PROBATE, GUARDIANSHIP & TRUSTSSTATUTES OF LIMITATIONS ISSUES

byJerry Frank Jones

andLaurie Ratliff

2010 Advanced Estate Planning & Probate CourseState Bar of Texas

San Antonio

JERRY FRANK JONES400 West 15 , Suite 975th

Austin, TX 78701Phone: (512) 476-2929

jerry@jerryfrankjones.com

Honors: Texas Monthly Super Lawyer: 2003--2009The Best Lawyers in America 2006--2009

Education: Williams College, Williamstown, Mass., B.A. 1967; University of Texas-Austin, J.D, 1971

Certification: Board Certified, Estate Planning and Probate, State Bar of Texas.Bicycle Assembly and Maintenance, Barnett Bicycle Institute, 2004

Fellow: American College of Trust and Estate CounselInstructor: U. of Texas, Legal Assistant Program, Estate Planning & Probate (1989-1995)Author:C Presented: “Exculpatory Clauses,” Fiduciary Litigation Course, State Bar (2009) C “LIMITATIONS IN FIDUCIARY LITIGATION,” Advocate, Litigation Section, State

Bar of Texas 2009.C “‘HE’S DEAD?’ Suing and Defending When There is A Dead Body,” Car Crash Seminar

2005-2006, University of Texas, School of LawC “HE’S INCAPACITATED? Powers of Attorney.” Advanced Real Estate Drafting

Course, State Bar of Texas 2005. C "A TOPICAL GUIDE: Advanced Estate Planning and Probate Course Articles" State Bar

of Texas, Annual Advanced Estate Planning and Probate Course (Originally prepared in1992; updated each year through 2010)

C “‘HE’S DEAD?’ Real Estate in a Decedent’s Estate,” Advanced Real Estate DraftingCourse 2002

C “HE’S INCAPACITATED? Powers of Attorney.” Advanced Real Estate DraftingCourse, State Bar of Texas 2005.

C “TEXAS LEGISLATIVE REPORT” 2003, 2001, 1999, 1997 State Bar of Texas, AnnualAdvanced Estate Planning and Probate Course.

C "The 706 for Country Lawyers and Other Simple People," Travis County Probate andTrust Law Section, 1994.

C "DEATH AND TAXES: An Introduction To Taxes Concerning A Probate Attorney,"prepared for the University of Texas Legal Assistant Program--1993.

State Bar of Texas: Real Estate, Probate and Trust Law Section: Chair (2001-2002), Council(1994-1998) and Legislative Liaison (1997–2003 ); Pattern Jury Charges: Family LawCommittee, Probate Subcommittee Chair (2009)Texas LegislatureC Legislative Liaison, Real Estate, Probate and Trust Law Section, State Bar of Texas

(1997–2003)C Legislative Liaison, Texas Academy of Probate Lawyers (1997-2003)C Member, Texas Legislative Interim Study Committee on Community Property Laws

(1999-2000)Alp d’Huez Club: October 2005.

LAURIE RATLIFFIkard & Golden, P.C.

400 West 15th St., Suite 975, Austin, Texas 78701(512) 472-4601

lratliff@ikardgolden.com

BOARD CERTIFICATION Civil Appellate Law - Texas Board of Legal Specialization

JUDICIAL CLERKSHIP and COURT EXPERIENCE Briefing Attorney - Seventh Court of Appeals, Amarillo (Justice John T. Boyd) Staff Attorney - Third Court of Appeals, Austin

EDUCATION Texas Tech University School of Law - J.D. 1992 Research Editor, Texas Tech Law Review University of Texas at Austin - B.B.A. 1989

SELECTED COMMUNITY SERVICE, ACTIVITIES and HONORS Board of Directors -- The Settlement Club AV Peer Review Rating by LexisNexis Martindale-Hubbell Super Lawyer(2005, 2006, 2007, 2008 & 2009) Member – State Bar Appellate Section; Pro Bono Committee Life Fellow, Texas Bar Foundation Past Chair, Travis County Bar Association Civil Appellate Section Past Chair, Heritage/History Committee, Appellate Section, State Bar of Texas Past Assistant Coach, University of Texas School of Law Jessup International Law MootCourt Team

SELECTED RECENT PRESENTATIONS and PAPERS“Statute of Limitations Issues in the Probate, Guardianship & Trust Context The Advocate(Vol. 48 Fall 2009) “Appealing Bench Trials” State Bar Nuts and Bolts of Appellate Practice (2009)“Everything you wanted to know but were afraid to ask: an open Q&A with Judge Hurley,Justice Wainwright & Chief Justice Jones” Panel Moderator Austin Bar Association Bench bar(2009) “Oil Tank Farm and Gas Storage Cases on Appeal” Texas Oil & Gas Association 2009 PropertyTax Representatives Annual Conference (2009) (co-presenter) “Case Law Update” Austin Bar Association Nuts & Bolts of Administrative Law Seminar(February 2009)“Practice Before the Courts of Appeals” State Bar Appellate Boot Camp (2008)“Jury Charge Issues” State Bar 31st Annual Advanced Civil Trial Course (2008) “Midland Tank Farm Appeal Update” Texas Oil & Gas Association 2008 Property TaxRepresentatives Annual Conference (2008) (co-presenter) “Not Just for Toxic Tort Cases: Strategic Use of Multidistrict Litigation Consolidation” 71

TexBar J. 98 (2008) (co-author with Lynne Liberato) “Preserving Issues in Post-Trial Motions” Austin Bar Association Civil Litigation SectionUltimate Trial Notebook Seminar (June 2007)“Shaking Out the New Multidistrict Litigation Rules and MDL Panel Decisions” Permian BasinOil & Gas Law Weather Report (March 2007)“Appellate Practice Tips Every Lawyer Needs to Know” Austin Bar Association First FridayCLE (December 2006)“Multidistrict Litigation” 20th Annual Advanced Civil Appellate Practice Course (2006)“Case Law Update” 7 Tex. Tech. Admin. L.J. 1 (Spring 2006) (co-author)“Appeals Involving the Government” 19th Annual Advanced Civil Appellate Practice Course(2005)“Case Law Update” Austin Bar Association Annual Advanced Administrative Law Seminar(2005, 2004, 2002)“Supreme Court Update” College of the State Bar Summer School (co-presenter)(2005) Ethics Seminar Class, “Lifestyle Issues” South Texas College of Law (co-presenter) (2004) “Third Court of Appeals Update” Travis County Bar Association Bench-Bar Conference (April2004)Austin Lawyer: Third Court of Appeals Update” - monthly article (2001-present)The Appellate Advocate: Texas Supreme Court Update” - annual article (co-author) (2002-present)

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PROBATE, GUARDIANSHIP & TRUSTSSTATUTES OF LIMITATIONS ISSUES

TABLE OF CONTENTS

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. PROBATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a. The effect of death on the statute of limitations. .. . . . . . . . . . . . . . . . 2b. An estate is not an entity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c. A suit against an estate may not toll the statute of limitations. . . . . . 2d. The relation back doctrine as a means of curing defects

in capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5e. Limitation issues relating to probating a will. . . . . . . . . . . . . . . . . . . . 6

i. Probate of the Living: Void. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6ii. Pre Mortem Probate.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6iii. Pre Mortem Agreements and Assignments. . . . . . . . . . . . . . . . 7iv. 4 Years to Probate.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7v. After 4 Years: Muniment of Title... . . . . . . . . . . . . . . . . . . . . . . . 7vi. After 4 Years: Innocent Purchasers. . . . . . . . . . . . . . . . . . . . . . 7vii. After 4 Years: Faultless Beneficiaries.. . . . . . . . . . . . . . . . . . . . 7viii. After 4 Years: Abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8ix. After 4 Years. To Show Revocation. . . . . . . . . . . . . . . . . . . . . . 8

f. Limitations issues in will contests.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9g. Statute of limitations issues relating to temporary administrators.. . 9h. Limitations issues relating to the appointment of a

personal representative... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10i. Before Appointment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

(1) 30 Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10(2) Four Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10(3) After Four Years. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ii. After Appointment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10(1) 20 days: Bond & Oath. . . . . . . . . . . . . . . . . . . . . . . . . . . 10(2) 60 Days. Notice to Beneficiaries. .. . . . . . . . . . . . . . . . . 11(3) 90 Days. Inventory.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(4) Notice to Creditors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

i. Limitations: Affidavits of Heirship.. . . . . . . . . . . . . . . . . . . . . . . . . . . 11j. Limitations issues relating to heirship proceedings. . . . . . . . . . . . . 12

i. East, Kenedy & Fernandez.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12ii. Cases Before East, Kenedy & Fernandez.. . . . . . . . . . . . . . . . 14

k. Limitations issues relating to adopted children. .. . . . . . . . . . . . . . . 16l. Additional Limitations issues for children without a

presumed father. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

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m. Limitations issues involving void marriages. . . . . . . . . . . . . . . . . . . 17n. Limitations issues with common law marriages. . . . . . . . . . . . . . . . 17o. Limitations issues relating to claims against an estate. . . . . . . . . . 17

i. Unsecured Creditors: 4 Month Notice.. . . . . . . . . . . . . . . . . . . 18ii. Secured Creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

(1) Election. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18(2) Preferred Debt and Lien. . . . . . . . . . . . . . . . . . . . . . . . . 18(3) Matured Secured .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18(4) Usual Election.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18(5) Deemed Election... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

iii. Tolling of claims in the Probate Code. . . . . . . . . . . . . . . . . . . 18iv. Liquidated claims in dependent administrations.. . . . . . . . . . 19

(1) 4 Months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19(2) 30 Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19(3) 90 Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

p. Foreclosures and dependent administrations. . . . . . . . . . . . . . . . . . 19q. Foreclosures and independent administrations.. . . . . . . . . . . . . . . . 19r. Limitations issues relating to contracts for bequests.. . . . . . . . . . . 19s. Statutory bill of review proceedings... . . . . . . . . . . . . . . . . . . . . . . . . 20

