

Opinion issued June 9, 2011. 

 
 
 
 
 
 
 
In The
Court of Appeals
For The
First District of Texas
 


















 

NO. 01-10-00078-CV
 





















 

ALI AKBAR MOHSENI, Appellant
 
V.
 
GAYE LAURINE HARTMAN, Appellee
 
 

On Appeal from Probate Court No. One
Harris County, Texas
Trial Court Cause No. 360497-403
 
 

O P I N I O N
          In
this probate dispute, an unsecured estate creditor appeals the trial court’s
summary judgment in favor of the estate’s independent executrix.  The creditor sued the executrix,
individually, for breach of fiduciary duty, for various negligence and fraud
claims, and for conversion.  On appeal,
the creditor contends that the trial court erred in granting summary judgment
on his negligence, gross negligence and negligence per se claims.  Specifically, he maintains that the trial
court erred in ruling that the independent executrix owed no legal duty to an unsecured
estate creditor.  We concluded that the
trial court properly granted summary judgment and therefore affirm. 
Background
Ali Mohseni
was an unsecured creditor of Yadollah Mosadegh, the decedent.  In August 2005, Mohseni loaned Mosadegh
$150,000 in exchange for a promissory note. 
The note carried an 18% simple interest rate and was payable in monthly
installments of $2250.  Mosadegh died in
November 2005.  After Mosadegh’s death, Mohseni
filed a claim for repayment against the estate in probate court.  The trial court approved the claim, but it
went unpaid.  
The probate
court appointed Gaye Laurine Hartman as executrix of the estate in January
2006.  In October 2007, Hartman moved to
withdraw, and requested appointment of a substitute independent executrix.  The motion to withdraw stated that the estate
had a value of $800,000, but that it was deeply in debt.  The trial court granted the relief, and it replaced
Hartman that month.  
          In
April 2009, Mohseni sued Hartman.  He
alleged that Hartman failed to pay outstanding payroll, sales, and property
taxes owed for the Garson Restaurant, a property of the estate.  As a result, he alleged, the estate incurred
additional penalties and interest. 
Mohseni claims that, had Hartman not caused the estate to incur these
extra costs, then the estate would have had sufficient money to pay his claim
against it.  
          Hartman
answered and specially excepted to the allegations in the petition, contending
that her duty ran to the estate, not to Mohseni.  Hartman then moved for a traditional summary
judgment, contending that an independent executor generally does not owe a duty
to unsecured creditors of the estate in the payment of estate expenses, and
therefore Mohseni’s negligence and breach of fiduciary duty claims failed as a
matter of law.  Hartman further asserted
that Mohseni’s negligent misrepresentation, common law fraud, and statutory
fraud claims lacked merit because Mohseni did not provide evidence that she had
made any negligent or false representations to him.  Finally, Hartman contended that Mohseni’s
conversion claim lacked merit because Mohseni did not own, possess, or have the
right immediately to possess any estate property.  
Mohseni
responded to Hartman’s motion for summary judgment with an affidavit in which
he averred that Hartman was negligent in failing to timely pay the taxes assessed
on the Garson Restaurant.  In addition,
Mohseni alleged, without providing factual support, that Hartman had stolen
from the estate and had refused an offer to purchase the restaurant.  Finally, Mohseni averred that he had relied
on Hartman’s statements that she would properly perform her duties as executrix
and that this reliance caused him injury. 
The trial court granted summary judgment.
Discussion
Mohseni
contends that the trial court erred in granting summary judgment with respect
to his claims of negligence, gross negligence, and negligence per se.  Mohseni does not brief his trial court claims
for breach of fiduciary duty, negligent misrepresentation, statutory fraud,
common law fraud, and conversion. 
Without briefing on these claims, the trial court’s rulings on them
stand.  Tex.
R. App. P. 38.1(i) (stating that brief “must contain a clear and concise
argument for the contentions made, with appropriate citations to authorities
and to the record.”); see Franz v. Katy
Indep. Sch. Dist., 35 S.W.3d 749, 755 (Tex. App.—Houston [1st Dist.] 2000,
no pet.).  Accordingly, we confine our
discussion to Mohseni’s negligence claims.  

