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Cortez v. Murray

Supreme Court of West Virginia

May 31, 2018

Mateo Cortez and the Estate of Deborah Cortez, Defendant Below and Movant Below, Petitioners,
v.
Linda Murray, in her capacity as Successor Trustee of the William D. Short and Phyllis D. Short Revocable Living Trust Dated April 30, 1991, Plaintiff Below, Respondent and Connie Lou Keith Barry, Donald Leaman Whited, Michael Ray Whited, Sherry Lynn Whited Salsbury, Sheila Pettry, Tywanna Pettry, Amanda Pettry, Heirs of Teresa Annette Whited Pettry, Terry Lee Whited, Betty Jo Marks, Charlene Rae Flesher-Johnston, Charles Bruce Roberts, Charlotte Rae Flesher-Ash, James Berl Marks, Linda Lou Murray, Lisa Ann Rader Smith, Magen Elizabeth Whited, Patricia Ann Marks Chapman, Randall Wayne Davis, Sandra Kay Flesher Brown, Thomas Wayne Marks, Virginia Ann Roberts Villers, Defendants Below, Respondents.

          Wirt County No. 15-C-28

          MEMORANDUM DECISION

         This is a dispute regarding the William D. Short and Phyllis D. Short Revocable Living Trust Dated April 30, 1991 (the Short Trust or the Trust). Linda Murray (Murray)[1]is the Successor Trustee of the Short Trust. In 2015, Murray sought a declaration from the Circuit Court of Wirt County as to the proportionate interests of certain contingent beneficiaries to the Short Trust, including Mateo Cortez. While Murray named Cortez as a party to her suit, she contends that he does not have a claim to the proceeds of the Short Trust.

         Cortez believes differently. He argues that he is entitled to all of the assets of the Short Trust, either in his individual capacity or as sole heir of the estate of his deceased wife, Deborah Cortez (née Short) (Mrs. Cortez), who was a co-trustee of the Short Trust. Two courts-one in Texas and the circuit court-have so far held that Cortez has no right to share in the proceeds of the Short Trust (either individually or as heir to Mrs. Cortez's estate) under the plain language of the Short Trust. Nevertheless, Cortez persists in his claim to the assets of the Short Trust, valued at approximately $5, 000, 000 plus oil and gas interests.

         We find the circuit court did not commit the various errors asserted by Cortez on appeal to this Court. Consequently, we affirm the circuit court's Order Denying Motion to Dismiss and Order Denying Motion to Intervene. We also affirm, in part, the Order Granting Motion for Partial Summary Judgment (Partial Summary Judgment Order) and Order Denying Defendant Mateo Cortez's Motion to Alter or Amend (Alter or Amend Order) insofar as those orders adjudge that Cortez does not have an interest in the Short Trust. However, for the reasons discussed below in Section III.B., we reverse, in part, the Partial Summary Judgment Order and Alter or Amend Order insofar as those orders dismiss Cortez as a defendant in Murray's declaratory judgment action. Further, we remand this case to the Circuit Court of Wirt County with directions, as set forth in detail in Section III.B.

         Because this case does not present a new or substantial question of law, and for the reasons set forth herein, we find that the issuance of a memorandum decision is appropriate pursuant to Rule 21 of the West Virginia Rules of Appellate Procedure.

         I. Facts and Procedural History

         Mrs. Cortez died childless and intestate in Texas in December 2011. Cortez is her surviving spouse and sole heir. Following Mrs. Cortez's death, Cortez filed a small estate affidavit in Texas probate court, affirming that Mrs. Cortez's assets (not including homestead or exemptions) did not exceed $50, 000 in value. It is undisputed that Cortez was aware of the Short Trust when he filed the small estate affidavit.

         Prior to her death, Mrs. Cortez was the co-trustee, together with Murray, of the Short Trust. Mrs. Cortez's parents, William Short (Mr. Short) and Phyllis Short (Mrs. Short), established the Short Trust in 1991 with the primary concern of providing for Mrs. Cortez's "health, support, education, welfare and best interests" during her lifetime. The value of the Short Trust is more than $5 million. It is composed of bank accounts and oil and gas interests, all located in West Virginia. The Trust owns no assets in Texas.

         Mr. Short died in 2002, and Mrs. Short died in February 2011. Following Mrs. Cortez's death in December 2011, Mrs. Short's relative, Murray, became the sole trustee of the Short Trust. Murray resides in West Virginia.

         In August 2014, Murray filed suit on behalf of the Short Trust in probate court in Travis County, Texas (the Texas Probate Court). On the Trust's behalf, she alleged claims of conspiracy, fraud, conversion, theft, negligence, and breach of fiduciary duty against Cortez, the Short Trust's investment advisor, and a Texas bank that had held some assets of the Short Trust. Murray sought money damages on the Trust's behalf, punitive damages, and attorneys' fees.

