is our life.” The draft letter stated, “We
are both sad that our choices and decisions in our life together have not pleased you but they remain our choices, our
decisions, and this is our life. My suggestion is that we drop this issue and concentrate on all the things that make us
love each other in the first place, the joy of being together and watching a whole new generation growing up before
our very eyes.”
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interviewed about events that occurred before she met B. The book contained a suggestion that
Kley had committed suicide based on Booth’s interview of Laura; however, Laura had no proof
that Kley committed suicide, and other evidence established that he was killed in a car accident,
likely driving while intoxicated. In the early 1990’s, before B met Laura, B was having financial
trouble; B and Laura’s interviews for the book conflict as to whether Ceci and Sarah knew of the
extent of the financial trouble. Laura said they did; B said they did not. B sold the Chaparrosa
ranch to alleviate the financial trouble. The childrens’ trusts, which also owned an interest in the
ranch, sued B because the sales agreement had money going to J.P. Morgan before the trusts, and
the trustees did not believe the trusts were receiving the amount they were entitled to receive
from the sale. Laura stated in an interview that Ceci and Sarah filed the lawsuit to bury B
financially; however, B had stated Ceci and Sarah did not know the extent of his financial
trouble. The jury could consider Laura’s reinterpretation of these historical events in a negative
manner as evidence of relationship poisoning.
The jury also heard evidence that Laura made negative remarks about Ceci and Sarah.
Laura’s friend, Reverend Zbinden, was interviewed by Booth and stated Laura had told him that
Ceci and Sarah were greedy and ungrateful. During his deposition, Reverend Zbinden testified it
was not unusual for Laura to speak negatively of Ceci and Sarah. Laura told Copley in a
telephone conversation that Sarah was vile, not smart, and had the attention span of a gnat.
Based on the evidence presented, the jury could infer that Laura also spoke negatively of Ceci
and Sarah to B.
Having reviewed the record, we conclude the evidence is legally and factually sufficient
to support a finding that undue influence existed and was exerted.
3. No Execution “But For” the Influence
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“Finally, the establishment of the fact that the testament executed would not have been
executed but for such influence is generally predicated upon a consideration of whether the
testament executed is unnatural in its terms of disposition of property.” Rothermel, 369 S.W.3d
at 923. During oral argument, the Appellants placed great emphasis on one sentence in this
court’s decision in Estate of Davis v. Cook, 9 S.W.3d 288 (Tex. App.—San Antonio 1999, no.
pet.). In that case, when describing a jury’s consideration of unnatural disposition, we stated, “In
this respect, only where all reasonable explanation for the devise is lacking may the trier of facts
consider the disposition as evidence of disorder or lapsed mentality.” Id. at 294 (emphasis
added). Based on the italicized portion of this statement, the Appellants argued that the standard
of review for no-evidence claims in undue influence cases is different than in other types of
cases. In short, Appellants contend the evidence could not support a finding of undue influence
because evidence was presented establishing a reasonable explanation for B’s disposition of his
estate. We cannot accept Appellants’ interpretation of the quoted portion of the Davis opinion
because it ignores the standard of review established by the Supreme Court in City of Keller v.
Wilson, 168 S.W.3d 802, 827-30 (Tex. 2005), and establishes a totally different standard of
review in undue influence cases. Tracing the source for the statement made in Davis reveals the
fallacy of Appellants’ position. The source for the statement in question is Craycraft v.
Crawford, 285 S.W.3d 275, 278-79 (Tex. 1926), in which the court stated, “If all explanation be
lacking, the trier of fact may take the circumstance as a badge of disordered or lapsed mentality
or of its subjugation; if some explanation be advanced, the jury may pass upon its adequacy and
attribute to the circumstance and its explanation such weight as may be thought proper, having in
view all other relevant evidence.” Accordingly, evidence of a reasonable explanation for an
unnatural disposition does not prevent a jury from finding undue influence. Instead, where such
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evidence is proferred, the jury must determine which explanation should be given more weight
and which explanation is more credible. In this case, the jury disbelieved the explanation
proffered by the Appellants in finding undue influence.