Standard of Review
          We
review de novo the trial court’s ruling on a motion for summary judgment. 
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d
844, 848 (Tex. 2009).  In a traditional
motion for summary judgment, the movant must establish that no genuine issue of
material fact exists and that the movant is entitled to judgment as a matter of
law.  Tex. R. Civ. P.
166a(c).  To determine if the non-movant
has raised a fact issue, we review the evidence in the light most favorable to
the non-movant, crediting favorable evidence if reasonable jurors could do so
and disregarding contrary evidence unless reasonable jurors could not.  See
Fielding, 289 S.W.3d at 848 (citing City of Keller v. Wilson, 168
S.W.3d 802, 827 (Tex. 2005)).
Negligence 
          Mohseni
contends that the summary judgment against him on his negligence claims is
improper because Hartman, as the independent executrix, owed him, an unsecured
creditor, a legal duty to exercise reasonable care in her administration of the
estate, under both the common law and the Probate Code.  In addition, he maintains that public policy
supports this position.    
          A
negligence cause of action has three elements: (1) a legal duty owed by one
person to another, (2) a breach of that duty, and (3) damages proximately
caused by the breach.  D. Houston,
Inc. v. Love, 92 S.W.3d
450, 454 (Tex. 2002). The threshold inquiry in a negligence case is duty. Centeq
Realty, Inc. v. Siegler,
899 S.W.2d 195, 197 (Tex. 1995); Mathis v. RKL Design/Build, 189 S.W.3d 839, 844 (Tex.
App.—Houston [1st Dist.] 2006, no pet.). 
The existence of duty is a question of law for the court to decide from
the facts surrounding the occurrence at issue. Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998); Siegler, 899 S.W.2d at 197; Greater
Houston Transp. Co. v. Phillips,
801 S.W.2d 523, 525 (Tex. 1990).  “The
nonexistence of a duty ends the inquiry into whether negligence liability may
be imposed.”  Van Horn, 970 S.W.2d at 544.  Generally, no duty exists to take action to
prevent harm to others absent certain special relationships or
circumstances.  Torrington Co. v. Stutzman, 46 S.W.3d 829, 837 (Tex. 2000). 
Hartman moved
for a traditional summary judgment solely on the existence of a duty.  We thus do not consider whether Mohseni has
adduced evidence of breach of duty, causation, or damages.  See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993) (holding
that a summary judgment motion must stand or fall on the grounds expressly
presented in the motion); Tex. R. Civ.
P. 166a(c) (“The motion for summary judgment shall state the specific
grounds therefor.”).         
A. Duty of Care of Independent
Executor 
The Texas Probate Code defines an “independent
executor” as “the personal representative of an estate under independent
administration as provided in Section 145 of this Code.”  Tex.
Prob. Code Ann. § 3(q).  The
purpose of section 145—and of independent administration itself—is to free an
independent executor from the expense and control of judicial supervision
except where the Probate Code otherwise provides.  Corpus Christi Bank & Trust v. Alice
Nat'l Bank, 444 S.W.2d 632,
634–35 (Tex. 1969); Bunting v. Pearson, 430 S.W.2d 470, 473 (Tex. 1968); Rowland v. Moore, 174 S.W.2d 248, 249–50 (Tex. 1943);
Eastland v. Eastland, 273 S.W.3d 815,
821 (Tex. App.—Houston [14th Dist.] 2008, no pet.).  
          
