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CAUSE NO.
VIRGINIA 0. KINSEL, et. al., §
§
Plaintiffs, §
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v. §
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JANE 0. LINDSEY, et. al., §
§
Defendants. § 153RD JUDICIAL DISTRICT
DEFENDANTS' MOTION FOR NEW TRIAL , MOTION TO DISREGARD
JURY FINDINGS, AND MOTION TO MODIFY FINAL JUDGMENT
TO THE HONORABLE SUSAN MCCOY:
Pursuant to Texas Rules of Civil Procedure 320-324 and Texas common law,
Defendants Keith Branyon ("Branyon"), Jackson Walker, LLP ("Jackson Walker"), Jane
Lindsey ("Lindsey"), and Robert Oliver ("Oliver") file this Motion for New Trial, Motion
to Disregard Jury Findings, and Motion to Modify Final Judgment. 1
I
INTRODUCTION
This case anses from a dispute between family members of Lesey Kinsel,
deceased, over the sale of Lesey's 60% interest in a ranch in Atascosa County (the
"Kinsel Ranch"), and amendments that Lesey made to her trust (the "Trust"). Plaintiffs J.
Frank ("Jeff') Kinsel, Carole Edwards ("Carole"), and Catherine ("Cathy") Collins are
Lesey's step-grandchildren. Plaintiff Virginia Kinsel is the widow of J. Frank Kinsel,
Defendants incorporate by reference and adopt the arguments and authorities set forth in
Defendants' Motion for JNOV and briefing related thereto, and any and all post-verdict motions,
briefings, or letters filed in this matter by Defendants, including their objections to proposed
judgments. Also, no issues were submitted in this case as to Jackson Walker, only Branyon.
Thus, the granting of this motion in Branyon's favor necessarily means that Jackson Walker is
entitled to a new trial as well.
Defendants' Motion for New Trial- Page 1 1442782 1
Lesey's step-son; she also is the mother of Jeff and Carole. Defendants Jane Lindsey and
Robert Oliver are Lesey's niece and nephew, and Lesey's blood relatives. Lesey had no
children. Defendant Keith Branyon, an attorney with the Jackson Walker law firm, first
met Lesey, Lindsey and Oliver in February 2007, when he represented Lesey in the
execution (though not the preparation) of the 4th Amendment to her Trust. A year later,
he again represented Lesey in the sale of her interest in the Kinsel Ranch, and the
preparation and execution of the 5th Amendment to her Trust.
In September 2008, within a month ofLesey's death, Plaintiffs filed suit alleging
in part that Defendants2 fraudulently induced them to sell their interests in the Kinsel
Ranch in conjunction with Lesey's sale of her 60% interest. (The ranch sold in July 2008
for more than its appraised value; Lesey's gross proceeds from the sale were $3,053,000.)
Virginia Kinsel (and her late husband J. Frank Kinsel) and Cathy Collins received a
substantial amount of proceeds from the sale of their 10% interests in the ranch
(approximately $509,000 each). Nonetheless, they pleaded that they only agreed to sell
their interests because Branyon falsely represented to them that Lesey had to sell the
ranch because she was "running out of money." 3 Plaintiffs contended that Lindsey and
Oliver defrauded them by remaining silent with knowledge of Branyon's alleged
misrepresentation. Plaintiffs also alleged that Lesey Kinsel lacked the requisite mental
capacity to sell her interest in the Kinsel Ranch, or that she was unduly influenced by
2
Branyon and Jackson Walker were not added as Defendants until August 2010.
3
Jeff Kinsel and Carole Edwards never owned or sold an interest in the Kinsel Ranch. The
other 20% of the ranch was owned by other Kinsel family members who are not parties to this
suit. They also received their respective shares of the sales proceeds but chose not to join in the
other Kinsels' claims in this suit.
Defendants' Motion for New Trial- Page 2 1442782 1
Defendants to do same. Plaintiffs also pleaded that Lesey Kinsel lacked the capacity to
execute the 4th and 5th Amendments to her Trust, or was unduly influenced to do so.
Plaintiffs later amended their pleading to include a claim against Defendants for tortious
interference with inheritance rights.
Running through all these claims, though fitting none, was the suggestion that
Defendants had duped Lesey and the Plaintiffs into a ranch sale that Lesey's expenses did
not require, with the result that Lesey's ranch interest did not pass to the Plaintiffs under
the Trust, but had been converted to cash proceeds that would pass to Lindsey as the
Trust's residuary beneficiary. Notably, none of the Plaintiffs at any time sought to
rescind the ranch sale, from which Virginia Kinsel and Cathy Collins had profited, even
as they all sought to nullify the legal effect of Lesey's sale of her interest in the same
ranch, namely, that those proceeds would go to her niece, Lindsey, Lesey's chosen
beneficiary.
The case was tried to a jury from October 29 through November 16, 2012. During
trial, Judge Curry permitted Plaintiffs' counsel, whose clients were entirely aligned, to
conduct dual voir dire, dual examinations of all witnesses, and dual arguments. He failed
to give effect to his pre-trial rulings; e.g., granting Defendants' motion in limine to limit
Plaintiffs to the claims they had pleaded, but overruling objections to evidence that
wandered far afield (with no trial amendment sought by or granted to Plaintiffs). Judge
Curry permitted any witness to testify about statements allegedly made by Lesey Kinsel,
regardless of whether they were corroborated, in complete breach of the hearsay rule.
He allowed an expert treating physician to testify, even though Plaintiffs failed to provide
Defendants' Motion for New Trial - Page 3 1442782 1
- - - - - - - - - - - - - - - - - - -
a written expert report required by the scheduling order. In a case that was exclusively
about alleged conduct by Defendants prior to Lesey's death, Judge Curry admitted
irrelevant evidence regarding the conduct of probate proceedings thereafter that was
highly prejudicial to the Defendants. The result was a free-for-all, wherein Plaintiffs and
their counsel enjoyed free reign.
In essence, Plaintiffs' position at trial was as follows:
( 1) if Virginia Kinsel and Cathy Collins had not been defrauded into selling
their 10% interests in the Kinsel Ranch, and
(2) the 3rd Amendment to Lesey's Trust had been the last valid trust
amendment,
(3) then the Kinsel Ranch would not have been sold, and
(4) upon Lesey's death, Jeff Kinsel would have inherited 15% ofLesey's 60%
interest in the Kinsel Ranch, Carole Edwards would have inherited 15% of
Lesey's interest, Virginia Kinsel (as attorney in fact for J. Frank Kinsel)
would have inherited 10% of Lesey's interest, and Cathy Collins would
have inherited 20% ofLesey's interest.
Based on that theory, which had no legal basis under the claims pleaded or Texas
law, Plaintiffs simply asked the jury in closing argument to award them as fraud
damages, an amount equal to Lesey's 60% gross proceeds from the Kinsel Ranch sale in
the same percentages outlined in the 3rd Trust Amendment-even though there is not a
single document signed by Lesey distributing the proceeds to the Plaintiffs in the event
she sold her interest in the Kinsel Ranch. On the contrary, the uncontroverted evidence
was that Branyon had explained to Lesey that, with the ranch sold, the sale proceeds
would pass to Lindsey as the residuary trust beneficiary, that he had explained to her the
Defendants' Motion for New Trial- Page 4 1442782 1
option to amend her Trust to dedicate those proceeds to the Kinsels, and that she had
chosen, for her own reasons, not to make that change.