         In June 2015, Cortez filed an Original Petition in Intervention (Petition) as representative of his deceased wife's estate in Murray's suit pending before the Texas Probate Court. In his Petition, Cortez asked the Texas Probate Court to declare that the Short Trust terminated on Mrs. Short's death; that Mrs. Cortez was the Shorts' sole heir at law; and that, because Mrs. Cortez was deceased, that the Trustee of the Short Trust was to distribute all remaining Trust funds to Mrs. Cortez's estate. Cortez named only Murray, in her capacity as Successor Trustee, as a defendant. His Petition did not name or otherwise allude to any other potential beneficiaries of the Trust.

         In November 2015, Murray filed a declaratory judgment action under West Virginia Code § 55-13-1 (2016) in the Circuit Court of Wirt County concerning distribution of the assets of the Trust. She named twenty defendants, including Cortez. The vast majority of the defendants named by Murray lived in West Virginia. Cortez was the sole defendant who resided in Texas. The defendants, except Cortez, answered Murray's complaint in December 2015 and January 2016. None of the defendants, except Cortez, objected to the distribution of the Short Trust as alleged by Murray in her complaint.

         Approximately one month after Murray filed the West Virginia declaratory judgment action, the Texas Probate Court issued a restraining order temporarily prohibiting her from distributing the assets of the Trust. The Texas Probate Court, however, did not order Murray to dismiss her declaratory judgment action.

         In December 2015, Cortez moved to dismiss the West Virginia action on the ground of forum non conveniens (West Virginia Code § 56-1-1A (2012)). The circuit court denied the motion by order entered March 21, 2016. Cortez then sought a writ of prohibition from this Court on the same grounds, which we refused the following June.

         In April 2016, Connie Lou Keith Barry (Barry), a defendant in Murray's declaratory judgment action, filed a motion for partial summary judgment to obtain a determination that Cortez was not a legal beneficiary of the Short Trust. The circuit court granted Barry's motion by order entered September 15, 2016 and dismissed Cortez from the case. Eleven days later, Murray filed a motion for summary judgment seeking a final order from the circuit court naming the Shorts' heirs and enumerating the proportional share of the Short Trust to which each individual heir was entitled. On September 29, 2016, Cortez filed a motion to alter or amend the circuit court's Partial Summary Judgment Order. Less than one month later, while that motion was still pending, Cortez removed the case to the Southern District of West Virginia. In April 2017, the Southern District of West Virginia remanded the case back to the circuit court due to Cortez's untimely removal under 28 U.S.C. § 1446(b)(1).[2]

         While Murray's declaratory judgment action was pending in federal court, the Texas Probate Court dismissed Cortez's Petition. In pertinent part, the Texas Probate Court's December 2016 judgment and dismissal order states:

[T]he Court hereby dismisses any and all claims that Mateo Cortez, in his individual capacity or in his capacity as personal representative of the Estate of Deborah Cortez, has to any assets of The William D. Short and Phyllis D. Short Revocable Living Trust . . . other than his claim for undistributed income from the Trust during the life of Deborah Cortez.

         Cortez is currently appealing that decision to the Third Court of Appeals, Texas (Appeal No. 03-17-00365). He submitted his reply brief in April 2018.

         Following remand of Murray's declaratory judgment action to the circuit court, Cortez moved to intervene on behalf of Mrs. Cortez's estate and to dismiss Murray's action because she had not named Mrs. Cortez's estate as a party. During a June 2017 hearing, the circuit court denied Cortez's pending motions (Motion to Intervene; Motion to Dismiss; and Motion to Alter or Amend). Then, on June 30, 2017, the circuit court entered two orders, entitled Findings of Fact and Conclusions of Law and Final Judgment Order, memorializing its earlier rulings in June. In those orders, the circuit court named the Shorts' heirs; enumerated the proportional share of the Short Trust to which each individual heir is entitled; and authorized Murray to distribute the Trust assets, accordingly.

         By order dated September 19, 2017, the circuit court voided its June 30, 2017 Findings of Fact and Conclusions of Law. It did not void the Final Judgment Order, which named the Shorts' heirs, detailed the Shorts' heirs' shares of the Short Trust, and authorized Murray to distribute the Trust assets. It then entered the following three orders: Alter or Amend Order; Order Denying Motion to Dismiss; and Order Denying Motion to Intervene. Cortez now appeals from those three orders, in addition to the Partial Summary Judgment Order.

         II. Standard of Review

         Cortez's various assignments of error invoke different standards of review. We identify each standard of review in conjunction with the corresponding assignment of error.

         III. Discussion

         A. Subject Matter Jurisdiction, Comity, and Forum Non Conveniens

         In his first three assignments of error, Cortez argues that the circuit court should have deferred to the first-filed litigation in Texas, or lacked jurisdiction to consider Murray's declaratory judgment action at all. For the following reasons, we find that the circuit court did not err by permitting Murray's declaratory judgment action to proceed here in West Virginia.

         1. Subject ...


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