This “administration” that the executor performs refers
to the management of the estate of a decedent. 
The estate of a decedent immediately vests in the devisees, legatees,
and heirs at law of the estate, subject to payment of decedent’s debts.  Tex.
Prob. Code Ann. § 37.  As trustee
of the property of the estate, an executor is subject to the fiduciary
standards applicable to all trustees.  Human Soc’y of Austin & Travis Cnty v.
Austin Nat’l Bank, 531 S.W.2d 574, 577 (Tex. 1975).  Thus, the duties of an executor to an estate are those of a
trustee.  Geeslin v. McElhenney, 788 S.W.2d 683, 684–85 (Tex.
App.—Austin 1990, no writ).  Section 230
of the Texas Probate Code codifies the common law concept that the executor has
a fiduciary duty to exercise reasonable care in the administration of the
estate property.  Tex. Prob. Code Ann. § 230 (“The executor or
administrator shall take care of the property of the estate of his testator or intestate as a prudent man
would take of his own property.”); see
also Restatement (Third) of Trusts  §
77 (2007) (stating that trustee has duty to administer the trust as a prudent
person would).   
          An independent executor’s fiduciary
duty runs to the estate’s beneficiaries, and it arises from his status as
trustee of the estate’s property.  Human Soc’y of Austin, 531 S.W.2d at
577; see also Huie v. DeShazo, 922
S.W.2d 920, 922–23 (Tex. 1996) (holding that relationship between executor and
estate’s beneficiaries is one that gives rise to fiduciary duty as matter of
law).  Thus, the independent executor owes a legal duty of care
to the estate and its beneficiaries.  See Frost Nat’l Bank of San Antonio v.
Kayton, 526 S.W.2d 654, 660–61
(Tex. Civ. App.—San Antonio 1975, writ ref’d n.r.e.) (holding that former
temporary administratrix of estate owed legal duty of care under Section 230 of
Probate Code to estate in negligence action brought by permanent administrator); see also Lawyers Sur. Corp. v. Snell, 617 S.W.2d 750, 752 (Tex. Civ.
App.—Houston [14th Dist.] 1981, no writ) (holding that former temporary
administratrix of estate did not owe legal duty of care under Section 230 of
Probate Code to obtain fire insurance for estate property in  negligence action because it was impossible
to obtain such insurance).  In contrast,
an executor does not owe a fiduciary duty to persons who claim an interest in a
decedent’s non-testamentary property; to them, she owes no legal duty of
care.  See In re Ernst, No. 04-10-00319-CV, 2011 WL 192654 (Tex. App.—San
Antonio Jan. 12, 2011, no pet.) (mem. op.) (holding that executor owed no legal
duty under negligence theory to decedent’s sons, who claimed bank accounts upon
her death under a right of survivorship, but were not beneficiaries of any of
decedent’s property under her will).  
          Historically,
some courts of appeals have held that, upon a showing that a decedent’s estate
was insolvent, an independent executor then held
the property in trust for its creditors until the executor wound up the affairs
of the estate.  Farmers’ & Merchants’ Nat’l. Bank of Waco v. Bell, 71 S.W. 570,
572 (Tex. Civ. App. 1902, writ ref’d); see
also Harms v. Ehlers, 179 S.W.2d 582, 583 (Tex. Civ. App.—Austin 1944, writ
ref’d); Palfrey v. Harborth, 158
S.W.2d 326, 327 (Tex. Civ. App.—San Antonio 1942, writ ref’d); Woods v. Bradford, 284 S.W. 673, 675
(Tex. Civ. App.—El Paso 1926, no writ). 
These cases were not concerned, however, with the relationship between
the executor and the estate creditors, but rather with the relationship between
the various creditors and the distribution of the estate corpus.  See
e.g. Farmers’ & Merchants’ Nat’l. Bank, 71 S.W. at 572 (judgment
creditor of estate could not sell estate property under execution because sale
would be inconsistent with rights of other estate creditors).  Moreover, they all predate the enactment of
the Probate Code.  See Acts
1955, 54th Leg.,
p. 88, ch. 55 (eff. Jan.1, 1956), amended
by Acts 1969, 61st Leg., p. 1703, ch. 556, § 2, (eff. June 10, 1969); Acts
1981, 67th leg., p. 2537, ch. 674, § 3, (eff. Sept. 1, 1981) (current version
at Tex. Prob. Code Ann. §
37).  We do not read them to say
that an executor owes a legal duty of care to creditors that imposes individual
liability on the executor, rather than on the estate, for estate debts.  
          Later,
section 37 of the Probate Code clarified that the estate of the decedent immediately vests in the devisees,
legatees, and heirs at law of the estate, subject to payment of decedent’s
debts, and that the executor thus holds the property in trust for the benefit
of those who have acquired a vested right to the decedent’s property under the
will.  Tex.
Prob. Code Ann. § 37.  Relying on
section 37, the Fourteenth Court of Appeals has held that an executor
does not automatically hold the estate property in trust for estate creditors.  FCLT
Loans, L.P. v. Estate of Bracher, 93 S.W.3d 469, 480–81 (Tex. App.—Houston
