Paxton role in Hunt case faulted
Questions raised on deal for heirs; AG defends work
Tanner Hunt, son of Dallas oil billionaire Ray Hunt, texted the mother of his two young daughters in the fall of 2011 for a picture of the girls in their Halloween costumes. The next day, he took a Glock pistol into bed, pressed it to his chest and fired a single shot, according to an Austin police report.
He was only 31 and left behind a $200,000 estate and no will, probate court records show.
His daughters stood to inherit not only that estate but had potential inheritance claims on a $2 million trust that had been established for their father and possibly other trusts created by their great-grandfather, the legendary wildcatter Haroldson Lafayette “H.L.” Hunt, who created multiple family trusts before his death in 1974.
But the following year, a veteran state lawmaker named Ken Paxton was appointed attorney ad litem in Tanner Hunt’s probate case, and Paxton later put forth a settlement that called for Tanner Hunt’s daughters to receive just $750,000, which Paxton would invest for them, if they relinquished any claim on any further inheritances from the Hunt family.
That proposed settlement was rejected by the girls’ mother, Crystal VanAusdal and ultimately replaced by a more generous confidential settlement after their mother filed a
motion asking the judge to recuse himself. She filed the recusal motion after learning that an attorney whose firm had ties to the Hunt family had called the judge and Paxton prior to filing Tanner Hunt’s probate case — contact her attorneys described as improper ex parte communications. Those calls gave the mother “great concern” that the attorney and others with ties to the Hunt family “may have handpicked the Court, the judge and the attorney ad litem” in order to disinherit her daughters, her attorneys wrote in June 2014.
The judge immediately recused himself.
Paxton’s role in the case from 2012-2014 was not publicly reported last year during his successful campaign for attorney general. Paxton took office in January as the state’s highest legal official. He was indicted last month on three felony counts for alleged violations of securities law in an unrelated case by a Collin County grand jury.
Paxton did not respond to the Chronicle’s specific questions about his actions in the case. Through a private attorney spokesman, he said via email: “This case was settled by all parties and the settlement was approved by the presiding Judge. The Houston Chronicle’s questions indicate a gross misunderstanding of this case and the settlement. General Paxton was appointed by the Court to strictly be an advocate for the children to the Court.” Ethical conduct
Two experts, Robert Schuwerk, a retired law professor and author of the Handbook of Texas Lawyer and Judicial Ethics, and Judge Kathleen Stone, a senior district and former probate judge with 25 years’ experience, said Paxton’s actions in the Hunt probate case raised significant questions about his ethical conduct as the daughters’ court-appointed attorney ad litem — a role in which he was required to protect their interests as if he were their hired lawyer under both Texas case law and ethics rules. Both reviewed documents in the case at the request of the Houston Chronicle.
The settlement Paxton negotiated on the two small girls’ behalf was in their view clearly not in the girls’ best interest and ran counter to his legal and ethical obligations, Schuwerk and Stone said.
“I don’t think a competent lawyer for the child could do that, especially without looking into both the asserted legal basis for proposing to award the girls less than the entirety of the decedent’s estate (and trust) and without examining the underlying Hunt family trusts ... in order to assess the strength of any claim they might have to those other assets,” Schuwerk said.
Paxton’s appointment as attorney ad litem came in early 2012 after a Dallas attorney filed a probate petition for Tanner Hunt in Collin County, 200 miles away from where Hunt died, court records show. The attorney asked the court to appoint W. Kirk Baker, a lawyer who had done extensive work for the Hunt companies, as administrator of the estate, the application and proposed orders in the court file show.
Tanner Hunt was the fifth son of Nancy and Ray Hunt, prominent citizens who are considered Dallas royalty and are patrons both of the George W. Bush Presidential Library and of their alma mater, Southern Methodist University.
He was in his 20s when he met Crystal VanAusdal, a Tyler public high school graduate. The two got engaged but never married. His parents did not approve. Tanner and Crystal lived together for several years and had two daughters in 2005 and 2006. Both girls bear the surname Hunt — Tanner Hunt is listed as their father on birth certificates. Photos in the court files show Tanner freckled and smiling with a blue-eyed baby in his arms.