Considering whether the disposition was unnatural, we must consider evidence of B’s
stated desires and actions. The evidence established that B made several comments about the
interest in the Hyatt being passed to the children/grandchildren. Similarly, evidence established
that B was very proud of his heritage and wanted his descendants to inherit the King Ranch
royalties. The majority interest in both of those assets, however, was not inherited by the
grandchildren. Instead, Laura initially would benefit from the income from those assets during
her life, and the interest would then pass to the foundation. Although the Appellants contend
Laura did not receive any greater interest in B’s estate than B’s prior wives, the inclusion of the
majority interest in these two assets in Laura’s life estate greatly increased its value and was
contrary to evidence that B wanted his descendants to inherit those assets. All of the estate
planning documents that the jury found were the result of undue influence were executed after
the dissolution of Johnson Properties and in connection with the creation of BKJ Interests.
Perhaps more importantly, the 1997 Management Trust expressly lists five charities as
the remainder beneficiary after Laura’s life estate consistent with the charities B had listed in his
prior documents, which included: (1) United Way of San Antonio & Bexar County; (2) Cornell
University; (3) National Cowboy Hall of Fame; (4) Trinity University; and (5) Trustees of
Deerfield Academy. The evidence established that B had strong ties with these five charities.
The documents found to be the product of undue influence eliminate a mandatory distribution to
these favored charities. Instead, the remainder beneficiary after Laura’s life estate became a
perpetual foundation. Although the trust document listed charities that B wanted to be the
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primary focus of distributions from the foundation, the trustee of the foundation had complete
control over the selection of the charities that would benefit from foundation distributions. In
addition, the list excluded the National Cowboy Hall of Fame with which B had strong ties, but
included a foundation with which B had no ties and which Eastland admitted was mistakenly
included. Finally, the list included “[a]ny other organization benefiting conservation,
environmental causes, protection of animals, [and] protection of nature or the environment,”
which described causes supported by Laura, not B. Similarly, the remainder beneficiary of the
grandchildren’s trust under the 1997 trust document are the five charities B selected, as opposed
to the foundation which was the remainder beneficiary in the 1998 trust documents.
The evidence presented was legally and factually sufficient to support a finding that the
wills and trusts rejected by the jury would not have been executed but for the undue influence.
D. Conclusion
The evidence is legally and factually sufficient to support the jury’s finding of undue
influence.
ATTORNEYS’ FEES
A. The Appellants’ Claims
The Appellants raise numerous challenges to the attorneys’ fee award. With regard to the
award of attorneys’ fees relating to the will contest, the Appellants contend: (1) Question 13A in
the jury charge allowed the recovery of attorneys’ fees by plaintiffs who were not eligible to
recover the fees; (2) Question 13A of the jury charge allowed the recovery of attorneys’ fees
which the plaintiffs did not pay or incur; and (3) by allowing the jury to consider and include
attorneys’ fees that were not recoverable, the jury charge contained harmful error.
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With regard to the award of attorneys’ fees relating to the trust contest, the Appellants
contend Question 13B allowed the recovery of attorneys’ fees by plaintiffs who did not contest
the trust, and by commingling plaintiffs who could and could not recover, the jury charge
contained harmful error.
The Appellants also contend the evidence is legally insufficient to support the attorneys’
fee award, claiming there is a lack of testimony regarding the necessary segregation of the fees.
Appellants claim the trial court erred in awarding $540,000 in expenses as part of the attorneys’
fee award, and that the total amount of the award constitutes an impermissible double recovery
of fees. Finally, the Appellants assert the trial court erred in rendering judgment against the
Estate for attorneys’ fees incurred in pursuing the trust contest claims.
B. The Jury Charge
The jury was asked the following questions in the court’s charge relating to the issue of
attorneys’ fees:
QUESTION NO. 11:
Do you find from a preponderance of the evidence that the following plaintiffs
prosecuted any of their applications to probate of any of the Wills or Codicils
dated from February 27, 1958 through July 24, 1995 in good faith and with just
cause, whether successful or not?
For each of the following Plaintiffs answer “Yes” or “No”:
a. Sarah (“Sarita”) Spohn Kleberg Pitt, Individually Yes
b. Sarah Spohn Kleberg Pitt as next friend of Stephen
McCarthy Pitt, Jr., Allegra Elizabeth McCarthy Pitt,
Harry Bennett McMurray, Belton Kleberg McMurrey,
and Estella Lewis McMurrey Yes
c. Alice Trueheart Johnson, Individually Yes
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d. Alice Trueheart Johnson, as next friend of Yes
Henry Kleberg Johnson
QUESTION NO. 12:
Do you find from a preponderance of the evidence that the following Plaintiffs
prosecuted any of their applications to probate any of the Wills or Codicils dated
from February 27, 1958 through September 27, 1993 in good faith and with just
cause, whether successful or not?