[14th Dist.] 2002, no pet.).  In FCLT, the court noted that no formal
recognition of a fiduciary relationship between the executor and estate
creditors exists, like the one between the executor and estate
beneficiaries.  Id.  The executor holds the estate property in trust for the
beneficiaries because they have a vested right in that property, but she does
not hold it in trust for the creditors, whose claims against the estate are
contingent.  Id. at 480–81. 
The court observed that no provision in the Probate Code establishes
that an independent executor holds the estate property in trust for those with
claims against the estate.  Id. 
But see Ertel v. O'Brien,
852 S.W.2d 17, 20–21 (Tex. App.—Waco 1993, writ denied) (holding that bank, as
co-executor of estate, breached its fiduciary and statutory duties to creditor
when it failed to pay creditor’s claim against estate and instead paid claims
of bank and other creditors); Ex parte
Buller, 834 S.W.2d 622, 626 (Tex. App.—Beaumont 1992, orig. proceeding)
(holding that independent executor stands in fiduciary relationship with
creditors of estate).  
          Following our sister court in FCLT, we conclude that, under the
present statutory scheme, an independent executor does not hold the estate
property in trust for the benefit of the estate creditors and therefore does
not owe them a fiduciary duty absent any specific undertaking to manage the
creditor’s interests in the case of a bankrupt estate.  93 S.W. 3d at 480–81.
B. Executor’s Duties
under Probate Code Sections 146, 147 and 149C
          Mohseni
further contends that the duties that Hartman owes to estate creditors under
the Probate Code, sections 146, 147, and 149C, justify this suit.  
          Sections 146,
147, and 149C provide creditors who
are aggrieved by an independent executor’s mismanagement with remedies—removal
and claims for payment, by which, when approved, a creditor can obtain a
judgment and execute it against the assets of the estate.  See  Tex.
Prob. Code Ann. §§ 146, 147, & 149C.  In addition, section 149A of the Probate Code
allows creditors to seek an accounting from the executor.  See id. § 149A (“At any time after the
expiration of fifteen months from the date that an independent administration
was created and the order appointing an independent executor was entered by
county court, any person interested in the estate may demand an accounting from
the independent executor.”).  These
provisions do not, however, give an unsecured creditor any guarantee against
financial mismanagement or the insolvency of the estate.  Such rights do not inure to an unsecured
creditor against a debtor who is living. 
An unsecured creditor cannot bring a negligence action against a debtor
who poorly manages his finances and cannot pay a debt.  See Jim
Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986) (“When the
injury is only the economic loss to the subject of a contract itself the action
sounds in contract alone.”).  Nor is
there any indication in the Probate Code that such rights inure to an unsecured
creditor after the debtor’s death.   
1. Sections 146 and 147
Section
146 of the Probate Code imposes a duty on an independent executor to approve
and pay proper claims against the estate.  See Tex.
Prob. Code Ann.    § 146(a)(3)
(“[An independent executor] shall approve, classify, and pay, or reject, claims
against the estate in the same order of priority, classification, and proration
prescribed in this Code”).  But Mohseni
does not contend that Hartman violated section 146 by failing to pay creditors
in the order prescribed by the Probate Code. 
The statutory duty to approve and pay claims against the estate does not
imply or establish a duty of the executor to exercise reasonable care in the
administration of the estate for the benefit of creditors, subjecting an
executor to individual liability beyond the estate’s assets.  Thus, Mohseni cannot rely on section 146 to
support his negligence claims.     
Section
147 of the Probate Code allows a person with a claim for payment against the
estate such as Mohseni to enforce that claim with a suit against the
independent executor for payment from the estate’s assets in accordance with
the provisions of the Probate Code.  Tex. Prob. Code Ann. § 147.  If Mohseni had filed suit against Hartman to
force the estate’s payment of his claim, then section 147 would authorize such
a suit, but he did not.  
          2. Section
149C
Probate
Code section 149C allows an interested party to seek the removal of an
independent executor when she is “guilty of gross misconduct or gross
mismanagement in the performance of the independent executor’s duties.”  Tex.
Prob. Code Ann. § 149C(a)(5) (West Supp. 2009).  The other grounds for removal are: 
(1) the independent executor
fails to return within ninety days after qualification, unless such time is
extended by order of the court, an inventory of the property of the estate and
list of claims that have come to the independent his knowledge;
 