2. INCAPACITY AND GUARDIANSHIPS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20a. Guardian Appointed.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

i. Bond and Oath... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20ii. Inventory.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21iii. Allowance... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21iv. Investments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

b. Incapacity tolls the statute of limitations. . . . . . . . . . . . . . . . . . . . . . 21i. Personal Actions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21ii. Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

c. The effect of the appointment of a guardian on limitations. . . . . . . 22d. Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

i. Election: Secured Creditor.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23ii. 120 Day Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23iii. 90 Day Barring Statute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

e. Bill of Review.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

3. NEXT FRIEND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

4. TRUSTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23a. General.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23b. Removal: No Limitation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24c. Trust Contest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25d. Limitation in Venue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25e. No shortening of limitations periods: Mandatory Rules.. . . . . . . . . 26

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5. BREACHES OF FIDUCIARY DUTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26a. General. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26b. Older Cases.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26c. Cases Under the Statute.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26d. Conte, Court of Appeals.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26e. Bonds: Executors, Administrators and Guardians Statute. . . . . . . . 27f. Accountings and Releases: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

i. Guardians and Dependent Administrators.. . . . . . . . . . . . . . . 27ii. Independent Executors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27iii. Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

6. LACHES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28a. Two Uses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28b. Applies to Settlors and Trustees as well as Beneficiaries.. . . . . . . . 28c. Affirmative Defense. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28d. Elements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28e. Relation to Statute of Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29f. Removal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29g. Old Repudiation Cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29i. Factors Considered.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30j. Damages vs Enforcement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30k. Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

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PROBATE, GUARDIANSHIP & TRUSTSSTATUTES OF LIMITATIONS ISSUES

byJerry Frank Jones

andLaurie Ratliff

INTRODUCTION

The focus of this paper is to highlightcommon statute of limitations issues inprobate, guardianships and trusts.Some time limits (such as filing a bond)are discussed, even though they are nottechnically statutes of limitations. Theyare mentioned because they may beimportant in monitoring the actions of afiduciary to avoid his being (or to causehim to be) driven from his office.

This paper does not cover deadlines forappealing final judgments or bills ofreview or direct and collateral attacks onjudgments.

The finality of judgments in probatecourt is a quagmire. Not only can itimpact when you must appeal; it alsotells you whether or not a particularorder of the court may be reviewed at alater date. Severance and vigilance arethe keys. Judge Steven King’s article onfinal judgments was most recentlypresented at the 2009 Advanced EstatePlanning and Probate Course and willbe found at Tab 23. Also see, thediscussion after Probate Code Section 5Johanson’s Texas Probate Code.

On direct and collateral attacks onprobate judgments see generally TexasPractice Series, Probate andDecedents’ Estates.

On probate bills of review, see Section31 (Decedents’ Estates) and Section657 (Guardianships) of the TexasProbate Code. For an introduction toequitable bills of review see pages 529et seq of O’Connor’s Texas Rules, CivilTrials 2010.

References to sections are to the TexasProbate Code unless otherwiseindicated. It is also worth noting thatthe Guardianship Code is actually a partof the Probate Code beginning atsection 601. The Trust Code is in theProperty Code at Sections 101.001through 117.012.

There are other sections of the PropertyCode dealing with trust matters. Mostnotably section 142.005 on courtcreated trusts, chapter 121 onemployees’ trusts, chapter 123 on theattorney general’s participation incharitable trusts, chapter 163 oninstitutions funds and chapter 181 onpowers of appointment.

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1. PROBATE

a. The effect of death onthe statute of limitations.

i. Section 16.062 ofthe Civil Practice and Remedies Codetolls for one year any action in favor ofor against a dead person. TEX. CIV.PRAC. & REM. CODE §16.062. Thus, if aplaintiff dies before suit is filed, therecan be up to one additional year to bringan action. Likewise, if a defendant diesbefore suit is filed, the plaintiff has anadditional year to bring any action.

ii. Except if a personalrepresentative is appointed within a yearof death. In that case this statutebegins to run on the date the personalrepresentative qualifies. Id. §16.062.

iii. Note that Section16.062 only tolls the claims on behalf ofthe decedent and his estate, not thosemade by the family under the wrongfuldeath statute. See TEX. CIV. PRAC. &REM. CODE § 71.001 et seq.

iv. This statute doesnot revive any action that was barred atthe time of death. Russell v. Ingersoll-Rand Co., 841 S.W.2d 343, 344-45(Tex. 1992).

v. In Garcia vCaremark, Inc., 921 S.W.2d 417, 421(Tex.App.—Corpus Christi, no writ1996), the parent sued on behalf of hischild’s estate. The suit was filed morethan 2 years after the child’s death butless than 3 years. The defendantcontends that the extra year under§16.062 was not available because the

parent had acted as de factoradministrator. The Court rejected thatcontention indicating that §16.062 callsfor a personal representative to qualify,which means taking an oath andpossibly filing a bond. Further, that ifthey allowed an informal or defactoadministrator to start the running of thestatute of limitations that the dateswould be nebulous. Whereas with aformal administration there is a definitedate.

b. An estate is not anentity. An estate is not an entity andcannot sue or be sued, Henson v.Estate of Crow, 734 S.W. 2d 648 (Tex.1987). The personal representative ofan estate can sue and be sued and incertain instances the heirs of an estatecan sue and be sued.

c. A suit against an estatemay not toll the statute of limitations.

i. There are a numberof cases in which a plaintiff sued anestate and not the personalrepresentative. In some the judgmentwas declared void. In others thejudgment was sustained because thedefendant had knowledge of the suit,participated or made an appearance.There are three supreme court cases.

(1) In Price v.Estate of Anderson, 522 S.W.2d 690(Tex. 1975), the plaintiff sued the“Estate of Anderson” and served thetemporary administrator. As authorized,the administrator accepted service,notified the insurance company andretained counsel. The attorney filed an

3

answer and several other documents onbehalf of the “estate.” Subsequently,the attorney filed a motion to dismiss,arguing the action was barred by thestatute of limitations.

(a) Theplaintiff then amended and named thetemporary administrator as a defendant. The trial court dismissed the actionagainst both the estate and thetemporary administrator.

(b) Theplaintiff argued that this was a“misnomer” case where the plaintiffmisnamed the defendant. The supremecourt disagreed and concluded it wasnot a “misnomer” case, but was amistake of law. Id. at 691-92. The courtrefused to consider whether or not thismistake was inexcusable. Instead it heldthat the purposes of the statute oflimitations were not breached in thismatter, because the defendant knew ofthe lawsuit and had attorneys whorepresented him throughout theproceeding. Id.

(2) In Henson v.Estate of Crow, 734 S.W.2d 648, 649(Tex. 1987), a landlord sued for backrents; the defendant died during thelitigation and the defendant’s lawyergave notice of death. The plaintiff thenamended and added the “Estate ofBruce L. Crow” as the defendant. Thelawyer who had been representing thedecedent filed an answer on behalf ofthe estate. The court entered judgmentfor the defendant and against theplaintiff landlord.

(a) CitingPrice v. Estate of Anderson, thesupreme court held that the estate wasnot a legal entity and could not be sued.The plaintiff argued that problem waswaived because the attorney filed ananswer for the estate. The supremecourt disagreed and concluded that thiscase was different from those where thepersonal representative appears. Theplaintiff also argued that the estatewaived any error because it did notexcept to the defect. The supremecourt again rejected the plaintiff’sargument. According to the court, sincethe estate is not a legal entity there wasno one before the court to makeexception or to waive defects. Id. at649. The supreme court affirmed. Therewas no indication or discussion ofwhether or not the plaintiff was nowbarred from making a proper claimagainst the personal representative. Nordid the supreme court discuss anylimitations problems.

(3) The supremecourt took up this problem one moretime in Rooke v. Jenson, 838 S.W.2d229 (Tex. 1992). In this car accidentcase, the plaintiff first sued Sam Reed.After learning that Reed was deceased,the plaintiff amended and namedReed’s wife, who was the sole heir andexecutrix in Reed’s will, as thedefendant. Reed’s daughter, Jenson,knowing of the suit, became thepersonal representative rather than thewidow, but more than two years afterthe accident. Rooke again amended herlawsuit this time to name Jensen, asexecutor, as a defendant. The trial courtdismissed the lawsuit on the basis oflimitations.

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(a) Thesupreme court held that becauseJensen knew about the lawsuit nopurpose of the statute of limitationswould be served by dismissing theaction. Id. at 230.

(b)Jensen argued that, unlike Price, supra,in this case the person actually servingas executor was different from theperson originally sued. The courtdisagreed because Jensen was fullyaware of the suit and used the sameattorney who had represented themother. Id.

ii. There are severallower court cases as well.

(1) In Estate ofC.M. v. S.G., 937 S.W.2d 8 (Tex.App.—Houston [14 Dist.] 1996, noth

writ), plaintiff brought an action againstLCM for molestation and against theestate of his wife, CM. LCM was theexecutor and the plaintiff had himserved. However, LCM never appearedor participated as executor. He had onelawyer and the “estate” had another.

(2) The trialcourt entered judgment for the plaintiffand against both LCM and CM’s estate. On appeal the court on its owndetermined that the matter had to bereversed because the estate was not alegal entity. Thus, the trial court lacked“fundamental jurisdiction” which couldnot be waived. The court ofappeals said that suits seeking toestablish liability of an estate should befiled against the personal representativeor in some instances, the heirs orbeneficiaries. Id. at 10.

(3) The courtexplained that a judgment against anestate is not necessarily void if thepersonal representative appears orparticipates in the lawsuit. Id. at 10. The court held that because theexecutor did not appear or participate inthe trial in his capacity as executor, thetrial court lacked jurisdiction to enterjudgment against the estate. The courtreversed and rendered a take-nothingjudgment. Id. at 10-11.

(4) Thereasoning of this court does not seem tosquare with the knowledge element setout in Price, supra.

(5) What thecourt did not say is whether or not asubsequent action was barred either byres judicata or by limitations or if therehad been a tolling of the statutes.

iii. In Gregg v. Barron,977 S.W.2d 654 (Tex. App.—Fort Worth1998, pet. denied), plaintiff sued theestate and listed the son as the childand heir of the decedent. The son wasserved with process. The heir answeredand participated in discovery. Afterlimitations ran, plaintiff amended andnamed the son, as the personalrepresentative of the estate, as adefendant and as sole heir. Id. at 655. Son moved for summary judgment inthat an estate was not a legal entity, thatno one had been appointed personalrepresentative and that son was notjoined until after the statute of limitationshad run. The trial court grantedsummary judgment for the son.