Judge Curry continued his erroneous ways in submitting the case, and in particular
the tort claims, to the jury. First, he submitted common law and statutory fraud questions
that had no legal, or factually insufficient, evidence to support them. In one egregious
example, he submitted fraud questions on behalf of Jeff Kinsel and Carole Edwards, who
testified they never owned or sold an interest in the Kinsel Ranch, and, consequently,
could not have been fraudulently induced to sell anything. In another, he submitted fraud
questions as to Oliver when it was undisputed that Oliver never communicated with any
of the Plaintiffs. He also submitted fraud questions on behalf of Virginia Kinsel and
Cathy Collins, whose own testimony negated any possible finding of justifiable reliance
on their behalf. The errors were not confined to the fraud claims. Judge Curry also
submitted a "tortious interference with inheritance rights" issue, which is not only
unsupported by legal or factually sufficient evidence, but which is not a cause of action
recognized by the Fort Worth Court of Appeals or the Texas Supreme Court.
In addition to submitting liability questions that were unsupported by the evidence,
Judge Curry submitted a fraud measure of damages instruction that is contrary to Texas
law. Ignoring long-standing law that limits fraud damages to out-of-pocket or benefit-of-
the-bargain damages (of which there was no evidence), Judge Curry erroneously
instructed the jury that fraud damages were "the value of [Plaintiffs'] present and future
interest, if any, in the Kinsel Ranch, excluding minerals." Even if this was somehow a
theoretically permissible measure of damages, it is undisputed that the Kinsel Ranch was
Defendants' Motion for New Trial- Page 5 1442782 1
sold to a third-party in July 2008. Thus, Plaintiffs had no "present and future" interest
that the jury could value as a matter of law-a fact that renders the jury's finding that the
combined value of Plaintiffs' alleged interests was over $3,000,000 absolutely
meaningless. It is certainly not supported by any legal or factually sufficient evidence.
In the end, the jury awarded the Plaintiffs the gross proceeds Lesey received from
the sale of her interest in the Kinsel Ranch as Plaintiffs' counsel suggested they do in
argument. 4 Of course, this results in nothing but a windfall for Plaintiffs because two of
them-Jeff and Carole-had no interest in the ranch, and the other Plaintiffs had already
received their share of the proceeds from the sale of the ranch after it was sold. The gross
sale proceeds for the Kinsel Ranch obviously do not constitute damages for any fraud
alleged by the Plaintiffs as a matter of law.
On December 28, 2012, Judge Curry signed his fatally flawed Final Judgment. In
the judgment, the Court awarded Plaintiffs as tort damages $3,053,000-the same
amount as Lesey's gross proceeds from the sale of her interest in the Kinsel Ranch,
realizing the error that the charge had invited. 5 Although the jury made specific findings
that Defendants were proportionately responsible for the underlying torts in percentages
that call for several liability (Lindsey 25%, Oliver 25%, and Branyon 50%), the Court
4
The amount awarded by the jury was not calculated to, and will not, put the Plaintiffs into
anything approximating the economic position that they would have been in if Lesey had elected
not to sell her interest-it fails to account for the fact that Virginia and Cathy would not have
sold their 10% interest, and it fails to account for the fact that Plaintiffs could not have received
either an interest in the ranch or proceeds without first paying substantial taxes.
5
The jury awarded Jeff Kinsel $763,000, which equals 15% of ranch sale gross proceeds,
Carole Edwards $763,000, which equals 15% of the ranch sale gross proceeds, Virginia Kinsel
$509,000, which equals 10% of ranch sale proceeds, and Cathy Collins $1,018,000, which equals
20% ofthe ranch sales proceeds. Collectively, the damages awards equal 60% ofthe ranch sale
gross proceeds, which is what Lesey received for her interest.
Defendants' Motion for New Trial- Page 6 1442782 1
entered a Final Judgment for joint and several liability based upon a conspiracy finding
that the proportionate responsibility findings negate, that itself had no evidentiary
support, and that was accompanied by no damages finding. To compound the error, the
Court awarded Plaintiffs $800,000 in attorney's fees, notwithstanding the fact that there
was no evidence that Plaintiffs entered into an agreement that created any obligation to
pay fees to any attorney and despite the failure to present a single piece ofpaper to the
jury supporting any services rendered or to segregate fees as strictly required by the
Texas Supreme Court.
The multitude of errors committed by Judge Curry in this case beggar explanation.
To any objective, unbiased eye, the errors clearly caused a manifestly unjust verdict and
judgment that must be set aside. Defendants understand that the jury reached conclusions
that are both adverse and serious; Defendants submit that the failures to enforce the rules
were too many and too basic for the jury's verdict to represent a meaningful set of
conclusions. Defendants also recognize that they are asking the Court to review
decisions of a trial over which she did not preside. Defendants, however, submit that the
errors committed by the Court's predecessor include errors that will be evident on their
face, and, both individually and collectively, are so egregious that they must be corrected.
At most, this case should have been tried on whether Lesey Kinsel lacked the requisite
mental capacity to amend her Trust and sell her interest in the Kinsel Ranch, or was
unduly influenced to do same. And even then, Judge Curry should have followed the law
and only allowed evidence on those matters that were relevant to when Lesey executed
the amendments and sales documents. Instead, and unfortunately, Plaintiffs were
Defendants' Motion for New Trial- Page 7 1442782 1
permitted to pursue and submit an array of ill-defined tort claims in disregard of Texas
law and the rules of evidence, and allowed to introduce evidence of Lesey's intermittent
state of mind months and even years removed from the specific dates in question, all of
which resulted in a runaway jury, a flawed verdict, and a reversible judgment.
If the Court does not grant a new trial to correct Judge Curry's errors, Defendants
will be forced to appeal. Given the patently egregious nature of many of the errors, the
appellate court will be forced to reverse the Court's judgment. In the interest of justice,
and to save the parties and the court of appeals the time and expense that will be
necessary to correct the Court's legal and evidentiary errors by appeal, Defendants
respectfully pray that the Court disregard jury findings and render judgment NOV in
Defendants' favor, or, alternatively, grant a new trial. 6
II.
FACTUAL BACKGROUND
Defendants provide a brief factual background to assist the Court in understanding
the issues raised below. Except where specifically indicated, these facts are undisputed
and conclusively established by the evidence presented at trial.
1. The ownership of the Kinsel Ranch.
E.A. Kinsel and his wife, Lesey, purchased the Kinsel Ranch in 1943. After E.A.
Kinsel passed away in 1979, Lesey owned 60% of the ranch-50% as community
property plus 10% willed to her by E.A. Kinsel. E.A. Kinsel left the remaining 40% of
6
In 2009, as the Court knows, the Texas Supreme Court reaffirmed that trial courts have
"broad discretion" in granting new trials. See In re Columbia Med. Ctr. of Las Colinas
Subsidiary, L.P., 290 S.W.3d 204, 210, 212 (Tex. 2009). This is especially true when the
damages awarded by the jury are "too large" or when there is any other "good cause" shown - as
expressly provided by Rule 320. !d. at 210 (citing Tex. R. Civ. P. 320).
Defendants' Motion for New Trial- Page 8 1442782 1
Kinsel Ranch to his four surviving children from a previous marriage: Virginia Kinsel's
husband-J. Frank Kinsel (10%), Joe Bob Kinsel, Sr.-Cathy Collins's father (10%),
Alex Kinsel (10%), and Maxine Prince (10%). Of the four surviving children, only the
estate of J. Frank Kinsel is a party in this lawsuit, through Virginia Kinsel as executrix of
his estate. Jeff Kinsel and Carole Edwards never owned an interest in the ranch.
Ex. 1, pp. 82-83; Ex. 2, p. 56. Cathy Collins's trust owned a 10% interest, which she
inherited from her father, Joe Bob Kinsel, Sr.
2. Creation of the Lesey B. Kinsel Trust and the early amendments.
Prior to moving to Fort Worth in 2005, which is where Lindsey and Oliver reside,
Lesey Kinsel lived in Beaumont and was a long-time client of attorney Floyd McSpadden
("McSpadden"). In 1996, McSpadden drafted a will and the Trust for Lesey Kinsel.
