Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Tuesday, June 16, 2015

Valdez v Hollenbeck (Tex 2015) SoL for Bill of Review in probate cases


BILL OF REVIEW IN PROBATE CASE: WHEN DOES IT HAVE TO BE FILED TO BE TIMELY UNDER THE STATUTE OF LIMITATIONS?


A bill of review proceeding to set aside a prior judgment must normally be brought within four years, unless a specific statute sets a different limitations period under specific circumstances. The probate code, now estates code, provides for a statutory bill of review with a two year statute of limitations. But even when there is no dispute as to which limitations period applies, there may still be a litigable issue on when the limitations period begins to run, and whether an extension of the applicable limitations period is available based on a tolling theory, and if so, when the tolling effect ceases.  

      
In an opinion issued last week, the Texas Supreme Court held in an egregious case of theft from an estate by a "rogue probate clerk" that the heirs brought their bill of review to reopen the probate case too late. In reaching this conclusion, the Court applied the two-year limitations period because the applicable statute "unequivocally prescribes a two-year limitations period for all bills of review in probate proceedings." The invocation of tolling did not save the heirs' claims.  
   


Valdez v Hollenbeck
No. 13-0709 (Tex. June 12, 2015) (Opinion by Justice Guzman)





The heirs had petitioned the probate court to re-open the estate more than ten years after the estate's administration had closed, alleging that the estate administrator breached fiduciary duties and fraudulently concealed information about the estate’s assets. The probate court denied the statutory bill of review (subject to two-year limitations period), but granted the equitable bill of review (governed by the residual 4-yr SoL) and set aside the orders closing probate. The heirs successfully litigated their claims against the administrator and were awarded damages against the administrator and his surety. The San Antonio Court of Appeals affirmed.

The Supreme Court reversed, holding that the heirs’ petition for bill of review was filed more than two years after they received information that would cause a reasonably prudent person to make inquiry, which would have led to the discovery of the concealed cause of action. A half-million-dollar discrepancy in the value of an estate, the court reasoned, is considerable and gives rise to a duty to make further inquiry. The heirs’ claims were discoverable and the estoppel effect of tolling ceased more than two years before they initiated bill-of-review proceedings. Under these circumstances, their bill of review was time-barred.under the two-year statute of limitations. The Supreme Court accordingly reversed and rendered judgment for the administrator and the surety without considering the merits of the bill of review.

EXCERPT FROM THE OPINION

The threshold issue here is whether the equitable bill of review was timely filed.

Generally, a bill of review allows a party to challenge a judgment after the time for filing a motion for new trial or an appeal has expired. Recognizing the importance our legal system places on the finality of judgments, courts generally allow bills of review only in limited circumstances or as authorized by statute. An equitable bill of review must ordinarily be filed within four years of the date the judgment is signed unless extrinsic fraud is established or an express limitations period is prescribed by statute. See TEX. CIV. PRAC. & REM. CODE § 16.051 (prescribing four-year residual statute of limitations if "there is no express limitations period"); PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 275 (Tex. 2012) (tolling limitations period because there was some evidence of extrinsic fraud).
     

At the time of the events giving rise to this suit, Texas Probate Code section 31 provided that "no bill of review shall be filed after two years have elapsed from the date of [the probate court’s] decision, order or judgment." Act of March 17, 1955, 54th Leg., R.S., ch. 55, § 31, 1955 Tex. Gen. Laws 88, 97 (former TEX. PROB. CODE § 31).1 Section 31’s plain language thus establishes a two-year limitations period for bills of review attacking a probate decision, order, or judgment.
 
Although the heirs contend limitations was tolled, we need not decide whether and under what circumstances tolling doctrines might apply because the effect of any tolling would have ended more than two years before the heirs filed their bill-of-review petition. We therefore hold the heirs’ bill of review is untimely. Accordingly, without reaching the merits of either the bill of review or the underlying claims, we reverse the court of appeals’ judgment and render judgment for the administrator and the surety on the bill of review. 


SOURCE: Valdez v Hollenbeck, No. 13-0709 (Tex. June 12, 2015)(Opinion by Justice Eva Guzman)

 

 

 

 
 

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