Opinion issued February = 15,=20 2008
For=20
The
LINDA =
KOVAL,=20
ADMINISTRATRIX OF THE ESTATE OF GRANT LYNN KOVAL, DECEASED,=20
Appellant HENRY =
KIRKLAND=20
CONTRACTORS, INC., Appellee On =
Appeal from=20
Probate Court No. 3 Harris =
County,=20
Texas Trial =
Court Cause=20
No. 337,789-402
Robert and Judy Newey's home =
was damaged=20
in June 2001 by Tropical Storm Allison which caused approximately =
five=20
billion dollars of damage to area homes and businesses. The Neweys =
filed a=20
notarized claim with the National Flood Insurance Program to =
repair the=20
dwelling. In June 2001, Koval was an =
independent=20
contractor associated with Kirkland. His mother, Mrs. Koval, was =
an office=20
manager and bookkeeper for Kirkland during this time. Koval, on =
behalf of=20
Kirkland, entered into a Representation and Repair Agreement with =
the=20
Neweys to make repairs to their home. After signing the agreement, =
the=20
Neweys delivered a check to Kirkland as a deposit for the=20
repairs. At some point after the =
agreement was=20
signed, but before repair work began, the Neweys and Kirkland =
agreed to=20
modify their contract. Instead of providing repair work in =
exchange for=20
the Newey's insurance proceeds, Kirkland agreed to refund the =
deposit=20
amount and to allow the Neweys to keep the insurance proceeds in =
exchange=20
for the Neweys' agreement to sell their home ("the Newey home") to =
Kirkland in its damaged state. Kirkland planned to remodel the =
home and=20
either to rent or to sell it. Kirkland provided Koval with a check =
that=20
returned the Neweys' deposit and directed him to memorialize the=20
renegotiated deal on behalf of the company. Koval returned the =
money, but=20
signed an agreement with the Neweys that gave himself, not =
Kirkland, the=20
right to lease the home with an option to purchase it at a later =
date. In=20
November 2001, Koval became a tenant in the Newey home and began =
making=20
lease payments to the Neweys. Around the same time, restoration =
work began=20
on the home, with Koval acting as foreman of the project =
purportedly on=20
behalf of Kirkland. Koval ordered supplies and materials using =
Kirkland=20
charge accounts which Kirkland paid in addition to all of the =
labor costs.=20
Mrs. Koval tracked all of the expenses on the Newey home project =
in her=20
role as office manager. Work on the home continued at a =
rapid=20
pace until March 2002, when both Koval and Mrs. Koval ended their=20
respective and formal relationships with Kirkland. However, after =
leaving=20
Kirkland, Koval continued to charge supplies against the company's =
accounts at local stores. Shortly after learning of these charges, =
Kirkland filed suit against both Koval and Mrs. Koval. During =
discovery,=20
Kirkland uncovered the agreement between Koval and the Neweys. =
Based on=20
this new information, Kirkland further claimed that Koval had used =
its=20
credit to make improvements on what became Koval's own =
home. In August 2002, Mrs. Koval =
moved into the=20
Newey home, and Koval exercised his option to purchase it. The =
next month,=20
the Neweys signed a deed conveying the home to Koval. On December 25, 2002, Koval =
committed=20
suicide. He died intestate, unmarried, and childless. Mrs. Koval =
filed an=20
application to determine heirship, naming herself and Koval's=20
half-brother, Shane Michael Kovalski, the sole heirs of the =
estate. The=20
court named Mrs. Koval the administratrix of the estate and =
declared her=20
and Shane the sole heirs. Kirkland filed a claim as a =
creditor=20
against the estate for the labor and materials used to improve the =
Newey=20
home. Mrs. Koval, as an individual, designated the Newey home as =
her=20
homestead and, in her capacity as administratrix, rejected =
Kirkland's=20
claim. Kirkland filed suit in probate =
court on=20
its rejected claim. On the exact same day this suit was filed, =
Mrs. Koval=20
filed a voluntary petition for bankruptcy in her individual =
capacity. In=20
her deposition testimony, her sworn bankruptcy petition, and her =
homestead=20
designation, Mrs. Koval asserted she owned fee simple title to the =
home.=20
Kirkland discovered Mrs. =
Koval's pending=20
bankruptcy and filed an adversary proceeding with the bankruptcy =
court to=20
