In re Delp

1

In the Matter of the Guardianship of Gertrude M. Delp, an Incapacitated Person

No. 02-22-00300-CV

Court of Appeals of Texas, Second District, Fort Worth

May 25, 2023

On Appeal from Probate Court No. 2 Tarrant County, Texas Trial Court No. 2020-GD00190-2-A

Before Sudderth, C.J.; Kerr and Womack, JJ.

MEMORANDUM OPINION

Elizabeth Kerr Elizabeth Kerr Justice

This case pits brother and sister against each other in a dispute over their elderly mother. After a bench trial involving Robert Kyle Delp's accusations of malfeasance lodged against Dianna Delp Gowdey, the probate court ordered that Dianna^[1] be removed as Gertrude ("Trudy") M. Delp's agent under both a healthcare power of attorney and a statutory durable power of attorney and entered conclusions of law that Dianna had breached formal and informal fiduciary duties owed to their mother.

Dianna appeals, arguing that Kyle had not pleaded the existence or breach of an informal fiduciary duty (and that it was not tried by consent); that Kyle lacked standing to challenge Dianna's actions outside her and Trudy's formal fiduciary relationship; and that the evidence was insufficient to establish that Dianna had breached her formal fiduciary duties.

Concluding that sufficient evidence existed to support the probate court's removing Dianna as Trudy's agent under the statutory durable power of attorney,^[2] we will affirm.

Background

Trudy who has experienced "progressive mental deterioration . . consistent with her dementia diagnosis," has five adult children. In June 2019, when she was 84, Trudy executed a statutory durable power of attorney designating her oldest daughter, Linda, as her agent and son Billy as successor agent. At the same time, Trudy appointed Dianna as her agent under a durable power of attorney for healthcare, with daughter Donna as the alternate.

Dianna had been living rent-free in a house that Trudy owned on Maryanna Way in North Richland Hills, Texas, although beginning in roughly March 2020, Dianna moved in with Trudy and cared for her at Trudy's home on Cardinal Lane, also in North Richland Hills. A few months later, Dianna arranged for a mobile notary public's services so that Trudy could execute a quitclaim deed transferring Trudy's interest in the Maryanna Way house to Dianna, a transaction that Adult Protective Services later found to have involved financial exploitation.^[3]

Shortly after that transaction, in mid-June 2020 Dianna took her mother to a new attorney, and Trudy signed a new statutory durable power of attorney (the 2020 POA), replacing Linda with Dianna as agent.^[4] Thus empowered, in and after June 2020 Dianna took control of some of Trudy's bank accounts, social-security payments, and credit cards.

In July 2020, Kyle applied to be appointed Trudy's guardian and for ancillary temporary relief designed to keep Dianna from taking any actions concerning the Maryanna Way property-which he pleaded constituted a "significant portion" of Trudy's net worth that Dianna had "taken"-and, broadly speaking, to keep Dianna from accessing Trudy's funds.^[5] To support his application for temporary relief, Kyle pleaded that he had "seen evidence that [Dianna] ha[d] taken a valuable asset from [Trudy] being the real property located at . . . Maryanna Way[,] North Richland Hills, Texas[,] and [was] in the process of either disposing of the property or obtaining a home improvement loan or home equity loan against the property."

The probate court denied Kyle's requested injunctive relief against Dianna, and a little over a month later, in September 2020, the same law firm that was representing Trudy in the guardianship proceeding filed an answer on Dianna's behalf in the severed case. An appointed Court Visitor met with Trudy in December 2020 and submitted a report in the guardianship proceeding opining that Trudy was "unable to make medical or financial decisions."

After being hospitalized for a fall at the end of April 2021 and again for several falls in June 2021, Trudy ultimately moved to a nursing home. At the March 2022 trial, Dianna testified to her "intent for [Trudy] to stay [there] until she either recovers or passes away."^[6]

In November 2021, Kyle amended his ancillary proceeding to seek a declaration that Trudy had lacked capacity to sign the 2020 POA, so that the earlier POA naming Linda as agent was controlling. Based on Dianna's alleged breach of fiduciary duties and her neglect of Trudy's health and wellbeing, Kyle also sought to remove Dianna as Trudy's ostensible agent under the 2020 POA and as the named agent under the 2019 healthcare power of attorney.