For each of the following Plaintiffs answer “Yes” or “No”:
a. Sarah Spohn Johnson Pitt Yes
b. Cecilia Johnson McMurrey Yes
Questions 13A and 13B of the jury charge asked the jury as follows:
QUESTION NO. 13A
What do you find from a preponderance of the evidence are the reasonable and
necessary fees and expenses for the services of Plaintiffs’ attorneys in connection
with prosecuting their application to probate the wills or codicils dated February
27, 1958 through July 24, 1995, stated in dollars and cents?
Answer with an amount, stated in dollars and cents, if any.
a. For preparation and trial. Answer: $3,150,646
b. For an appeal to the Court Answer: $300,000
of Appeals:
c. For preparing or responding to
a petition for review in the Supreme
Court of Texas: Answer: $100,000
d. For briefing and oral argument in
the Supreme Court of Texas: Answer: $50,000
QUESTION NO. 13B
What do you find from a preponderance of the evidence are the reasonable and
necessary fees and expenses for the services of Plaintiffs’ attorneys in connection
with prosecuting the contest of the Trusts, referred to in Question 3, stated in
dollars and cents?
Answer with an amount, stated in dollars and cents, if any.
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a. For preparation and trial. Answer: $3,150,646
b. For an appeal to the Court Answer: $300,000
of Appeals:
c. For preparing or responding to
a petition for review in the Supreme
Court of Texas: Answer: $100,000
d. For briefing and oral argument in
the Supreme Court of Texas: Answer: $50,000
Based on the jury’s findings, the trial court’s judgment awarded the Appellees
$6,301,292 in attorneys’ fees and expenses for preparation and trial of the will and trust contests.
C. Texas Probate Code § 243
The Appellants contend the trial court erred in submitting Question 13A of the charge
because it allowed the jury to consider fees for legal services provided to plaintiffs who are
ineligible to recover attorneys’ fees under section 243 of the Texas Probate Code. Section 243 of
the Probate Code makes provision for the payment of expenses and disbursements, including
attorneys’ fees, to certain classifications of individuals who incur them while defending or
prosecuting a will. The statute expressly provides:
When any person designated as executor in a will or an alleged will, or as
administrator with the will or alleged will annexed, defends it or prosecutes any
proceeding in good faith, and with just cause, for the purpose of having the will or
alleged will admitted to probate, whether successful or not, he shall be allowed
out of the estate his necessary expenses and disbursements, including reasonable
attorney’s fees, in such proceedings. When any person designated as a devisee,
legatee, or beneficiary in a will or an alleged will, or as administrator with the will
or alleged will annexed, defends it or prosecutes any proceeding in good faith,
and with just cause, for the purpose of having the will or alleged will admitted to
probate, whether successful or not, he may be allowed out of the estate his
necessary expenses and disbursements, including reasonable attorney’s fees, in
such proceedings.
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TEX. PROB. CODE ANN. § 243 (West 2003). From the plain language of the statute, persons
designated as devisees, legatees, or beneficiaries who defend or prosecute a will admitted to
probate in good faith may recover their attorneys’ fees. Id.
“A trial court has wide discretion in submitting . . . jury questions.” Moss v. Waste
Mgmt. of Tex., Inc., 305 S.W.3d 76, 81 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). We
review an allegation of jury charge error for an abuse of discretion. Tex. Dep’t of Human Servs.
v. E.B., 802 S.W.2d 647, 649 (Tex. 1990). A trial court abuses its discretion when it acts in an
arbitrary or unreasonable manner, or if it acts without reference to any guiding rules or
principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). For an
appellate court to reverse on the basis of charge error, the appellant must show the error was
harmful. Tex. Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 580
(Tex. App.—Austin 2007, pet. denied).