Ownership of all of Lesey's assets, including her 60% interest in the Kinsel Ranch, was
conveyed to the Trust. McSpadden also prepared the 1st, 2nd, and 3rd amendments to
the Trust and other estate-planning documents for Lesey Kinsel. The 3rd Amendment to
her Trust devised her 60% interest (surface and minerals) as follows: 10% to J. Frank
Kinsel, 15% to Jeff Kinsel, 15% to Carole Edwards, and 20% to Cathy Collins. Ex. 3.
3. The 4th Amendment to Lesey Kinsel's Trust.
In early 2007, Lesey asked McSpadden to draft the 4th Amendment to her Trust
and an updated will. After talking with Lesey over the phone and exchanging letters with
her, McSpadden drafted the 4th Amendment and the will in accordance with Lesey's
instructions. The 4th Amendment contained two changes at issue here. First, she deleted
the devise to J. Frank Kinsel. Second, she left the minerals underlying her 60% of the
Defendants' Motion for New Trial- Page 9 1442782_1
ranch to Lindsey and Oliver in equal shares. Thus, the 4th Amendment would leave
Lesey's 60% interest as follows: 20% of the surface to Jeff Kinsel, 20% of the surface to
Carole Edwards, and 20% to Cathy Collins. Half of the minerals were left to Lindsey,
and half of the minerals were left to Oliver. Ex. 4. Importantly, neither the Trust nor
any amendment thereto addressed what would happen to the proceeds in the event
Lesey Kinsel sold her 60o/o interest in the Kinsel Ranch during her lifetime. There is
no testamentary document indicating that Lesey Kinsel ever intended to give
Plaintiffs any money she might receive in the event she decided to sell her interest
during her lifetime.
By the time the 4th Amendment was drafted in early 2007, Lesey Kinsel was
residing in an assisted-living facility in Fort Worth, Broadway Plaza, which she selected
while previously visiting Lindsey in Fort Worth. It is undisputed that Lesey and Lindsey
had a very close relationship, and that Lesey moved to Fort Worth so that she could be
near Lindsey. It is also undisputed that Lindsey looked after Lesey while she lived in
Fort Worth and had Lesey's power of attorney. Lesey lived in a self-contained
apartment in Broadway Plaza without the need for live-in care of any sort and was living
as such when she executed the 4th Amendment to her Trust. Lesey did have poor
eyesight and was unable to read documents on her own. Accordingly, she needed to have
documents read to her so that she would know their contents before she signed them.
While her longtime Beaumont lawyer-McSpadden-had drafted the 4th
Amendment and the new will and advised Lesey about those documents, Lesey needed to
sign the documents in Fort Worth (the county of her residence). Branyon was therefore
Defendants' Motion for New Trial- Page 10 1442782_1
retained with the limited task to assist with the execution of the documents. 7 McSpadden
sent Branyon a detailed letter together with the 4th Amendment and will, explaining that
Lesey Kinsel had poor eyesight and that Branyon would need to read the documents to
her.
Branyon met with Lesey for approximately an hour and a half on February 23,
2007 (which is the first time they had ever met or spoken), and Lesey executed the 4th
Amendment at that meeting. None of the Plaintiffs was present when Lesey Kinsel met
with Branyon. Lindsey and Oliver also were not present. 8
The same day that Branyon met with Lesey, he sent a letter to McSpadden
regarding the meeting. He informed McSpadden that "[i]t was clear that Ms. Kinsel
knew all of the people that she had chosen to benefit and she asserted over and over that
she was comfortable with the terms" of the 4th Amendment. Plaintiffs presented no
evidence that Branyon made any changes to the 4th Amendment that McSpadden sent to
him before Lesey Kinsel signed it. Neither did Plaintiffs present any legally competent
evidence, direct or circumstantial, that Lindsey, Oliver or Branyon exerted any "undue
influence" on Lesey with regard to her execution of the 4th Amendment. Branyon had no
further contact with Lesey, Lindsey or Oliver for approximately one year.
7
Bob Oliver's son-in-law, Kent Smith, is a partner with Jackson Walker's Austin office.
8
Lindsey and Oliver accompanied Lesey to Jackson Walker's offices, but remained
outside the conference room while Branyon met with Lesey.
Defendants' Motion for New Trial- Page 11 1442782 1
4. The decision to sell Kinsel Ranch.
Paul Prince, Lesey's step-grandson, began taking care of the Kinsel Ranch at
Lesey's request in early 2007. 9 Ex. 5, p. 2. In November 2007, Prince, based on
conversations with Joe Bob Kinsel, Jr. (Cathy Collins's brother) about high prices for real
estate in the area, talked to Lindsey about whether it might be a good time to sell the
Kinsel Ranch. !d. at 23-24, 36-37. About one week later, Prince talked to Lesey about
the idea of selling the Kinsel Ranch. !d. at 24, 33, 37-38. Lesey told Prince that she
thought it was time to sell the ranch, even though she had a sentimental attachment to it.
!d. at 24, 37-38.
Following his conversation with Lesey, Prince ordered an appraisal for the Kinsel
Ranch and hired a broker. !d. at 38. In January 2008, Prince received an appraisal for the
Kinsel Ranch of approximately $2,100 per acre. !d. at 26. During this time period,
Prince showed the Kinsel Ranch to the broker, who then showed itto a potential cash
buyer. The potential buyer then offered $2,300 per acre and signed a Farm and Ranch
Contract on those terms. !d. at 39. Prince signed the contract on behalf of the sellers,
stipulating that "his signature is contingent upon him acquiring legal authority from all of
the heirs." !d. Prince testified that Lesey "was excited because she thought we got a lot
of money for the ranch." !d. at 30.
Virginia Kinsel first learned of Lesey's decision to sell her portion of the Kinsel
Ranch in December 2007. Ex. 6, p. 23. By that time, Virginia Kinsel was acting as
attorney-in-fact for J. Frank Kinsel, Sr., who had Alzheimer's disease. Because of his
9
Prince owned 3.333% of Kinsel Ranch, one-third of the 10% share that had been owned
by his mother, Maxine Prince.
Defendants' Motion for New Trial- Page 12 1442782 1
disease, she did not want him involved in the ranch sale process. Virginia testified that
she never believed that Lesey was "running out of money." ld. at 29.
Cathy Collins first learned of Lesey's decision to sell Kinsel Ranch in the latter
part of2007. She testified that in the latter part of2007, Paul Prince (not Lindsey, Oliver
or Branyon) contacted her and told her that Lesey was running out of money and had to
sell the ranch. Ex. 7, pp. 70-71.
5. Lesey retains Branyon to represent her in the sale of Kinsel Ranch.
It is undisputed that Branyon had no communications with Lesey from February
23, 2007 (the execution of the 4th Amendment) until February 2008, which is when he
was contacted about representing Lesey in the sale of the Kinsel Ranch. By that time, the
buyer had already made an offer to purchase the Kinsel Ranch, the buyer and Prince had
signed a contract, the Kinsel Ranch had been appraised, and Cathy Collins had become
an enthusiastic supporter of the ranch sale. Branyon had no role in any of these
developments or in the negotiations for the sale price of the Kinsel Ranch. Shortly after
the February 2008 contact, Branyon met with Lesey and confirmed her desire to sell her
Kinsel Ranch interest. E-mails show that Lesey decided to sell her interest in the
Kinsel Ranch by February 6, 2008 (Trial Exhibit 145, attached hereto as Exhibit
8)-five days before Branyon was even contacted about representing Lesey in the
sale of the ranch (Trial Exhibit 49, attached hereto as Exhibit 9).
