In re Estate of Childs

IN THE ESTATE OF Marjorie A. CHILDS, Deceased

No. 04-18-00900-CV

Fourth Court of Appeals San Antonio, Texas

April 22, 2020

MEMORANDUM OPINION

From the Probate Court No. 2, Bexar County, Texas

Trial Court No. 2014PC0056

Honorable Tom Rickhoff, Judge Presiding

Opinion by: Patricia O. Alvarez, Justice

Sitting: Patricia O. Alvarez, Justice Irene Rios, Justice Beth Watkins, Justice

AFFIRMED

Mollie Allen Childs appeals a judgment declaring an agreement between Mollie and her two sisters regarding the ownership of two brokerage accounts to be valid and enforceable based on a jury's findings. The jury found the agreement was supported by consideration and Mollie's failure to comply with the agreement was not excused by a mutual mistake. On appeal, Mollie challenges the legal and factual sufficiency of the evidence to support the jury's findings. Mollie also challenges the award of attorney's fees. We affirm the probate court's judgment.

BACKGROUND

This is the second appeal to this court from the underlying probate case. In the first appeal, this court reversed a summary judgment in Mollie's favor holding "Mollie did not conclusively establish either the lack of consideration or a mutual mistake of material fact." In re Estate of Childs, No. 04-15-00623-CV, 2016 WL 3452624, at *4 (Tex. App.—San Antonio June 22, 2016, no pet.) (mem. op.) (Childs I). We then remanded the cause for further proceedings. Id.

Mollie, Susan Addison, and Pamela McCaskill are the three daughters of Marjorie Allen Childs. Marjorie was the only daughter of Bertha Allen.

Bertha's friend, Alma Fehr, bequeathed Bertha some shares of stock in Fehr Baking Company. By the time Bertha executed her will in 1980, the shares of stock in Fehr Baking Company had been converted into shares of stock in Campbell Taggart Associated Bakeries, Inc. Bertha's will devised those shares of stock under the following provision of her will:

II.

I give all shares of stock owned by me in Campbell Taggart Associated Bakeries, Inc. at the time of my death to my daughter, Marjorie Allen Childs, with the request that she use only the income in cash dividends from said shares during her lifetime and that on her death she make provision for said shares to be divided equally among her daughters, or the issue of any deceased daughter. Should it become wise at any time to sell these shares, it is my desire that the proceeds, or any reinvestment of the proceeds, be held and disposed of by my daughter at her death in the same manner.

Bertha passed away in 1981. At some point, Campbell Taggart was acquired by Anheuser Busch Companies, and the Campbell Taggart shares then held by Marjorie were converted into shares of stock in Anheuser Busch.

In 1992 or 1993, Marjorie placed some of the Anheuser Busch shares into a joint brokerage account which she and Mollie could use as leverage to borrow and invest in other stock. Mollie testified the purpose of opening the brokerage account was to diversify Marjorie's assets. While the shares were held in the brokerage account, Marjorie continued to receive the income from the dividends paid on the shares while Mollie received all other income generated by the brokerage account. At some point, the brokerage account was closed. Some of the shares transferred to the brokerage account were sold to pay the brokerage account debt that was owed, and the remainingshares were placed into an account held by a revocable trust. Marjorie and Mollie were the co-trustees of the trust, and Mollie, Pamela, and Susan were the beneficiaries.

On November 20, 2008, Marjorie executed a will containing the following provision regarding the shares of stock she was bequeathed by Bertha:

Pursuant to the requirements of the life estate created for my benefit under Section II of the Will of Bertha Allen, the Anheuser Busch stock, which is derived from the Campbell Taggart Associated, Inc., stock addressed in the aforementioned Section II of Bertha Allen's Will, shall be distributed to my daughters and their descendants, per stirpes. Furthermore, and also pursuant to the requirement of the life estate created for my benefit under Section II of Bertha Allen's Will, if at the time of my death I no longer own the Anheuser Busch stock, then the proceeds or reinvestment of the proceeds shall be distributed to my daughters and their descendants, per stirpes.

In late 2008, Anheuser Busch was acquired by another company, and the Anheuser Busch shares held by Marjorie were redeemed by the acquiring company for approximately $5.8 million. The Anheuser Bush shares then held by the trust were apparently redeemed in a separate transaction than the shares that were never transferred to the brokerage account. The money paid for the shares held by the trust, approximately $1 million, was used to open a transfer on death brokerage account with Raymond James & Associates, Inc. The money paid for the other shares, approximately $4.8 million, was used to open a transfer on death brokerage account with RBC Correspondent Services which the parties generally refer to as the Federated Securities account.¹

Mollie testified she prepared the account applications for both accounts which Marjorie then signed. The Raymond James account listed Mollie as the only beneficiary. The Federated Securities account listed Mollie, Pamela, and Susan as beneficiaries. Although Pamela and Susan received statements for the Federated Securities account and were able to request trades in that account, they did not receive any information regarding the Raymond James account.