The Appellants contend Question 13A improperly “allowed the jury to include in its
finding attorneys’ fees which the eligible plaintiffs did not pay or incur.” We are not persuaded
by this contention because “proof of fees actually incurred or paid [is] not [a] prerequisite[] to
the recovery of attorney’s fees in Texas.” AMX Enters., L.L.P. v. Master Realty Corp., 283
S.W.3d 506, 520 (Tex. App.—Fort Worth 2009, no pet.). Moreover, the record shows the jury
was presented with testimonial and documentary evidence establishing that the individual
plaintiffs incurred attorneys’ fees based upon an hourly rate, which they contractually agreed to
pay to their respective attorneys. Although the individual plaintiffs did not personally pay or
advance payment for their respective attorneys’ fees, the record shows that certain trusts, created
for the benefit of the individual plaintiffs, paid or advanced payment for such fees. 2 The
2
The trustees apparently paid the attorneys’ fees as trust expenses.
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Appellants fail to cite any case law demonstrating that the manner in which the attorneys’ fees
were paid or advanced in this case somehow precludes the Appellees from recovering their
attorneys’ fees under section 243. See generally In re Ray Ellison Grandchildren Trust, 261
S.W.3d 111, 127 (Tex. App.—San Antonio 2008, pet. denied) (“The Trustees have cited no
authority for the proposition that it is unequitable and unjust to award attorney’s fees to parties
who have had their fees paid up front by another party, subject to reimbursement.”).
Consequently, we reject the Appellants’ contention.
The Appellants next complain that the wording of Question 13A was incorrect because it
allowed “the jury to include fees for services provided to plaintiffs who are not eligible to
recover fees under Section 243.” As previously noted, Question 13A asked the jury to determine
“the reasonable and necessary fees and expenses for the services of Plaintiffs’ attorneys in
connection with prosecuting their application to probate the wills or codicils dated February 27,
1958 through July 24, 1995.” Question 13A was not conditioned upon an affirmative response
by the jury to any part of Questions 11 or 12, which asked the jury to determine whether the
named plaintiffs prosecuted “their applications to probate of any of the Wills or Codicils . . . in
good faith and with just cause.” The Appellants argue that by not conditioning the charge, the
wording of Question 13A improperly allowed the jury to consider the fees incurred by Hager and
the trustee plaintiffs, who are ineligible to recover attorneys’ fees under section 243 because they
lack any good faith findings.
While the jury charge submitted by the trial court would have been more definitive had
the attorneys’ fees question been conditioned upon an affirmative response by the jury to any
part of the “good faith” questions, we cannot say the charge is erroneous under the facts of this
case. As written, Question 13A necessarily precludes the jury from considering the fees incurred
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by Hager and the trustee plaintiffs because it limits the jury’s consideration to the fees incurred
by only those plaintiffs who prosecuted an application to probate a will or codicil “dated
February 27, 1958 through July 24, 1995.” It is undisputed that neither Hager nor the trustee
plaintiffs ever prosecuted any wills or codicils during the underlying proceedings. All of the
persons who filed an application for probate were listed under Questions 11 and 12 of the charge
and were found to have acted in good faith and with just cause by the jury. Assuming the jury
answered the question put to them, see Phillips v. Phillips, 820 S.W.2d 785, 787 n.2 (Tex. 1991)
(“We must assume that the jury followed the trial court’s instructions and answered the question
put to them.”), the jury’s answer to Question 13A could not include any fees relating to Hager or
the trustee plaintiffs because they did not prosecute an application to probate a will or codicil
dated “February 27, 1958 through July 24, 1995.”
The Appellants further complain that Question 13A improperly allowed the jury to
consider the fees incurred by B’s grandchildren because they were not designated as devisees,
legatees, or beneficiaries in the referenced wills as required by section 243. The grandchildren,
however, are beneficiaries of testamentary trusts created under the wills and are direct
beneficiaries or legatees under at least two of the wills that they offered for probate.
Accordingly, the grandchildren have the right to recover their attorneys’ fees under the Probate
Code. We conclude that Question 13A is not defective, and we therefore reject the Appellants’
complaint.