(1) The court ofappeals reversed and remanded.

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Although acknowledging that a personalrepresentative is the proper party, notthe estate; the court of appealsconcluded that the statute of limitationswas tolled because the properdefendant participated in the trialalthough the suit was incorrectly styledas being brought against the estate. Id.at 656-57; see also Dueitt v. Dueitt, 802S.W.2d 859, 861-62 (Tex. App.--Houston [1 Dist.], 1991, no writ) (only

st

estate was named as plaintiff butexecutor participated in hisrepresentative capacity; judgment wasnot set aside).

(2) Son went onto argue that Price could bedistinguished

“…because no personalrepresentative has beenappointed to his father's estate.However, this difference does notaffect the spirit of the Priceopinion, nor does it change thefact that Charles participated inthe trial of the case. Moreimportantly, Charles has notdenied that he is the sole heir ofthe deceased.”

iv. In Richardson v.Lake, 966 S.W.2d 681 (Tex.App.—SanAntonio 1998, no pet.) the statute oflimitations was about to run. In his suit,filed against “The Estate of Torfeasor”plaintiff stated that he knew he had tomake the personal representative aparty but that there was noadministration pending. As soon as thetemporary administrator was appointed(which was after the statute oflimitations had run), the plaintiff had him

served with process. The court waspersuaded that the plaintiff knew the lawand complied with it as promptly aspossible. Id. at 683.

d. The relation backdoctrine as a means of curing defectsin capacity.

i. Under the relationback doctrine, if a filed pleading relatesto a cause of action or defense that isnot subject to limitations when thepleading is filed, a subsequentamendment that changes the facts orgrounds of liability is not subject tolimitations unless the amendment iswholly based on a new, distinct ordifferent transaction or occurrence. Tex. Civ. Prac. & Rem. Code §16.068.

ii. Two TexasSupreme Court cases are worth noting.In both cases, the supreme courtconcluded that a plaintiff’s lack ofcapacity could be cured by thesubsequent appointment asadministrator after limitations had run,but before the actions were dismissed.

iii. First, in AustinNursing Center, Inc. v Lovato, 171S.W.3d 845 (Tex. 2005), a womanasserted a health care liability claim onbehalf of her mother’s estate. She filedsuit within the statute of limitationsindividually and as personalrepresentative of her mother’s estate. Infact, however, she was not the personalrepresentative. After the statute oflimitations had run, the probate courtappointed her the personalrepresentative. Id. at 847.

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iv. According to thesupreme court, the estate’s claims werenot barred and her claims as personalrepresentative related back to heroriginal filing. Id. at 852-53. The courtcharacterized the issue as one ofcapacity to sue, not as standing to sue. Id. at 848-49. Thus, the defendant hadto raise the issue in the trial court by averified pleading. Id. at 849. Standingon the other hand, which is acomponent of subject matter jurisdiction,can be raised for the first time onappeal. Id.

v. Second, thesupreme court addressed a similarissue with similar facts in Lorentz v.Dunn, 171 S.W.3d 854 (Tex. 2005).Lorentz, the decedent’s sister, broughtan action purporting to be theadministrator of her sister’s estate. Infact her application was pending andhad not been granted at the time shefiled suit. Her appointment asadministrator came after the statute oflimitations had run. Defendant moved todismiss contending that Lorentz lackedstanding when the suit was filed. Defendant also asked that the matter bedismissed as sanctions formisrepresenting her capacity.

vi. As in Lovato, thesupreme court treated the issue as oneof capacity not standing. Id. at 856. The court concluded that the afteracquired capacity cured the pre-limitations lack of capacity. Id.. TheCourt declined to address the sanctionsmotion, leaving that to the discretion ofthe trial court.

vii. The Amarillo Courtof Appeals addressed the relation back

doctrine in Covington v. Sisters ofCharity, 179 S.W.3d 583 (Tex. App.--Amarillo 2005, pet denied). The case isinstructive in its discussion of Lovatoand Lorentz.

viii. In Covington,decedent’s sister brought an action forherself and Aon behalf of the estate,”even though one of the decedent’schildren had already been appointedadministrator. Id. at 584-85. After beingchallenged, and after the statute oflimitations had run, the sister amendedher lawsuit to include the courtappointed administrator. Id. at 585.

ix. The Amarillo Courtheld that the relation back doctrine didnot apply. According to the court, thesister was a “stranger” to the lawsuit,and thus she did not have any claims. Id. at 587-89.

x. Interestingly, theadministrator did not bring the action asrequired by Civil Practice and Remedies§71.001(c). The case does not discussthe administrator’s possible liability.

e. Limitation issuesrelating to probating a will.

i. Probate of theLiving: Void. Any administration of anestate or probating of a will of a personwho is still living is void. TEX. PROB.CODE § 72(a).

ii. Pre MortemProbate. Similarly, one cannot establishthe validity of a will during the testator’slife. While some states allow proof of

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the validity of a will during a testator’slifetime, Texas does not have any suchprovision. See Gerry Beyer, TEXAS LAW

OF WILLS, § 52.38 et seq.

iii. Pre MortemAgreements and Assignments. Butagreements regarding the disposition ofa living person’s estate are sometimesmade. Some courts have approvedsuch agreements and others havedeclined jurisdiction. This occursoccasionally in contested guardianshipswhere the parties want to avoid furtherlitigation on the death of the proposedward. Such an agreement would not bebinding on the Ward, for example if theysubsequently regained capacity. UnderTexas law, a person may assign anexpectancy. See Section 11.7, TexasPractice, Wills If a person assigns anexpectancy, the assignee only takeswhat the assignor actually has at death.A testator always has the right tochange a will.

iv. 4 Years toProbate. The statute of limitations toprobate a will is four years from the dateof death. TEX. PROB. CODE § 73.

(1) In Farr v.Bell, 460 S.W.2d 431, 436(Tex.Civ.App.—Dallas 1970, writ ref.n.r.e.) the court held that article 5538 ofthe Revised Civil Statutes (thepredecessor to Civil Practice &Remedies Code §16.062) did notextend this four year statute.

v. After 4 Years:Muniment of Title. A will may beadmitted to probate after four years butonly for the limited purpose to prove

title, as a muniment of title. No personalrepresentative can be appointed. Theperson offering the will must establishthat they are not in default for failing topresent the will for probate within thefour-year period. TEX. PROB. CODE

§73(a). In Brown v Byrd, 512 S.W.2d753, 755 (Tex.Civ.App.—Tyler 1974, nowrit), the court defined, not in default as“…a failure due to the absence ofreasonable diligence on the part of theparty offering the instrument.”

vi. After 4 Years:Innocent Purchasers. If a bona fidepurchaser buys property from the heirsfour years after the decedent’s death,and no will has been probated, he isprotected. The subsequent probate of awill does not effect the good title of thepurchaser. Section 73(b). Any complaintthe beneficiaries under the will has to bedirected against the heirs and theproceeds received from the BFP. Butanyone who buys from heirs takessubject to an administration. TexasPractice, Decedent’s Estates, Section191.

vii. After 4 Years:Faultless Beneficiaries. Even thoughone beneficiary under a will may bebarred from probating the will becausethey are in default, another beneficiarywho is not in fault may successfullysubmit it for probate. Fortinberry v.Fortinberry, 326 S.W.2d 717, 719-20(Tex. Civ. App.--Waco 1959, writ ref’dn.r.e.).

(1) This rule,however, does not protect thesuccessors to a beneficiary in default. InFaris v Faris, 138 S.W.2d 830 (Tex. Civ.

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App.--Dallas 1940, writ ref’d), the widowsurvived her dead husband by 20 years,but never offered his will for probate. Onher death, her children tried to probatehis will. According to the court ofappeals, widow waived her rights andher successors--even though notdirectly in default--could not probate thewill. Id. at 832.

(2) The courtshave been more generous with granteesunder deeds who are trying to establisha link in their chain of title. Chovanec v.Chovanec, 881 S.W.2d 135, 137-38(Tex.App.--Houston [1 Dist.] 1994, nost

writ).

(3) If a will isprobated as a result of the application ofa person not in default, everyone underthe will takes their interest, even aperson who could not have probated thewill because they were in default. Masterson v. Harris, 107 Tex. 73, 174S.W. 570, 573-75 (1915).

(4) In Estate ofWilliams, 111 S.W.3d 259, 263-64(Tex.App.--Texarkana 2003, pet.denied), only one beneficiary applied toprobate the will. The appellate courtheld that he was in default and that thelack of fault of the other beneficiaries(who did not apply to have the willprobated) was irrelevant. Whether ornot those persons could subsequentlyseek probate of the will was notaddressed.

(5) If a will isoffered for probate after four years, thedecedent’s heirs (or beneficiaries of aprior will) must be given notice of theapplication. TEX. PROB. CODE §128B.

Section 128B details the type of noticeand its requirements. This statute wasenacted in 1999. The only reported caseapplying §128B is Estate of Cornes, 175S.W.3d 491 (Tex.App.--Beaumont 2005,no pet). In Cornes, the Beaumont Courtheld that the constitutional countycourt’s failure to give notice washarmless error because the issues weretried “de novo” in the district court. Id. at494-95.

viii. After 4 Years:Abandonment However, a proponentmay raise a presumption that theapplication was abandoned. In Abramsv. Ross’ Estate, 250 S.W. 1019, 1021-22 (Tex. Comm’n App.1923, judgm’tadopted), the court held that a 44-yeardelay from an order of continuancecreated a “conclusive” presumption ofabandonment. But generally, apresumption of abandonment may berebutted. Brown v. Byrd, 512 S.W.2d753 (Tex. Civ. App.—Tyler 1974, nowrit).

ix. After 4 Years. ToShow Revocation. A will notadmissible to probate because notoffered within four years can still haveeffect. Such will can show revocation ofan earlier will. Even if the will was notadmitted to probate because theproponent was at fault in not offering itearlier, it can still be used to showrevocation of an earlier will. In re Estateof Williams, 111 S.W.3d 259 (Tex.App.--Texarkana 2003, pet. denied).

