Clovis Wakefield v. Joyce Phillips and the E.A. Ohlenbusch Trust, Marilyn Kensing and Louise Genz, Trustees

Opinion filed September 6, 2007 Opinion filed September 6, 2007 In The Eleventh Court of Appeals ____________ No. 11-06-00066-CV __________ CLOVIS WAKEFIELD, Appellant V. JOYCE PHILLIPS AND THE E.A. OHLENBUSCH TRUST, MARILYN KENSING AND LOUISE GENZ, TRUSTEES, Appellees On Appeal from the 32nd District Court Fisher County, Texas Trial Court Cause No. 5809 M E M O R A N D U M   O P I N I O N In his will, Ernest A. Ohlenbusch created a trust for the benefit of his wife, Martha H. Ohlenbusch. The trust came into existence upon the death of Mr. Ohlenbusch and terminated upon the death of Mrs. Ohlenbusch. Mr. Ohlenbusch died on September 19, 1994, and Mrs. Ohlenbusch died on January 14, 2003. On February 18, 2004, Joyce Phillips and the E.A. Ohlenbusch Trust, through its named trustees Marilyn Kensing and Louise Genz filed this lawsuit against Clovis Wakefield to partition approximately 363 acres of land in Fisher County. Later, Phillips, Kensing, Genz, and Wakefield entered into an agreed order of sale that was then entered by the trial court. On November 3, 2005, Stan Edwards, the receiver appointed by the court in the agreed order, sold the property; he filed a report of the sale that same day. Before the sale could be confirmed, Wakefield fired her lawyer and filed a pro se amended answer in which she raised various matters not raised in earlier pleadings.[1] On November 30, 2005, the trial court conducted a hearing regarding confirmation of the sale. Wakefield appeared at the hearing pro se. On December 16, 2005, the trial court entered a decree confirming the sale. We modify and affirm. In her first issue on appeal, Wakefield argues that the decree confirming the sale was Ainvalid as a matter of law@ because the trustees did not have standing to bring the suit. She next argues, in her second issue on appeal, that the decree confirming the sale was Ainvalid as a matter of law@ because the trial court failed to require joinder of all of the owners of the property. Finally, in her third issue on appeal, Wakefield maintains that the trial court abused its discretion in confirming the sale because the receiver did not sell the entire interest in the property. Standing is an issue that can be raised at any time because it is a part of subject-matter jurisdiction. Tex. Ass=n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445-46 (Tex. 1993). For a party to have standing, there must be an actual controversy between the parties in the lawsuit that actually will be determined by the relief sought in it. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 850 (Tex. 2005). Capacity, however, is an issue that must be raised by a verified pleading or it is waived. Tex. R. Civ. P. 93(1), (2); Spurgeon v. Coan & Elliott, 180 S.W.3d 593, 597 (Tex. App.CEastland 2005, no pet.). A party must have both standing and capacity to bring a lawsuit. Lovato, 171 S.W.3d at 848; Spurgeon, 180 S.W.3d at 597. The focus in a standing issue is upon the question of whether the party bringing the lawsuit has a sufficient relationship with it so that there is a justiciable interest in the outcome. Lovato, 171 S.W.3d 848; Spurgeon, 180 S.W.3d at 597. Standing exists if the party bringing the lawsuit is personally aggrieved by the alleged wrong. Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996). Capacity is procedural in nature, and the focus in a capacity inquiry is upon the personal qualifications of a party to litigate. Id. A party may lack standing because that party does not have a justiciable interest in the outcome of a case but yet have capacity when the party has the legal authority to act. Id. We review standing questions de novo. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). Wakefield correctly argues that the trust terminated upon the death of Mrs. Ohlenbusch. Tex. Prop. Code Ann. ' 112.052 (Vernon 2007); see Sorrel v. Sorrel, 1 S.W.3d 867, 871 (Tex. App. CCorpus Christi 1999, no pet.). She is also correct that the legal title held by the trustees and the equitable title held by the beneficiaries merged in the beneficiaries at that time.[2] Id. Phillips was one of those beneficiaries. Wakefield does not question that Phillips has both standing and capacity in this lawsuit. Regardless of whether Kensing and Genz have standing, Phillips, as an owner of the property, would have standing to bring a suit to partition the property. See Tex. Prop. Code Ann. ' 23.001 (Vernon 2000). Further, Wakefield admits that Kensing and Genz are beneficiaries of the trust in their individual capacities. As beneficiaries of the trust, Phillips, Kensing, and Genz each have a sufficient relationship with the lawsuit so that there is a justiciable interest in the outcome. See Lovato, 171 S.W.3d at 848. Phillips, Kensing, and Genz each have standing in this lawsuit. While couched as standing issues, Wakefield=s position is more in the nature of an attack on the capacity of Kensing and Genz to bring this suit for partition. Complaints regarding a party=s capacity must be raised timely by verified pleading. Rule 93(1), (2). Wakefield filed a verified pleading in which