D. Texas Trust Code § 114.064
The Appellants contend the trial court erred in connection with its submission of
Question 13B of the charge. This issue involves section 114.064 of the Texas Trust Code, which
authorizes the recovery of attorneys’ fees in a trust action. Section 114.064 provides: “In any
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proceeding under this code the court may make such award of costs and reasonable and
necessary attorney’s fees as may seem equitable and just.” TEX. PROP. CODE ANN. § 114.064
(West 2007). An award of attorneys’ fees under this section “is within the sound discretion of
the trial court, and a reviewing court will not reverse the trial court’s judgment absent a clear
showing that the trial court abused its discretion by acting without reference to any guiding rules
and principles.” Hachar v. Hachar, 153 S.W.3d 138, 142 (Tex. App.—San Antonio 2004, no
pet.); see Lee v. Lee, 47 S.W.3d 767, 793-94 (Tex. App.—Houston [14th Dist.] 2001, pet.
denied).
First, the Appellants argue that because the attorneys’ fees were paid for by the trusts
created for the benefit of the individual plaintiffs, as opposed to being paid by the individual
plaintiffs themselves, the Appellees are not entitled to attorneys’ fees under the statute.
According to the Appellants, it is not equitable or just to award fees to parties who do not
personally incur fees. The Appellants have cited no authority for the proposition that it is
unequitable and unjust to award attorneys’ fees to parties who have had their fees paid or
advanced by another. See In re Ray Ellison Grandchildren Trust, 261 S.W.3d at 127. Given that
proof of fees actually incurred or paid is not a prerequisite to the recovery of attorneys’ fees in
Texas, see AMX Enters., L.L.P., 283 S.W.3d at 520, we must reject the Appellants’ contention.
Second, the Appellants argue the wording of Question 13B improperly permitted the
jury to award attorneys’ fees to plaintiffs who never contested the trusts at issue. Question 13B
asked the jury: “What do you find from a preponderance of the evidence are the reasonable and
necessary fees and expenses for the services of Plaintiffs’ attorneys in connection with
prosecuting the contest of the Trusts, referred to in Question 3, stated in dollars and cents?” The
plain wording of Question 13B, however, does not support the Appellants’ contention because it
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expressly limits the jury’s consideration to the fees and expenses actually incurred in
“prosecuting the contest of the Trusts.” Assuming the jury followed the plain wording of
Question 13B, see Phillips, 820 S.W.2d at 787 n.2, its answer does not include any fees relating
to any non-trust claims or plaintiffs who did not contest the trusts. The Appellants’ argument
thus lacks merit.
E. Sufficiency of the Evidence
The Appellants also contend the evidence is legally insufficient to support the attorneys’
fee award. Because the Appellants are challenging the legal sufficiency of the evidence to
support a finding on which they did not have the burden of proof at trial, the Appellants must
demonstrate on appeal that no evidence exists to support the adverse finding. Exxon Corp. v.
Emerald Oil & Gas Co., L.C., No. 05-1076, 2009 WL 795668, at *6 (Tex. Mar. 27, 2009);
Brockie v. Webb, 244 S.W.3d 905, 909 (Tex. App.—Dallas 2008, pet. denied). When reviewing
the record, we look to see whether any evidence supports the challenged finding. Brockie, 244
S.W.3d at 909. In reviewing the reasonableness of an award of attorney’s fees, the reviewing
court should consider: (1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill required to perform the legal service properly; (2) the likelihood that the
acceptance of the particular employment will preclude other employment by the lawyer; (3) the
fee customarily charged in the locality for similar legal services; (4) the amount involved and
the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6)
the nature and length of the professional relationship with the client; (7) the experience,
reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee
is fixed or contingent on results obtained or uncertainty of collection before the legal services
have been rendered. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex.
1997); Aquila Sw. Pipeline, Inc. v. Harmony Exploration, Inc., 48 S.W.3d 225, 240-41 (Tex.
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App.—San Antonio 2001, pet. denied). A trial court is not required to consider all of the factors
in every case because the factors are simply guidelines for the trial court to consider, not
elements of proof. Petco Animal Supplies, Inc. v. Schuster, 144 S.W.3d 554, 567 (Tex. App.—
Austin 2004, no pet.); Academy Corp. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d
732, 742 (Tex. App.—Houston [14th Dist.] 2000, no pet.).
In Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex. 2006), the Supreme
Court reaffirmed the general rule requiring segregation of attorneys’ fees. The Court held that
intertwined facts underlying claims for which attorney’s fees are recoverable and unrecoverable
do not excuse a party from segregating fees between claims—“it is only when discrete legal
services advance both a recoverable and unrecoverable claim that they are so intertwined that
they need not be segregated.” Id. at 313-14; see Varner v. Cardenas, 218 S.W.3d 68, 69 (Tex.