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f. Limitations issues in willcontests.

i. As with anyproceeding in which court relief issought, a will may be contested before itis admitted to probate. Section 10 of theProbate Code provides for the filing ofan opposition by an interested person. TEX. PROB. CODE §10. A will may alsobe contested for two years after itsprobate. TEX. PROB. CODE § 93.

ii. There is also anexception to the two-year statute oflimitations to contest a will forincapacitated persons. An incapacitatedperson has two years after gainingcapacity to institute a contest. TEX.PROB. CODE 93.

iii. Courts tend to belenient in allowing will contests. Forexample, personal service on a personbefore the will is admitted to probatedoes not bar a post probate will contestunder Section 93. Estate of Blevins, 202S.W.3d 326, 328 (Tex.App.--Tyler 2006,no pet.).

iv. The appointment ofa guardian ad litem for a minor in theoriginal contest did not bar the minorfrom filing a contest within two years ofreaching majority. Ladehoff v. Ladehoff,436 S.W.2d 334, 340 (Tex. 1968). Thismysterious result is explained becausethe minor was not served with process. Service on a minor is a prerequisite tohaving a judgment binding on a minor.

v. A proceeding toprobate a will dated later than the onealready admitted to probate is not a willcontest--because it is not disputing the

validity of the probated will-- and iscontrolled by the four year statute,Section 73; not the two-year limitation inSection 93. See Estate of Morris, 577S.W.2d 748, 752(Tex.Civ.App.—Amarillo 1979, writ ref’dn.r.e.).

g. Statute of limitationsissues relating to temporaryadministrators.

i. The temporaryadministration procedure is set out inTexas Probate Code § 131A et seq; see17 M.K. WOODWARD & ERNEST E. SMITH,III, TEXAS PRACTICE: PROBATE AND

DECEDENTS’ ESTATES §§ 461-80 (1971).

ii. Temporaryadministrations should be avoided if atall possible. It will double theadministration costs. Also, someprobate judges are openly hostile toestablishing a temporary administrationespecially if the only reason is becausea plaintiff’s attorney has not beendiligent. However, if a temporaryadministrator is involved, below areissues to consider.

iii. At best, apermanent personal representativecannot be appointed until the firstMonday 10 days after the application isfiled and citation is posted. TEX. PROB.CODE §§ 128; 33(f)(2).

iv. If the statute oflimitations will run, even with the help ofTCPRC Section 16.062, before anadministrator can be appointed, thecourt can appoint a temporary

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administrator. If the temporaryadministrator is to be a defendant, heshould be authorized to accept serviceof suit, notify the insurance carrier, todemand defense and indemnity and toco-operate with the insurance company.

v. While it is true thata creditor of an estate (such as aplaintiff in a personal injury claim) isentitled to be appointed administratorunder Probate Code §77(f), it is not thebest practice. If the plaintiff asks for anadministrator so there is a proper partyto sue, the plaintiff should decline toserve and ask that an independent thirdparty be appointed.

vi. A decedent’sdebtor, a potential defendant, is not aninterested person under Section 3(r) ofthe Texas Probate Code. Thus, adebtor may not bring an action toappoint an administrator.

vii. If the deceaseddoes not have any assets (or at leastnot any non-exempt assets) other thanhis rights under an insurance policy, theapplicant may have to pay thetemporary administrator’s fees andexpenses.

h. Limitations issuesrelating to the appointment of apersonal representative.

i. BeforeAppointment.

(1) 30 Days.The Probate Code provides for ahammer on executors who fail to offer awill for probate in a timely manner.

Section 178(b) provides, inter alia, thatletters of administration shall issue if aperson named as executor in the will,without good cause, fails to offer the willfor probate within 30 days of thedecedent’s death. Thus, a third partycould step in and be appointedadministrator rather than the personnamed in a will. This rule is seldomused. But it is there, and the statuteuses “shall.” There have been no casessince it was amended in 2007 to add the“good cause” clause. For a discussionof the cases before that time, seeJohanson’s Texas Probate Codediscussion following Probate Code §178.

(2) Four Years.There is a four-year statute of limitationsfor appointing a personal representative. Section 73(a) states that no personalrepresentative shall be appointed wherea will is probated more than four yearsafter the date of death. TEX. PROB.CODE §73(a).

(3) After FourYears. However, apparently a personalrepresentative can be appointed afterfour years if the application to appointhim was filed within four years. SeeSection 74 and Texas Practice,Decedents’ Estates, Section 226. Thiscould come up if a will has beenprobated as a muniment of title or in anheirship proceeding.

ii. After Appointment.

(1) 20 days:Bond & Oath. After the court appoints apersonal representative, the

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representative must file a bond (if any isrequired) and oath within 20 days of theorder of appointment. If the bond andoath are not filed within 20 days, thecourt may revoke the order appointingthe personal representative. TEX. PROB.CODE §192.

(2) 60 Days.Notice to Beneficiaries. Under Section128A a personal representative has togive notice to all beneficiaries under awill that the will has been probated andthe personal representative has beenappointed.

(3) 90 Days.Inventory. Within 90 days ofqualifications, the personalrepresentative must file an inventoryunless an extension has been granted.Section 250.

(4) Notice toCreditors.

(a) 30Days. Publish in Newspaper. Within 30days of qualification, the personalrepresentative must publish a notice tocreditors in the newspaper. Section 294.

(b) 2Months. Within 2 months ofqualification, the personalrepresentative must give notice bycertified mail to all secured creditors.Section 295.

(c) At anytime. At any time, the personalrepresentative may give to unsecuredcreditors that they must present theirclaims within four months are their claimwill be barred. Section 294(d)

i. Limitations: Affidavits ofHeirship.

i. Section 52 of theTexas Probate Code provides thataffidavits of heirship that have been onfile for five years are prima facieevidence of the facts stated in theaffidavit in heirship proceedings andsuits involving title to real or personalproperty.

ii. Section 52(c) statesthat this statute is cumulative and that itis not to abrogate any right to presentevidence or rely on an affidavit

iii. For more on therelationship between that Section andTexas Rules of Civil Procedure Rules804(b)(3) and 893 (14), see Compton v.WWV Enterprises, 679 S.W.2d 668(Tex. App.–Eastland 1984, no writ). Fora history of affidavits of heirship, seeJohanson’s discussion of Nonstatutoryaffidavits of heirship in his Commentaryfollowing Section 52.

iv. These affidavitshave always been looked on with favor.But in 1999, at the behest of the Texastitle companies, the Texas Legislatureenacted Section 52A. That is a statutoryform for affidavits of heirship. Sincethen, affidavits of heirship have becomeeven more accepted for proving up titleto real estate.

v. However, affidavitsof heirship are merely evidentiarydevices. They do not start the running ofany statutes of limitation. Section 52(c)says:

“An affidavit of facts concerningthe identity of heirs of a decedent

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does not affect the rights of anomitted heir or creditor.”

vi. So while they canbe very handy and economical, theyshould be used with caution.

j. Limitations issuesrelating to heirship proceedings.

i. East, Kenedy &Fernandez. On April 16, 2010, theTexas Supreme Court decided fourcases arising out of the estates of JohnKenedy and Sarita East: Frost NationalBank v. Fernandez, __________S.W.3d _________, 2010 WL 1526369(Tex.); In re the John G. and MarieStella Kenedy Memorial Foundation, ---S.W.3d ----, 2010 WL 1526353 (Tex.);John G. and Marie Stella KenedyMemorial Foundation,v. Fernandez, ---S.W.3d ----, 2010 WL 1509668 (Tex.);and,John G. and Marie Stella KenedyMemorial Foundation,v. Fernandez ---S.W.3d ----, 2010 WL 1509657 (Tex.).Most of the facts and commentsregarding limitations are set out in the Frost National Bank v. Fernandez,supra, opinion.

(1) AnnFernandez was born in 1925 to MariaRowland. Rowland worked for theKenedy family.

(2) John G.Kenedy, Jr. died in 1948 with aholographic will that left his property tohis wife Elena. It was promptly probatedin the Kenedy County Court.

(3) In 1949Humble Oil, which was a lessee of part

of the Kenedy Estate mineral interests,filed a will construction suit in districtcourt to find out if that will disposed ofall of his property. That year the districtcourt found that “all of the Kenedy heirswere before it and that it did not leavean intestacy.” That district court held asa matter of law that

“’all persons who would haveinherited any part of the Estate ofJohn G. Kenedy, Jr., deceased, ifhe had died intestate as to all orany part of his estate, are partiesto this suit and therefore allnecessary and interested partiesare included among thedefendants herein.’”

(4) In 1952“Kenedy's estate was distributed, taxed,and closed”

(5) In 1961 hissister, Sarita Kenedy East died. Her willwas probated that same year. Therewere several contests of that will. In1975 the district court entered ajudgment pursuant to a settlement withsome of the parties. The rest of the willcontests were resolved in 1978, SeeTrevino v Turcotte, 564 S.W.2d 682(Tex. 1978).

(6) In 1987,East’s estate was closed.

(7) Mrs. Kenedydied in 1984. Her will was probated thatyear and her estate closed in 1987.

(8) Fernandezcontended that while she had heardrumors it was only in 2000 that hermother told her that Kenedy was her

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father. She immediately started filingactions including bills of review andapplications to determine heirship.

(9) The supremecourt took up a number of issues thatare very interesting to a probate lawyer(standing, dominant jurisdiction,exclusive jurisdiction, good faithpleadings used to determine jurisdictionexhumation, direct attacks onjudgments, bills of review, abatement,and jurisdiction for heirshipproceedings)

(10) Asconcerns this paper it addresseslimitations and the discovery rule. Atthe very beginning of the opinion thecourt says

“...we hold that the discovery ruledoes not apply to inheritance orheirship claims by non-maritalchildren, or bill of review claims toset aside probate judgments.Because Fernandez's claimswere barred by the applicablestatute of limitations, we renderjudgment reinstating the districtcourt's judgment.”

(11) At page 10,the court says

“When an heirship claim isbrought after an administration ofthe decedent's estate or aconveyance of the decedent'sproperty to a third party, courtshave applied the four-yearresidual limitations period ofTexas Civil Practice andRemedies Code section 16.051.See, e.g., Cantu v. Sapenter, 937

S.W.2d 550, 552 (Tex.App.-SanAntonio 1996, writ denied); Smithv. Little, 903 S.W.2d 780, 787-88(Tex.App.-Dallas 1995), rev'd inpart on other grounds, 943S.W.2d 414 (Tex.1997). Underany conceivable accrual date, thefour-year statute of limitations ranwell before Fernandez firstasserted claims to the Kenedyand East estates. Fernandezconceded (emphasis added) thatthe residual statute of limitationsapplies and has never deniedthat it bars her heirship claimabsent the application of thediscovery rule to save her claims,arguing that we should apply thediscovery rule in heirship casessuch as this.”