she raised the issue of capacity. However, the trial court had entered its agreed order for the sale of the property, the receiver had sold the property, and he had filed a report of the sale before Wakefield raised the issue of capacity in an amended answer. The trial court held that the issue was not timely raised. We agree. By waiting until after the report of the sale had been filed, Wakefield did not raise the issue of capacity timely, and she waived it. See Ray Malooly Trust v. Juhl, 186 S.W.3d 568, 570 (Tex. 2006). Wakefield=s first issue on appeal is overruled. Wakefield next maintains that the decree confirming the sale is invalid because the trial court did not require the joinder of all joint owners of the property. In various pleadings and in numerous arguments to the trial court and to this court, Wakefield states that there are other owners of the property who were not joined in the lawsuit. However, Wakefield offered nothing in the way of actual evidence or testimony regarding these other owners. While there may well be other owners, the trial court was presented with nothing beyond unsworn declarations and arguments regarding such other possible owners. The only actual evidence that the trial court had before it was that the property was owned one-third by Phillips, one-third by the trust, and one-third by Wakefield. However, because the trust had terminated and because the legal and equitable titles to the property had merged into the beneficiaries, as a matter of law, ownership of the one-third interest attributed to the trust should have been attributed to the beneficiaries of the trust. We will modify that portion of the judgment of the trial court to show that the one-third interest attributed to the trust is owned by the beneficiaries of the trust. Otherwise, Wakefield=s second issue on appeal is overruled. In her third issue on appeal, Wakefield maintains that the trial court abused its discretion when it confirmed the report of the sale because it Afailed to sell the entire interests of the parties in the subject property.@ A trial court abuses its discretion by acting arbitrarily, unreasonably, or without consideration of guiding principles. Walker v. Gutierrez, 111 S.W.3d 56, 62 (Tex. 2003). The agreed order for the sale of the property contained a legal description of the 362.83-acre tract of land. The agreed order contained no restrictions on the sale. When the receiver sold the property, he retained, for the parties to the lawsuit, certain mineral interests as well as certain royalty interests from future wind turbine contracts. Wakefield claims that, in making the reservations, the receiver sold the property on terms in direct conflict with the agreed order of sale. Wakefield cites us to Mergenthaler Linotype Co. v. McClure, 16 S.W.2d 280 (Tex. Comm=n App. 1929), for the proposition that a receiver must follow the mandates of a court order when it sells property and may not sell on terms that conflict with the order. In McClure, the court order contained very detailed instructions on how, when, where, and on what terms the sale would be made. Among those terms were that the sale would be for cash and the proceeds deposited with the court for distribution after a hearing on the establishment of liens and claims against the property. The holder of the first lien on the property claimed that the receiver refused its bid and that its bid was higher than the one made by the actual buyer at the sale. On appeal, the court pointed out that the first lienholder wanted to credit the amount of its bid to the lien it held but that Aa receiver exercises a naked power according to the mandate of the court, the terms of which he must follow.@ McClure, 16 S.W.2d at 282. The trial court had ordered that the sale be for cash and that matters involving liens would be determined later. The receiver was required to take the action it did and to refuse to authorize the credit. Here, the trial court placed no such restrictions upon the receiver. The order merely provided that the receiver was to sell the property at private sale. That was done. The receiver did nothing to conflict with the order for the sale of the property. The trial court did not abuse its discretion when it confirmed the sale of the property. Wakefield=s third issue on appeal is overruled. The judgment of the trial court is modified to show that the owners of the one-third interest credited to the trust are the beneficiaries of the trust. As modified, the judgment of the trial court is affirmed. JIM R. WRIGHT CHIEF JUSTICE September 6, 2007 Panel consists of: Wright, C.J., McCall, J., and Strange, J. [1]Wakefield is represented by counsel in this appeal. [2]Wakefield relies on Sorrel also for the proposition that there can be no judicial partition in cases of this nature. Sorrel is distinguishable. In Sorrel, the attempted partition was nonjudicial. The trustees there attempted to partition the property by direct conveyance. Moreover, even if the trial court could not partition the property at the request of the trustees, it could partition the property at the request of Phillips. That proposition has not been questioned either in the trial court or in this court.