In the Estate of Margaret Villasana, Deceased--Appeal from Probate Court No 3 of Dallas County

COURT OF APPEALS

COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

IN THE ESTATE OF

MARGARET VILLASANA,

DECEASED.

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No. 08-02-00156-CV

Appeal from the

Probate Court No. 3

of Dallas County, Texas

(TC# 98-365-P3)

MEMORANDUM OPINION

One of five heirs, Rudolph J. Villasana, Jr., appeals a judgment of property division by a Dallas probate court. From the real properties, the trial court variously awarded cash to one heir, and undivided interests in the remaining realty to the other four heirs. Appellant lists ten issues that essentially dispute the sale of certain realty assets and the court=s refusal to make a partitioned, in kind, division. We affirm.

I

Appellant=s mother, Margaret K. Villasana, died intestate in December 1997. She left twenty-two real estate parcels valued between over one million dollars and just under three million dollars. Application for administration was made for the Villasana estate and three commissioners were appointed to partition and distribute the real property.

 

The decedent was survived by three children and two grandchildren. The children include appellant, Rudolph J. Villasana, Jr., and appellees Charles Villasana and Yolanda Villasana Rodriguez. The grandchildren are Michael James Zapata, 46, and Patrick David Zapata, 44. It is undisputed that the three surviving children are each entitled to twenty-five percent of the estate and the two grandsons are entitled to twelve and one-half percent share each. Only one of the heirs, Patrick Zapata, represented to the court that he wanted the realty sold and proceeds distributed in cash. The other four heirs requested distribution of the real estate in kind, and made various but conflicting proposals to accomplish their desires. The trial court appointed three commissioners to make a partition and distribution of the real properties. The commissioners in turn recommended that all the property be sold in bulk. The commissioners also found that to divide the property in kind would devalue the total and render it less marketable.

 

The commissioners also reported, and the record discloses, the heirs could not agree on an equitable division. The commissioners= report sheds further light on the trial court=s challenge. They note the heirs= inability to agree upon an in kind partition, despite the commissioners= sincere encouragement, and the willingness of Aone side@ to be both generous and fair. At least one of the heirs had a business interest among the properties to be distributed, making it unfair to assign that property to another heir and also unfair to the other beneficiaries not to receive this more valuable and saleable tract. Some Harwood/Harry Hines properties were in demand and readily saleable, while others were not. A significant purchase offer was received for certain tracts as a group, and thus to divide those tracts would be injurious to all heirs. The Acrown jewel@ of properties, worth an estimated $350,000, would be denied to any heir who could not repay any over allotment, if assigned the property. And one of the heirs (Patrick Zapata) was financially unable and did not wish to join a group or joint ownership. At the hearing, his attorney effectively argued that if awarded one or two tracts in isolation, Patrick Zapata would not receive his proportionate share of the estate. The commissioners concluded by recommending the bulk sale of all the properties as the fairest to all beneficiaries. This was opposed by all, save Patrick Zapata.

After a hearing, the trial court ordered the sale of the Harwood/Harry Hines and certain other parcels. From the proceeds, Patrick Zapata was to receive the sum of $284,887.56 as his share in the real estate. The remaining real property was to be distributed among the other heirs, according to their respective interests. All the heirs also were awarded their proportionate share of the other non-real estate assets.

II

When a party attacks the legal sufficiency of an adverse finding on an issue on which he has the burden of proof, he must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chemical Co. v. Francis, 46 S.W.3d 237, 241 42 (Tex. 2001). In reviewing a matter of law challenge, the reviewing court must first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If there is no evidence to support the finding, then the reviewing court will examine the entire record to determine if the contrary proposition is established as a matter of law. Id. And the issue should be sustained only if the contrary proposition is conclusively established. Id.

