Good Evening All,

Please accept my sincere apologies for taking so long to provide an update. So to start from April 14, where I left off, the following report (in italics) was prepared by one of our wonderful Preservation Association members: 

Palacios Preservation Association Report - Description of the Luther Hearing in Judge Polly Spencer’s Probate Court, April 14th

Today’s hearing was about “standing,” basically to determine if the following parties have a legal right to sue the estate:

1.       Edith Gower, Margaret Doughty and the Palacios Preservation Association; Palacios Area Historic Association

2.        Claimants, who may later be proven as creditors against the Estate (comprised of former employees and volunteers); and

3.       The investors (YAALX Corporation).

The above parties all filed their own motions in this action alleging their rights as parties in this matter. The attorneys for the Administrator of the Estate filed motions to attempt to have the above parties “thrown out” or dismissed from the case. The attorneys argued the Estate has the right to sell the historic Luther Hotel to the Ed Rachal Foundation which that “plaintiffs” have no legal right to interfere or intervene.

While arguing their points to the Court, the three Corpus Christi attorneys, Welder Leshin Law Firm, representing Annie Jones, Administrator of the Findley Estate, relied on probate law in an attempt to persuade the Judge that the above parties had no legal right to be parties in this case.  The Administrator’s attorneys told the Judge that the Administrator had the right to sell the Luther Hotel to the Ed Rachal Foundation and it was a private matter.  

The attorney for the investors, Cal Bobbit of San Antonio, who want to purchase and preserve the historic hotel argued his clients are not relying on the probate law, but are relying on, among other law, the Texas Free Enterprise Act, the Texas Business and Commerce Code, and the Texas Anti-Trust Statute. He also referred to the fact that his clients are offering more for the property than the Ed Rachal Foundation, and as an added bonus, the hotel would be preserved.  It was made clear the Corpus Christi attorneys for Annie Jones and the Corpus Christi based Ed Rachal Foundation worked hand in hand, privately to sign a sales agreement.  The investors’ attorney pointed out the Estate’s Administrator has a fiduciary duty to the heirs of the Estate and part of that duty would be to sell to the highest offeror.

Attorney for Edith Gower, Margaret Doughty, the Palacios Preservation Association, and the Palacios Area Historic Association, Chris Bell of Houston, argued his clients will sustain a loss based on their involvement with the hotel, general loss of income experienced with the closing of the hotel, and the loss of the historical value of the property. He also discussed the perceived non-compliance with the State Historical Commission that granted permission for demolition after a moratorium period.

Attorney for the Claimants who worked at the hotel until it was closed in August of 2022, John Griffin of Victoria, argued his clients have a right to pursue legal damages for loss and conversion of personal property that they were not allowed to return to the hotel to retrieve, along with damages for long term health issues suffered by one of the claimants when pipes burst during the big Texas freeze. Because the hotel was not insured, the attorney alluded that failure to remediate the damage led to the Claimant’s health issues, stating that her damages could surpass the value of the Estate.

After all attorneys had the opportunity to be heard, argument continued with the request that claimants be allowed to enter the hotel.  Attorneys for the Administrator of the Estate argued against such entry.  Argument about dates for the deposition of the elderly Administrator Annie Jones continued.

After hearing all arguments of counsel, the Judge asked for clarification of certain items including the date of the freeze in relation to the date of death of Harold Jack Findley and the date Annie Jones was appointed as Administrator pointing out that the facts would determine which and how the law is applied.  It seems the freeze occurred before Ms. Jones’ appointment as Estate Administrator.  The Judge also had the attorneys for the Administrator clarify as to whether they had Court approval to sell the property, or the “dirt” on the ground as she referred to it several times, to the Ed Rachal Foundation. The attorneys had to admit to the Judge that they had not requested permission from the Court, as required by the Texas Estate Code, for the sale to the Ed Rachal Foundation.  It became clear that at this time, the contract between the Ed Rachal Foundation and the Estate’s Administrator is not yet legally binding and the sale cannot legally be completed.  The Judge kindly reminded the attorneys that a title company should not attempt to close the real estate transaction without proper approval from the Court.  One of the attorneys fighting to stop demolition of the hotel pointed out that the Estate Administrator has the duty to preserve the Estate assets and there is concern the hotel is deteriorating after being closed down.  The attorney made the point that the longer the Estate keeps the hotel closed, the more likely the Estate will be able to argue their self-fulfilling prophecy:  The hotel is to too deteriorated to save.  The Judge had previously clarified that the hotel had in fact been in operation until August 2022 when it was abruptly closed.

The Judge determined there is a need to allow limited entry into the Luther Hotel.   Annie Jones, the elderly Estate Administrator, will be deposed (questioned under oath) in her home state of Alabama as all attorneys seemed to agree a trip to Texas would be detrimental to her poor health.  Additionally, there will be a hearing held in the near future regarding a “Rule 91A” motion which is where the Court will determine whether or not a case should be dismissed for failure to state a valid cause of action.  

                                                                                                                Palacios Preservation Association

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Now a quick rundown of things that have happened between late April and today:

1. The next week after the hearing, Judge Spencer said that the Palacios Preservation Association and Palacios Area Historical Association did not have standing; the other two court cases could continue.

April 25- As per Judge Spencer’s orders, a handful of key people did a walkthrough of the Luther Hotel 

April 25-Roger T. Gray’s article in Texas Outlaw Writers came out on April 25. Check it out here: https://www.texasoutlawwriters.com/a-clean-well-lighted-room/ 

April 26- Karen and Joe Hamilton came to Palacios to present to the City by the Sea Museum a beautiful blueprint of the Luther Hotel to be included the museum’s May exhibition (going on now)

May 8-the Inspection Report done by architecture preservation professionals Lance Malley and Annie Sauser was released. The report was positive and ended with "We whole heartedly support the preservation and reuse of the historic Luther Hotel, and believe putting the rehabilitated property back into service for its original use as a hotel will provide a real economic boost to the local community." 

Thank you for your continued support . . .