GNADT v. MOODY NATIONAL BANK IV (2026)

OPINION

Appellant Valerie Lynn Gnadt (“Gnadt”), as independent executrix of the estate of Deloris Darlene Moody (“Darlene”), appeals an order granting the discharge of appellee Moody National Bank (“MNB”) as the executor of the estate of W.L. Moody, IV (“Bill”). In one issue, Gnadt argues the trial court erred in granting the discharge because MNB did not provide her with the required statutory notice. We affirm.

I. Background

Darlene and Bill were married and are now deceased. MNB has been the executor for Bill's estate since Bill's death and Gnadt is the executor for Darlene's estate. This appeal arises from the probate proceedings from Bill's estate.

During their marriage, Bill and Darlene executed a Marital Property Agreement (“MPA”), which provided:

[Bill] and [Darlene] covenant and agree that all of their marital property other than that described on Schedule A and Schedule B is and shall remain or become, as the case may be, community property of [Bill] and [Darlene]. Accordingly, [Bill] and [Darlene] shall each own an undivided one-half (1/2) community property interest in and to all of the marital property of [Bill] and [Darlene] other than those assets which are specifically described on Schedule A and Schedule B.

The MPA did not list oil and gas assets and the “Buffalo Gap Property” that were purchased during Bill and Darlene's marriage, which thus were community property pursuant to the MPA's terms. As a result, Darlene owned an undivided one-half interest in these assets following Bill's death, but they have remained in Bill's estate since his passing.

In 2023, Gnadt as the executor of Darlene's estate and MNB as the executor of Bill's estate executed a Confidential Settlement Agreement and Release (the “Settlement Agreement”). The Settlement Agreement addresses the dispute between Darlene's estate and Bill's estate concerning the character of their community and separate property and includes a broad release of future claims. In January 2025, MNB filed an unopposed application for resignation and judicial discharge as the personal representative of Bill's estate, which the trial court granted. It is undisputed that MNB did not provide Darlene's estate with notice of its application for judicial discharge.

Gnadt filed a motion for new trial, arguing that MNB's judicial discharge should be set aside because MNB failed to provide her with the notice required by Estates Code § 361.003. See Tex. Estates Code Ann. §§ 361.003, 361.005; Tex. R. App. P. 33.1(a). In support of her argument, Gnadt attached MNB's application for resignation showing that she was not among the parties served. MNB filed a response arguing that Darlene's estate was no longer an “interested person” in Bill's estate. The trial court held an evidentiary hearing on Gnadt's motion and admitted into evidence copies of the Settlement Agreement and the MPA. At the end of the hearing, the trial court granted Gnadt's request for an opportunity to file a reply brief “to address specifically the legal authorities that have been cited to the Court.”

In Gnadt's reply to MNB's response, she argued that the agreement's terms did not apply to Darlene's interest in the oil and gas leases and the Buffalo Gap property because the parties were mutually mistaken if these interests were included in the Settlement Agreement. Gnadt attached to her reply copies of emails from MNB and other documents in support of her contention that the agreement was unenforceable as to these assets because of a mutual mistake. The trial court overruled Gnadt's motion, and this appeal followed. See Cunningham v. Fox, 879 S.W.2d 210, 212 (Tex. App.—Houston [14th Dist.] 1994, writ denied) (“A determination that the applicant lacks interest in the estate ‘is in no sense interlocutory,’ and is a final judgment.” (quoting Womble v. Atkins, 160 Tex. 363, 331 S.W.2d 294 (1960))).

II. Discussion

In one issue, Gnadt argues the trial court erred in granting MNB's petition for discharge because she did not receive the required statutory notice as an “interested person.”

A. Applicable Law

“A personal representative who wishes to resign the representative's trust shall file a written application with the court clerk, accompanied by a complete and verified exhibit and final account showing the true condition of the estate entrusted to the representative's care.” Tex. Est. Code Ann. § 361.001.¹ The probate court may immediately accept the resignation of a personal representative and appoint a successor, but the court may not discharge the resigning representative or release the sureties on the representative's bond until a final order has been issued or judgment has been rendered on the required final account. Id. § 361.002.