When the party opposing a claim or defense has lost the issue at trial, it may attack

the legal sufficiency of the evidence by establishing that there was no evidence to support

the finding in favor of the opponent=s claim or defense. Garza v. Alviar, 395 S.W.2d 821,

824 (Tex. 1965). We will sustain the challenge when the record discloses: (1) a complete

absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence

 

from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively proves the opposite of the vital fact. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). In reviewing the evidence under a no evidence point, we consider all the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party=s favor. Associated Indemnity Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285 86 (Tex. 1998). In evaluating legal sufficiency, we are required to determine whether the proffered evidence as a whole rises to the level that would enable reasonable and fair minded people to differ in their conclusions. Id. at 286.

A trial court=s conclusions of law are not binding on this Court, and we may make our own legal conclusions. Harlingen Irrigation Dist. Cameron County No. 1 v. Caprock Communications, 49 S.W.3d 520, 530 (Tex. App.--Corpus Christi 2001, pet. denied); Muller v. Nelson Sherrod & Carter, 563 S.W.2d 697, 701 (Tex. Civ. App.--Fort Worth 1978, no writ). AConclusions of law are reviewed de novo as a question of law and will be upheld if the judgment can be sustained on any legal theory supported by the evidence.@ Harlingen Irrigation Dist., 49 S.W.3d at 530. A trial court=s conclusions of law may not be reviewed for factual sufficiency. Id. Conclusions of law may be reversed only if they are erroneous as a matter of law. Stable Energy, L.P. v. Newberry, 999 S.W.2d 538, 547 (Tex. App.--Austin 1999, pet. denied); Hofland v. Fireman=s Fund Ins. Co., 907 S.W.2d 597, 599 (Tex. App.--Corpus Christi 1995, no writ). Incorrect conclusions of law do not require reversal, provided that the controlling findings of fact support a correct legal theory. Stable Energy, 999 S.W.2d at 547.

 

III

While appellant lists a total of ten issues, we agree with appellee that the issues may be logically divided into three groups. In his first group of seven issues, appellant argues for an in kind distribution of the real estate to all the heirs. He also argues against a partial sale and distribution to Patrick Zapata, and against awarding an undivided interest in the remaining properties. Appellant=s next group of two issues argues against the trial court=s distribution of the remaining estate, including a cause of action, because there was no evidence to support that distribution. And finally, appellant urges error against the trial court=s finding that the administrative costs were $300,000.

In his first set of issues, appellant argues that Texas law favors partition in kind of jointly owned property, rather that sale and division. He cites Adams v. Adams, 205 S.W.2d 801, 803 (Tex. Civ. App.--Waco 1947, no writ). In a partition and trespass to try title context, the court held the law looks with favor upon a partition in kind of jointly owned property, rather than a sale and division of the proceeds derived therefrom. Id. (citing Humble Oil & Refining Co. v. Lasseter, 95 S.W.2d 730 (Tex. Civ. App.--Texarkana 1936, writ dism=d)). Appellant also argues that the probate code requires the appointed commissioners to make a fair distribution in the following order:

(c) Partition by Commissioners. The commissioners shall make a fair, just, and impartial partition and distribution of the estate in the following order:

(1) Of the land or other property, by allotting to each distributee a share in each parcel or shares in one or more parcels, or one or more parcels separately, either with or without the addition of a share or shares of other parcels, as shall be most for the interest of the distributees; provided, the real estate is capable of being divided without manifest injury to all or any of the distributees.

 

(2) If the real estate is not capable of a fair, just and equal division in kind, but may be made so by allotting to one or more of the distributees a proportion of the money or other personal property to supply the deficiency or deficiencies, the commissioners shall have power to make, as nearly as may be, an equal division of the real estate and supply the deficiency of any share or shares from the money or other property.

(3) The commissioners shall proceed to make a like division in kind, as nearly as may be, of the money and other personal property, and shall determine by lot, among equal shares, to whom each particular share shall belong.

Tex. Prob. Code Ann. ' 380(c) (Vernon 2003).

