Introduction. Family estate disputes over trusts and wills often bring out the worst in the parties as was exemplified in the recent case of ESTATE OF FELIPE A. RADELAT, DECEASED, 02-17-00264-CV, 2019 WL 5792652, at *1 (Tex. App.—Fort Worth Nov. 7, 2019, no pet. h.). In this case, Lourdes Radelat sued her mother and brother, appellants Ana and Andrew Radelat, over their handling of an estate matter. The appellants’ defenses to the suit included that the alleged claims were barred by the statute of limitations. In other words, Lourdes waited too long to file the lawsuit. However, Lourdes countered this defense with the fraudulent concealment doctrine. That is, appellants’ fraudulent concealment tolled the running of the statute of limitations. According to the record, after the lawsuit was filed, the appellants engaged in a series of actions that violated the court’s orders and abused the discovery process. The trial court struck the appellants’ defenses and rendered what is known as death-penalty sanctions and entered judgment against the appellants who then appealed.
Background. Lourdes filed her lawsuit in 2012 pertaining to the estate of her father Felipe Radelat, the decedent, who died in 1994. The decedent created two testamentary trusts in his will which provided that upon his death the bulk of his estate was to be transferred to these two trusts. The will named decedent’s wife Anna as the executor of the estate. The will named Lourdes, Ana, and Andrew as co-trustees of the trusts. Ana, as executor, did not fund the trusts.
Apparently, Lourdes did not find out about the trusts and the fact that she was supposed to be a co-trustee until 2012, when appellants attempted to sell real estate that belonged to one of the trusts. According to Lourdes, “appellants had withheld the will from her and misled her about its content. Lourdes alleged that appellants breached their fiduciary duties by concealing Felipe’s estate plan, failing to properly fund the trusts, and self-dealing with trust property, among other misdeeds. Lourdes demanded a statutory accounting for the trusts.” Id. at 1.
Appellant’s filed an answer to the lawsuit that included the statute of limitations defense. Further, appellants filed counterclaims to the lawsuit. Lourdes responded that limitations were tolled by appellants’ fraudulent concealment.
After the lawsuit was filed, the trial court granted a temporary injunction that restrained appellants from using funds belonging to the trust among other restrictions. During the course of the litigation, the trial court also ordered the appellants to provide an accounting to Lourdes. Further, the parties engaged in discovery including the taking of depositions.
Apparently, appellants engaged in a pattern of misconduct during the course of the proceedings. They violated the temporary injunction order by collecting rent for property that belonged to one of the trusts, submitted a false accounting to the court, failed to provide a statutory accounting for the trusts, failed to produce documents despite an order compelling production, and failed to cooperate in giving their depositions.
On January 11, 2017, after numerous hearings on these issues, the trial court ordered death-penalty sanctions against appellants for contempt of court. The court struck appellants’ answer including the statute of limitations defense.
“After a hearing to prove damages, the trial court rendered a final judgment awarding Lourdes $1,145,401 in damages and $173,467 in attorney’s fees and ordering that all remaining trust assets be distributed to Lourdes. This appeal followed.” Id. at 3.
Holding by Court of Appeals. On appeal, the appellants contended that: “as a general rule, before death-penalty sanctions may issue, the misconduct should justify the presumption that the claim or defense lacks merit.” Id. at 4.
In affirming the trial court’s decision against appellants ,the court of appeals stated (Id. at 6):
In its order, the trial court found that each of these forms of misconduct—discovery abuses,4 refusal to cooperate, violations of a temporary injunction meant to protect trust property, and deception of the court—had occurred, along with failure to produce an accounting and other misconduct. Each of these forms of misconduct generally favors the notion that appellants’ defenses lack merit.
The court of appeals also stated (Id. at 6):
But beyond this general connection, we think appellants’ misconduct speaks to the merits directly. Appellants’ primary defense was limitations. To this, Lourdes pleaded fraudulent concealment, alleging that limitations should be tolled because appellants deceived her and hid the true nature of the will and the trusts from her. See Valdez v. Hollenbeck, 465 S.W.3d 217, 230 (Tex. 2015). The nature of appellants’ misconduct—a borderline fraud on the court—could have rationally persuaded the trial court that appellants also fraudulently concealed the truth from Lourdes. Appellants’ misconduct might have convinced the judge that just as appellants provided the court with false information, they also provided Lourdes with false information concerning the nature of the will; that just as appellants withheld bank records, they likewise withheld the will from Lourdes; and that just as Ana acted with “guile and artifice” in pretending not to understand the litigation process in order to obstruct it, she acted with a similar intent in pretending not to understand her responsibilities under Felipe’s estate plan. Under this view, appellants’ misconduct could have convinced the trial court that appellants fraudulently concealed the truth from Lourdes and, therefore, that appellants’ limitations defense lacked merit.
The court of appeals held that the trial court did not abuse its discretion and overruled the issue raised by appellants on appeal. The trial court’s judgment was affirmed.