After a two-day bench trial, the probate court entered its judgment that because Dianna had "breached her fiduciary duty," Dianna was "removed as agent in all powers of attorney for health care and all durable powers of attorney executed by" Trudy. See Tex. Est. Code Ann. § 753.001 (empowering probate court to remove agent upon finding breach of fiduciary duties owed to principal). The probate court ordered Dianna to file an accounting of her actions taken under the 2020 POA but denied Kyle's requested declaratory relief.

Later-entered fact findings recited several facts relating to Dianna's breach of her formal fiduciary duty as agent under the 2020 POA, which Dianna's third issue challenges as being legally insufficient; we will discuss that issue first.^[7]

Discussion

Dianna does not dispute that an agent under a statutory durable power of attorney owes formal fiduciary duties to her principal and can be removed for a breach of those duties.^[8] See id. §§ 751.101 752.051, 753.001. Among them are the duties to act in good faith, to avoid conflicts, and to act loyally, which prohibits a fiduciary from using her position to benefit at the principal's expense-that is, an agent must not engage in self-dealing. Tex. Bank &Tr. Co. v. Moore, 595 S.W.2d 502, 508-09 (Tex. 1980). Because all transactions between a fiduciary and her principal are presumptively fraudulent, the fiduciary bears the burden to establish the validity and fairness of any particular transaction in which she is involved. E.g., id. at 507 (noting that "once a fiduciary or confidential relationship is established, a presumption arises that a gift from the principal to the fiduciary is unfair and invalid" and holding that "the presumptive unfairness and invalidity of the transactions in question st[oo]d unrebutted in any respect by" the defendant fiduciary); Jurgens v. Martin, 631 S.W.3d 385, 411 (Tex. App.-Eastland 2021, no pet.); Lesikar v. Rappeport, 33 S.W.3d 282, 298 (Tex. App.-Texarkana 2000, pets. denied).

Dianna correctly notes that when a party attacks the legal sufficiency^[9] of an adverse finding on an issue on which the party had the burden of proof-here, to show the fairness and validity of her transactions with Trudy, her principal-the party must demonstrate on appeal that the evidence establishes as a matter of law all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). In reviewing a "matter of law" challenge, we must first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Dow Chem. Co., 46 S.W.3d at 241. If no evidence supports the finding, we will then examine the entire record to determine if the contrary position is established as a matter of law. Id. We will sustain the issue only if the contrary position is conclusively established. Id. Evidence conclusively establishes a fact when it leaves "no room for ordinary minds to differ as to the conclusion to be drawn from it." Int'l Bus. Machs. Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224, 235 (Tex. 2019).

A trial court's findings of fact have the same force and dignity as a jury's answers to jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). As with jury findings, a trial court's fact-findings on disputed issues are not conclusive, and, when the appellate record contains a reporter's record, an appellant may challenge those findings for evidentiary sufficiency. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); Super Ventures, Inc. v. Chaudhry, 501 S.W.3d 121, 126 (Tex. App.-Fort Worth 2016, no pet.). We review the sufficiency of the evidence supporting challenged findings using the same standards that we apply to jury findings. Catalina, 881 S.W.2d at 297.

Dianna challenges the evidentiary sufficiency to support the following findings: • "Dianna used Trudy's credit cards and funds to benefit Dianna."

• "Dianna had little knowledge as to the issues with the Maryanna House, the insurance lawsuit[,] and settlement. The alleged damage occurred when Dianna was living rent free in the Maryanna House. When there was a water pipe break, no claim was filed."

• "When questioned about the Wells Fargo account Dianna did not know what several checks were written to pay for (or if actually for the benefit of Trudy)."

• "Dianna stated the account was used to pay the Petroleum Club account, but admitted Trudy could not go to the Club."

• "Dianna hired the law firm of Whitaker, Chalk, Swindle &Schwartz, PLLC ('Whitaker Chalk') to represent Trudy and Dianna in defending the Guardianship Application brought by Kyle. Dianna caused in excess of $60,000.00 to be paid to Whitaker Chalk to defend Trudy when the law firm was also defending Dianna. There was no delineation between the services rendered by the law firm for Dianna versus the services rendered for Trudy. Dianna only contributed $1500.00 of her own funds to pay Whitaker Chalk for representing Dianna and Trudy (the rest of the bills were paid from Trudy's funds)."

• "Many checks contained

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