Texas Court of Appeals Says It Has Jurisdiction Over Two Brothers Who Received Funds From Property Sale – Family and Marriage
United States: Texas Court of Appeals Says It Has Jurisdiction Over Two Brothers Who Received Funds From Property Sale
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The Texas Court of Appeals recently ruled that a title company could sue two brothers who received proceeds from the sale of their deceased father’s Texas property, and that the brothers’ actions were sufficient to confer jurisdiction. To see Capital Title of Tex., LLC v. shank, 2022 Texas App. LEXIS 1138 (Tex. App. February 17, 2022). In the case, a couple bought a second home in Texas. The husband died, and although his will provided that his interest in the property revert to his wife, she never verified the will. In 2019, the wife concluded a contract for the sale of the property. Under Texas ab intestate law, the husband’s 50% undivided interest in the property passed to his four children from a previous marriage in equal shares (that is to say, 12.5% each). So the title company contacted the kids about the sale. All four agreed to sign deeds, but two agreed that the proceeds from their sales could go to the wife and two, Mark and Douglas, asked to receive their 12.5% of the proceeds themselves. However, for disputed reasons, only 50% of the proceeds went to the wife and 25% each to Mark and Douglas, who refused to return the excess monies. The wife and two children who did not want the proceeds of the sale then sued the title company, and the title company filed a third-party lawsuit against Mark and Douglas for unjust enrichment. Mark and Douglas filed a combined special appearance arguing that the Texas court did not have jurisdiction over them. The trial court agreed and granted the special appearance.
On appeal, the Court reversed. The Court confirmed that “[t]The exercise of personal jurisdiction satisfies due process if (1) the non-resident defendant has established minimal contact with the forum state and (2) the exercise of jurisdiction conforms to traditional notions of fair play and substantial justice.” The Court then agreed with Mark and Douglas that the fact that their father bought the property, their stepmother refused to probate the will and their stepmother decided to sell ownership did not give them jurisdiction, but the transaction did not end there.[I]If the brothers wanted to avoid Texas jurisdiction over this transaction, they could have simply refused to sign the deed. And if they wanted to sever all ties with Texas regarding ownership, they could have signed a quit claim in favor of Carolyn or their brothers. . . . Instead, they opted to sign the general warranty deed and pass on their interest to the buyers in exchange for a portion of the sale proceeds. In doing so, they established an ongoing relationship between themselves, the buyers, and Texas.” Also, given that Douglas resides in a neighboring state and Mark acknowledged that he sometimes travels to Texas to visit his father , the Court found that it would not be particularly onerous for them to defend a lawsuit in Texas. Accordingly, the Court reversed the judgment of the trial court.
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