Appellant argues that because the trial court appointed commissioners under Probate Code section 380(a), that necessarily means the trial court found the estate was capable of partition in kind. We do not agree. First, there is no such finding by the trial court.[1] Additionally, appellant ignores section 380(c)(2) providing for circumstances when in kind division cannot be accomplished fairly. Tex. Prob. Code Ann. ' 380(c)(2) (Vernon 2003). The appellant notes evidence from one commissioner, an appraisal expert, as well as some of the parties, that the real property was capable of division in kind. Appellant duly notes the trial court=s findings that the real property could not be divided in kind because the parties disagreed on an equitable division in kind. Further the selling price of the properties could decrease if sold separately. Appellant neglects to mention here, that the commissioners found the properties could not be distributed in kind, that the individual aggravate value, versus assemblage value, was significant, and that Patrick Zapata did not desire in kind distribution, as well as manifest Ainjustice@ to Patrick Zapata.[2]

 

Charles Villasana counters first, that in partition cases, the reviewing court is precluded from reversing the trial court=s judgment unless the evidence of unfairness is conclusive. Grimes v. Collie, 733 S.W.2d 338, 341 (Tex. App.--El Paso 1987, no writ) (citing Grimes v. Hall, 211 S.W.2d 956 (Tex. Civ. App. Eastland 1948, no writ)). Appellee relies heavily upon Cecola v. Ruley, 12 S.W.3d 848, 855 (Tex. App.--Texarkana 2000, no pet.). There, the court observes:

The language in Texas Rule of Civil Procedure 770 requiring a showing that the land is incapable of partition in kind does not mean incapable in a physical sense. Land could be divided into microscopic fractional pieces, but the court must look to determine if a partition in kind would be impracticable, given the small size of some interests, whether the divided interest would have an equal interest relevant to its percentage of the whole, and whether the value of the share of each would not be materially less than his share of the money equivalent that would be obtained for the whole.

If the property can be divided in kind without materially impairing its value, a sale will not be ordered, but when dividing the land into parcels causes its value to be substantially less than its value when whole, the rights of the owners are substantially prejudiced. Substantial economic loss is one of the significant factors that would warrant a sale in lieu of a partition in kind. . . . [B]ut even if the two parts are divided into equal value, if the value as a part of the larger tract has been greatly diminished, this also should be considered in determining whether or not a division in kind would be fair and equitable.

Cecola, 12 S.W.3d at 855. We agree.

 

Next appellant finds fault with the trial courts finding of Amanifest injustice@ instead of the statutory language of Amanifest injury.@ See Tex. Prob. Code Ann. ' 380(c)(1). This finding is in relationship to Patrick Zapata=s interest. Appellant reiterates his argument from Adams, 205 S.W.2d at 803--that the law favors in kind distribution rather than sale. Appellant complains the commissioners did not consider the different methods available for arriving at a fair, just, and impartial division. Specifically, the commissioners did not consider grouping properties together, dividing the property on a percentage basis, or encumbering certain parcels. However, Commissioner Hutchison=s testimony also observed that the commissioners would have had to have much more information, incur substantial additional costs, that the property could not be divided in kind, and ultimately, to do so would reduce the value of the properties by half. We have already noted above other reported concerns of the commissioners. In any event, it is ultimately the trial court, not the commissioners, who must determine whether or not the properties can be divided in kind. Rayson v. Johns, 524 S.W.2d 380, 382 (Tex. Civ. App.--Texarkana 1975, writ ref=d n.r.e.).

Appellant next contends, in a variation of his Ainjury@ argument, that certain parcels should not have been sold to pay Patrick Zapata his share of the real estate in cash. Primarily, appellant contends the experts testified a Aforced sale@ of a few properties would diminish the value of these properties and injure the estate. Actually this testimony showed the property values would be higher if sold in bulk, which was opposed by appellant and most others. Testimony also showed that a division of the properties would devalue the total and result in manifest injury to the beneficiaries. Specifically, Commissioner Hutchison testified that to divide the properties in kind could devalue the total and render it less marketable. The expert Jon Duperier did opine that in a liquidation, forced sale of individual properties would result in discounted prices. Appellant=s argument however, also overlooks other evidence, that certain properties had substantial offers on them, were in demand, and were readily saleable. Specifically, some tracts had an offer of $55 per foot, $20 per foot higher than recent values when appraised separately. These were the very properties ordered sold by the trial court, in order to satisfy the minority interest of Patrick Zapata and administration costs.

