Opinion
NO. 14-19-00324-CV
04-08-2021
U.S. BANK NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR BEAR STEARNS ASSET BACKED SECURITIES I TRUST, ASSET-BACKED CERTIFICATES, SERIES 2007-HE4, Appellant v. KELLEY M. BENTLEY, DEPENDENT ADMINISTRATOR OF THE ESTATE OF FLORENCE NSE MCKINNEY, DECEASED, Appellee
On Appeal from the County Court at Law No. 3 Fort Bend County, Texas
Trial Court Cause No. 15-CPR-027920
MEMORANDUM OPINION
Appellant appeals the probate court's order approving the sale of real property on which it had a preferred debt and lien. In two issues appellant contends the probate court erred. We affirm.
I. BACKGROUND
Florence Nse McKinney died without a will. The probate court appointed Kelley M. Bentley as dependent administrator to administer the estate. Appellant field an Authenticated Secured Claim, claiming a secured interest in decedent's real property and a claim in the amount of $236,097.01. Appellant attached an affidavit proving up the amounts owed on the note between appellant and decedent, the note, a transfer of lien, and a recorded deed of trust. Appellant requested that the dependent administrator approve the claim and that the claim be classified by the probate court as a preferred debt and lien against the real property.
Shortly thereafter, the dependent administrator filed an inventory and list of claims of the estate. The inventory showed that the only property owned by the decedent at the time of her death was the real property. The dependent administrator valued the real property at $230,260.00. The probate court approved the inventory and list of claims. The dependent administrator filed an application for sale of real property requesting that the probate court approve a private sale. The dependent administrator alleged that it would be in the estate's best interest to sell the real property to pay expenses of administration and claims against the estate. The dependent administrator then rejected the full amount of the claim filed by appellant.
Appellant filed an objection to the application to sell and moved to abate the proceedings. Appellant requested that the probate court abate any hearing on the motion to sell because it was going to file a suit to enforce its claim. Appellant then filed its original petition in the probate court. Appellant requested that the probate court establish appellant's claim against the property, approve and allow the claim in full as a preferred debt and lien against the property, and authorize a non-judicial public sale of the property under section 51.002 of the Property Code.
The probate court signed an agreed order approving the application for sale of the real property by private sale, allowing the dependent administrator to retain a real estate agent to list and sell the property. The agreed order stated that the dependent administrator and appellant "shall agree on the sales price of the Property prior to submitting approval to the Court for the sale of the Property." The order concluded with decretal language ordering that the real property was to be sold, the dependent administrator may retain a real estate agent, and after the sale had been made, a report of sale shall be filed and returned in accordance with law.
About five months after the agreed order was rendered, the dependent administrator and appellant entered into a Rule 11 settlement agreement that was filed and approved by the probate court. The Rule 11 agreement provided that the parties agreed that appellant's claim should be approved and allowed as a preferred debt and lien against the real property. The probate court approved the Rule 11 agreement.
Approximately one month later, appellant and the dependent administrator appeared before the probate court for a status conference. The dependent administrator informed the probate court that the real property had been listed for sale with a realtor for 180-days and that she had an offer for purchase in the amount of $220,000.00. Appellant indicated that it was not willing to agree to the sale of the property at $220,000.00 and intended to file an application to foreclose on the property.
Two days after the status conference, appellant filed an application for foreclosure of preferred lien. The application alleged that more than six months had passed since the date letters of administration were granted and the property had not been sold or distributed. Additionally, the dependent administrator had not paid the maturities "which have accrued on the debt according to the terms of the Note and Deed of Trust" under section 355.155(a) of the Estates Code. Appellant noticed the hearing on its application for April 15, 2019.
On April 5, 2019, the dependent administrator filed a Report of Sale of Property with the Court, indicating that the real property would be sold at a private sale immediately following approval of the sale by the probate court. The report attached the contract for sale of the real property with a sale price of $215,000.00, "less unpaid taxes and estimated costs and expenses." The dependent administrator attested by affidavit that the sale was in the best interest of the estate, that the property needed substantial repair, that considerable expense would be necessary to repair the property, and that the sales price appeared to be fair. Appellant immediately filed its opposition to the report arguing that it had not agreed with dependent administrator on the price for the sale and that it had a preferred debt and lien on the real property. Appellant did not object to the evidence attached to the report; therefore, appellant is not contesting the market value of the sale.
Five days later, the probate court signed an order confirming the sale of the property. The probate court indicated that it considered the report of sale filed by the dependent administrator, found the sale in compliance with the court's prior order for the sale of the real property, and determined the private sale was for a fair price and was in the best interest of the estate. The probate court "approved and confirmed" the report of sale and authorized the conveyance of the property. This appeal followed. See Tex. Est. Code § 356.556(c).