“When an application to resign as personal representative is filed under Section 361.001, supported by the exhibit and final account required under that section, the court clerk shall bring the application to the judge's attention and the judge shall set a date for a hearing on the matter.” Id. § 361.003(a). After a hearing is set, “the clerk shall issue a citation to all interested persons ․” Id. § 361.003(b). In relevant part, “interested person” or “person interested” means “an heir, devisee, spouse, creditor, or any other having a property right in or claim against an estate being administered ․” Id. § 22.018(1).

B. Standards of Review

The construction and interpretation of a statute's language is a question of law we review de novo. See Baumgardner v. Brazos River Auth., 714 S.W.3d 597, 601 (Tex. 2025) (per curiam); Maxim Crane Works, L.P. v. Zurich Am. Ins., 642 S.W.3d 551, 557 (Tex. 2022). The truest manifestation of legislative intent is the literal text of the statute. Baumgardner, 714 S.W.3d at 601; see BankDirect Cap. Fin., LLC v. Plasma Fab, LLC, 519 S.W.3d 76, 86 (Tex. 2017) (“The text is the alpha and the omega of the interpretive process.”). Accordingly, we rely on the plain meaning of the statutory text, reading contextually to give effect to every word, clause, and sentence and giving undefined words their common, ordinary meaning unless a more precise definition is apparent from the statutory context or the plain meaning yields an absurd result. Baumgardner, 714 S.W.3d at 601; see also Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam) (“We presume the Legislature included each word in the statute for a purpose and that words not included were purposefully omitted.”).

New trials may be granted and a judgment set aside for good cause. Tex. R. Civ. P. 320. We review a trial court's ruling on a motion for new trial for an abuse of discretion. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009). A trial court abuses its discretion when its decision is unreasonable or arbitrary or when it rules without reference to guiding rules and principles. See Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex. 1999) (per curiam).

C. Analysis

To answer the question of whether Gnadt was entitled to notice under § 361.003(b), we must determine whether Gnadt is an “interested person” under the Estates Code and whether the Settlement Agreement prevented Gnadt from being “an interested person.”

1. Who is “an interested person” under Estates Code § 22.018?

Gnadt was entitled to notice under § 361.003(b) if she, as the executor of Darlene's estate, is an “interested person” in Bill's estate. See Tex. Est. Code Ann. § 361.003(b). The statute defines “interested person” as “an heir, devisee, spouse, creditor, or any other having a property right in or claim against an estate being administered ․” Id. § 22.018(1).

Gnadt argues that Darlene's estate is an interested person regardless of the Settlement Agreement because Darlene was Bill's “spouse,” as well as a “devisee” under his will, and points to precedent from the Texarkana and Eastland courts of appeal. See, e.g., Estate of Daniels, 575 S.W.3d 841, 845–46 & n.6 (Tex. App.—Texarkana 2019, pet. denied) (concluding that § 22.018 defines “interested person” as “heir, devisee, spouse, [or] creditor” or “one who has a property right in” or a “claim against” the estate being administered); see also, e.g., Matter of Estate of Holley, No. 11-15-00173-CV, 2017 WL 549009, at *3 (Tex. App.—Eastland Feb. 10, 2017, pet. denied) (mem. op.) (concluding the same). The Texarkana and Eastland courts focused on the language “heir, devisee, spouse, creditor” in concluding that no other showing is necessary to be an interested person under the statute. See Daniels, 575 S.W.3d 841 at 845–46 & n.6; Holley, 2017 WL 549009, at *3. However, other courts of appeal have looked at the statutory language in its entirety and concluded that any “heir, devisee, spouse, creditor, or any other” person must have “a property right in or claim against an estate being administered” in order to be an “interested person.” See Wassmer v. Hopper, 463 S.W.3d 513, 524 (Tex. App.—El Paso 2014, no pet.) (holding that heirs lacked standing after conveying their interest in decedent's estate to a third party); In re Litoff, No. 05-13-00556-CV, 2014 WL 1690746, at *3 (Tex. App.—Dallas Apr. 29, 2014, no pet.) (mem. op.) (holding that once a party relinquishes his interest in the estate, he becomes a “stranger to the estate” and no longer has standing); In re Estate of Velasco, 214 S.W.3d 213, 216 (Tex. App.—El Paso 2007, no pet.) (holding that where a brother and otherwise heir of an intestate decedent transferred his interest in the estate to a third party, the brother was not an interested person and therefore did not have standing to challenge an administration proceeding).

