Supreme Court steers clear of feud over asbestos settlement

By Steve Korris | Jan 13, 2011

Texas Supreme Court AUSTIN � State Supreme Court justices chose to stay out of a long running family feud over $150,000 from the settlement of an asbestos suit in federal court at Beaumont.

Texas Supreme Court

AUSTIN – State Supreme Court justices chose to stay out of a long running family feud over $150,000 from the settlement of an asbestos suit in federal court at Beaumont.

On Jan. 7, they denied rehearing of a petition to review the removal of Richard Hoelzer as independent executor of the estate of his father, Carl Hoelzer.

Judge Alfred Gerson of Jefferson County Court at Law No. 1 removed Hoelzer, and Ninth District appeals judges in Beaumont affirmed the removal last April.

The Supreme Court denied his petition for review on Oct. 15, and his plea for a second chance didn't sway them.

Carl Hoelzer died in 1987, after executing a will that named wife Lillian Hoelzer as independent executor and sole beneficiary.

His will provided that, "no other action shall be had in the county court in the administration of my estate than to prove and record this will and to return an inventory and appraisement of my estate and list of claims."

Lillian filed an asbestos suit in federal court, and settled with various defendants.

Carl's children, stepchildren of Lillian, intervened as wrongful death beneficiaries.

In 1993, they filed a petition in probate court to remove Lillian as executor.

They alleged she breached her fiduciary duty and embezzled proceeds of the estate.

A judge denied their petition for lack of standing, and Ninth District judges dismissed their appeal.

Then they sued Lillian in Orange County district court, alleging breach of fiduciary duty by embezzlement, self-dealing, misapplication of funds and gross misconduct.

A judge granted summary judgment, and Ninth District judges affirmed the judgment.

Lillian died in 2007, and under the terms of Carl's will, his son Richard Hoelzer succeeded her as executor.

He filed a verified claim against the estate for himself and three siblings, requesting reimbursement of $150,000 Lillian received from the asbestos litigation.

Clyde Hebert, Lillian's son, moved to remove and disqualify Richard as executor.

Hebert asserted sufficient grounds to support a belief that once the settlements are paid to the estate, Richard would pay himself and his siblings the full amount.

He argued that according to courts, Richard and his siblings weren't creditors of the estate and the claim was time barred.

He filed an inventory that did not include the $150,000 claim.

Gerson set a hearing, and on the hearing date Richard moved to continue it.

He claimed he needed vital documents from lawyers who settled the asbestos case.

Gerson denied the motion, held the hearing, declared Richard unsuitable as executor, and removed him.

On appeal, Richard argued there was insufficient evidence to warrant removal.

He argued the statute of limitations hadn't run because no one filed a final accounting.

He claimed he didn't receive 45 days notice of the hearing, and pleaded that Gerson should have continued it.

Hebert answered that payment of the claim would be a misapplication of property.

He claimed Richard tried to gain funds that prior judgment resolved against him.

Ninth District judges affirmed Gerson, finding he didn't have to determine the merits of Richard's claim to future payments.

"On this record, the judge could reasonably conclude sufficient grounds appear to support belief that Richard intended to apply any funds received by the estate to pay a judgment barred claim, a claim he did not list on the amended inventory presented to and approved by the court," Justice David Gaultney wrote.

He found probate law didn't require 45 days notice of the hearing.

He wrote that Richard didn't promptly bring the discovery issue to Gerson's attention.

"When a motion for continuance claiming a need for discovery is filed on the day of a removal hearing, and sufficient explanation for the delay in presentation of this issue is not provided, the trial court may reasonably consider the motion as presented too late," he wrote.

Justices Charles Kreger and Hollis Horton joined the opinion.

Bruce Gregory represented Hebert.

Roxie Lormand represented Richard Hoelzer.

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