2007) (per curiam) (stating Chapa holds “a prevailing party must segregate recoverable from
unrecoverable attorney’s fees in all cases”). Thus, the general duty to segregate fees applies
unless a party meets its burden of establishing that the same discrete legal services were rendered
with respect to both a recoverable and unrecoverable claim. Chapa, 212 S.W.3d at 313-14;
Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 455 (Tex. App.—Houston [1st Dist.] 2007,
no pet.). “Whether and the extent to which attorney’s fees can be segregated, is a mixed question
of law and fact, and if segregation is possible, remand is required.” Osborne v. Jauregui, Inc.,
252 S.W.3d 70, 76 (Tex. App.—Austin 2008, pet. denied).
James J. Hartnett, Jr. was the only attorney to testify regarding the Appellees’ attorneys’
fees. The underlying trial began in February of 2007. By the beginning of trial, the Appellants
had incurred $8,570,150.93 in attorneys’ fees and expenses; however, that amount did not
include the attorneys’ fees incurred by BKJ Interests or two of the attorneys representing Laura.
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Hartnett testified that his opinion regarding the reasonableness of the attorneys’ fees took into
consideration the attorneys’ fees incurred by the Appellants and all of the attorneys’ fee bills. 3
He also indicated that he considered many factors when assessing the reasonableness of the fees
in this matter, including: (1) the time and labor expended and the complexity of the matter; (2)
the fees in the location where the case was tried; and (3) the experience, reputation, and ability of
the lawyers performing the services.
Hartnett stated he has been licensed since 1983 and approximately 90-95% of his work is
in probate, trust, and fiduciary-related litigation. Jack Lawter has been licensed since 1981 and
has focused on the same type of work over his career. Dianne Lawter was licensed in 1989.
Hartnett described the case as complex, noting the case was filed in May or June of 2003
but not tried until 2007. Hartnett had been involved in only two other cases that had taken as
long to get to trial. Hartnett testified that the matter was as vigorously contested as any matter
with which he had been involved, noting there were numerous hearings, pleadings, and
depositions. Hartnett also noted the increased workload due to the number of attorneys involved
and due to the intervention of BKJ Interests in the proceeding.
The document production in the case filled 600 boxes, not including the electronic
discovery, which Hartnett described as “significant.” Over forty depositions were taken, and
several of them were two-day depositions. Four separate mediations were conducted. The
attorneys disagreed and had hearings on many discovery matters, including the production of
documents, whether a deposition would be taken, and time limits on depositions. Hartnett stated
that they had been involved in “innumerable hearings” in which 20 motions would be scheduled
and could carry over into the next day.
3
The trial court’s judgment awards Copley $4,312,777 for defending the wills in good faith. This award is not
challenged on appeal.
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Hartnett testified that Jack Lawter’s rate started at $375 per hour and rose to $475 per
hour. Dianne Lawter initially charged $300 per hour, and her fee rose to $400 per hour. The
rates for Hartnett and one other member of his firm started at $300 per hour and rose to $350 per
hour. The rates for the other members of his firm were $250 per hour. Hartnett then compared
those rates to the rates charged by the Appellants’ attorneys which ranged from $375 per hour to
$485 per hour. He noted that one of the paralegals for the Appellants billed as high as $180 per
hour.
Hartnett stated the Lawters’ fees and expenses through April 2007 totaled $5,032,938.73.
Hartnett testified that the bills for his firm through December of 2006 totaled $994,714.68.
Including an estimated amount of unbilled fees through trial of $1,500,000, he further testified
that the total fees would be $6,532,938.73. He stated that fee was reasonable given the
complexity of the case and “all of the moving parts and number of people and the amount of time
that’s expended and the amount of preparation.”
