in Re: Guardianship of Joyce Margol, an Alleged Incapacitated Person

Citation: Not availableDocket: 05-21-00255-CV

Court: Court of Appeals of Texas; September 1, 2022; Texas; State Appellate Court

Original Court Document: View Document

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Stuart Margol's motion for rehearing was denied by the Court of Appeals, which also withdrew its previous opinion and vacated the earlier judgment regarding the guardianship of Joyce Margol, an incapacitated person. Joyce has three children: Stuart, Marla, and Debra. Disputes arose between Stuart and Marla, leading Marla to file an application for both temporary and permanent guardianship of Joyce, which Stuart contested, filing his own application. The probate court appointed a temporary guardian for the estate but denied Marla's application for a temporary guardian of the person and suspended all of Joyce's powers of attorney except her medical power of attorney.

Marla later filed a motion in limine asserting that Stuart's interests conflicted with Joyce’s and that he lacked standing to contest the guardianship. After a two-day evidentiary hearing, the court granted Marla's motion, ruling that Stuart could not contest the guardianship or file any related applications, and dismissed all of his pleadings for lack of jurisdiction. Subsequently, the court appointed permanent guardians for both Joyce's person and estate, excluding Stuart from the proceedings.

Stuart appealed three orders, arguing that the temporary guardian was unqualified, the appointment of a permanent guardian lacked necessary jury findings and sufficient evidence, and the court erred in granting Marla's motion in limine, thus excluding him from the process. The court affirmed all three orders, emphasizing that Stuart's lack of standing was decisive in the case. Marla’s motion in limine effectively challenged Stuart’s standing within the guardianship proceedings, as specified in the Texas Estates Code.

Findings of fact establish that a testamentary trust, the Melvin Margol Family Trust, was created for the benefit of the Protected Person following her husband Melvin Margol's death in 1992. The Protected Person’s three children—Stuart, Debra, and Marla Margol—serve as Co-Trustees, with decisions made by majority. Stuart exerted control over the Trust by transferring assets without the other Co-Trustees' knowledge or consent, leading to the depletion of Trust assets through unauthorized distributions to the Protected Person, which were deemed premature.

The Trust's terms prohibit Stuart from self-dealing, including borrowing or gifting funds to himself. Despite this, he borrowed $135,000 from the Trust without documentation and under circumstances that benefitted him personally. Similar unauthorized loans totaling $570,000 were taken from the Protected Person’s Estate over several years, all lacking security and documented terms, benefitting Stuart without demonstrating any benefit to the Protected Person. In total, Stuart took over $705,000 in unsecured loans, which appeared repaid but lacked supporting documentation or clear repayment terms. Additionally, over $10,000 in interest from these loans remains unaccounted for, and there’s no evidence of repayment to the Protected Person for any profits or losses from the loans. In 2008, Stuart also sold a residential property held in the Trust to his business partner without the consent of the other Co-Trustees.

From 2010 to 2020, Stuart, as Trustee of the Trust and agent under the Protected Person’s Powers of Attorney, misappropriated approximately $378,960.66 from the Trust and the Protected Person’s Estate to pay personal credit card debts, with no evidence that these expenditures benefitted the Protected Person. Stuart's actions were self-serving, failing to act in the best interest of the Protected Person under both financial and medical powers of attorney.

On November 9, 2020, the Temporary Guardian filed a Motion to Compel Stuart to comply with a previous court order regarding a $705,000 loan from the Trust and the transfer of real and personal property, including Timeshares, to himself. On December 8, 2020, Stuart's counsel signed an Agreed Order requiring Stuart to provide documentation and return the Timeshares by January 31, 2021. However, after this date, Stuart claimed the Timeshares belonged to the Trust and did not fulfill his obligation to transfer them back. He also refused to convey his interest in the Midway Condo and failed to cooperate with the Temporary Guardian's investigation, providing incomplete information.

Stuart later contested the legal sufficiency of the evidence regarding his adverse interests to the Protected Person, arguing that the probate court erred in supporting Marla’s motion in limine. The legal standard requires that a party challenging the evidence must show a complete absence of a vital fact or that the evidence did not support the court's findings, which are treated as binding unless proven otherwise.

An appellant challenging findings of fact from a bench trial should specifically target the sufficiency of evidence for individual findings rather than the overall judgment, though a challenge to an unspecified finding may suffice if the argument clarifies the specific finding in question. Legal conclusions from a trial court are reviewed de novo, and while not bound by these conclusions, they will be upheld if the judgment can be supported by any legal theory based on the evidence. Incorrect legal conclusions do not necessitate reversal if valid factual findings support a correct legal theory.