 

Also in the first group of issues, specifically Issue Four, appellant reiterates his attack on the Patrick Zapata sale and cash award, and dividing the remainder of the tracts without partition to the other heirs. Zapata, he says, was treated in a favored manner, the others in a quite different manner. In a related challenge of Issue Five, this argument is again reiterated, by degree, suggesting the trial court erred in awarding an undivided interest in the remainder of the estate, to all but Zapata. He argues that the applicable code mandates title to be vested in the distributees of the respective shares. See Tex. Prob. Code Ann. '380(e). Other than the code, appellant cites no authority. This section provides:

(e) Action of the Court. Upon the return of such report, the court shall examine the same carefully and hear all exceptions and objections thereto, and evidence in favor of or against the same, and if it be informal, shall cause said informality to be corrected. If such division shall appear to have been fairly made according to law, and no valid exceptions are taken to it, the court shall approve it, and shall enter a decree vesting title in the distributees of their respective shares or portions of the property as set apart to them by the commissioners; otherwise, the court may set aside said report and division and order a new partition to be made.

Id. Appellant does not consider the requirements of this section that the division proposed by the commissioners is subject to exceptions, objections, other evidence, and then if the division is fairly made, with no valid exception, the court shall approve it and vest title as argued. Id. We also observe the permissive language of the statute, specifically the legislature=s use of Amay.@ Id. Three of the heirs, representing seventy-five percent of the estate, objected to the commissioners= report. Appellant himself objected to the report. And finally, the report itself did not Aset apart@ a division.

Appellant continues that no or insufficient evidence supports the trial court=s finding that the assemblage value was $2,724,575. He suggests this figure to properly be $2,727,840. Even if appellant were correct, such error would be harmless. See Tex. R. App. P. 44.1(a)(1). De minimus non curat lex.[3]

 

Appellant avers that the trial court=s finding that the aggregate value of the real property if sold separately, was $1,210,920. The argument is based on the fact the trial court sustained appellant=s objection to the DCADS tax appraisal figures in one column of one exhibit. This contention appears to be technically correct. However, we also find considerable evidence, and indeed appellant argues, that a piecemeal sale of individual properties would significantly diminish the total value of the estate. As such, the finding, even if erroneous, is harmless. Tex. R. App. P. 44.1(a)(1).

The trial court conducted an extensive hearing and followed many of the recommendations of the commissioners, but also considered considerable other evidence. It appears to us that the trial court assiduously sought to accommodate not only a principal aim of appellant, but also the majority interests in the estate--to hold the family property together, and that the properties not be sold in bulk, as recommended by the commissioners.

 

Generally, where the evidence is conflicting or admits of more than one inference it is a question of fact for the jury or the trier of facts whether or not a partition in kind is feasible or a sale for division necessary. Kuehn v. Wishard, 452 S.W.2d 5, 9-10 (Tex. Civ. App.--Houston [14th Dist.] 1970, writ ref=d n.r.e.) (citing Adams, 205 S.W.2d at 803; Burton v. Williams, 195 S.W.2d 245, 247 (Tex. Civ. App.--Waco 1946, writ ref=d n.r.e.); Robertson v. Robertson, 425 S.W.2d 707, 708 (Tex. Civ. App.--Houston [14th Dist.] 1968, no writ)). We recognize, as argued by appellant, that the right to have property partitioned in kind is a valuable right. Pfefferv. Meissner, 286 S.W.2d 241, 247 (Tex. Civ. App.-- Galveston 1955, writ ref=d n.r.e.). However, the law likewise does not favor compelling an owner to sell his property against his will (but prefers a division in kind when such can be fairly and equitably made). Rayson, 524 S.W.2d at 382 (citing Amerada Petroleum Corp. v. Cheesman, 223 S.W.2d 74 (Tex. Civ. App.--San Antonio 1949, writ ref=d)). The trial court obviously tried to accommodate the majority interests in the estate, including appellant=s, by not following the commissioners= recommendation of bulk sale. See id. The trial court carefully crafted an equitable remedy that protected the minority interest of Patrick Zapata, by ordering the sale of the fewest properties at the greatest possible price, under the circumstances. See Campbell v. Tufts, 3 S.W.3d 256, 260 (Tex. App.--Waco 1999, no pet.) (court exercising its powers of equity in partition suit need not partition the property by lot when A>the interests of the parties in the realty to be partitioned are unequal.=@ (quoting Grimes v. Hall, 211 S.W.2d 956, 958 (Tex. Civ. App. Eastland 1948, no writ)). Appellant vehemently argued that the properties should be held and not sold. This was accomplished to the greatest interest and equity of all. Faced with conflicting evidence on the issue or evidence admitting of more than one inference, the determination is for the jury or the trier of fact, based upon a preponderance of the evidence. Burton, 195 S.W.2d at 247. We cannot conclude that the evidence shows unfairness to appellant. Grimes, 733 S.W.2d at 341.