We note that two canons of statutory construction could apply to the statutory language here: the last-antecedent canon and the series-qualifier canon. Under the series-qualifier canon, the phrase “having a property right in or claim against an estate being administered” would modify all nouns listed in the series before it. See U.S. Polyco, Inc. v. Tex. Cent. Bus. Lines Corp., 681 S.W.3d 383, 387 (Tex. 2023) (per curiam). Under the last-antecedent canon, the phrase would only modify the last item in the series. Id. The last-antecedent and series-qualifier canons generally will reasonably point in different directions. Id. at 387–88. “The task of the court is to assess the language, structure, and context of a written instrument to determine which principle carries more weight and relevance.” Id. at 388.

The Supreme Court of Texas has explained the type of interest a party must demonstrate to establish standing in a probate proceeding:

[T]he term “person interested” has a well-defined but restricted meaning. The interest referred to must be a pecuniary one, held by the party either as an individual or in a representative capacity, which will be affected by the probate or defeat of the will. An interest resting on sentiment or sympathy, or any other basis other than gain or loss of money or its equivalent, is insufficient. Thus the burden is on every person ․ to allege, and, if required, to prove, that he has some legally ascertained pecuniary interest, real or prospective, absolute or contingent, which will be impaired or benefited [sic], or in some manner materially affected ․

Logan v. Thomason, 146 Tex. 37, 202 S.W.2d 212, 215 (1947); see Ferreira v. Butler, 575 S.W.3d 331, 334–35 (Tex. 2019) (“The statutory definition of interested person includes anyone ‘having a property right in or claim against an estate.’ We have reframed this standing test broadly as whether ‘the proponent[ ] possesse[s] a pecuniary interest to be benefited and affected by the probate of the will and one which would ․ be[ ] materially impaired in the absence of its probate.’ ”).

“A court may not judicially amend a statute by adding words that are not contained in the language of the statute. Instead, it must apply the statute as written.” Lippincott v. Whisenhunt, 462 S.W.3d 507, 508 (Tex. 2015) (per curiam). We disagree with the conclusions reached by the Texarkana and Eastland courts because they were reached by adding a word to the plain language of the statute and because of the statute's context. See id.; Daniels, 575 S.W.3d 841, 845 (“Because Section 22.018 defines ‘interested person’ in the disjunctive, one is an interested person if they are an ‘heir, devisee, spouse, [or] creditor’ or one who has a ‘property right in’ or a ‘claim against’ the estate being administered.”); Holley, 2017 WL 549009 at *3 (same). Additionally, such a construction would lead to absurd results because it would permit anyone listed in § 22.018 to qualify as an “interested person” even when they lack any pecuniary interest in the estate. See Estate of Johnson, 631 S.W.3d 56, 60 (Tex. 2021) (“In the absence of such interest a contestant is a mere meddlesome intruder.”); Brashear v. Dorai, No. 14-19-00194-CV, 2020 WL 5792304, at *3 (Tex. App.—Houston [14th Dist.] Sept. 29, 2020, no pet.) (mem. op.) (“[I]t is not the policy of the State of Texas to permit those who have no interest in a decedent's estate to intermeddle therein.”). Therefore, we conclude that “interested person” under § 22.018(1) means “an heir, devisee, spouse, creditor, or any other” if such person has “a property right in or claim against an estate being administered ․” See Tex. Est. Code Ann. § 22.018(1); Logan, 202 S.W.2d at 215.