After the Anheuser Busch stock redemption, Pamela, Susan, and Mollie began exchanging e-mails regarding the transfer on death accounts and the terms of Bertha's and Marjorie's wills. Pamela, Susan, and Mollie all initially believed Bertha's will gave Marjorie a life estate in the shares of stock she received under Bertha's will with Pamela, Susan, and Mollie as equal remaindermen. In the e-mails, Pamela and Mollie discussed whether the transfer on death accounts altered that disposition in the wills. Although Susan was not as involved in the discussion, she was copied on several e-mails, and sent at least one e-mail asking about the Raymond James account. As a result of their discussions, Pamela, Mollie, and Susan entered into an agreement in 2012 which provided, in pertinent part as follows:

Agreement Regarding Remainder Interests

Of Bertha Allen Life Estate

Pamela Ann Childs McCaskill (Pam), Susan Kaye Childs Addison (Susan), and Mollie Allen Childs (Mollie) are the three daughters and only children of Marjorie A. Childs. For value received and hereby acknowledged Pam, Susan and Mollie hereby agree as follows:

The entire assets subject to the life estate created by the will of Bertha Allen and referenced in the will of Marjorie A. Childs signed November 20, 2008, are contained within 2 brokerage accounts styled "Mollie Childs POA U/W Bertha Allen DTD 12/5/2008 FBO Marjorie Childs Life Tenant". One brokerage account is held under account [number] at Federated Securities, the other under account [number] at Raymond James & Associates. In the event Pamela, Susan and Mollie are living at the time of death of Marjorie A. Childs, the accounts are to be divided and distributed as follows:

The Federated Securities account to be split equally and distributed between Pam and Susan; the Raymond James account to be distributed in its entirety to Mollie.

In the event one or two of the distributees predeceases Marjorie A. Childs, that portion of the assets subject to the life estate that would have been distributed to the heir/heirs shall be distributed in equal parts to the surviving heir/heirs named under the wills of Bertha Allen and Marjorie A. Childs.

Marjorie died on December 17, 2013. After Marjorie's will was admitted to probate, Mollie filed a lawsuit seeking a declaratory judgment that the 2012 agreement was unenforceablebased on mutual mistake or lack of consideration. Pamela and Susan filed various counterclaims including counterclaims seeking to declare the 2012 agreement was valid and enforceable. As previously noted, the probate court initially granted summary judgment in Mollie's favor; however, this court reversed the judgment and remanded the cause to the probate court for further proceedings. See id.

Prior to trial, Pamela and Mollie settled their claims against each other. After three days of evidence was presented to the jury, the jury was charged with answering the following questions on the issues of consideration and mutual mistake:

QUESTION NO. 1:

With respect to the 2012 Agreement [PX26], do you find that Mollie did receive a benefit or Susan did incur a detriment?

Answer "Yes" or "No."

Answer: __________

QUESTION NO. 2:

Was Mollie Child's failure to comply with the 2012 Agreement [PX26] excused?

Failure to comply with an agreement is excused if the agreement was made as the result of a mutual mistake.

A mutual mistake results from a mistake of fact common to both parties if both parties had the same misconception concerning the fact in question. A mistake by one party but not the other is not a mutual mistake.

A mistake of persons as to their private legal rights and interests is a mistake of fact.

Answer "Yes" or "No."

Answer: __________

The jury answered the first question "yes" and the second question "no."² After denying Mollie's motion for a judgment notwithstanding the verdict, the probate court entered judgment declaring the 2012 agreement to be valid and enforceable and awarding Susan attorney's fees. The probate court subsequently denied Mollie's motion for new trial. Mollie appeals.

SUFFICIENCY

In her first two issues, Mollie challenges the legal and factual sufficiency of the evidence to support the jury's findings.

A. Burden of Proof

Mutual mistake is an affirmative defense. Santos v. Mid-Continent Refrigerator Co., 471 S.W.2d 568, 569 (Tex. 1971) (per curiam); Garza v. Villarreal, 345 S.W.3d 473, 483 (Tex. App.—San Antonio 2011, pet. denied). "'The...