Failing to pay attention to the statute of limitations and deadlines and timelines in Texas probate disputes can end your case before it ever begins. In the February 2020 case of Watson v. Schrader, The Texas Eleventh District Court of Appeals issued a stark reminder of the importance of time limits in Texas probate litigation by affirming a summary judgment based on time limitations.
The Facts Of Watson
Oran and Mary Watson died in 2004 and 2006, respectively. Their wills and the Watson Family Trust were executed in 1995. Myron Schrader was the executor of their estates and trustee of the trust.
In 2013, William and Jodi Watson (the “Watsons”) obtained affidavits signed by the witnesses to the documents. The affidavits indicated that Schrader was not named as executor in the husband’s will.
In October 2016, the Watsons sued Schrader. The Watsons accused Schrader of breaching the fiduciary duties that Schrader owed them as the executor of the estates and as trustee of the Watson family trust. The Watsons also asserted claims of fraud, negligent misrepresentation, fraud by nondisclosure, and conversion.
In sum, the timeline of the case looked like this:
- 1995: Wills and Watson Family Trust executed
- 2004: Oran dies
- 2004: Schrader appointed as executor of Oran’s estate
- 2006: Mary dies
- 2006: Schrader appointed as executor of Mary’s estate
- September 28, 2013: Affidavits obtained from witnesses
- October 2016: Watsons sue Schrader
The Watsons alleged that their actions were filed on time under Texas law pursuant to the “discovery rule.”
Schrader was granted summary judgment by the Texas probate court based on the statute of limitations, and the Watsons appealed.
What Is The Discovery Rule In Texas?
The discovery rule under Texas law defers accrual of a claim until the injured party learned of, or in the exercise or reasonable diligence should have learned of, the wrongful act causing the injury.
The discovery rule is limited to “circumstances where ‘the nature of the injury incurred is inherently undiscoverable and the evidence of injury is objectively verifiable.'” Id. (quoting Comput. Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996)).
“An injury is inherently undiscoverable if it is by nature unlikely to be discovered within the prescribed limitations period despite due diligence.” S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996).
Here, the Watsons argued that the statute of limitations simply did not apply to their case, but that in any event, the discovery rule made their action timely, asserting:
The statute of limitations does not apply in this case due to Appellee’s false representations, passive conduct and silence or failure to disclose and makes Appellee liable in his individual capacity because he knew of this fraud prior to becoming the Independent Executor of the Will, and Trustee of The Watson Family Trust, and continued to conceal the truth from Appellant[ ]’s after he was no longer the Independent Executor, and Trustee of The Watson Family Trust through passive silence.
The basis for the Watsons’ argument that the statute of limitations did not apply was that Schrader was not originally named as executor of the estate in the wills, and was not validly named as trustee of the Watson Family Trust. So, according to the Watsons, Schrader must have forged or altered the documents to name himself. The Watsons allege that they did not learn of these facts until 2013.
When Does An Action Accrue In Texas?
Under Texas law an action accrues when facts come into existence that:
- authorize a claimant to seek a judicial remedy,
- when a wrongful act causes some legal injury, or
- whenever one person may sue another.
The Watsons relied on the discovery rule to argue that the statute of limitations did not accrue until 2013. Here, Schrader argues that, at the latest, Appellants’ claims accrued in 2006, when the wife died and Schrader became executor.
What Is The Statute Of Limitations For Fraud And Fiduciary Duty Claims In Texas Probate?
Four years. The Watsons filed suit within four years of September 2013, when they obtained the affidavits from the witnesses to the will. The Watsons relied on the discovery rule to argue that their suit filed in 2016 was timely.
Does The Discovery Rule Apply To Texas Probate Cases?
No. The Texas Supreme Court has refused to apply the discovery rule in most Texas probate cases as a matter of public policy.
A four-year statute of limitations applies to fraud and breach of fiduciary duty As stated by the Texas Supreme Court in Little v. Smith, “Texas courts have refused to apply the discovery rule to claims arising out of probate proceedings in most instances, however, even in the face of allegations of fraud.” 943 S.W.2d 414, 420 (Tex. 1997). The court noted that this policy is based on the “strong public interest in according finality to probate proceedings.” Id. at 421. Accordingly, Appellants’ reliance on the discovery rule and their allegations of fraud are unavailing to defer the accrual of limitations for their claims against Appellee with respect to him being named as the executor of the estates.
In this case, Schrader stopped serving as trustee in 2006. The Watsons did not state any basis for why they were unable to know how Schrader administered the trust since that time. Therefore, the action filed in 2016 was barred by the statute of limitations as a matter of law.
What Is The Texas Statute Of Limitations For A Conversion Claim?
Two years. Therefore, even if one assumes that the Watsons did not learn of the alterations in the documents until September 2013, they still filed their lawsuit over two years later, in 2016.
What Is The Statute Of Limitations For A Negligent Misrepresentation Claim in Texas?
Two years. Therefore, just like the conversion claim, the negligent misrepresentation claim was long barred.
File Texas Probate Actions On Time
In this case, the Watsons simply waiting too long to take action. Filing a Texas probate lawsuit 10 years after death is almost never viable under the applicable statutes of limitation.
It is critical to act timely in Texas probate litigation. If you follow the deadlines and timelines in Texas probate, you will not risk your legitimate probate claims being barred by a technicality like the statute of limitations.