(12) The courtdiscusses its prior refusal to extend thediscovery rule to adopted children. Theyremind us that in Little v Smith, supra,the court declined to apply the discoveryrule even though adopted children mayhave many barriers to knowing theywere adopted or getting recordsunsealed to learn who their biologicalparents are.

(13) Generally,this is a well written case. But, there aretroubling parts:

(a) Theyrefer to dominant jurisdiction.

(b) Theydid not tell us when limitations accrue.

(c) Theymisstated, albeit in dictum, that youcannot have an heirship proceeding in

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the absence of a probate proceeding.That’s got to be wrong.

(i)First of all, Section 48(a) says a

court may declare intestacy in severalinstances including when, “... noadministration has been granted in thisState.”

(ii)Then, what about an heirship

proceeding when there is no need for anadministration, or it is too late to requestone.

(iii)And what about a future interest

(remainder interest under a will,remainder interest under a trust) wherethe fiduciary needs to know who takesbut there is no administration pending.

(d)Fernandez’s lawyer “conceded” that thefour year statute applied. Why didn’t heargue that the real estate statutes oflimitations applied?

(e)Apparently he did not argue the Section31 bill of review. The argument was onlyregarding the equitable bill of review. The statute appears fairly clear but itwould be nice to know if there is adiscovery rule that applies.

(f) Theydo not discuss whether their decision isbased in any part of this being an remproceeding.

(g) Theydo not tell us if the 1949 intestacydetermination included ad litems andcitations by publication.

(h) Theydo not discuss the impact of the nowmandatory citation by publication(Section 50(b)) and the now mandatoryappointment of ad litems (Section 53(c))both of which were added to thestatutes in 2001.

(i) Theydo not discuss if these same rules applyto marital children.

ii. Cases BeforeEast, Kenedy & Fernandez

(1) Sections 48through 56 of the Texas Probate Codeprovide a court procedure fordetermining the heirship of a deceasedperson. While the procedure is set out,there is no statute of limitationsmentioned. Because the Probate Codeis silent, courts have held that thegeneral four year statute applies. TEX.CIV. PRAC. & REM. CODE § 16.051;

(2) However,Section 55 (a) does say that if an heir isnot served, he may

“...within four years from the dateof the such judgment have thesame corrected by bill of reviewor upon proof of actual fraud,after the passage of any length oftime,...”

(3) In York v.Flowers, 872 S.W.2d 13, 16 (Tex.App.--San Antonio 1994, writ denied), thecourt made an exception for real estate.Husband died intestate in 1944. Thewidow conveyed the land by generalwarranty deed in 1955. His out-of-wedlock daughter brought suit to

15

recover her interest in 41.5 acres thather father and his wife owned ascommunity property at the time he died.

(a) Thetrial court granted summary judgmentfor Flowers. First, Flowers contendedthat out-of-wedlock children had noinheritance rights. The San AntonioCourt of Appeals concluded that suchchildren do have inheritance rightsbased on Trimble v. Gordon, supra.Flowers next argued that he had goodtitle under all of the adverse possessionstatutes including the 25 year statute.The court said that since the child was aco-tenant from the time of her father’sdeath, the burden was on Flowers toshow “actual notice of repudiation of theco-tenancy relationship…. There is noevidence of actual notice ofrepudiation.”

(b)Finally, the court rejected Flowersargument that Section 16.051 of CPRCcontrolled because it is restricted topersonal actions. The court reversedand remanded.

(4) Then inCantu v. Sapenter, 937 S.W.2d 550,552-53 (Tex. App.—San Antonio 1996,writ denied) the court discussed,Section 55(a) of the Texas ProbateCode. It said there is a four-year rule,but it is a four year bill of review, not astatute of limitation. It says that aperson not served “…may at any timewithin four years from the date of suchjudgment have the same corrected by abill of review, or upon proof of actualfraud, after the passage of any length oftime….”

(a) InCantu v. Sapenter, children born out ofwedlock brought an heirship actioneleven years after the date of death.There was no administration but thewidow conveyed the property to a bonafide purchaser. The court pointed outthat §55a of the Probate Code had thisfour-year bill of review provision, but itdid not have a limitation provision. Thecourt noted that when a cause of actionwas not governed by a particularstatute, that the four-year residuarystatute applied. Cantu, 937 S.W.2d at552. The court applied these ruleswhile acknowledging the rights ofillegitimates under the equal protectionclause as announced in Weber v. AetnaCasualty & Sur. Co., 406 U.S. 164, 175-76, 92 S.Ct. 1400, 1406-07, 31 L.Ed.2d768 (1972). Id. at 552-53.

(b) Thiscourt also said that York v Flowers didnot apply because this was a probateproceeding and York was an action torecover real estate. The court didacknowledge that the determination ofheirship was a perquisite to recovery inYork.

(c) Thiscourt said that the children knew theywere the decedent’s children and knewthat he had died, but took no action.The court said that the recording of thatdeed gave them at least constructivenotice that their interest in the propertywas at stake.

(d) Thecourt acknowledged that at that timethere was no mechanism under Texaslaw for a non marital child to assert theirinterests. However, effective

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September 1, 1987 the statute wasamended to allow their claims. Thus onSeptember 1, 1991 the statute oflimitations had run.

(e) Finallythe court said that is was restricting thisholding to cases with similar facts andthat they were not expressing anyopinion in cases where the children didnot know and through diligence couldnot have found about the facts adverseto their rights.

(5) In Jeter v.McGraw, 79 S.W.3d 211(Tex.App.—Beaumont 2002, pet.denied), a “non marital child,” contendedthat when dad died in 1947 intestatethat dad’s estate passed to non maritalchild and not to the surviving spouse.There was no administration of hisestate and no proceeding to determineheirship. There was an affidavit ofheirship prepared in 1981 by Jeter’sattorney showing that Jeter was an heirof the decedent. The surviving spouseconveyed her one-fourth interest toMcGraw. And in the next year signedanother deed to McGraw conveying“…all [her] undivided interest. Theappellate court held that because thisinvolved real estate that the four yearresidual statute (Section 16.051 CPRC)did not apply, but suggested that onremand that the adverse possessionstatutes should be considered. Id. at215-16.

k. Limitations issuesrelating to adopted children.

i. Probate CodeSection 40 and Family Code Section

162.507 set out the rights of adoptedchildren.

ii. In Little v. Smith,943 S.W.2d 414 (Tex. 1997), anadopted child discovered in 1989 theidentities of her biological mother andgrandmother. She learned that bothwere dead and that her biologicalmother (died in 1969) had predeceasedher grandmother and that her biologicalgrandmother had died in 1982.

iii. In 1991, theadopted child tried to make a claim afterthe grandmother’s estate had beendistributed and closed. The TexasSupreme Court said that the discoveryrule did not apply. The court reasonedthat the rights of an adopted child weretrumped by the need for finality ofprobate proceedings and the need tomaintain confidentiality of adoptionrecords. Id. at 418-20.

l. Additional Limitationsissues for children without apresumed father.

i. See the discussionof Frost National Bank v Fernandez,supra.

ii. Children whosefather’s paternity have not beenestablished in modern times aresometimes referred to as nonmartialchildren, or children both outside ofwedlock. The Family Code refers tosuch children as “children without apresumed father. TEX. FAM. CODE §160.204.

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iii. For inheritancepurposes, children whose paternity isestablished or presumed under FamilyCode §160.204 shall inherit from thatfather. TEX. PROB. CODE §42(b).Children who do not have a presumedfather may petition the probate court fora determination of the right to inherit.

iv. According to caselaw, there is a four-year statute oflimitations for heirship proceedings. Forexample, in Cantu v Sapenter, 937S.W.2d at 553, the San Antonio Courtheld that the four-year statute oflimitations barred an heirship claim.

v. In Turner v. Nesby,848 S.W.2d 872, 876-78 (Tex.App.--Austin 1993, no writ), the Austin Courtheld a bill of review filed more thanseven years after heirship judgment wasbarred and not available to a non-marital child. According to the court, thestatute of limitations began to run whenthe judgment was entered, not laterwhen the legislature expanded thestatute. Id. at 878. The court reasonedthat the need for finality of judgmentswas key. Id.

vi. While thesedecisions, and York supra, are notfavorable to children without apresumed father, there is a substantialconstitutional overlay that has to beconsidered. See Trimble v. Gordon,430 U.S. 762 (1977).

vii. Also see casesdiscussed under Limitations issuesrelating to heirship proceedings, supra.

m. Limitations issuesinvolving void marriages.

i. At death, if there isno action pending to have a marriagedeclared void because of incapacity, aperson has one year after the death ofone of the parties to the marriage tobring an action to declare the marriagevoid. TEX. PROB. CODE §47A. Thissection was added in 2007. Before thisstatute, upon death there was noprocedure for setting aside themarriage. The statute was in responseto numerous cases of care giver abusewhere the caregiver would marry anelderly person and even keep it a secretuntil death.

ii. Johanson in TexasProbate Code Annotated after Section47A details one egregious example ofthis behavior.

n. Limitations issues withcommon law marriages. Anaction to establish a common lawmarriage must be brought within twoyears after the date the parties separateor the death of one. TEX. FAM. CODE

§2.401(b); see Amaya v. Oravetz, 57S.W.3d 581, 583-84 (Tex.App.—Houston [14th Dist. 2001, pet.denied).

o. Limitations issuesrelating to claims against an estate. Because the statute of limitationsapplicable to claims against an estateare some of the shortest in Texasjurisprudence, they are also worthnoting here.