determine whether Kirkland had a valid constitutional lien against =
the=20
property. See Tex. Const. art. XVI, =A7 37. The =
bankruptcy court=20
found that Kirkland had a valid lien in the amount of $100,047.04, =
plus=20
all taxable costs. The judgment from the bankruptcy court did not =
mention=20
attorney's fees. Mrs. Koval did not appear in the bankruptcy =
proceeding in=20
her capacity as administratrix of the estate. Kirkland filed a "request to =
certify=20
judgment and allow claim" with the probate court to certify the =
judgment=20
of the bankruptcy court and to enter its claim as a preferred debt =
owed by=20
the estate. Kirkland filed for traditional and complete summary =
judgment=20
on its claim, stating that the doctrines of res judicata =
and=20
collateral estoppel prohibited the re-litigation of the facts and =
legal=20
issues surrounding its constitutional lien against the real =
property.=20
Kirkland sought final judgment in the amount of $100,047.04, plus =
all=20
costs incurred in prosecuting its claim and attorney's fees under =
the=20
Probate Code. In a supplemental motion for =
summary=20
judgment, Kirkland focused on its claim for attorney's fees. =
Additional=20
grounds were alleged for recovery of attorney's fees. No response =
was=20
filed to this supplemental motion. In this motion, Kirkland asked =
for=20
attorney's fees under Texas Civil Practice and Remedies Code =
section=20
38.001 (1), (2), and (3), under the theory that Kirkland had =
"provided=20
services, performed labor and furnished material with respect to =
the=20
property of the deceased for which the claim was established. . .=20
." In reply to Kirkland's motion =
for summary=20
judgment, Mrs. Koval asserted that there were genuine issues of =
material=20
fact regarding both the constitutional lien and the application of =
res=20
judicata, that Kirkland had not sufficiently proven its =
attorney's=20
fees under the Probate Code, and that there were various =
procedural=20
defects to Kirkland's claim. Mrs. Koval claimed that the =
bankruptcy court=20
did not have proper jurisdiction to determine issues related to =
the Newey=20
home because she did not have legal title to the property until =
the=20
administration was complete. Kirkland filed more than forty =
pages of=20
documents with the trial court detailing the costs it incurred to=20
prosecute its claim. Kirkland alleged more than $37,000 in =
attorney's fees=20
and $3,000 in court costs made necessary following Mrs. Koval's =
refusal,=20
in her capacity as administratrix, to honor the claim. Mrs. Koval=20
challenged Kirkland's claim for attorney's fees, arguing they were =
not=20
authorized by section 315 of the Probate Code and claiming that =
Kirkland=20
was attempting only to enforce, rather than to prosecute, its =
judgment=20
through the probate court. On December 19, 2005, the =
probate court=20
determined that res judicata barred re-litigation of the =
lien and=20
granted Kirkland's motion for summary judgment. In addition to =
determining=20
Mrs. Koval wrongfully rejected Kirkland's claim and finding in =
favor of=20
Kirkland for a $100,047.04 lien, the court also granted Kirkland=20
$40,971.13 in attorney's fees and court costs under the Probate =
Code.=20
On appeal, Mrs. Koval argues =
that the=20
trial court erred in entering judgment in favor of Kirkland =
because: (1)=20
res judicata cannot apply offensively; (2) Kirkland =
failed to=20
meet all the requirements to establish res judicata; (3)=20
attorney's fees should be excluded from the calculation of costs =
under=20
section 315 of the Probate Code; and (4) Kirkland cannot recover =
costs=20
because it failed to establish its claim "in the court of original =
probate=20
jurisdiction as mandated by Section 313." Kirkland seeks affirmation of =
the summary=20
judgment and requests that this Court tax the costs of this appeal =
against=20
Mrs. Koval. Kirkland further requests that we remand the case to =
the trial=20
court to calculate attorney's fees and costs incurred for this =
appeal.=20
STANDARD =
OF=20
REVIEW We review summary judgments =
de=20
novo. Valence Operating Co. v. Dorsett, 164 S.W.3d =
656, 661=20
(Tex. 2005). Under the standard of review for traditional summary=20
judgment, the moving party must establish that no material fact =