II. GENERAL LEGAL PRINCIPLES
The legislature has created a statutory scheme governing estate administration proceedings to sell estate property and orders authorizing such sales. In re Estate of Bendtsen, 229 S.W.3d 845, 848 (Tex. App.—Dallas 2007, no pet.). See generally Tex. Est. Code §§ 356.001-356.655. Sections 356.251-.257 contain the process a dependent administrator must undertake to obtain an order to sell real property of the estate. The dependent administrator must file an application for order of sale, id. § 356.251, with particular contents, id. § 356.252, and obtain citations to "all persons interested" in the estate, id. § 356.253. The probate court "shall order the sale of the estate property" if the court is "satisfied that the sale is necessary or advisable." Id. § 356.256.
Once the dependent administrator has entered into a contract for sale, the dependent administrator then files a report of sale. See id. § 356.551. Five days after filing the report of sale, the trial court must inquire into the manner of the sale, hear evidence for or against the report, and determine the sufficiency or insufficiency of the administrator's bond, if any. Id. § 356.552. If the trial court determines that the sale is fair, proper, and in conformity with the law, the trial court shall confirm the sale and authorize the conveyance of the property upon the buyer's compliance with the terms of sale. Id. § 356.556.
The trial court's confirmation or disapproval of a report shall have the force and effect of a final judgment. Id. Any person interested in the estate or in the sale shall have the right to have such orders reviewed as in other final judgments in probate proceedings. Id. We review the action of the probate court in either confirming or setting aside the sale for an abuse of discretion. In re Estate of Stone, 475 S.W.3d 370, 373 (Tex. App.—Waco 2014, pet. denied).
III. ISSUE ONE
In its first issue, appellant complains that the probate court abused its discretion by concluding that the sale of the real property complied with the prior order for sale, namely the provision within the order that, prior to submitting the report of sale, the dependent administrator and appellant shall agree to the sale price of the real property. Appellant contends that because it filed an objection to the report of sale indicating that it did not agree to the sales price, the trial court could not approve the report of sale without abusing its discretion. We disagree with appellant.
To confirm the report of sale, the probate court need only determine whether the court is satisfied that the sale is for "a fair price, properly made, and in conformity with law." Id. § 356.556(a). The order confirming the sale states "that the real property has been or will be sold, for a fair price . . . and was properly made and in conformity with the law." To the extent that the order does not conform to the probate court's prior order authorizing sale, appellant does not make an argument or cite to authority that the lack of strict conformance with the prior order authorizing the sale means that the order confirming the sale was not "in conformity with the law." The parties' agreement to agree was not in the decretal language of the order and was not a term required by the Estates Code. We decline to hold that the agreement of the parties constrains the probate court from approving the report of sale in conformance with the Estates Code.
Appellant does not dispute that the price received at the sale was a "fair" price and provided no evidence to the probate court as to the fair market value of the real property. Appellant did not challenge the dependent administrator's evidence regarding the property's condition, the fairness of the price, or the fair market value of the property. Appellant further does not dispute that the sale was "properly made." Appellant's only dispute is that it did not agree to the price and that the order authorizing the sale stated that the parties "shall agree" to the price prior to submitting a report of sale to the Court. Under the circumstances presented herein, we cannot say that the probate court abused its discretion. We overrule appellant's first issue.
IV. ISSUE TWO
Next appellant contends that the trial court failed to hear evidence for or against the report of sale before ordering confirmation of the sale as required by section 356.552 of the Estates Code. Appellant argues that the probate court's order must be reversed because there was no hearing on the report. There is no indication in this case that the probate court did not "hear" the evidence submitted by the parties before confirming the sale as contemplated by the statute. Compare Tex. Est. Code § 356.552 ("After the expiration of five days from the date the report is filed . . . the court shall . . . hear evidence in support of or against the report . . . ."), with id. § 356.255(a) ("The clerk of the court in which an application for an order of sale is filed shall immediately call to the judge's attention any opposition to the sale that is filed . . . . The court shall hold a hearing on the application if an opposition to the sale is filed during the period described in the citation."); see also Tex. Commerce Bank, Nat'l Ass'n v. New, 3 S.W.3d 515, 516-17 (Tex. 1999) (holding court of appeals incorrectly concluded that a "trial court does not hold 'an evidentiary hearing merely by accepting the affidavits attached to the motion'"); Barganier v. Saddlebrook Apts., 104 S.W.3d 171, 173 (Tex. App.—Waco 2003, no pet.) (considering language that the "court shall hear evidence as to damages" in Texas Rule of Civil Procedure 243 and concluding that the court satisfied the requirement by basing its decision on the record without convening a proceeding in open court).
The order confirming the sale indicates that the probate court considered the report of the sale of the property filed by the dependent administrator. The report included the unobjected-to exhibits proving up the statutory requirements for confirming the sale of the property. The probate court did not abuse its discretion by basing its decision on the record, including the contract and the affidavit of the dependent administrator, in confirming the sale of the property without convening a proceeding in open court. See Barganier, 104 S.W.3d at 173-74. We overrule appellant's second issue.
V. CONCLUSION
Having overruled both of appellant's issues, we affirm the order of the probate court.
/s/ Ken Wise
Justice Panel consists of Justices Wise, Bourliot, and Spain.