Branyon's first task was to identify all of the Kinsel heirs who owned an interest
in the ranch; thus, he sent letters to all persons he had been told might have an ownership
interest in Kinsel Ranch. The letters sought to confirm ownership interests, notify the
Defendants' Motion for New Trial- Page 13 1442782 1
owners of the offer on the ranch, and to gauge interest in selling the ranch. In February
2008, Branyon sent such letters to Cathy Collins and J. Frank Kinsel, Sr. that stated in
part:
I represent Lesey Kinsel and the trustee of her living trust with regard to the
referenced property [Kinsel Ranch]. As you may know, Ms. Kinsel's living
expenses, including the care she receives at her home, have increased
substantially of late. As we have investigated the various possibilities
available to her in raising some additional cash, she has made the decision
that she would like to sell the referenced property in Atascosa County. It is
my understanding that her Trust currently holds her 60% interest and that
the other 40% is owned by various people. I was given your name by Bob
Oliver and Jane Lindsey, and it is my understanding that you [own an
interest in the ranch]. . .. In my experience, the ranch would clearly bring
more money for everyone if it were sold intact rather than sold in pieces.
Trial Exhibits 57 and 59 (attached hereto as Exhibits 10 and 11). According to
Plaintiffs' 8th Amended Petition, these letters were the sole basis for Plaintiffs' claims
against Branyon and Jackson Walker for common law fraud, statutory fraud in a real
estate transaction, and conspiracy to commit fraud. Plaintiffs' only pleaded fraud claims
against Lindsey and Oliver were that Lindsey and Oliver committed fraud by failing to
advise Plaintiffs of the falsity of Branyon's letters. However:
• Virginia Kinsel and Cathy Collins testified at trial they could not identify
anything untrue in the letter. Ex. 6, pp. 42-43; Ex. 7, pp. 146-47.
• The letters do not state "that the Kinsel Ranch needed to be sold to raise
money for Lesey B. Kinsel's living expenses."
• Nothing in the letters indicates that J. Frank (and Virginia) or Collins would
be required to sell their interests.
6. The Kinsel Ranch sale closes.
Lesey signed the Kinsel Ranch sales contract on April 15, 2008. On that same
day, Lindsey signed the Kinsel Ranch sales contract on behalf of the other sellers who
Defendants' Motion for New Trial- Page 14 1442782 1
had granted her a limited power of attorney to execute documents related to the sale of
the Kinsel Ranch. Virginia Kinsel obtained a power of attorney from her husband and
also agreed to the sale of J. Frank Kinsel, Sr.'s interest in Kinsel Ranch.
The sale of the Kinsel Ranch closed on or about July 25, 2008. Collins received
$509,067.94 in exchange for her 10% interest in Kinsel Ranch. J. Frank and Virginia
Kinsel received $509,279.44 in exchange for J. Frank Kinsel, Sr.'s 10% interest in the
Kinsel Ranch. Plaintiffs presented no evidence showing that any seller objected to the
sale price. Plaintiffs also presented no evidence that their interests in the ranch were
worth more than the amount they received from the sale. On the contrary, the sale price
exceeded the appraisal.
7. The 5th Amendment to Lesey Kinsel's Trust.
During the ranch sale process, Branyon met with Lesey several times to discuss
whether she wanted to make any additional changes to her estate-planning documents.
As a result of those meetings, including a meeting on August 4, 2008, Branyon drafted
the 5th Amendment and met with Lesey on August 12, 2008 to discuss that Amendment.
Lesey signed the 5th Amendment during her August 12, 2008 meeting with Branyon.
Ex. 12. Branyon also testified, without contradiction, that he advised Lesey that the Trust
provision giving her ranch interest to the Plaintiffs at her death would not apply to the
proceeds of the sale of her ranch interest. Instead, he explained, those proceeds would
pass to Lindsey as the residuary beneficiary. Branyon also told Lesey that another trust
amendment would be required if she wished for those proceeds to pass to the Kinsels in
Defendants' Motion for New Trial- Page 15 1442782_1
the same fashion as the 4th Amendment. According to Branyon, and again without
contradiction, Lesey decided not to make that change.
Lesey passed away on August 22, 2008.
III.
ARGUMENT AND AUTHORITIES
A. FRAUD: There is no evidence to support the submission of fraud.
Alternatively, the evidence is factually insufficient evidence to support the
jury's fraud findings (Question Nos. 1-12 and 16-27).
As a threshold matter, this Court should disregard the jury's answers to Question
Nos. 1-12 and 16-27 (common law and statutory fraud and damages), modify the Final
Judgment to eliminate any finding and recovery for common law and statutory fraud, or,
alternatively, grant a new trial because there is absolutely no evidence that Defendants in
any way intended to defraud Plaintiffs, which is required under Texas law. See Ernst &
Young, LLP v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577-79 (Tex. 2001). In addition,
the fraud and damages findings should be disregarded for the following reasons:
1. Jeff Kinsel and Carole Edwards never owned or sold an interest in the
Kinsel Ranch.
Plaintiffs claimed they were fraudulently induced to sell their interests in the
Kinsel Ranch. Plaintiffs' live Petition limited their fraud claims (both common law and
statutory) to the claim that Defendants had "conspired to fraudulently induce Plaintiffs
into selling their interests in the Kinsel Ranch by misrepresenting that Lesey needed to
1
sell the ranch in order to cover escalating living expenses." Plaintiffs' 8h Amended
Petition, ~ 53, p. 23 (emphasis added). At trial, however, Jeff Kinsel and Carole
Edwards testified that they never owned or sold an interest in the Kinsel Ranch;
Defendants' Motion for New Trial- Page 16 1442782 1
thus, they could not and were not induced to do anything. Ex. 1, pp. 82-83 and Ex. 2, p.
56. Despite this unequivocal testimony, Judge Curry incredibly submitted common law
and statutory fraud questions to the jury on their behalf. This is clear, reversible error.
To sustain a fraud finding, Texas law requires that Plaintiffs prove actual and
justifiable reliance on a misrepresentation. Grant Thornton LLP v. Prospect High Income
Fund, 314 S.W.3d 913, 923 (Tex. 2010). Because Jeff Kinsel and Carole Edwards were
not induced to enter a contract, they cannot show reliance as a matter of law. As the
Texas Supreme Court explained in Haase v. Glazner:
Texas law has long imposed a duty to abstain from inducing another to
enter a contract through the use of fraudulent misrepresentations. Certainly
there can be no breach of that duty when one is not induced into a contract.
More significantly, proof that a party relied to its detriment on an alleged
misrepresentation is an essential element of a fraud claim. Without a
binding agreement, there is no detrimental reliance, and thus no fraudulent
inducement claim. That is, when a party has not incurred a contractual
obligation, it has not been induced to do anything.
62 S.W.3d 795, 798 (Tex. 2001) (emphasis added). The Court must therefore disregard
the jury's findings to Questions 4, 7, 19, and 22 as to Jeff Kinsel and Carole Edwards.
2. Virginia Kinsel and Cathy Collins provided no legally or factually
sufficient evidence of actual and justifiable reliance.
The two Plaintiffs who did sell an interest in the Kinsel Ranch, Virginia Kinsel
and Cathy Collins, provided no evidence of actual and justifiable reliance. On the
contrary, their own testimony (as well as other evidence) conclusively negated any such
reliance. Thus, the Court must disregard the jury's answers to Questions 1, 10, 16, and
25.
Defendants' Motion for New Trial- Page 17 1442782_1
In measuring justifiability, the Court "must inquire whether, gtven a fraud
plaintiffs individual characteristics, abilities, and appreciation of facts and circumstances
at or before the time of the alleged fraud, it is extremely unlikely that there is actual
reliance on the plaintiffs part." Grant Thornton LLP v. Prospect High Income Fund, 314
S.W.3d 913, 923 (Tex. 2010) (quoting Haralson v. E.F. Hutton Group, Inc., 919 F.2d
1014, 1026 (5th Cir. 1990) (applying Texas law)) (internal quotations omitted).