issue=20
exists and that it is entitled to judgment as a matter of law. =
Tex. R.=20
Civ. P. 166a(c); M.D. Anderson Hosp. & Tumor Inst. v.=20
Willrich, 28 S.W.3d 22, 23 (Tex. 2000). Once the movant =
produces=20
evidence warranting summary judgment, the nonmovant must present =
evidence=20
that raises a fact issue. Walker v. Harris, 924 S.W.2d =
375, 377=20
(Tex. 1996). In an appeal from a take-nothing summary judgment, =
the=20
reviewing court should view all evidence in the light most =
favorable to=20
the nonmovant and indulge every reasonable inference in the =
nonmovant's=20
favor. Id. As a=20
preliminary matter, we address whether this case involves the =
doctrine of=20
collateral estoppel or res judicata. The supreme court =
sought to=20
clear up some of the confusion associated with those terms in =
Barr v.=20
Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992). The =
court=20
noted that, broadly speaking, res judicata is the =
"generic term"=20
for a group of related concepts concerning the conclusive effects =
given=20
final judgments. Id. Within this general doctrine, there =
are two=20
principal categories: (1) res judicata, also known as =
claim=20
preclusion, and (2) collateral estoppel, also known as issue =
preclusion.=20
Id. "Res judicata or claim preclusion prevents the =
relitigation=20
of a claim or cause of action that has been finally adjudicated, =
as well=20
as related matters that, with the use of diligence, should have =
been=20
litigated in the prior suit." Id. Collateral estoppel or =
issue=20
preclusion prevents relitigation of particular issues already =
resolved in=20
a prior suit. Id. The=20
policies behind res judicata reflect the need to bring =
all=20
litigation to an end, to prevent vexatious litigation, to maintain =
stability of court decisions, to promote judicial economy, and to =
prevent=20
double recovery. Id. at 629. A. OFFENSIVE USE OF =
RES=20
JUDICATA In her first issue, Mrs. Koval=20
asks: When a Plaintiff files a =
lawsuit in=20
probate court and subsequent to the trial of that lawsuit files an =
almost=20
identical lawsuit in bankruptcy court, and tries the bankruptcy =
court case=20
to a final judgment, is the Plaintiff prohibited from applying =
res=20
judicata offensively to establish its claims under the =
earlier filed=20
lawsuit in probate court? B. ARE THE ELEMENTS OF =
RES=20
JUDICATA SATISFIED? Mrs. Koval challenges the =
subject matter=20
jurisdiction of the bankruptcy court to adjudicate a claim over =
property=20
of the estate. Citing Marshall v. Marshall, Mrs. Koval =
asserts=20
that federal courts lack jurisdiction to act in probate matters. =
392 F.3d=20
1118, 1121 (9th Cir. 2004). Although "it is true that a federal =
court has=20
no jurisdiction to probate a will or administer an estate . . . it =
has=20
been established by a long series of decisions that federal courts =
. . .=20
have jurisdiction to entertain suits in favor of creditors" and =
others=20
against a decedent's estate to establish their claims as long as =
the=20
federal court does not interfere with the probate proceedings in =
state=20
courts. Markham v. Allen, 326 U.S. 490, 494, 66 S. Ct. =
296, 298=20
(1946). The case relied upon by Mrs. Koval was reversed and =
remanded by=20
the United States Supreme Court, which held that a ruling of a =
Texas=20
probate court that it retained exclusive jurisdiction over all=20
of a=20
widow's claims against the decedent's stepson could not deprive a =
federal=20
court of jurisdiction over the widow's tort claim against the =
stepson=20
asserted in her bankruptcy proceeding. Marshall v. =
Marshall, 547=20
U.S. 293, 126 S. Ct. 1735 (2006). While a federal court is =
proscribed from=20
exercising its jurisdiction to disturb or to affect the possession =
of=20
property in the custody of a state court, it may exercise its =
jurisdiction=20
to adjudicate matters outside those confines and otherwise within =
federal=20
jurisdiction. Id. at 310-11, 1747-48. Here, the bankruptcy court's =
judgment was=20
part of a "core proceeding." Core proceedings include, but are not =
limited=20
to, determinations of the validity, extent, or priority of liens. =
28=20
U.S.C. =A7 157(b)(2)(K) (2006). Mrs. Koval filed a voluntary =
petition for=20
bankruptcy. She held out the property as her own in fee simple. =