Appellant=s first group of seven issues are overruled.

In Issue Eight, appellant complains of the trial court=s distribution of all the remaining assets (excluding the real estate). The distribution of the remaining assets was exactly according to the heirship interests. The gravamen of this complaint is that the hearing was about the commissioners= report and no other evidence was taken. The Probate Code specifically requires that the judgment of the court in a proceeding to declare heirship shall declare the names and places of residence of the heirs of the decedent, and their respective shares and interests in the real and personal property of such decedent. Tex. Prob. Code Ann. ' 54 (Vernon 2003). The heirship interests were undisputed. Appellant does not demonstrate, nor do we perceive any harm to appellant. Tex. R. App. P. 44.1(a)(1). This issue is also overruled.

 

In his related Issue Nine, appellant again complains of the judgment=s pro rata award, specifically attacking the pro rata award of an interest in a lawsuit against two heirs for rent on one of the properties. He argues this is not just and fair to reward the very defendants against whom the actions are asserted. The only reference to the record relating to this lawsuit is found in the First Amended Application for Administration at page two. We believe this error, if any, is waived. See Tex. R. App. P. 38.1(h). Even so, the only legal argument, supported by authority, asserts that the judgment is somehow a Mary Carter agreement, which is void, citing Elbaor v. Smith, 845 S.W.2d 240, 250 (Tex. 1992). We do not discern how the trial court=s judgment A. . . create[s] the likelihood that a less culpable defendant will be hit with the full judgment.@ Id. This issue is overruled.

In his last issue, appellant challenges the trial court=s finding that the administrative costs of the estate were $300,000. At the hearing, the administrator told those present that the outstanding administrative expenses incurred were $100,000 and taxes owed were $45,000. Appellant complains that no evidence was taken and that no one addressed potential expenses for the sale of real properties. The trial court, however, made supplemental findings of fact and conclusions of law that noted: A[T]he issue of remaining administrative costs of the estate is always before the Court, and must be given due consideration.@ Appellant fails to point to any administration expenses that the trial court has already approved. We can only conclude the trial court will properly and fairly hear any complaints or evidence by appellant or others before approving payment of expenses of the estate. See Tex. Prob. Code Ann. '' 262, 319 inter alia. Appellant=s last issue is overruled.

 

The judgment of the trial court is affirmed.

DON WITTIG, Senior Justice

August 29, 2003

Before Panel No. 5

Larsen, McClure, and Wittig, JJ.

(Wittig, J., sitting by assignment)

 

[1]We acknowledge that the trial court should not appoint the commissioners if it has already determined the estate is incapable of partition. See Tex. Prob. Code Ann. ' 380(a). However, the fact that the trial court appointed commissioners does not preclude the court=s final or later determination that the estate is not capable of partition. See id.

[2]Appellant does mention most of these other findings, scattered amongst his first seven issues.

[3]The law does not cure minimal matters. In any event, appellant has waived this point by failing to accurately cite to a voluminous record. Tex. R. App. P. 38.1(h).