"Moreover, a person may not justifiably rely on a representation if there are red flags
indicating such reliance is unwarranted." /d. (quoting Lewis v. Bank of Am., NA., 343
F.3d 540, 546 (5th Cir. 2003) (internal quotations omitted)) (emphasis added). "For
example, a party's reliance on a representation is not justified when the pa
Preview
CAUSE NO. VIRGINIA 0. KINSEL, et. al., § § Plaintiffs, § § v. § § JANE 0. LINDSEY, et. al., § § Defendants. § 153RD JUDICIAL DISTRICT DEFENDANTS' MOTION FOR NEW TRIAL , MOTION TO DISREGARD JURY FINDINGS, AND MOTION TO MODIFY FINAL JUDGMENT TO THE HONORABLE SUSAN MCCOY: Pursuant to Texas Rules of Civil Procedure 320-324 and Texas common law, Defendants Keith Branyon ("Branyon"), Jackson Walker, LLP ("Jackson Walker"), Jane Lindsey ("Lindsey"), and Robert Oliver ("Oliver") file this Motion for New Trial, Motion to Disregard Jury Findings, and Motion to Modify Final Judgment. 1 I INTRODUCTION This case anses from a dispute between family members of Lesey Kinsel, deceased, over the sale of Lesey's 60% interest in a ranch in Atascosa County (the "Kinsel Ranch"), and amendments that Lesey made to her trust (the "Trust"). Plaintiffs J. Frank ("Jeff') Kinsel, Carole Edwards ("Carole"), and Catherine ("Cathy") Collins are Lesey's step-grandchildren. Plaintiff Virginia Kinsel is the widow of J. Frank Kinsel, Defendants incorporate by reference and adopt the arguments and authorities set forth in Defendants' Motion for JNOV and briefing related thereto, and any and all post-verdict motions, briefings, or letters filed in this matter by Defendants, including their objections to proposed judgments. Also, no issues were submitted in this case as to Jackson Walker, only Branyon. Thus, the granting of this motion in Branyon's favor necessarily means that Jackson Walker is entitled to a new trial as well. Defendants' Motion for New Trial- Page 1 1442782 1 Lesey's step-son; she also is the mother of Jeff and Carole. Defendants Jane Lindsey and Robert Oliver are Lesey's niece and nephew, and Lesey's blood relatives. Lesey had no children. Defendant Keith Branyon, an attorney with the Jackson Walker law firm, first met Lesey, Lindsey and Oliver in February 2007, when he represented Lesey in the execution (though not the preparation) of the 4th Amendment to her Trust. A year later, he again represented Lesey in the sale of her interest in the Kinsel Ranch, and the preparation and execution of the 5th Amendment to her Trust. In September 2008, within a month ofLesey's death, Plaintiffs filed suit alleging in part that Defendants2 fraudulently induced them to sell their interests in the Kinsel Ranch in conjunction with Lesey's sale of her 60% interest. (The ranch sold in July 2008 for more than its appraised value; Lesey's gross proceeds from the sale were $3,053,000.) Virginia Kinsel (and her late husband J. Frank Kinsel) and Cathy Collins received a substantial amount of proceeds from the sale of their 10% interests in the ranch (approximately $509,000 each). Nonetheless, they pleaded that they only agreed to sell their interests because Branyon falsely represented to them that Lesey had to sell the ranch because she was "running out of money." 3 Plaintiffs contended that Lindsey and Oliver defrauded them by remaining silent with knowledge of Branyon's alleged misrepresentation. Plaintiffs also alleged that Lesey Kinsel lacked the requisite mental capacity to sell her interest in the Kinsel Ranch, or that she was unduly influenced by 2 Branyon and Jackson Walker were not added as Defendants until August 2010. 3 Jeff Kinsel and Carole Edwards never owned or sold an interest in the Kinsel Ranch. The other 20% of the ranch was owned by other Kinsel family members who are not parties to this suit. They also received their respective shares of the sales proceeds but chose not to join in the other Kinsels' claims in this suit. Defendants' Motion for New Trial- Page 2 1442782 1 Defendants to do same. Plaintiffs also pleaded that Lesey Kinsel lacked the capacity to execute the 4th and 5th Amendments to her Trust, or was unduly influenced to do so. Plaintiffs later amended their pleading to include a claim against Defendants for tortious interference with inheritance rights. Running through all these claims, though fitting none, was the suggestion that Defendants had duped Lesey and the Plaintiffs into a ranch sale that Lesey's expenses did not require, with the result that Lesey's ranch interest did not pass to the Plaintiffs under the Trust, but had been converted to cash proceeds that would pass to Lindsey as the Trust's residuary beneficiary. Notably, none of the Plaintiffs at any time sought to rescind the ranch sale, from which Virginia Kinsel and Cathy Collins had profited, even as they all sought to nullify the legal effect of Lesey's sale of her interest in the same ranch, namely, that those proceeds would go to her niece, Lindsey, Lesey's chosen beneficiary. The case was tried to a jury from October 29 through November 16, 2012. During trial, Judge Curry permitted Plaintiffs' counsel, whose clients were entirely aligned, to conduct dual voir dire, dual examinations of all witnesses, and dual arguments. He failed to give effect to his pre-trial rulings; e.g., granting Defendants' motion in limine to limit Plaintiffs to the claims they had pleaded, but overruling objections to evidence that wandered far afield (with no trial amendment sought by or granted to Plaintiffs). Judge Curry permitted any witness to testify about statements allegedly made by Lesey Kinsel, regardless of whether they were corroborated, in complete breach of the hearsay rule. He allowed an expert treating physician to testify, even though Plaintiffs failed to provide Defendants' Motion for New Trial - Page 3 1442782 1 - - - - - - - - - - - - - - - - - - - a written expert report required by the scheduling order. In a case that was exclusively about alleged conduct by Defendants prior to Lesey's death, Judge Curry admitted irrelevant evidence regarding the conduct of probate proceedings thereafter that was highly prejudicial to the Defendants. The result was a free-for-all, wherein Plaintiffs and their counsel enjoyed free reign. In essence, Plaintiffs' position at trial was as follows: ( 1) if Virginia Kinsel and Cathy Collins had not been defrauded into selling their 10% interests in the Kinsel Ranch, and (2) the 3rd Amendment to Lesey's Trust had been the last valid trust amendment, (3) then the Kinsel Ranch would not have been sold, and (4) upon Lesey's death, Jeff Kinsel would have inherited 15% ofLesey's 60% interest in the Kinsel Ranch, Carole Edwards would have inherited 15% of Lesey's interest, Virginia Kinsel (as attorney in fact for J. Frank Kinsel) would have inherited 10% of Lesey's interest, and Cathy Collins would have inherited 20% ofLesey's interest. Based on that theory, which had no legal basis under the claims pleaded or Texas law, Plaintiffs simply asked the jury in closing argument to award them as fraud damages, an amount equal to Lesey's 60% gross proceeds from the Kinsel Ranch sale in the same percentages outlined in the 3rd Trust Amendment-even though there is not a single document signed by Lesey distributing the proceeds to the Plaintiffs in the event she sold her interest in the Kinsel Ranch. On the contrary, the uncontroverted evidence was that Branyon had explained to Lesey that, with the ranch sold, the sale proceeds would pass to Lindsey as the residuary trust beneficiary, that he had explained to her the Defendants' Motion for New Trial- Page 4 1442782 1 option to amend her Trust to dedicate those proceeds to the Kinsels, and that she had chosen, for her own reasons, not to make that change. Judge Curry continued his erroneous ways in submitting the case, and in particular the tort claims, to the jury. First, he submitted common law and statutory fraud questions that had no legal, or factually insufficient, evidence to support them. In one egregious example, he submitted fraud questions on behalf of Jeff Kinsel and Carole Edwards, who testified they never owned or sold an interest in the Kinsel Ranch, and, consequently, could not have been fraudulently induced to sell