That claim=20
was subject to the debts against the estate. See Tex. =
Prob. Code=20
Ann. =A7 37 (Vernon 2003 and Supp. 2007) ("[W]henever a person =
dies=20
intestate, all of his estate vests immediately in his heirs at =
law, but=20
with the exception aforesaid shall still be liable and subject in =
their=20
hands to the payments of the debts of the intestate. . . ."). =
Kirkland=20
initiated proceedings in the bankruptcy court to determine the =
validity,=20
extent, and priority of the lien against the property. Mrs. =
Koval's=20
voluntary filing with the bankruptcy court authorized the =
bankruptcy court=20
to exercise its jurisdiction over the "core proceeding" to =
determine the=20
validity of any liens on property she claimed as her own. In issues=20
three and four, Mrs. Koval contends the trial court erred in =
awarding=20
Kirkland attorney's fees under section 315 of the probate code. =
Tex. Prob.=20
Code Ann. =A7 315(c) (Vernon 2003) (the estate shall pay "all =
costs incurred=20
in the probate court with respect to claims . . . rejected, but=20
established by suit. . . .") . Section 315=20
does not provide for attorney's fees to be taxed against the =
estate.=20
Kirkland agrees that the term "costs" does not generally include=20
attorney's fees in the statutory context. See Baumann v. =
Willis,=20
721 S.W.2d 535, 538 (Tex. App.--Corpus Christi 1986, no writ) =
("'costs'=20
simply does not include attorney's fees"); Am. Airlines, Inc. =
v. Swest=20
Inc., 707 S.W.2d 545 (Tex. 1986). Nevertheless, Kirkland =
argues that=20
the Legislature's intent in passing section 315--"to discourage=20
administrators from denying claims without a valid factual or =
legal=20
basis"--should outweigh the general proposition that costs do not =
include=20
attorney's fees. The probate=20
code does provide for the award of attorney's fees in some =
circumstances.=20
See, e.g., Tex. Prob. Code Ann. =A7 149C(d) =
(Vernon Supp.=20
2007) (authorizing payment out of the estate for costs and =
expenses,=20
"including reasonable attorney's fees and expenses," incurred "by =
the=20
party seeking removal incident to removal of an independent =
executor");=20
Tex. Prob. Code Ann. =A7 245 (Vernon Supp. 2007) (authorizing an =
award of=20
attorney's fees in actions against administrators who neglect the=20
performance of their duties). Under the rules of statutory =
construction,=20
we must presume that the Legislature was aware of its decision to =
exclude=20
attorney's fees under section 315 of the probate code. See =
Acker v.=20
Tex. Water Comm'n, 790 S.W.2d 299, 301 (Tex. 1990). The =
Legislature's=20
express inclusion of a right in another section of the probate =
code=20
suggests that it did not intend to include that right elsewhere. =
See=20
Dallas Merchant's & Concessionaire's Ass'n v. City of =
Dallas, 852=20
S.W.2d 489, 493 n.7 (Tex. 1993) (discussing the doctrine of =
expressio=20
unis est exclusio alterius--the expression of one thing is =
the=20
exclusion of another). If the Legislature had intended to include=20
attorney's fees under this provision, it would have done so. =
Consequently,=20
we hold that the award of attorney's fees under section 315 of the =
Probate=20
Code as found by the trial court was error. However,=20
Kirkland argued in its supplemental motion for summary judgment =
that=20
attorney's fees were appropriate under either probate code section =
315 or=20
under section 38.001 of the Civil Practice and Remedies Code. Tex. =
Civ.=20
Prac. & Rem. Code Ann. =A7 38.001 (Vernon 1997). A summary =
judgment may=20
be affirmed on any of the movant's theories which has merit. =
See=20
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 627 (Tex. =
1996).=20
In=20
Cincinnati Life, the court stated:
We hold=20
that courts of appeals should consider all summary judgment =
grounds that=20
the trial court rules on and the movant preserves for appellate =
review=20
that are necessary for final disposition of the appeal when =
reviewing a=20
summary judgment. We further conclude that the appellate court=20
may consider other grounds that the movant preserved for =
review=20
and trial court did not rule on in the interest of judicial =
economy.=20
Kirkland briefs =
the point on=20
the merits. However, as =
previously=20