2. Is Darlene's estate an “interested person” in Bill's estate?

Next, we must determine whether Gnadt was entitled to notice under § 361.003(b) as an interested person in light of the Settlement Agreement executed by Gnadt, on behalf of Darlene's estate, and MNB, on behalf of Bill's estate. At the trial court, MNB argued that Darlene's estate was not an interested person because Darlene's estate had released all interests and claims against Bill's estate in the Settlement Agreement.

We construe the intent of the parties via a settlement agreement according to its plain language, so long as it is not ambiguous. See El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 806 (Tex. 2012). While our task is to effectuate the intent of the parties that made the Settlement Agreement, we must do so “as expressed in the writing itself.” See Burlington Res. Oil & Gas Co. v. Tex. Crude Energy, LLC, 573 S.W.3d 198, 203 (Tex. 2019). Terms are given their plain, ordinary, and generally accepted meaning unless the Settlement Agreement text itself shows that such terms were used in a technical or different sense. Id.

The Settlement Agreement provides that Darlene's estate and Bill's estate “mutually desire to enter into this Agreement in order to fully and finally compromise and resolve the Dispute” and defines “the Dispute” by stating:

[A] dispute has arisen between MNB and [Darlene] regarding: (1) potential community property of [Bill], Deceased ․ and [Darlene], Deceased ․, (2) potential separate property of [Bill] as of [Bill's] date of death, (3) potential separate property of [Darlene] as of [Bill's] date of death, (4) any other issues arising out of the separate versus community character of property owned by [Bill] or [Darlene] (or both) during the marriage of [Bill] and [Darlene], and (5) the Marital Property Agreement dated April 6, 2014 (hereinafter referred to as “the Dispute”).

The Settlement Agreement then provides for the settlement amount and includes a broad and comprehensive release:

Mutual Releases. Subject to the terms, conditions, and obligations of this Agreement, and following receipt of the Settlement Amount, each Party releases, acquits, and forever discharges the other from any and all claims, actions, suits, demands, liabilities, losses, damages, attorneys' fees, and court costs, whether known or unknown, based upon, arising out of, attributable to, or relating to, the Dispute (the “Released Matters”). These mutual releases are binding on, and run to the benefit of, each Party's, as applicable, past or present employees, agents, attorneys, officers, directors, shareholders, subsidi8lies, affiliates, partners, successors, heirs, and assigns (the “Related Parties”). The Parties acknowledge and agree that the mutual releases herein are enforceable general releases.

Here, the plain language of the Settlement Agreement unambiguously provides that Darlene's estate released Bill's estate from any claims, actions, suits, demands, liabilities, losses, and damages—i.e., Darlene's estate released any right and interest it had in Bill's estate—“whether known or unknown” that is “attributable to, or relating to, the Dispute.” The plain language of the release in the Settlement Agreement and the evidence in the record establish that Gnadt's underlying complaint and claim is “attributable to or relating to the Dispute”: Gnadt's underlying complaint concerns Darlene's one-half interest in certain assets acquired during Darlene and Bill's marriage, the Settlement Agreement defines “the Dispute” broadly to include all of Bill and Darlene's community and separate property, and Gnadt's complaint concerning those assets arose subsequent to and as a result of the execution of the Settlement Agreement. Thus, we conclude that the plain language of the mutual release applies to Gnadt's underlying complaint concerning the oil and gas assets and the Buffalo Gap property.