The couple lived together, took family vacations and Tanner attended his daughters’ birthday parties before they split up and he moved to Austin, while his children remained in East Texas, according to an affidavit in the case file from VanAusdal that describes their family life. He worked at a nonprofit that feeds the homeless that was supported by his parents. He told friends he was adopted.
Hunt found a new girlfriend but called his children and agreed to pay child support in 2008, family court records show. After his death, the Travis County Medical Examiner’s office determined that he suffered from depression and found the cause of death to be suicide.
Normally, proceedings to determine heirs — socalled “heirships” — take place in the county where the deceased last resided. Hunt died in his home in Williamson County.
But a Dallas attorney filed an application to handle the estate in Collin County, which has only one probate judge. In the application, the attorney requested that Baker serve as administrator of the estate, and Paxton was later appointed as ad litem. As attorney ad litem, Paxton’s role as defined in state law was to find out if there were any other heirs besides Tanner’s two daughters, whose claims were known to the court. On Oct. 15, 2012, the judge declared the two girls to be the “sole lawful heirs of Tanner Hunt” and approved a $5,000 payment for Paxton.
At that point, his ad li- tem job normally would have been over, Stone said. Instead Paxton was allowed by the judge to continue to represent the girls in what Schuwerk and Stone said was an unorthodox and ill-defined role in behind-the-scenes settlement negotiations involving Baker and litigation over the father’s trust, according to records in the case file. ‘Made it up’
“He just seemed to have made it up as he went along what his job was,” Stone said.
The original probate appointments that put Baker and Paxton in place said that VanAusdal, mother of Hunt’s daughters, would agree — via the attorney ad litem —to have Hunt’s estate managed by Baker. Under that arrangement, Baker provided an inventory and other financial documents about Hunt’s estate and about his larger trust directly to Paxton and the mother claimed she got little or no information, according to a motion to compel accountings that the mother’s attorneys later filed.
VanAusdal declined comment through her attorneys.
Sally Alexander, VanAusdal’s aunt, said VanAusdal verbally agreed to the arrangement. Alexander said VanAusdal initially trusted Paxton because he was a well-known legislator and lawyer and only became concerned when she saw that Paxton’s proposed settlement set aside only $750,000 for her daughters, which he would manage himself, along with smaller college funds. Up until the time VanAusdal rejected that settlement, Baker paid Tanner Hunt’s court-ordered child support, but those payments were cut off for a month when she refused to sign, according to receipts and an email cited in a lawsuit the mother filed.
Earlier in the proceedings, Baker had disclosed that he had also been named to replace Ray Hunt as the lone trustee of Tanner Hunt’s family trust, called the Tanner Hunt Trust 2. Then, in April 2013, Baker filed a petition in an attempt to get Collin County probate judge Weldon Copeland to declare that the children were not Tanner Hunt’s “lawful descendants” because their parents had never been married and thus should not inherit any of his trust fund. Instead, Baker argued that Tanner’s siblings should be considered his descendants.
Ray Hunt, the original trustee, also supported that interpretation of the trust, according to an affidavit in the court file that is cited in the litigation.
Baker’s legal claim seemed at odds with the unusual history of the H.L. Hunt family in Texas. H.L. Hunt fathered 14 different children with three different women and left behind millions in trusts for his descendants before his death in 1974. Tanner’s father, Ray, was himself born out-of-wedlock, though his father, H.L. Hunt, later adopted him and married his mother. Ray Hunt has been described as the wealthiest of his siblings with a net worth that Forbes estimates is more than $5 billion.
Baker did not respond to questions the Chronicle emailed to him about the case. (Ray Hunt is represented by attorney Donald Godwin of Godwin Lewis in Dallas.) Experts see a conflict
In Tanner Hunt’s probate case, Baker’s dual role as the independent administrator of the estate and as the trustee of the Tanner Hunt Trust 2 presented an obvious conflict, Stone and Schuwerk said. His duties as administrator for their father’s estate made him responsible for the heirs’ financial well-being — a role he could not play while arguing as trustee that the girls should not inherit any of their father’s $2 million trust.
