Interlocutory appeals serve as a vital component of the legal system, providing a mechanism for parties to seek immediate review of important legal issues during an ongoing case.
Unlike regular appeals that occur after a final judgment, interlocutory appeals address specific rulings or issues that could significantly impact the outcome of the case or have broader implications. This form of appeal plays a crucial role in preserving rights, promoting efficiency and judicial economy, establishing legal precedents, protecting constitutional rights, and preventing irreparable harm.
This can be particularly important in probate cases as the probate courts often enter a number of orders before the final judgment in the case, and the probate dispute can last for quite some time–with cases spanning several years being the norm.
The recent In re Bumstead Family Irrevocable Trust, No. 13-20-00350-CV (Tex. App. Aug. 10, 2020), on appeal from Probate Court No. 1 of Harris County, Texas, provides an opportunity to consider whether two of the most common types of probate court orders are immediately appealable.
The Facts & Procedural History
This case involves a trustee and alleged breaches of his fiduciary duty.
On November 13, 2019, the trust beneficiaries sued the trustee. The plaintiffs sought declaratory relief, an accounting, the imposition of a constructive trust, the removal of the alleged trustee, and temporary injunctive relief. The lawsuit alleged multiple causes of action, including fraud, breach of fiduciary duty, negligence, undue influence, trespass, conversion, and money had and received.
On July 20, 2020, the trial court issued a comprehensive order that suspended the trustee’s powers as trustee and appointed a receiver. The court found that the trustee had failed to fulfill his duty to disclose material facts, maintain the separation of trust and entity assets, and avoid commingling assets. The court also determined that the trustee breached fiduciary duties, engaged in self-dealing, and provided inadequate accountings.
As a result, the court assumed jurisdiction over the disputed assets, imposed injunctive relief to prevent the trustee from interfering with the trusts, assets, and entities involved, and mandated that the trustee provide an accounting for each trust. The order contained 180 separate enumerated paragraphs with general findings and findings supporting interim relief, a probable right of recovery, and probable imminent and irreparable harm.
The Ability to Immediately Appeal the Court Order
The question for an appeal is often one of timing. There are court orders that cannot be appealed until the final trial on the merits. This delay can result in significant injustice. This is why Texas law allows some court orders to be appealed immediately. These so-called “interlocutory appeals” are had sooner rather than later.
An interlocutory appeal and a regular appeal differ in the timing and scope of the appeal process. An interlocutory appeal occurs during an ongoing case, addressing specific issues and temporarily halting the proceedings until the appellate court resolves the matter. It aims to review important legal issues that could impact the case. In contrast, a regular appeal takes place after the final judgment, encompassing the entire case and allowing parties to challenge legal errors. It does not automatically suspend proceedings in the trial court, and parties have a specific time frame to file the appeal.
Thus, an interlocutory appeal focuses on specific issues during an ongoing case, while a regular appeal addresses the entire case after the final judgment or order has been issued. Interlocutory appeals aim to resolve important legal questions promptly, while regular appeals seek to review the final decision of the trial court.
Interlocutory Appeal for Removal of Trustee
The first issue the appeals court considered is whether the parties could immediately appeal the probate court’s order to suspend the trustee.
The appeals court had previously ruled in a different case that it did not have jurisdiction over an appeal removing a trustee. In the current case, however, the appeals court noted that the facts were different. The probate court not only removed the trustee but also appointed a receiver. Thus, there was no need for a trustee.
Thus, the appeals court concluded that this was sufficient to allow it to have jurisdiction, as it caused the issue to be immediately appealable.
Interlocutory Appeal for an Accounting
The second issue was whether the parties could immediately appeal the probate court’s order for an accounting.
Again, prior court cases suggested that this decision was not immediately appealable. The appeals court noted that the facts, in this case, were different as the order was part of a temporary injunction. Since temporary injunctions are appealable, the order for accounting, in this case, was appealable.
Those who want to preserve their right to immediately appeal a probate court order removing a trustee or for an accounting may want to ensure that the claims and court orders follow the process in this case. The trustee removal should involve the appointment of a receiver and the accounting request should be part of a temporary injunction.
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