stated, summary judgments must stand or fall on their own merits, =
and the=20
non-movant's failure to answer or to respond cannot supply by =
default the=20
summary-judgment proof necessary to establish the movant's right.=20
Clear Creek, 589 S.W.2d at 678. Despite the fact that =
Mrs. Koval=20
failed to address the application of section 38.001 on the merits =
before=20
us or in the trial court, we consider it because it was raised in =
the=20
motion for summary judgment and discussed before the =
court Issues three and =
four are=20
overruled. In its first cross-issue, Kirkland seeks a remand of this cause =
for the=20
award of and calculation of reasonable attorney's fees incurred =
for this=20
appeal. Kirkland has waived its right to pursue its appellate =
attorney's=20
fees by failing to present evidence or to obtain a ruling on those =
fees in=20
the trial court. Everest Exploration, Inc. v. URI, Inc. =
131=20
S.W.3d 138, 145 (Tex. App.--San Antonio 2004, no pet.); City =
of San=20
Antonio v. Int'l Ass'n of Fire Fighters, Local 624, 539 =
S.W.2d 931,=20
935 (Tex. Civ. App.--El Paso 1976, no writ). An appellee that does =
not=20
offer any evidence as to future attorney's fees and does not =
procure a=20
finding and judgment thereon waives any such recovery. Loomis =
Constr.=20
Co. v. Matijevich, 425 S.W.2d 39 (Tex. Civ. App.--Houston =
[14th=20
Dist.] 1968, no writ); see also Int'l Sec. Life Ins. Co. v.=20
Spray, 468 S.W.2d 347 (Tex. 1971). We overrule cross-issue =
number=20
one. In its second cross-issue, Kirkland seeks to have the costs on =
appeal=20
taxed against Mrs. Koval. In a civil case, the court of appeal's =
judgment=20
should award the appellate costs to the prevailing party. Tex. R. =
App. P.=20
43.4. On appeal, costs include (1) the filing fees paid to the =
clerk of=20
the court of appeals, (2) the fee paid to the trial-clerk for the=20
preparation of the clerk's record, and (3) the fee paid to the =
court=20
reporter for preparation of the reporter's record. Tex. =
R. App.=20
P. 51.1; See WesTech Eng'g Inc. v. Clearwater Constructors, =
Inc.,=20
835 S.W.2d 190, 206 (Tex. App.--Austin 1992, no writ). Thus, these =
costs=20
are taxed against Mrs. Koval in accordance with the rules of =
appellate=20
procedure.
CONCLUSION Having overruled each issue presented, we affirm the trial =
court's=20
judgment. Davie L. Wilson Justice Panel consists of Justices Alcala, Hanks, and Wilson. 1. The scope of the property included in the =
bankruptcy estate is broad. United States v. Whiting Pools, =
Inc.,=20
462 U.S. 198, 204-05, 103 S. Ct. 2309, 2313 (1983); Sigmar v.=20
Anderson, 212 S.W.3d 789, 794 (Tex. App.--Austin 2006, no =
pet.).;=20
After a debtor files a bankruptcy proceeding, the determination of =
what=20
constitutes property of the estate is a core proceeding over which =
the=20
bankruptcy court has exclusive jurisdiction. See In re Duval =
Ocunty=20
Ranch Co., 167 B.R. 848 (Bankr. S.D. Tex. 1994) (citing =
Slay=20
Warehousing Co. v. Modern Boats, Inc., 775 F.2d 619, 620 (5th =
Cir.=20
1985)).
2. We note that at the hearing on attorney's =
fees, the=20
Court stated: Okay. As I=20
recall what the bankruptcy court did was it made a ruling of law, =
but they=20
can't award things in Probate Court, so it would be necessary =
[sic] the=20
claimant is denied to come in and apprise the probate court -- =
they ruled=20
as to an issue of law, but that is not self-executing. Okay . . . =
So the=20
only way you can go through to get a claim successfully done in =
Probate=20
Court is to follow the claims procedure. And since the underlying =
suit=20
under [sic] Civil Practices and Remedies would provide for =
attorney's=20
fees, attorney's fees are warranted, and they are =
granted. 3. The Honorable Davie L. Wilson, retired =
Justice,=20
Court of Appeals, First District of Texas at Houston, =
participating by=20
assignment.
The actions =
at issue=20
are based on the same nucleus of operative facts: the facts =
surrounding=20
the alleged ownership and repair of the Newey home. Because the =
motion for=20
summary judgment alleged res judicata, and the court =
ruled that=20
res judicata applied in this case, we review that =
determination=20
without regard to whether Kirkland could have also alleged =
collateral=20
estoppel, or issue preclusion.