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i. UnsecuredCreditors: 4 Month Notice. Forunsecured claims, there is s 4-monthbarring statute. A personalrepresentative may give notice tounsecured creditors pursuant to Section294(d) of the Texas Probate Code. That notice, if properly given, requiresthe creditor to present its claim withinfour months or the claim will be barred.A guardian may send a similar noticeunder Probate Code § 784(d).

ii. Secured Creditors.For secured creditors, there is anelection. Under Section 295, thepersonal representative must givecertified mail notice to all securedcreditors of the issuance of letterstestamentary or of administration. Within four months of receiving thenotice, or six months from the dateletters or granted (whichever is later, thecreditor must make an election for theirclaim to be “matured secured” or“preferred debt and lien” under Section306.

(1) Election.Section 306(b) says that if they do nottimely make that election, they aretreated as a “preferred debt and lienholder under Section 306(a)(2)

(2) PreferredDebt and Lien. A “preferred debt andlien” means the creditor is entitled toforeclose on his collateral, but cannotproceed against the estate for anydeficiency. This is best illustrated in thecase of Cessna Finance Corp. v.Morrison, 667 S.W.2d 580 (Tex.App.--Houston [1 Dist.] 1984, no writ). In thatst

case, the collateral was a Cessna

airplane that crashed in South America.The creditor elected preferred debt andlien status and much to its surprise wasonly entitled to go to South America andpick up the airplane. It had no right topursue any other claims or deficienciesagainst the estate. Id. at 583-84.

(3) MaturedSecured “Matured secured” means thecreditor subordinates its rights in thecollateral to a Class 3 claim. That is, theproceeds from the collateral will first goto pay funeral and last illness expenses(Class 1) and expenses ofadministration (Class 2). Then thecreditor gets what is left from theproceeds of the sale of the collateral. Ifthat is not sufficient to pay the creditor infull, it is a Class 8 unsecured for anydeficiency.

(4) UsualElection. Because most creditors arereluctant to have their claims besubordinate to administrative expenses(which includes lawyers fees), they tendto take their collateral (preferred debtand lien).

(5) DeemedElection. If the creditor does not makean election within four months ofreceiving notice, he is deemed to haveelected “preferred debt and lien” status.

iii. Tolling of claimsin the Probate Code. There is a tollingprovision on the statute of limitationsrelating to claims. Section Probate Code§ 299 states that the presentment of aclaim or the filing of a suit tolls anystatute of limitation.

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iv. Liquidated claimsin dependent administrations. Independent administrations, claims forliquidated amounts have to go through aspecific process.

(1) 4 Months.First a creditor has the four monthsproblem arising from Section 294(d) ifthey receive notice from theadministrator.

(2) 30 Days.First, once the creditor makes a claim,the personal representative has 30 daysto allow or reject the claim. TEX. PROB.CODE § 309. If the claim is allowed, itgoes to the court for approval.

(3) 90 Days. Ifthe claim is rejected, the creditor has 90days to file suit. TEX. PROB. CODE §313. If suit is not filed within 90 daysthe claim is barred. TEX. PROB. CODE §313. If the representative does not acton the claim within 30 days, it isdeemed to have been rejected and the90 days begins to run.

p. Foreclosures anddependent administrations.

i. Once a debtor dies,the rights of a secured creditor change. If a secured creditor forecloses after thedeath of the debtor but before anyadministration is taken out, asubsequently appointed administratormay set the foreclosure aside, Pearce v.Stokes, 155 Tex. 564, 291 S.W.2d 309,311-12 (1956). Only four years after thedecedent’s death does such aforeclosure become final. Wiener v.Zweib, 105 Tex. 262, 141 S.W. 771

(1912); see 18 WOODWARD & SMITH,TEXAS PRACTICE: PROBATE AND

DECEDENTS’ ESTATES § 921. As a result,the only safe procedure for a securedcreditor is to apply for an administrationof the decedent’s estate.

ii. After theestablishment of an administration, anynon judicial foreclosure is void, Pearcev. Stokes, supra.

q. Foreclosures andindependent administrations. In anindependent administration, the rights ofthe creditor do not change asdramatically. As distinguished from adependent administration, a non judicialforeclosure can occur before or duringan independent administration and notbe subject to set aside, Pearce v.Stokes, supra, and Pottinger v.Southwestern Life Ins. Co., 138 S.W.2d645, 647-48 (Tex.Civ.App.–Waco 1940,no writ). If matured secure status hasbeen elected, there is no foreclosureavailable. If preferred debt and lien hasbeen elected, then the creditor mayforeclose without judicial permission ifthere is a default. See “ClaimsProcedures in Probate andGuardianship,” Schwartzel 1996Advanced Estate Planning and ProbateTab D and “Handling Claims AgainstDecedent’s Estates,” Horrigan, 1997Advanced Estate Planning and ProbateTab K.

r. Limitations issuesrelating to contracts for bequests. The statute of limitations on breaches ofcontract to make a bequest does notbegin to run until the death of thedecedent. Seale v. Muse, 352 S.W.2d

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534, 538 (Tex.Civ.App.--Dallas 1961,writ ref’d n.r.e.).

s. Statutory bill of reviewproceedings. In addition to theequitable bill of review which applies toall civil cases, the Probate Code hassome specialized statutory bills ofreview.

i. Section 31 of theTexas Probate Code, allows anapplication for a bill of review at anytime up to two years from the time anorder is entered. The petitioner mustprove a meritorious position, somewrongful act by the other party and thatthe petitioner was not negligent.

As contrasted withSection 93 below, Section 31 does notset out any exceptions to the two yearlimit.

In Power vChapman, 994 S.W.2d 331 (Texarkana1999, no writ), Power learned within twoyears about the probate of his wife’swill. However, he did not bring an actionto set it aside until more than two yearsafter the order admitting it to probateand within two years of learning of theprobate and less than four years fromthe probate.

Then he brought hisaction under Section 31 not Section 93.

The trial courtpoured him out and the court of appealsaffirmed saying

“Power argued that hebrought suit within two years ofdiscovering that he had been

defrauded by the appellees. Atthe time Power filed suit,limitations had run on thestatutory bill of review and hewas not entitled to an equitablebill of review because he failed topursue his legal remedies...”

ii. Section 93 providesthat a probated will can be challengedwithin two years of the date the orderwas entered. In addition, a will may bechallenged within two years of thediscovery of any fraud or forgery or twoyears after an incapacitated person hastheir disabilities removed.

iii. And as discussedabove, there is a special four year bill ofreview provision in proceeding todetermine heirship under Section 55(a).

iv. In the case of In reVance, No. 10-09-00177, 2009 WL4574896 (Tex.App.--Waco 2009), thecourt lists the possible remedies.

2. INCAPACITY ANDGUARDIANSHIPS Guardianships donot have the limitations that you find indecedent’s estates. Obviously, aguardianship can be sought at any timewhen a person is incapacitated or aminor.

a. Guardian Appointed.Once an appointment of a guardian ismade, however, there are deadlines thathave to be met and they deviate slightlyfrom probate proceedings.

i. Bond and Oath. Aswith probate estates, the guardian musttake his oath and file his bond within 20

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days of the order of appointment. TEX.PROB. CODE § 701.

ii. Inventory. Theinventory however, must be filed within30 days of qualifying TEX. PROB. CODE §729. Note that this is a recent change inthe statute. Before 2003, a guardianhad 90 days to file an inventory, just likeprobate. The current 30-day deadlineallows the probate court to know assoon as possible if the bond wassufficient and what assets wereavailable for the care of the ward.

iii. Allowance. If anallowance was not established in theorder appointing the guardian, theguardian must seek a monthlyallowance within 30 days of qualifying. TEX. PROB. CODE §776.

iv. Investments. Theguardianship code also provides certaininvestment parameters and deadlinesfor the guardian in managing existingassets of the ward. The guardian mayretain, without court approval, theassets of the ward that were on hand atthe time of appointment for up to oneyear without any duty to diversify andwithout liability for any depreciation orloss. TEX. PROB. CODE §855A(a). Theguardian may seek an order of the courtallowing continued retention after thatthe one year period. TEX. PROB. CODE

§855A(b).

Within 180 days ofqualification, the guardian must havethe estate’s assets invested pursuant toSection 855(b) (the safe harborprovision) or submit a proposedinvestment plan. TEX. PROB. CODE

§855B.

b. Incapacity tolls thestatute of limitations. As everyoneknows, incapacity tolls the statutes oflimitations. As it turns out, this is ageneral rule.

i. Personal Actions.As it relates to personal actions, Section16.001 of the Civil Practices andRemedies Code addresses limitationson incapacitated persons.

(1) If a person is“under a disability” when a cause ofaction accrues, the period of disability isnot included in the limitations period.TEX. CIV. PRAC. & REM. CODE

§16.001(b). (2) Two

examples: 1) if a sixteen year-old childis injured in a car accident, limitationsbegins when the child turns eighteen;and 2) if a minor or adult is injured andnever regains capacity, limitations neverruns. See infra “The effect of theappointment of a guardian onlimitations.” This only applies tolimitations of personal actions arisingunder Subchapter A of Chapter 16(16.001 through 16.012).

The statute alsohas some qualifications. A disabilityarising after the limitations period hasstarted does not suspend the statute. TEX. CIV. PRAC. & REM. CODE

§16.001(d). Disabilities also cannot bestacked to extend a limitations period. Id. at §16.001(c).

ii. Real Estate. Sections 16.021 et seq sets out thelimitation and tolling provisions foractions involving real estate., Civil

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Practices and Remedies Code §16.022sets out the tolling rules when there is adisability.

(1) The statutedefines persons who are under adisability as minors, incapacitatedpersons and persons serving in thearmed forces during a time of war. Thestatute is tolled for these persons if theclaim or defense is based on title to realproperty. For the tolling provision tooperate, the person has to be under adisability at the time title vests oradverse possession commences. Iftolled, the statute does not run duringthe period of disability.

(2) With twoexceptions, the statute begins to runwhen the disability is lifted.

(a) First,regardless of a disability, an action mustbe brought within 25 years to recoverreal estate where another is assertingtitle by adverse possession. TEX. CIV.PRAC. & REM. CODE §16.027.