Additionally, despite having a section for exceptions to the releases, the Settlement Agreement provides only a very limited exception for the enforcement of the Settlement Agreement: “Exception to Releases. The foregoing releases shall not serve as a bar or defense to any claims or actions seeking enforcement of this Agreement, and nothing herein shall be construed as a release or waiver of any Party's obligations, representations, or warranties under this Agreement.” Finally, the Settlement Agreement provides that it is an integrated agreement:

Entire Agreement and Disclaimer of Reliance. The Parties represent and warrant that this Agreement states the entire settlement agreement between the Parties with respect to the Dispute, and that this Agreement supersedes all prior or contemporaneous oral or written understandings, settlement agreements, statements, or promises with respect to the matters settled herein. The Parties also represent and warrant that no representation of fact or opinion has been made by any other Party to this Agreement or anyone acting on behalf of such Party to induce this compromise with respect to the extent or nature of the damages claimed by any Party. Each Party expressly disclaims reliance upon any facts, promises, undertakings, or representations made by any other Party or such Party's attorneys before the date of the execution of this Agreement. This Agreement may not be amended or modified except by an agreement in writing executed by all Parties.

We conclude that the plain language of the Settlement Agreement released any interest Darlene's estate had in Bill's estate and thus Gnadt was not an interested person unless she established a defense to the enforcement of the agreement. See Tex. Est. Code Ann. § 22.018(1); Womack v. Holley, No. 14-94-00565-CV, 1995 WL 613068, at *4 (Tex. App.—Houston [14th Dist.] Oct. 19, 1995, writ denied) (not designated for publication) (“In the absence of mutual mistake or fraud, family settlement agreements will be upheld.”). At the hearing on her motion for new trial, Gnadt argued that the Settlement Agreement was not enforceable against the oil and gas interests and the Buffalo Gap property because of the mutual-mistake doctrine and attempted to introduce evidence in support of her allegation that the parties were mutually mistaken when they accidentally included the disputed assets in the Settlement Agreement.

Generally, a court may not consider “extrinsic evidence ‘to create an ambiguity or to give the contract a meaning different from that which its language imports.’ ” First Bank vs. Brumitt, 519 S.W.3d 95, 109–10 (Tex. 2017). Further, subsequent communications and conduct cannot contradict an unambiguous contract. See Sun Oil v. Madeley, 626 S.W.2d 726,732 (Tex. 1981) (concluding that appellate court erred by considering subsequent conduct to interpret unambiguous contract); Roc-Houston, P.A. v. Parameswaran, No. 01-22-00613-CV, 2024 WL 3762479 at *7 (Tex. App.—Houston [1st Dist.] August 13, 2024, no pet.) (mem. op.) (“Evidence of the parties' conduct after contract formation is extrinsic evidence that may not be considered when interpreting an unambiguous contract.”). Nevertheless, “mutual mistake” is an affirmative defense that states “when the parties to an agreement have contracted under a misconception or ignorance of a material fact, the agreement will be avoided.” Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). The burden to establish mutual mistake is on the party seeking to avoid the agreement, and it is a fact issue to be determined by the trier of fact. Id. at 265; see Smith–Gilbard v. Perry, 332 S.W.3d 709, 714 (Tex. App.–Dallas 2011, no pet.). If it can be established that a release sets out a bargain that was never made, then it will be invalidated. Williams, 789 S.W.2d at 265. Thus, if the objective manifestation of the parties' intent—i.e., their conduct—indicates that no release of unknown personal injuries was contemplated, then the courts cannot provide intent for them. Id. Stated differently, unambiguous contract language does not defeat a mutual mistake claim as a matter of law. See id. (“We overrule McCarty and disapprove McClellan to the extent that they give controlling weight to the language of the release to defeat a claim of mutual mistake.”).

Here, the trial court held an evidentiary hearing on Gnadt's motion for new trial and admitted into evidence MNB's copies of the MPA and the Settlement Agreement, but it did not admit into evidence any of Gnadt's proffered exhibits. At the hearing, the trial court granted Gnadt's request to submit a reply to MNB's response, discussing the applicable law only, at a later date. When Gnadt filed her reply, she attached multiple documents in support of her contention that the parties did not intend for the Settlement Agreement to cover the interest in the oil and gas assets.² MNB then filed objections to these documents.