anything. In another, he submitted fraud questions as to Oliver when it was undisputed that Oliver never communicated with any of the Plaintiffs. He also submitted fraud questions on behalf of Virginia Kinsel and Cathy Collins, whose own testimony negated any possible finding of justifiable reliance on their behalf. The errors were not confined to the fraud claims. Judge Curry also submitted a "tortious interference with inheritance rights" issue, which is not only unsupported by legal or factually sufficient evidence, but which is not a cause of action recognized by the Fort Worth Court of Appeals or the Texas Supreme Court. In addition to submitting liability questions that were unsupported by the evidence, Judge Curry submitted a fraud measure of damages instruction that is contrary to Texas law. Ignoring long-standing law that limits fraud damages to out-of-pocket or benefit-of- the-bargain damages (of which there was no evidence), Judge Curry erroneously instructed the jury that fraud damages were "the value of [Plaintiffs'] present and future interest, if any, in the Kinsel Ranch, excluding minerals." Even if this was somehow a theoretically permissible measure of damages, it is undisputed that the Kinsel Ranch was Defendants' Motion for New Trial- Page 5 1442782 1 sold to a third-party in July 2008. Thus, Plaintiffs had no "present and future" interest that the jury could value as a matter of law-a fact that renders the jury's finding that the combined value of Plaintiffs' alleged interests was over $3,000,000 absolutely meaningless. It is certainly not supported by any legal or factually sufficient evidence. In the end, the jury awarded the Plaintiffs the gross proceeds Lesey received from the sale of her interest in the Kinsel Ranch as Plaintiffs' counsel suggested they do in argument. 4 Of course, this results in nothing but a windfall for Plaintiffs because two of them-Jeff and Carole-had no interest in the ranch, and the other Plaintiffs had already received their share of the proceeds from the sale of the ranch after it was sold. The gross sale proceeds for the Kinsel Ranch obviously do not constitute damages for any fraud alleged by the Plaintiffs as a matter of law. On December 28, 2012, Judge Curry signed his fatally flawed Final Judgment. In the judgment, the Court awarded Plaintiffs as tort damages $3,053,000-the same amount as Lesey's gross proceeds from the sale of her interest in the Kinsel Ranch, realizing the error that the charge had invited. 5 Although the jury made specific findings that Defendants were proportionately responsible for the underlying torts in percentages that call for several liability (Lindsey 25%, Oliver 25%, and Branyon 50%), the Court 4 The amount awarded by the jury was not calculated to, and will not, put the Plaintiffs into anything approximating the economic position that they would have been in if Lesey had elected not to sell her interest-it fails to account for the fact that Virginia and Cathy would not have sold their 10% interest, and it fails to account for the fact that Plaintiffs could not have received either an interest in the ranch or proceeds without first paying substantial taxes. 5 The jury awarded Jeff Kinsel $763,000, which equals 15% of ranch sale gross proceeds, Carole Edwards $763,000, which equals 15% of the ranch sale gross proceeds, Virginia Kinsel $509,000, which equals 10% of ranch sale proceeds, and Cathy Collins $1,018,000, which equals 20% ofthe ranch sales proceeds. Collectively, the damages awards equal 60% ofthe ranch sale gross proceeds, which is what Lesey received for her interest. Defendants' Motion for New Trial- Page 6 1442782 1 entered a Final Judgment for joint and several liability based upon a conspiracy finding that the proportionate responsibility findings negate, that itself had no evidentiary support, and that was accompanied by no damages finding. To compound the error, the Court awarded Plaintiffs $800,000 in attorney's fees, notwithstanding the fact that there was no evidence that Plaintiffs entered into an agreement that created any obligation to pay fees to any attorney and despite the failure to present a single piece ofpaper to the jury supporting any services rendered or to segregate fees as strictly required by the Texas Supreme Court. The multitude of errors committed by Judge Curry in this case beggar explanation. To any objective, unbiased eye, the errors clearly caused a manifestly unjust verdict and judgment that must be set aside. Defendants understand that the jury reached conclusions that are both adverse and serious; Defendants submit that the failures to enforce the rules were too many and too basic for the jury's verdict to represent a meaningful set of conclusions. Defendants also recognize that they are asking the Court to review decisions of a trial over which she did not preside. Defendants, however, submit that the errors committed by the Court's predecessor include errors that will be evident on their face, and, both individually and collectively, are so egregious that they must be corrected. At most, this case should have been tried on whether Lesey Kinsel lacked the requisite mental capacity to amend her Trust and sell her interest in the Kinsel Ranch, or was unduly influenced to do same. And even then, Judge Curry should have followed the law and only allowed evidence on those matters that were relevant to when Lesey executed the amendments and sales documents. Instead, and unfortunately, Plaintiffs were Defendants' Motion for New Trial- Page 7 1442782 1 permitted to pursue and submit an array of ill-defined tort claims in disregard of Texas law and the rules of evidence, and allowed to introduce evidence of Lesey's intermittent state of mind months and even years removed from the specific dates in question, all of which resulted in a runaway jury, a flawed verdict, and a reversible judgment. If the Court does not grant a new trial to correct Judge Curry's errors, Defendants will be forced to appeal. Given the patently egregious nature of many of the errors, the appellate court will be forced to reverse the Court's judgment. In the interest of justice, and to save the parties and the court of appeals the time and expense that will be necessary to correct the Court's legal and evidentiary errors by appeal, Defendants respectfully pray that the Court disregard jury findings and render judgment NOV in Defendants' favor, or, alternatively, grant a new trial. 6 II. FACTUAL BACKGROUND Defendants provide a brief factual background to assist the Court in understanding the issues raised below. Except where specifically indicated, these facts are undisputed and conclusively established by the evidence presented at trial. 1. The ownership of the Kinsel Ranch. E.A. Kinsel and his wife, Lesey, purchased the Kinsel Ranch in 1943. After E.A. Kinsel passed away in 1979, Lesey owned 60% of the ranch-50% as community property plus 10% willed to her by E.A. Kinsel. E.A. Kinsel left the remaining 40% of 6 In 2009, as the Court knows, the Texas Supreme Court reaffirmed that trial courts have "broad discretion" in granting new trials. See In re Columbia Med. Ctr. of Las Colinas Subsidiary, L.P., 290 S.W.3d 204, 210, 212 (Tex. 2009). This is especially true when the damages awarded by the jury are "too large" or when there is any other "good cause" shown - as expressly provided by Rule 320. !d. at 210 (citing Tex. R. Civ. P. 320). Defendants' Motion for New Trial- Page 8 1442782 1 Kinsel Ranch to his four surviving children from a previous marriage: Virginia Kinsel's husband-J. Frank Kinsel (10%), Joe Bob Kinsel, Sr.-Cathy Collins's father (10%), Alex Kinsel (10%), and Maxine Prince (10%). Of the four surviving children, only the estate of J. Frank Kinsel is a party in this lawsuit, through Virginia Kinsel as executrix of his estate. Jeff Kinsel and Carole Edwards never owned an interest in the ranch. Ex. 1, pp. 82-83; Ex. 2, p. 56. Cathy Collins's trust owned a 10% interest, which she inherited from her father, Joe Bob Kinsel, Sr. 2. Creation of the Lesey B. Kinsel Trust and the early amendments. Prior to moving to Fort Worth in 2005, which is where Lindsey and Oliver reside, Lesey Kinsel lived in Beaumont and was a long-time client of attorney Floyd McSpadden ("McSpadden"). In 1996, McSpadden drafted a will and the Trust for Lesey Kinsel. Ownership of all of Lesey's assets, including her 60% interest in the Kinsel Ranch, was conveyed to the Trust. McSpadden also prepared the 1st, 2nd, and 3rd amendments to the Trust and other estate-planning documents for Lesey Kinsel. The 3rd Amendment to her Trust devised her 60% interest (surface and minerals) as follows: 10% to J. Frank Kinsel, 15% to Jeff Kinsel, 15% to Carole Edwards, and 20% to Cathy Collins. Ex. 3. 