(b)Second, regardless of a disability, anaction must be brought within 25 yearswhere another person is claiming byadverse possession coupled with adeed. TEX. CIV. PRAC. & REM. CODE

§16.028.

c. The effect of theappointment of a guardian onlimitations.

i. There are severalolder cases that say the appointment ofa guardian does not start the statuterunning. Neblett v. Valentino, 127 Tex.279, 92 S.W.2d 432, 434-35 (1936);

Collins v. McCarty, 68 Tex. 150, 3 S.W.730, 731-32 (1887); Texas Utilities Co.v. West, 59 S.W.2d 459, 460-61 (Tex.Civ. App.--Amarillo 1933, writ ref’d), andBrown v. Midland Nat. Bank, 268 S.W.226, 228 (Tex. Civ. App.-- El Paso1924, writ ref’d).

ii. However, a recentTexas Supreme Court case may hint ata guardian discovery rule. In Yancy v.United Surgical Partners International,Inc. 236 S.W.3d 778 (Tex. 2007), theprimary issue was the Open CourtsDoctrine not directly a statute oflimitations issue. The plaintiff’s motherwas appointed guardian and thenbrought an action against some but notall of the possible defendants. Morethan 2 years after the incident occurred(and she was appointed) the guardianjoined additional defendants. Id. at 780.

iii. In analyzing theOpen Courts Doctrine, the Court statesthat the guardian knew of the Ward’s

“...condition and retained alawyer well within the limitationsperiod. On this record, there is nofact issue establishing that Yancy(on Yates's behalf) did not have areasonable opportunity todiscover the alleged wrong andbring suit within the limitationsperiod or that she sued within areasonable time after discoveringthe alleged wrong.” Id. at 786.

d. Creditors The rules oncreditors in guardianships are verysimilar to those set out above fordependent administrators. There is a

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similar provision for giving notice to asecured creditor in a guardianship,Section 784(a).

i. Election: SecuredCreditor. In Section 793 the securedcreditor has to state whether he wantsmatured secured or preferred debt andlien status. If he does not make anelection, he is deemed to have electedpreferred debt and lien.

ii. 120 Day Notice. Aguardian is required to give notice tounsecured creditors, Section 784(b).And if the creditor does not assert aclaim within 120 days, that claim will bebarred. Section 784(e). This is similar toSection 294(d) for decedent’s estates.However, notice that this provision ismandatory not permissive and that ituses 120 days rather than 4 months.

iii. 90 Day BarringStatute. Further, if a creditor makes aclaim and it is rejected, whether by theguardian or by operation of law after 30days, and the creditor does not file suitwithin 90 days, the claim is barred.Section 800.

e. Bill of Review. Section657 is the guardianship counter part toSection 31 bill of review for decedent’sestates. It gives a person two yearsfrom the date of a “decision, order, orjudgment” to bring an action to set itaside. It goes on to give a person twoyears after the removal of theirdisabilities to file a bill of review.

3. NEXT FRIEND

a. Statute of limitationsissues also arise when a suit is broughtby a next friend. The bringing of anaction by the next friend of a minor, andthe dismissal thereof, did not causelimitations to commence to run against asubsequent suit on the same cause ofaction, since it does not remove thedisability. The bringing of an action by afather as next friend for an injury to hisson does not create the relation ofguardian and ward, so as to start therunning of limitations against the minor. Galveston, H. & S.A. Ry. Co. v.Washington, 25 Tex.Civ.App. 600, 63S.W. 538, 540-41 (1901, no writ).

b. Similarly, a statutory causeof action for death of a father was,according to the court, a property assetbelonging to minor children, and wasnot barred because not brought withintwo years after appointment of guardian,when children were still minors at timeof trial. Texas Utilities Co. v. West, 59S.W.2d 459, 461(Tex.Civ.App.—Amarillo, 1933, writref’d).

4. TRUSTS

a. General. Whilemany of the limitation issues concerningtrusts are the same as in decedent’sestates and guardianships, there areimportant differences. First, there is nocourt participation initially or thereafterunless someone specifically invokes thejurisdiction of the court. Also, trusts areapt to run for a very long time ascompared to estates. Thus, limitations

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issues may be triggered years in thefuture.

b. Removal: NoLimitation. In Ditta v Conte,298S.W.3d 187, (Tex. 2009), the TexasSupreme Court held “...that no statutorylimitations period restricts a court’sdiscretion to remove a trustee.” Id. at187. There were further proceedings inthe court of appeals, Ditte v. Conte,____ S.W.3d ______ 2010WL1053097(Tex.App.-Houston [1 Dist.] Mardallst

2010, no. pet. h.).

i. Ditta, a courtappoint guardian of the estate, appliedto remove the trustees more than fouryears after the offending events andmore than 4 years after he wasappointed guardian.

ii. The Ward and herhusband created the trust. After he diedshe was the trustee along with her twochildren. It was subsequently discoveredthat the son was not properlyadministering the trust and litigationensued.

iii. In August of 1998,Ditta as guardian sought theappointment of a receiver. The courtappointed a successor temporarytrustee and suspended the powers ofthe children as trustees.

iv. In June 2000, thetemporary trustee filed an accountingfrom the date of dad’s death toDecember 1999. That accountingrevealed that both son and daughterhad obtained trust funds for their ownbenefit. A settlement of those issuesoccurred in January 2001 in which the

obligation was recognized.In January 2003, son was

removed as a trustee, and in April of2004, Ditta applied to remove daughteras trustee. The trial court removed her,but the court of appeals reversed,concluding that § 16.004 of the CPRCapplied.

v. The TexasSupreme Court reversed andremanded, concluding that there was nostatute of limitations Id. at ______.

vi. In reaching itsresult, the Court observed that thetrustee position is a “status.” The courtthen analogized a removal action to adivorce sought on the basis of crueltyand adultery. Id. at *3-4. According tothe court, marriage is a status and anaction for divorce does not have to bebrought within any statutory deadline.

The Court further analogizedremoval to a real property action toremove a cloud on title. Id. at *4.

vii. The Courtconcluded that the daughter breachedher duties and A...her role as trustee wascompromised due to her indebtednessto the Trust and her tenuousrelationship with her...@ mother andbrother. Id. at *4. According to theCourt, removal actions A...exist toprevent the trustee from engaging infurther behavior that could potentialharm the trust.@ Id. at *4. A trustee=sprior conduct can be indicative of futureconduct.

viii. The Court did notaddress laches, the discovery rule, orthe impact of the 2001 settlementagreement.

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c. Trust Contest. Like a will, a trust can be challengedbecause of lack of capacity, undueinfluence, improper execution etc. See“Contesting Inter Vivos Trusts,” T. JackChallis, ACTEC Notes Vol. 26 No. 3 at221 (Winter 2000).

i. Unlike a will,however, there is no direct statutoryguideline on when this must be done. Section 16.051 CPRC is the four yearresidual limitations period applying toactions not otherwise covered by astatute of limitations. Section 16.051applies to contracts. Seureau v.ExxonMobil Corp., 274 S.W.3d 206, 227(Tex. App.--Houston [14th Dist.] 2008,no pet.). As we have seen, it coversheirship determinations, Cantu v.Sapenter, supra.

ii. Presumably itcovers contests of the validity of a trustas well. If so, some notice or discoveryof the existence of the trust should benecessary to trigger the statute.

iii. While there is noTexas authority on point, there is someauthority nationally. BOGERT ON TRUSTS

discusses at Section 950 including thepaucity of specific statutes on trustcontests. Section 604 of the UniformTrust Code provides for a 3-yearlimitation period on contests ofrevocable trust that begins to run fromthe date of the settlor=s death. Thatsection shortens that time to 120 daysfrom the time notice is given by thetrustee. The Uniform Trust Code makesno reference to the time frame forchallenging an irrevocable trust. Whenthe Texas legislature cherry picked theUniform Trust Code it did not import

these limitation provisions into Texaslaw.

iv. Much of the caselaw in Bogert and elsewhere applies totrustees who have repudiated a trustand the beneficiaries are attempting toenforce it. Similarly, most of the trustcases cited under §16.051 arerepudiation cases. See, e.g.Courseview v. Phillips Petroleum Co.,158 Tex. 397, 312 S.W.2d 197, 205(1958) (limitations does not begin to runin favor of a trustee and against thecestui until the latter has notice of arepudiation and there is no duty toinvestigate until the cestui hasknowledge of facts sufficient to inciteinquiry).

v. There are alsonumerous cases under §16.025 of theCPRC that say limitations for trustsholding real estate do not start to rununtil there has been a repudiation.

d. Limitation in Venue. While this may stretch any definition oflimitations, it is worth noting that for asingle non-corporate trustee, an actionshall be brought in any county in whichthe trustee resided for the four yearspreceding the filing of an action, TEX.PROP. CODE § 115.002(b)(1), or in thecounty in which the situs ofadministration was maintained at anytime in the four years preceding thefiling. TEX. PROP. CODE § 115.002(b)(2).

If there are multipletrustees or a corporate trustee, theaction shall be brought in any county inwhich “situs of administration ismaintained or has been maintained” forthe last four years. These provisions

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were added in 1999. Previously the testwas the principal office of the trust. There are no Texas cases on what theconstitutes “situs of administration.”

e. No shortening oflimitations periods: MandatoryRules. Section 111.0035 of the TrustCode (the Texas Property Code) setsout default and mandatory rules fortrusts. Generally, the provisions of atrust trump the rules set out in the TrustCode. And, to the extent that the trustdoes not speak to an issue theprovisions of the Trust Code control. TEX. PROP. CODE § 111.0035(a).

However, Section111.0035(b) sets out those matters, themandatory rules, which cannot beoverridden by the trust instrument. Oneof those rules is Section 111.0035(b)(3). It provides that, “ . . .the terms of thetrust may not limit . . . the periods oflimitation for commencing a judicialproceeding regarding a trust.”