With regard to segregation, Hartnett testified that almost all of the legal fees were
incurred in advancing the will contest, estimating that 95% of the total fees were incurred in
relation to the will contest and trust contest claims or approximately $6,301,291.80. Hartnett
explained that the work required on the claims relating to the dissolution of Johnson Properties
was also tied to the undue influence claims because the dissolution was evidence of the undue
influence. Based on his experience in prosecuting claims for breach of fiduciary duty, Hartnett
estimated that the breach of fiduciary claim against J.P. Morgan relating to the 1998 Family
Trust would be $250,000. He further testified that the legal service or work done in connection
with the tortious interference claim was included in the work done in connection with the will
contest, in particular the undue influence allegation.
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Hartnett’s testimony provided the jury with sufficient evidence to support an award of
$6,301.292 for attorneys’ fees. In light of the record before us, we reject the Appellants’
sufficiency challenge and overrule their appellate complaint.
F. Inclusion of Expenses
The Appellants contend the trial court erred in including $540,000 in expenses in the
attorneys’ fee award because only costs and not expenses are recoverable under section 114.064
of the Texas Trust Code. See TEX. PROP. CODE ANN. § 114.064 (“In any proceeding under this
code the court may make such award of costs and reasonable and necessary attorney’s fees as
may seem equitable and just.”). The Appellees note, however, that the Appellants failed to
object to Question No. 13B, which permitted the jury to award expenses in connection with the
contest of the trusts. See TEX. R. CIV. P. 274 (complaint as to question in jury charge waived
absent objection). We agree with the Appellees that this complaint is waived because the
Appellants failed to object below. Moreover, the jury’s answer did not expressly include an
amount for expenses in relation to the trust contest, and we note the expenses were recoverable
in relation to the will contest. See TEX. PROB. CODE ANN. § 243 (providing for recovery of
necessary expenses in will contest).
G. Double Recovery of Attorneys’ Fees
The Appellants next argue there is a double recovery of attorneys’ fees by the Appellees.
The judgment shows the Appellees were awarded $6,301,292 in attorneys’ fees. The Appellants
assert the trial court “arrived at its award by taking the $3,150,646 found by the jury for the
attorneys’ fees for the will contest (Question 13A) and adding it to the $3,150,646 for the
attorneys’ fees found for the trust contest.” They argue the trial court should not have combined
the jury’s findings for the will and trust contest because it amounts to a double recovery of
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attorneys’ fees. The Appellants’ assertion that the Appellees received a double recovery is
without merit.
The record shows the Appellees raised two causes of action for which they could recover
their attorneys’ fees: (1) a will contest/application claim, see TEX. PROB. CODE ANN. § 243; and
(2) a trust contest claim. See TEX. PROP. CODE ANN. § 114.064. The charge thus asked the jury
to provide findings as to the attorneys’ fees incurred by the Appellees for their prosecution of the
will contest/application separate and distinct from the fees they incurred prosecuting their trust
contest. Although the jury determined a reasonable and necessary fee for the prosecution of each
claim was the same ($3,150.646), the jury heard testimony from Hartnett that the fees for the will
and trust contests were “identical,” and that the total amount of fees incurred was in excess of
$6,300,000. The attorneys’ fees award is consistent with Hartnett’s testimony, and we cannot
conclude the Appellees received a double recovery of their attorneys’ fees.
H. Award of Trust Contest Fees Against Estate
The Appellants’ final argument is that the trial court erred in rendering judgment against
the Estate for attorneys’ fees incurred in pursuing the trust contest claims. The Appellants
contend the Estate was not a party to the trust contest claim. Under section 114.064 of the Texas
Trust Code, a trial court has the discretion to make an award of attorneys’ fees in a trust contest
case “as may seem equitable and just.” Id. We review such an award under an abuse of
discretion standard. Hachar, 153 S.W.3d at 142.
The Appellants’ contention ignores that all of the claims were jointly tried together, and
the management trusts were part of the overall estate plan. In order to defend the wills, the
executor necessarily was required to defend the management trusts. Because defense of the will
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necessarily required defense of the trust, the trial court’s award of the attorneys’ fees against the
Estate was equitable and just. We therefore reject the Appellants’ contention.
CONCLUSION
After full consideration of the Appellants’ claims, we conclude the record supports the
jury’s finding that Belton Kleberg Johnson executed certain wills and trusts as a result of undue
influence. Likewise, the jury’s award of attorneys’ fees is supported by the record evidence.
The trial court properly rendered judgment on the jury’s verdict. Accordingly, we affirm the
judgment of the trial court.
Catherine Stone, Chief Justice
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