3. The 4th Amendment to Lesey Kinsel's Trust. In early 2007, Lesey asked McSpadden to draft the 4th Amendment to her Trust and an updated will. After talking with Lesey over the phone and exchanging letters with her, McSpadden drafted the 4th Amendment and the will in accordance with Lesey's instructions. The 4th Amendment contained two changes at issue here. First, she deleted the devise to J. Frank Kinsel. Second, she left the minerals underlying her 60% of the Defendants' Motion for New Trial- Page 9 1442782_1 ranch to Lindsey and Oliver in equal shares. Thus, the 4th Amendment would leave Lesey's 60% interest as follows: 20% of the surface to Jeff Kinsel, 20% of the surface to Carole Edwards, and 20% to Cathy Collins. Half of the minerals were left to Lindsey, and half of the minerals were left to Oliver. Ex. 4. Importantly, neither the Trust nor any amendment thereto addressed what would happen to the proceeds in the event Lesey Kinsel sold her 60o/o interest in the Kinsel Ranch during her lifetime. There is no testamentary document indicating that Lesey Kinsel ever intended to give Plaintiffs any money she might receive in the event she decided to sell her interest during her lifetime. By the time the 4th Amendment was drafted in early 2007, Lesey Kinsel was residing in an assisted-living facility in Fort Worth, Broadway Plaza, which she selected while previously visiting Lindsey in Fort Worth. It is undisputed that Lesey and Lindsey had a very close relationship, and that Lesey moved to Fort Worth so that she could be near Lindsey. It is also undisputed that Lindsey looked after Lesey while she lived in Fort Worth and had Lesey's power of attorney. Lesey lived in a self-contained apartment in Broadway Plaza without the need for live-in care of any sort and was living as such when she executed the 4th Amendment to her Trust. Lesey did have poor eyesight and was unable to read documents on her own. Accordingly, she needed to have documents read to her so that she would know their contents before she signed them. While her longtime Beaumont lawyer-McSpadden-had drafted the 4th Amendment and the new will and advised Lesey about those documents, Lesey needed to sign the documents in Fort Worth (the county of her residence). Branyon was therefore Defendants' Motion for New Trial- Page 10 1442782_1 retained with the limited task to assist with the execution of the documents. 7 McSpadden sent Branyon a detailed letter together with the 4th Amendment and will, explaining that Lesey Kinsel had poor eyesight and that Branyon would need to read the documents to her. Branyon met with Lesey for approximately an hour and a half on February 23, 2007 (which is the first time they had ever met or spoken), and Lesey executed the 4th Amendment at that meeting. None of the Plaintiffs was present when Lesey Kinsel met with Branyon. Lindsey and Oliver also were not present. 8 The same day that Branyon met with Lesey, he sent a letter to McSpadden regarding the meeting. He informed McSpadden that "[i]t was clear that Ms. Kinsel knew all of the people that she had chosen to benefit and she asserted over and over that she was comfortable with the terms" of the 4th Amendment. Plaintiffs presented no evidence that Branyon made any changes to the 4th Amendment that McSpadden sent to him before Lesey Kinsel signed it. Neither did Plaintiffs present any legally competent evidence, direct or circumstantial, that Lindsey, Oliver or Branyon exerted any "undue influence" on Lesey with regard to her execution of the 4th Amendment. Branyon had no further contact with Lesey, Lindsey or Oliver for approximately one year. 7 Bob Oliver's son-in-law, Kent Smith, is a partner with Jackson Walker's Austin office. 8 Lindsey and Oliver accompanied Lesey to Jackson Walker's offices, but remained outside the conference room while Branyon met with Lesey. Defendants' Motion for New Trial- Page 11 1442782 1 4. The decision to sell Kinsel Ranch. Paul Prince, Lesey's step-grandson, began taking care of the Kinsel Ranch at Lesey's request in early 2007. 9 Ex. 5, p. 2. In November 2007, Prince, based on conversations with Joe Bob Kinsel, Jr. (Cathy Collins's brother) about high prices for real estate in the area, talked to Lindsey about whether it might be a good time to sell the Kinsel Ranch. !d. at 23-24, 36-37. About one week later, Prince talked to Lesey about the idea of selling the Kinsel Ranch. !d. at 24, 33, 37-38. Lesey told Prince that she thought it was time to sell the ranch, even though she had a sentimental attachment to it. !d. at 24, 37-38. Following his conversation with Lesey, Prince ordered an appraisal for the Kinsel Ranch and hired a broker. !d. at 38. In January 2008, Prince received an appraisal for the Kinsel Ranch of approximately $2,100 per acre. !d. at 26. During this time period, Prince showed the Kinsel Ranch to the broker, who then showed itto a potential cash buyer. The potential buyer then offered $2,300 per acre and signed a Farm and Ranch Contract on those terms. !d. at 39. Prince signed the contract on behalf of the sellers, stipulating that "his signature is contingent upon him acquiring legal authority from all of the heirs." !d. Prince testified that Lesey "was excited because she thought we got a lot of money for the ranch." !d. at 30. Virginia Kinsel first learned of Lesey's decision to sell her portion of the Kinsel Ranch in December 2007. Ex. 6, p. 23. By that time, Virginia Kinsel was acting as attorney-in-fact for J. Frank Kinsel, Sr., who had Alzheimer's disease. Because of his 9 Prince owned 3.333% of Kinsel Ranch, one-third of the 10% share that had been owned by his mother, Maxine Prince. Defendants' Motion for New Trial- Page 12 1442782 1 disease, she did not want him involved in the ranch sale process. Virginia testified that she never believed that Lesey was "running out of money." ld. at 29. Cathy Collins first learned of Lesey's decision to sell Kinsel Ranch in the latter part of2007. She testified that in the latter part of2007, Paul Prince (not Lindsey, Oliver or Branyon) contacted her and told her that Lesey was running out of money and had to sell the ranch. Ex. 7, pp. 70-71. 5. Lesey retains Branyon to represent her in the sale of Kinsel Ranch. It is undisputed that Branyon had no communications with Lesey from February 23, 2007 (the execution of the 4th Amendment) until February 2008, which is when he was contacted about representing Lesey in the sale of the Kinsel Ranch. By that time, the buyer had already made an offer to purchase the Kinsel Ranch, the buyer and Prince had signed a contract, the Kinsel Ranch had been appraised, and Cathy Collins had become an enthusiastic supporter of the ranch sale. Branyon had no role in any of these developments or in the negotiations for the sale price of the Kinsel Ranch. Shortly after the February 2008 contact, Branyon met with Lesey and confirmed her desire to sell her Kinsel Ranch interest. E-mails show that Lesey decided to sell her interest in the Kinsel Ranch by February 6, 2008 (Trial Exhibit 145, attached hereto as Exhibit 8)-five days before Branyon was even contacted about representing Lesey in the sale of the ranch (Trial Exhibit 49, attached hereto as Exhibit 9). Branyon's first task was to identify all of the Kinsel heirs who owned an interest in the ranch; thus, he sent letters to all persons he had been told might have an ownership interest in Kinsel Ranch. The letters sought to confirm ownership interests, notify the Defendants' Motion for New Trial- Page 13 1442782 1 owners of the offer on the ranch, and to gauge interest in selling the ranch. In February 