On appeal, Gnadt argues the trial court considered her exhibits as evidence in ruling on her motion for new trial because the trial court did not rule on MNB's objections. Contrary to Gnadt's argument, the trial court's order provides that the court considered Gnadt's motion, MNB's response, counsel's arguments, and the evidence on file. Although “the evidence on file” could be construed as including the exhibits attached to Gnadt's reply filed with the clerk's record, the exclusion of her “reply” from the trial court's consideration indicates that the trial court did not consider them. See, e.g., Envt'l Procs., Inc. v. Guidry, 282 S.W.3d 602, 620 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (“Our conclusion that the trial court did in fact decline to consider this evidence is consistent with the order on the judgment, in which the trial court stated that the motion and response were considered, but did not mention the reply.”). Gnadt does not advance any argument on appeal challenging the trial court's exclusion of her evidence. See Tex. R. App. P. 38.1(i).

Accordingly, we will not consider any of Gnadt's evidence in reviewing the trial court's ruling on her motion for new trial. As noted, the Settlement Agreement in the record establishes that Gnadt, as the executor of Darlene's estate, and MNB, as the executor of Bill's estate, executed a mutual release. Because the evidence before the trial court conclusively establishes that Darlene's estate no longer had a pecuniary interest in Bill's estate, we cannot conclude that the trial court erred in implicitly rejecting Gnadt's mutual-mistake argument, finding that Darlene's estate was not an “interested person,” and denying Gnadt's motion for new trial. See In re Estate of Velasco, 214 S.W.3d 213, 216 (Tex. App.—El Paso 2007, no pet.) (“[T]he record contains a conveyance whereby Velasco transferred any interest he may have had in his sister's estate to ONEOK. Even if we read the assertions contained in the various motions as true, this conveyance left Velasco with no pecuniary interest in the estate.”); Estate of Maberry, No. 11-18-00349-CV, 2020 WL 7863337, at *3 (Tex. App.—Eastland Dec. 31, 2020, no pet.) (mem. op.) (“Harper lost standing by clearly and unambiguously agreeing to release any right or interest she had or may have had to the decedent's estate. Accordingly, she no longer constituted an interested person under the Estates Code.”).

Finally, even if we were to consider Gnadt's evidence, the evidence would only raise a fact issue as to the intent of the parties and Gnadt's assertion of mutual mistake. See El Paso Field Servs, 389 S.W.3d at 806; Williams, 789 S.W.2d at 265; see also Estes v. Rep. Nat'l Bank of Dall., 462 S.W.2d 273, 275 (Tex. 1970) (“While it is true that parol evidence is admissible to show that the writing, because of a mutual mistake, incorrectly reflects the true agreement, and that the equitable remedy of reformation is available to correct such a mutual mistake in the written instrument, reformation is unavailable unless the party claiming mistake presents ‘clear, exact, and satisfactory evidence,’ ․”). The trial court, as fact-finder, implicitly found that there was no mutual mistake in overruling Gnadt's motion for new trial. On appeal, Gnadt does not challenge the sufficiency of the evidence underpinning this implicit finding as necessary to establish that the trial court abused its discretion when it denied her motion for new trial. See Tex. R. App. P. 38.1(i); Garcia, 988 S.W.2d at 222.

We overrule Gnadt's sole issue on appeal.

III. Conclusion

We affirm the trial court's order.

FOOTNOTES

1.   Estates Code Chapter 361 is titled “Death, Resignation, or Removal of Personal Representatives; Appointment of Successors.” In its application, MNB moved for discharge under Estates Code §§ 361.001 and 361.005. Gnadt's motion for new trial argued that the discharge should be set aside because MNB failed to provide her with notice as required by Estates Code § 361.003. See Tex. R. App. P. 33.1(a). The parties later raised the issue of notice under Estates Code Chapter 405, which more specifically addresses the removal of an independent executor. See Tex. Est. Code Ann. § 405.003(b). We will address Gnadt's argument as preserved for our review on appeal. See Tex. R. App. P. 33.1(a).

2.   Gnadt states in her appellate brief that her reply “was not an amended motion for new trial.”

Brad Hart, Justice