In In the Est. of Lemme, an administratrix of an estate hired her boyfriend to do legal work. No. 07-21-00300-CV, 2022 Tex. App. LEXIS 8829 (Tex. App.—Amarillo December 1, 2022, no pet. history). After an accounting was submitted, heirs objected to the amount of the fees paid. The trial court removed the administratrix for gross mismanagement, and she appealed.
The court of appeals first discussed the law regarding removing an administrator:
Gross misconduct or gross mismanagement is a ground for removal of an executor. “Gross misconduct” and “gross mismanagement” include, at a minimum: (1) any willful omission to perform a legal duty; (2) any intentional commission of a wrongful act; and (3) any breach of a fiduciary duty that results in actual harm to a beneficiary’s interests. “As a fiduciary, an executor has a duty to protect the beneficiaries’ interest by fair dealing in good faith with fidelity and integrity. His personal interests may not conflict with his fiduciary obligations to the estate.” In addition, a fiduciary owes a principal a high duty of strict accountability.
Id. The court of appeals then reviewed the evidence concerning the payment of attorney’s fees:
Richardson and Allen alleged that, considering the size of the estate and lack of complexity involved in handling it, the attorney’s fees charged by Durrance were not reasonable or necessary. They further asserted that fees charged for non-legal activities, such as consulting plumbers and realtors, should not have been charged to or paid by the estate. Richardson and Allen claimed that Cox’s relationship with Durrance influenced Durrance’s billing practices in this case and Cox’s decision to pay the excessive amounts, which significantly reduced the value of the estate and the ultimate amount received by the beneficiaries. Cox contends that she merely sought and paid for legal counsel and, as such, her actions could not constitute gross misconduct or gross mismanagement.
At the evidentiary hearing, Durrance’s invoice for $43,037.50, for services provided between March of 2019 and November of 2020, was admitted into evidence. Many entries were one-word descriptions of the work performed, such as “review,” “preparation,” and “plumber.” The invoice also reflected entries for “travel” and one 20-hour “site visit.” Richardson presented evidence that of the $43,037.50 paid to Durrance from estate funds, roughly $20,000 was paid for activities that were not legal in nature, such as communicating with plumbers, realtors, and utility companies. Durrance testified that he did not recall discussing any of the entries with Cox or Cox making any complaint about his invoices…
In sum, the evidence reveals that Durrance charged, and Cox paid, attorney’s fees that were not reasonable or necessary, including substantial charges for non-legal work. The evidence further shows that Cox failed to exercise meaningful oversight of the administration, instead delegating her fiduciary responsibilities to Durrance. Moreover, because Durrance and Cox are romantic partners who share a household, the payments to Durrance indicated that Cox favored her partner’s—and arguably her own—personal financial interests over those of the estate beneficiaries.
Id. The court then concluded that the evidence supported the trial court’s conclusion that the administratrix breached her fiduciary duty and engaged in gross mismanagement of the estate and affirmed the removal.
The court also affirmed the trial court’s award of attorney’s fees against the former administratrix. The court held that Section 351.003 of the Texas Estates Code allows certain costs and reasonable attorney’s fees to be assessed against an administrator when the administrator is removed for cause. The court stated: “Because Cox was removed for cause, it was proper for the trial court to charge her with the attorney’s fees incurred in removing her as administratrix.” Id. The court then reviewed the evidence of attorney’s fees, which included billing statements, hourly rate, number of hours, and testimony regarding segregation, and affirmed the award of $7,075 in attorney’s fees.