2008, Branyon sent such letters to Cathy Collins and J. Frank Kinsel, Sr. that stated in part: I represent Lesey Kinsel and the trustee of her living trust with regard to the referenced property [Kinsel Ranch]. As you may know, Ms. Kinsel's living expenses, including the care she receives at her home, have increased substantially of late. As we have investigated the various possibilities available to her in raising some additional cash, she has made the decision that she would like to sell the referenced property in Atascosa County. It is my understanding that her Trust currently holds her 60% interest and that the other 40% is owned by various people. I was given your name by Bob Oliver and Jane Lindsey, and it is my understanding that you [own an interest in the ranch]. . .. In my experience, the ranch would clearly bring more money for everyone if it were sold intact rather than sold in pieces. Trial Exhibits 57 and 59 (attached hereto as Exhibits 10 and 11). According to Plaintiffs' 8th Amended Petition, these letters were the sole basis for Plaintiffs' claims against Branyon and Jackson Walker for common law fraud, statutory fraud in a real estate transaction, and conspiracy to commit fraud. Plaintiffs' only pleaded fraud claims against Lindsey and Oliver were that Lindsey and Oliver committed fraud by failing to advise Plaintiffs of the falsity of Branyon's letters. However: • Virginia Kinsel and Cathy Collins testified at trial they could not identify anything untrue in the letter. Ex. 6, pp. 42-43; Ex. 7, pp. 146-47. • The letters do not state "that the Kinsel Ranch needed to be sold to raise money for Lesey B. Kinsel's living expenses." • Nothing in the letters indicates that J. Frank (and Virginia) or Collins would be required to sell their interests. 6. The Kinsel Ranch sale closes. Lesey signed the Kinsel Ranch sales contract on April 15, 2008. On that same day, Lindsey signed the Kinsel Ranch sales contract on behalf of the other sellers who Defendants' Motion for New Trial- Page 14 1442782 1 had granted her a limited power of attorney to execute documents related to the sale of the Kinsel Ranch. Virginia Kinsel obtained a power of attorney from her husband and also agreed to the sale of J. Frank Kinsel, Sr.'s interest in Kinsel Ranch. The sale of the Kinsel Ranch closed on or about July 25, 2008. Collins received $509,067.94 in exchange for her 10% interest in Kinsel Ranch. J. Frank and Virginia Kinsel received $509,279.44 in exchange for J. Frank Kinsel, Sr.'s 10% interest in the Kinsel Ranch. Plaintiffs presented no evidence showing that any seller objected to the sale price. Plaintiffs also presented no evidence that their interests in the ranch were worth more than the amount they received from the sale. On the contrary, the sale price exceeded the appraisal. 7. The 5th Amendment to Lesey Kinsel's Trust. During the ranch sale process, Branyon met with Lesey several times to discuss whether she wanted to make any additional changes to her estate-planning documents. As a result of those meetings, including a meeting on August 4, 2008, Branyon drafted the 5th Amendment and met with Lesey on August 12, 2008 to discuss that Amendment. Lesey signed the 5th Amendment during her August 12, 2008 meeting with Branyon. Ex. 12. Branyon also testified, without contradiction, that he advised Lesey that the Trust provision giving her ranch interest to the Plaintiffs at her death would not apply to the proceeds of the sale of her ranch interest. Instead, he explained, those proceeds would pass to Lindsey as the residuary beneficiary. Branyon also told Lesey that another trust amendment would be required if she wished for those proceeds to pass to the Kinsels in Defendants' Motion for New Trial- Page 15 1442782_1 the same fashion as the 4th Amendment. According to Branyon, and again without contradiction, Lesey decided not to make that change. Lesey passed away on August 22, 2008. III. ARGUMENT AND AUTHORITIES A. FRAUD: There is no evidence to support the submission of fraud. Alternatively, the evidence is factually insufficient evidence to support the jury's fraud findings (Question Nos. 1-12 and 16-27). As a threshold matter, this Court should disregard the jury's answers to Question Nos. 1-12 and 16-27 (common law and statutory fraud and damages), modify the Final Judgment to eliminate any finding and recovery for common law and statutory fraud, or, alternatively, grant a new trial because there is absolutely no evidence that Defendants in any way intended to defraud Plaintiffs, which is required under Texas law. See Ernst & Young, LLP v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577-79 (Tex. 2001). In addition, the fraud and damages findings should be disregarded for the following reasons: 1. Jeff Kinsel and Carole Edwards never owned or sold an interest in the Kinsel Ranch. Plaintiffs claimed they were fraudulently induced to sell their interests in the Kinsel Ranch. Plaintiffs' live Petition limited their fraud claims (both common law and statutory) to the claim that Defendants had "conspired to fraudulently induce Plaintiffs into selling their interests in the Kinsel Ranch by misrepresenting that Lesey needed to 1 sell the ranch in order to cover escalating living expenses." Plaintiffs' 8h Amended Petition, ~ 53, p. 23 (emphasis added). At trial, however, Jeff Kinsel and Carole Edwards testified that they never owned or sold an interest in the Kinsel Ranch; Defendants' Motion for New Trial- Page 16 1442782 1 thus, they could not and were not induced to do anything. Ex. 1, pp. 82-83 and Ex. 2, p. 56. Despite this unequivocal testimony, Judge Curry incredibly submitted common law and statutory fraud questions to the jury on their behalf. This is clear, reversible error. To sustain a fraud finding, Texas law requires that Plaintiffs prove actual and justifiable reliance on a misrepresentation. Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex. 2010). Because Jeff Kinsel and Carole Edwards were not induced to enter a contract, they cannot show reliance as a matter of law. As the Texas Supreme Court explained in Haase v. Glazner: Texas law has long imposed a duty to abstain from inducing another to enter a contract through the use of fraudulent misrepresentations. Certainly there can be no breach of that duty when one is not induced into a contract. More significantly, proof that a party relied to its detriment on an alleged misrepresentation is an essential element of a fraud claim. Without a binding agreement, there is no detrimental reliance, and thus no fraudulent inducement claim. That is, when a party has not incurred a contractual obligation, it has not been induced to do anything. 62 S.W.3d 795, 798 (Tex. 2001) (emphasis added). The Court must therefore disregard the jury's findings to Questions 4, 7, 19, and 22 as to Jeff Kinsel and Carole Edwards. 2. Virginia Kinsel and Cathy Collins provided no legally or factually sufficient evidence of actual and justifiable reliance. The two Plaintiffs who did sell an interest in the Kinsel Ranch, Virginia Kinsel and Cathy Collins, provided no evidence of actual and justifiable reliance. On the contrary, their own testimony (as well as other evidence) conclusively negated any such reliance. Thus, the Court must disregard the jury's answers to Questions 1, 10, 16, and 25. Defendants' Motion for New Trial- Page 17 1442782_1 In measuring justifiability, the Court "must inquire whether, gtven a fraud plaintiffs individual characteristics, abilities, and appreciation of facts and circumstances at or before the time of the alleged fraud, it is extremely unlikely that there is actual reliance on the plaintiffs part." Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex. 2010) (quoting Haralson v. E.F. Hutton Group, Inc., 919 F.2d 1014, 1026 (5th Cir. 1990) (applying Texas law)) (internal quotations omitted). "Moreover, a person may not justifiably rely on a representation if there are red flags indicating such reliance is unwarranted." /d. (quoting Lewis v. Bank of Am., NA., 343 F.3d 540, 546 (5th Cir. 2003) (internal quotations omitted)) (emphasis added). "For example, a party's reliance on a representation is not justified when the pa