Marla's motion in limine, filed under section 1055.001 of the Texas Estates Code regarding standing in guardianship proceedings, posits that standing is a legal question. The Estates Code allows individuals to initiate or contest guardianship proceedings, except for those with adverse interests to the proposed ward. The court must evaluate standing through a motion in limine if a party has an adverse interest. While the Estates Code lacks a definition for "adverse interest," Black’s Law Dictionary describes it as contrary to another's interest. To understand "adverse interest," one must consider its ordinary meaning and relevant appellate decisions. Evidence of indebtedness to the ward does not automatically qualify as an adverse interest sufficient to negate standing.

In Betts v. Brown, the court addressed the eligibility of individuals with debts to a proposed ward in guardianship proceedings. The Texas legislature intended for such individuals to participate in these proceedings, but they may be disqualified from serving as guardians if their conduct constitutes self-dealing or establishes an adverse interest. The case references In re Guardianship of Olivares, where a party was barred from participating due to self-dealing that occurred after the ward was declared incompetent. The court clarified that for an applicant's interests to be deemed adverse, they must conflict with the proposed ward's objectives as defined prior to their loss of capacity. It noted that the concurring opinion in In re Thetford does not establish a binding standard for assessing adverse interests. The Olivares case illustrated this principle, showing that Olivares, who owed significant debt to his mother (the ward), engaged in using her assets for personal benefit while failing to ensure repayment. The court expressed concern that Olivares, despite his capabilities, chose to rely on his mother's finite estate, demonstrating a potential conflict with her best interests.

Self-dealing occurred after Olivares became a fiduciary through a power of attorney, creating an obligation to prioritize his mother's interests. Legal precedents establish that an attorney-in-fact acts solely for the principal's benefit and must maintain good faith and accountability. Evidence indicated that Olivares’s actions were sufficiently adverse to his mother's interests, preventing him from participating in her guardianship proceedings. Similarly, Stuart borrowed over $705,000 from Joyce and her Trust without proper security or documentation, despite lacking authority to loan money to himself or engage in self-dealing. The funds benefited Stuart personally, including paying off his credit card debts, and he could not account for over $10,000 in interest on these loans. Stuart also retained timeshares belonging to Joyce against a probate court order. Although Stuart operates several businesses and is financially capable, he misused Joyce's estate for personal gain. The trial court made nearly forty findings of fact, with Stuart challenging only one, which stated he had not reimbursed Joyce for profits or losses from the loans. However, the court's unchallenged findings supported the conclusion that Stuart had an adverse interest to Joyce, justifying the denial of his standing in the guardianship proceedings under section 1055.001(b) of the Estates Code. The court concluded that sufficient evidence demonstrated Stuart's adverse interest, and self-dealing was not a strict statutory requirement for this determination. Overall, the probate court's findings reflected that Stuart abused his power over Joyce’s estate following her incapacitation.

Stuart Margol was excluded from the guardianship proceedings after the probate court granted Marla's motion in limine, which dismissed all of Stuart's pleadings due to lack of subject matter jurisdiction. Stuart did not challenge this dismissal on appeal, resulting in his status as a non-party in the proceedings. Although he claimed to be an "interested person" who could intervene, he failed to file for intervention post-dismissal. Therefore, the court ruled that Stuart lacked standing to participate in or contest the guardianship proceedings.

Stuart raised three additional issues regarding the guardianship: 1) the appointment of the temporary guardian was void due to lack of certification; 2) the probate court abused its discretion in ordering a permanent guardianship without necessary jury findings; and 3) there was insufficient evidence for the permanent guardianship order. These issues pertain to the specific phase of the guardianship concerning its establishment and the guardian's appointment. However, because Stuart lacked standing due to the earlier limine ruling, he was also unable to challenge the probate court's subsequent orders related to the guardianship. The court affirmed the decision to grant the motion in limine, reinforcing that only parties of record can contest guardianship proceedings.

An appealing party cannot contest errors solely affecting the rights of others. In Guardianship of Gafford, the court indicated that a limine order, which determined that a party lacked standing to challenge a guardian appointment, does not prevent that party from appealing the final guardian appointment order. In this case, Stuart Margol lacked standing regarding the guardianship creation and the appointment of the guardian, resulting in the court not addressing his first three issues on appeal. The appellate court affirmed the probate court's orders from March 19, 2021, and April 22, 2021, which included the granting of a motion in limine and the appointment of both a permanent guardian of the estate and a permanent guardian of the person. Additionally, Marla Margol is awarded costs from the appeal against Stuart Margol. The judgment was entered on September 1, 2022.