(2) sufficient grounds
appear to support belief that the he has misapplied or embezzled, or that the
independent executor is about to misapply or embezzle, all or any part of the
property committed to his care;
 
(3) he fails to make an
accounting which is required by law to be made;
 
(4) he fails to timely file
the notice required by Section 128A of this code;
 
. . . .  or  
 
(6) he becomes an
incapacitated person, or is sentenced to the penitentiary, or from any other
cause becomes legally incapacitated from properly performing the independent
executor's fiduciary duties.
 
Id. §
149C(a)(1)–(6).      
 
Mohseni,
as an unsecured estate creditor, qualifies as an “interested party.”  Tex.
Prob. Code Ann. § 3(r) (West Supp. 2009) (“‘Interested persons’. . .
means heirs, devisees, spouses, [or] creditors”).  However, the limited nature of the
remedy—removal—and the higher bar for obtaining it—proof of gross
misconduct—make it clear that section 149C does not create an ordinary duty of
care owed to an unsecured creditor that may be breached by mere
negligence.  See Geeslin,
788 S.W.2d at 684 (“[O]ne may not reasonably impute to the Legislature an
intent that the terms ‘gross mismanagement’ or ‘gross misconduct’ should
encompass any and all deviations from ordinary care.”). Rather, “[t]he use of the adjective ‘gross’ indicates that
something beyond ordinary misconduct and ordinary mismanagement is required to
remove an independent executor. Gross is defined as ‘[g]laringly obvious;
flagrant.’”  Kappus v. Kappus, 284 S.W.3d 831, 836
(Tex. 2009) (quoting Am. Heritage
College Dictionary 600 (3d ed. 2000)). 
Therefore, section 149C does not support an ordinary negligence action
under these facts. Moreover, Mohseni does not seek to remove Hartman, and the record shows
that she has resigned.  Rather, he seeks
damages, which are not provided for under this section of the Code.
           Mohseni points to no additional
conduct to support his claims of negligence per se and gross negligence other
than Hartman’s failure to pay his debt and the other debts of the estate.  Accordingly, we find that these claims, like
the negligence claim, fail as a matter of law because an executor does not owe
a duty of care to unsecured creditors in the independent administration of the
estate.  
 
C. Public Policy 
          Mohseni
further asserts that public interest demands that we recognize a common-law
duty of care owed by an independent executor to unsecured creditors. We
disagree.  Any such duty would undermine independent administrations
and conflict with the executor’s duty to administer the estate for the benefit
of the heirs and legatees as delineated in the Probate Code.  Also, it could conflict with the executor’s
statutory duties to other classes of creditors.  
Holding that
an independent executor owes a duty of care to unsecured creditors could in
practice “convert independent administration into court-supervised
administration [because] it would encourage numerous lawsuits challenging
almost every aspect of an executor’s conduct regarding the estate.”  Geeslin, 788 S.W.2d at 684.  More
important, if an independent executor owed a legal duty of care to creditors,
such a duty under certain circumstances could require an executor to act to the
detriment of the estate’s heirs.  But her
role is different—she stands in the shoes of the decedent and his heirs, whose
interest can be adverse to those of estate creditors, particularly in choosing
among which unsecured debts to pay.  See Smith v. O’Donnell, 288 S.W.3d 417,
421 (Tex. 2009) (“An executor is a personal representative who ‘stands in the
shoes’ of the decedent.”) (citing Belt v.
Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780, 787 (Tex.
2006)); see also Boyles v. Gresham,
309 S.W.2d 50, 51 (Tex. 1958) (“The creditor’s interest is necessarily
antagonistic to the distributees, to the estate.”).  The Probate Code recognizes this antagonism,
providing that the creditor should sue the executor to pursue its direct claim
against the estate.  See  Tex. Prob. Code Ann. § 147.  The creditor’s remedy is to seek a
judgment against the executor in her capacity as the estate administrator and
seek execution against the estates’ assets.  Id.  As a matter of policy, we conclude that
it is unwise to extend such a right absent express Legislative intent.
Conclusion
          We
hold that an independent executor does not owe a general legal duty of care to
the unsecured creditor of an estate in the management of the estate’s
assets.  We therefore affirm the judgment
of the trial court. 
 
          
 
                                                          Jane
Bland
                                                          Justice
 
Panel consists of Justices Keyes, Higley,
and Bland.

