Family wins in costly probate court struggle

Appeals ruling says judge acted without authority in removing woman from trust

Lise Olsen (lise.olsen@chron.com)
September 4, 2007
Houston Chronicle (TX)

Harris County Probate Judge Russell Austin acted “without authority” when he ordered a River Oaks woman removed from her family’s multimillion-dollar trust fund in one of the most contentious and expensive probate cases in recent county history, a Texas appeals court has ruled.

The ruling, issued last week, appears to be a significant victory for Houston heiress Susan Conte, whose widowed mother was declared “incapacitated” and whose family fortune was turned over to court appointees to manage in 1998.

The family has paid some of the highest court-ordered fees in Texas — around $2 million — in the nine-year struggle with Harris County Probate Court.

“This is not about retaliation — we just want this whole thing to stop,” said Conte. “I hope to God we are one of the families that is able to break away from the probate courts. I don’t know yet.”

On Friday, the Houston-based First Court of Appeals of Texas ruled that the court order removing Conte from her family trust and replacing her with a bank was “improper.”

The decision will likely send the case back to the Harris County Probate Court.

In an e-mail response to the Chronicle, Judge Austin said: “It would be premature for me to make any comments at this time because I have not received an official copy of the opinion nor do I know whether there will be a re-hearing or appeal to the Texas Supreme Court. Hence, the matter is still pending before the Court.”

Conte hopes that opinion will pave the way for her to be reappointed trustee to the family estate — as do her brother and her mother. The ruling does not mean the Contes will get back any of their money.

The family’s saga was featured in a Chronicle story in June.

The newspaper’s analysis of probate fees awarded across Texas from January 2003 to December 2005 showed that payments ordered by Austin in the case were among the state’s highest.

The Contes’ troubles began in March 1993 when the family patriarch, Joe Conte Sr., died of a heart attack after a trip to the grocery store.

After his death, Susan Conte moved back home to River Oaks to be with her mother.

Doris Conte, who has been disabled by a series of small strokes, was able to remain home with help from her daughter and a live-in caregiver.

For five years, Doris, Susan and Joe Conte Jr. served as co-trustees in their family trust.

Their assets included about $10 million in real estate, cash and stocks left behind by their father, who was a car dealership owner and real estate investor.

Not long after their father’s death, the siblings began to argue over money and their mother’s care. Ultimately, they sued each other.

In 1998, Susan and her mother went to the probate courts to seek help. Instead, the Contes have contended, the probate court made things worse.

Austin initially appointed a young accountant with no experience running a trust to oversee the Conte case.

And while the Contes agreed to allow the accountant to run their trusts temporarily, the judge renewed her appointment for nearly seven years and paid her firm $1.3 million. He also ordered additional payments to 10 different law firms.

When Austin’s temporary appointee stepped down in 2005, the judge selected a bank to run the trusts instead of Susan Conte.

He ruled Conte “violated the terms” of the trust by charging for personal expenses, and those debts amounted to a conflict of interest that prohibited her from serving as trustee.

In the appeal, Conte’s attorneys called the rulings “paternalistic decisionmaking” that had “no foundation in the law or the evidence.”

They noted that Susan Conte had enough assets to repay her debts, but had never been asked to do so.

The First Court of Appeals, however, simply said Austin’s order came too late.

Documents showed Conte owed her trust $420,423 in 1999 — thus court officials had known about the debts since then. If those debts alone justified Conte’s removal, action should have been taken by 2003, the appellate court said.

Therefore, the May 2005 removal was unauthorized and the appointment of a bank as trustee was “improper.”

The ruling doesn’t give back to the Contes any of the money the bank charged them to serve as trustee from 2005 to 2007 — nor does it prevent more of their money from being used by court appointees in more lawsuits or appeals.

“After nine years, any victory is nice — but it doesn’t give me any hope (for the probate system),” Susan Conte said. “We had the truth on our side and we got lucky.”

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