Stone and Schuwerk said Paxton had a duty to act on behalf of the girls to ask the court that Baker be removed as independent administrator of their father’s estate because of his conflict of interest once Baker filed suit and named the girls as defendants.
But Paxton did not object to Baker’s move to dis- inherit Hunt’s daughters or to his use of funds from Hunt’s $200,000 estate to hire lawyers in attempts to block them from inheriting from the $2 million trust fund — or from other Hunt trust funds, court records show. Records show the Collin County probate judge did not find Baker had a conflict of interest.
In a hearing, the mother’s attorneys questioned Baker about why he had allegedly paid out $40,000 in legal fees to lawyers from the estate, according to a hearing transcript.
VanAusdal found attorneys from a small McKinney-based family firm called McCraw Gantt who filed a motion claiming Baker had not provided sufficient accountings. In a lawsuit, they questioned Baker about why $563,000 had been withdrawn from the Tanner Hunt Trust 2 after Tanner Hunt’s death.
Paxton accepted Baker’s theory that Hunt’s girls were not really their father’s “lawful” descendants because their parents were never married, according to a lawsuit their mother later filed against Baker.
Texas law has recognized for decades the rights of children born “out-ofwedlock” and eliminated the term “illegitimate” from state family and probate codes as irrelevant in the 1980s, according to case law cited by the mother’s attorneys.
Paxton told the mother’s lawyers he took the word of Baker’s lawyer that the girls were not the beneficiaries of any other trust before agreeing to the $750,000 settlement that could have disinherited the girls from any Hunt family trusts. Paxton told them he “was not offered and did not review any documents to confirm (the girls) inher- itance rights,” according to information later included in a lawsuit the girls’ mother filed against Baker.
“I think that on its face that’s improper,” Schuwerk said. Judge is recused
In another motion filed in June 2014, VanAusdal’s lawyers asked Judge Copeland to recuse himself because of attorneys’ bills they had obtained from Baker during the court case that showed that one of Baker’s attorneys had called the judge and Paxton in advance of filing the case.
Copeland recused himself from the case on the same day the mother’s attorneys filed the petition alleging there had been improper out-of-court communications about the case. Through a court employee, he declined comment on the case.
The mother’s lawyers simultaneously filed a lawsuit against Baker for allegedly breaching his fiduciary duty by attempting to disinherit the children.
In responses, Baker claimed he provided sufficient financial information and denied he breached his fiduciary duties.
With a new probate judge assigned to preside over the matter from another county, the mother’s attorneys quickly reached a confidential settlement. The details are not public, but the judge’s order says the children were awarded funds from their fathers’ estate and from his trust that were used to create their own Hunt family trust. According to information in the lawsuit the mother filed against Baker, it appears that some of the attorneys fees Baker charged to their father’s estate might have been refunded at the request of the probate judge.
Via a spokesman’s email, Paxton said the “Hunt Family” and “the trustee of the Hunt grandchildren’s trust” resolved the case together.
The lawsuit against Baker was dismissed as part of the settlement, court records show.
On Friday, McGraw Gantt issued a short statement about the case: “Throughout our representation, our goal has been to determine and preserve the inheritance rights of Ray Hunt’s young granddaughters. Certain matters have been resolved, but significant issues remain. We are committed to taking all actions necessary to protect these young girls and see that they are treated fairly.”
Tanner Hunt is buried in a Dallas cemetery just off Highway 75 about 30 miles south of the Collin County Courthouse. Back in 2011, his parents held a “private service,” according to his obituary. His children were not invited to attend. His girls, who were only 5 and 6, were too young to understand the probate battle. They were only recently told of their father’s death, Alexander said.
His epitaph comes from the lyrics of one of his favorite country songs: “Life’s a dance, you learn as you go.”