5. BREACHES OF FIDUCIARYDUTY

a. General. Section16.004(a)(5), which was enacted in1999, sets a four year statute oflimitations for breaches of fiduciary duty.Section 16.004a(b) sets a four statutefor bonds, personal representatives andguardians. All of this illustrates theimportance of full disclosure and notice.The preference is for judicial releasesover the usual releases.

b. Older Cases. Section16.004(a)(5) of the CPRC requires that

an action for breach of fiduciary dutymust be brought within four years of thetime the action accrues.

i. Because of therelationship between the trustee and thebeneficiary, the courts have appliedvarious rules for when the cause ofaction accrues.

ii. Older casesgenerally refer to repudiation. Latercases say when a beneficiary knew orshould have known and that this isespecially true in a fiduciary relationshipwhere one party is entitled by law to relyon another.

c. Cases Under the Statute.Although §16.004(a)(5) was enacted 10years ago, it has only been cited inthree cases: Conte v. Ditta,287S.W.3d28 (Tex. App. Houston [1stDist.] 2007), rev’d, 298S.W.3d187(Tex.2009); Crull v. Rhodes, No. 02-04-235-CV, 2005 WL 737473 (Tex.App.--Fort Worth March 31, 2005, no pet.); USMCT, Inc. v. Brodsky, No. 05-98-00204-CV, 2001 WL 1360301 (Tex.App.--Dallas November 07, 2001, no pet).

d. Conte, Court of Appeals.While the supreme court in Ditta v.Conte, supra, concluded that there is nostatute of limitations for removal actionsand reversed, the court of appeals’opinion provides an excellent renditionof what is probably the status of thediscovery rule in fiduciary matters:

“Statute of limitations serve tocompel the assertion of claimswithin a reasonable period duringwhich the evidence is fresh in the

27

minds of the parties andwitnesses. Price v. Estate ofAnderson, 522 S.W.2d 690, 692(Tex.1975). The discovery ruledefers accrual of a cause ofaction until the plaintiff knew or,exercising reasonable diligence,should have known of the factsgiving rise to the cause of action.Trinity River Auth. v. URSConsultants, 889 S.W.2d 259,262 (Tex.1994). However, thediscovery rule applies only incertain limited circumstances.See Computer Assocs. Int'l, Inc.v. Altai, Inc., 918 S.W.2d 453,456 (Tex.1996). Generally,application has been permitted incases where the nature of theinjury incurred is inherentlyundiscoverable and the evidenceof the injury is objectivelyverifiable. See id. Therequirement of inherentundiscoverability recognizes thatthe discovery rule exceptionshould be permitted only where“it is difficult for the injured partyto learn of the negligent act oromission.” Willis v. Maverick, 760S.W.2d 642, 645 (Tex.1988) Thisis particularly true in the contextof a fiduciary. ee ltai, 918 S.W.2dat 456 Fiduciaries are presumedto possess superior knowledge,and the injured party is presumedto possess less information thanthe fiduciary. See id. While aperson owed a fiduciary duty hassome responsibility to ascertainwhen an injury occurs, it may besaid that the nature of the injuryis presumed to be inherentlyundiscoverable. Courseview, Inc.

v. Phillips Petroleum Co., 158Tex. 397, 312 S.W.2d 197, 205(1957). The issue in a breach offiduciary duty case is, thus, whenthe plaintiff knew or should haveknown, with the exercise ofreasonable diligence, of the legalinjury giving rise to the right tosue. In re Fawcett, 55 S.W.3d214, 219 (Tex.App.-Eastland2001, pet. denied)”

Conte v. Ditta, 287S.W.3d at 34-35.

e. Bonds: Executors,Administrators and GuardiansStatute. Section 16.004 says actionsagainst executors, administrators andguardians and their bonding agents,must be brought within four years oftheir death, resignation, removal ordischarge.

f. Accountings andReleases:

i. Guardians andDependent Administrators. TheSection 16.004 provisions are shortenedwith the proper notice and pleading of afinal in court supervised proceedings.For an excellent treatment of thisproblem see Joyce Moore, “Releasesand Receipts and Judicial Accountings,”Chapter 27, 2008 Advanced EstatePlanning and Probate Course.

ii. IndependentExecutors. Before 1999 there was noclear means for an independentexecutor to obtain a discharge orrelease.

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(1) In particular,section 151 (d) stated that an executorcould require a receipt from abeneficiary but “...shall not require awaiver or release from a distributee as acondition of delivery of property...”

(2) In 1999, theState legislature enacted Sections 149Dthrough 149G. This now allows ameans for an independent executor toobtain a judicial discharge of liability forall matters that are “fully and fairlydisclosed.” Section 149D.

iii. Trustees. A court’sapproval of a final account and orderclosing estate may result in a dischargeof the personal representative. But thatmay not be a release of the fiduciary orhis bondsman. Texas State Bank v.Amaro, 87 S.W.3d 538, 544-45 (Tex.2002). At best it is only a release to theextent fo “fair and full” disclosure. Tothat extent that the approval of theaccounting will represent a bar isdependent upon notice and res judicata.See Coble Wall Trust Co. Inc. V.Palmer, 859 S.W. 2d 475, 481(Tex.App. – San Antonio 1993, writdenied).

6. LACHES A related issue to thestatute of limitations is laches. There isvery little law in Texas applying lachesto trust litigation. Most of it is old anddeals with repudiation of a trust by atrustee.

a. Two Uses. Bogert onTrusts, 2 , sets out two bases fornd

laches at Section 948.

i. First, when there isno applicable statute of limitations,laches will bar a beneficiary when hehas “inexcusably” delayed and it hascaused prejudice to the trustee. Bogertgives examples of delay in complainingabout sales or mortgages of trustproperty. (Footnotes 4 and 5 at page583).

ii. Second, on page584 Bogert notes that even if there is astatute of limitations, and that time hasnot run, the courts have sometimesgranted the defense of laches.

b. Applies to Settlors andTrustees as well as Beneficiaries. Atfootnote 6 and 7 on page 583, Bogertnotes that laches can also apply tosettlors or trustees.

c. Affirmative Defense.Laches is a frequently pled as anaffirmative defense that must be pled bythe defendant. See Tex. R. Civ. P. 94. As stated in Bogert, the theory in Texasunderlying laches is that the stalenessof a claim will prejudice a defendant ifthe claim is not barred. Stevens v.State Farm Fire & Cas. Co., 929 S.W.2d665, 672 (Tex. App.—Texarkana 1996,writ denied).

d. Elements. Laches is notmere delay; it is delay that works adisadvantage to another. Ross’ Estatev. Abrams, 239 S.W 705, 709 (Tex. Civ.App.—San Antonio 1922), aff’d, 250S.W. 1019 (Tex.Comm’n App. 1923,judgment adopted). There are twoelements that must exist for laches tobar a claim:

29

i. an unreasonabledelay by one having a legal or equitablerights in asserting those rights and

ii. a good faith changeof position by another (generally thetrustee) to her detriment because of thedelay.

Rogers v. Ricane Enters.,Inc., 772 S.W.2d 76, 80 (Tex. 1989); Inre Jindal Saw Ltd., 264 S.W3d 755, 760(Tex. App.—Houston [1st Dist.] 2008,orig. proceeding). Delay alone is notenough to establish laches, there mustbe injury or prejudice. Tribble &Stephens Co. v. RGM Constructors,L.P., 154 S.W.3d 639, 669 (Tex.App.—Houston [14th Dist.] 2004, pet.denied). Laches is a question of factthat must be determined by consideringall the circumstances in a particulardispute. Tribble, 154 S.W.3d at 669. The defendant bears the burden ofproving laches. City of Fort Worth v.Johnson, 388 S.W.2d 400, 403 (Tex.1964).

e. Relation to Statute ofLimitations. Laches is generally notappropriate when the controversy is oneto which a statute of limitations applies. Graves v. Diehl, 958 S.W.2d 468, 473(Tex. App.—Houston [14th Dist.] 1997,no pet.). In certain exceptionalcircumstances, however, laches maybar a claim in a period shorter than theapplicable statute of limitations. Graves, 958 S.W.2d at 473. Forexample in Stevens v. State Farm, thecarrier asserted laches against thepolicy holder’s claim for additionalmoney for damages to home. The claimwas made within the statute of

limitations but after the policy holderrazed his home following a fire and builta new one. The court of appealsconcluded that the summary judgmentevidence did not conclusively establishlaches. 929 S.W.2d at 672.

f. Removal. The TexasSupreme Court left open the possibilityof the application of laches in a removalaction. See Ditta v. Conte, 298 S.W.3d187, 192 (Tex. 2009). In that case, theCourt held that removal of a trustee isnot subject to a limitations analysis. Id. The Court, however, expressly did not“pass on whether equitable defenses,such as laches or estoppel, may applyto removal actions.” Id. at n.27.

g. Old Repudiation Cases.In cases before the enactment of theTrust Code statute of limitations, courtsheld that laches did not bar abeneficiary from suing a trustee until thetrust had been clearly and unequivocallyrepudiated and the beneficiary hadnotice of the repudiation. Murphy v.Johnson, 54 S.W.2d 158, 164 (Tex. Civ.App.—Austin 1932, writ dism’d). Thesame applied with a resulting trust. Thebeneficiary of a resulting trust is notbarred from enforcing a trust merely bydelay. Atkins v. Carson, 467 S.W.2d495, 501 (Tex. Civ. App.—San Antonio1971, writ ref’d n.r.e.). It is only wherethe trustee under the resulting trustrepudiates the trust and the beneficiaryhas knowledge of the repudiation thatthe beneficiary may be barred by lachesfrom enforcing the trust. Id.

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h. Restatement. WhileTexas authority on this issue is limited,the Restatement of Trusts providesguidance.

i. Factors Considered. Abeneficiary may lose her right to sue atrustee for breach of trust because oflaches. As set out in the Restatementof Trusts, in determining if a beneficiaryis barred by laches in pursuing a breachof trust by the trustee, the court willconsider among others the followingfactors:

i. the amount of timebetween the commission of the breachof trust and the bringing of suit;

ii. whether thebeneficiary knew or had reason to knowof the breach of trust;

iii. whether thebeneficiary was incapacitated;

iv. whether thebeneficiary has a present or futureinterest;

v. whether thebeneficiary had complained of thebreach of trust;

vi. the reasons for thedelay in suing;

vii. change of positionby the trustee, including loss of rightsagainst third persons;

viii. the death ofwitnesses or parties;

ix. hardship to thebeneficiary if relief is not given;

x. hardship to thetrustee if relief is given.

Restatement (Second)Trusts §219.

j. Damages vsEnforcement. While laches may bar abeneficiary’s suit for damages against atrustee, laches does not preclude thebeneficiary from enforcing the trust. Restatement (Third) Trust §98.

k. Third Parties. In addition,laches may apply against a trustee whofails to timely pursue an action against athird party. The laches that applies tothe trustee also bars the action by thebeneficiary unless the third partyknowingly participated in the breach oftrust and the beneficiary was not himselfguilty of laches. Restatement (Second)Trusts §327.