A parent dies and leaves behind a vacation property that earns rental income. One person, often a surviving partner or the child who lives closest, ends up running it: taking bookings, collecting deposits, paying the bills. Everyone else in the family wants to know where the money went.
That sounds like an easy question. It usually isn’t. The answer often depends on records nobody in the family controls, kept by a rental platform or a resort operator with its own bookkeeping problems. When those records don’t match what the person managing the property reports, does the estate have a claim? Or just a suspicion?
The Wyoming Supreme Court answered that question in In the Matter of the Estate of Robert P. Dykes (Dykes v. Hutton), 2026 WY 78, No. S-25-0246 (Wyo. July 15, 2026). It isn’t a Texas case, but the problem it deals with comes up in Texas estates all the time, and Texas discovery rules work much the same way. The court had to decide two things: whether the estate was entitled to discovery sanctions against the beneficiary managing the property, and whether the estate had proved she kept rental income that belonged to the estate.
Facts & Procedural History
Robert P. Dykes died unexpectedly in Florida in 2022. His will was admitted to probate in Wyoming, and his sons, Michael and J. Christopher Dykes, were appointed co-personal representatives. Dykes and Katya Hutton had been in a long-term relationship. His one piece of Florida real estate was a penthouse hotel condominium at a Marriott property on Singer Island in Palm Beach. It was a high-end three-bedroom unit of about 2,000 square feet, often called the “Presidential Suite.” The couple used it when they were in Florida and rented it out part-time when they weren’t.
The will left the condo to Hutton. It also gave her $10,000 a month during administration and told the estate to pay the condo’s expenses until it was distributed to her. Because the condo was in Florida, it was handled in a separate ancillary probate there. In that case the parties made an agreement, which the Florida court adopted: the estate would distribute the condo to Hutton as soon as reasonably possible, and in the meantime she would use her best efforts to rent it and give the court and the estate an accounting of its income and expenses. If the condo’s income didn’t cover its expenses, the estate paid the difference.
The rental setup came from Dykes, not Hutton. While he was alive, his assistant set up the rental accounts on VRBO, Airbnb and Expedia and set up a Colorado bank account where all rental income was deposited automatically. Hutton had nothing to do with it until he died. After that she took over the passwords and let the online process “work itself.” The deposits kept going to the same Colorado account.
The sons thought Hutton was taking in more rental money than she reported, which meant the estate was paying condo expenses without getting the income that should have offset them. In May 2023 the estate sued her in Wyoming, in Fremont County district court. It brought five claims: embezzlement or alienation of estate money before letters were granted, concealment of funds, conversion, declaratory judgment, and a demand for an accounting and restitution. Its main evidence was Marriott’s own records, which the estate said showed the condo was rented far more often than Hutton had accounted for.
Discovery was a fight. The estate served two sets of interrogatories and 67 requests for production asking for every record of how, when, and for how much Hutton rented the condo. She produced 2,883 pages, then 284 more, and said she had turned over everything she had. The estate filed three motions to compel. On the last one, the court found Hutton could still produce certain records, including occupancy records, her communications with Marriott, and rental-platform and tax documents. It refused the estate’s request for a default judgment but warned her that further noncompliance could lead to that sanction. She was ordered to respond by 5:00 p.m. on June 27, 2025, less than three days before trial, and she produced more documents by the deadline.
On the first morning of the two-day bench trial, the estate asked again for sanctions, including a default judgment. The judge took the request under advisement and went ahead with the trial. After hearing five witnesses and taking in thirty-two exhibits, the court found the estate had not proved Hutton ever received rental income that was wrongfully kept from the estate or misused. It ruled for Hutton on all five claims, which included the estate’s request for at least $233,668.71 in condo expenses it had paid. The court never ruled on the sanctions request in writing. The estate appealed.
Who Owes Whom an Accounting, and What Has to Be Produced?
To understand this case, start with who is responsible for estate property during administration. In Texas, once letters testamentary or of administration are issued, the executor or administrator “has the right to possession of the estate as the estate existed at the death of the testator,” and must “recover possession of the estate and hold the estate in trust to be disposed of in accordance with the law.” Tex. Est. Code § 101.003. Put simply, the personal representative is responsible for gathering the estate’s property and income, and that includes rent a property brings in before it’s distributed.
Things get messier when someone else runs the property in the meantime, like the beneficiary who will eventually get it. That’s what happened in Dykes. Hutton wasn’t the personal representative. Her duty to account came from the agreement the Florida court had adopted. The estate’s claims were about recovering estate money it said she had kept. Its embezzlement, concealment, and conversion claims all depended on the same thing: proof that Hutton actually took or hid money that belonged to the estate.
Discovery is how an estate gets that proof, and the Texas rules look a lot like Wyoming’s. A party must produce requested documents “within the person’s possession, custody or control.” Tex. R. Civ. P. 196.3(a). “Possession, custody, or control” means the person “either has physical possession of the item or has a right to possession of the item that is equal or superior to the person who has physical possession of the item.” Tex. R. Civ. P. 192.7(b). If a party doesn’t comply, the court may impose sanctions, but only “after notice and hearing.” Tex. R. Civ. P. 215.2(b). And if the records are held by someone who isn’t a party, such as a rental platform, a bank, or a resort, the way to get them is a subpoena or court order directed to that nonparty. Tex. R. Civ. P. 205.1.
These rules matter because they limit what a court can do. A beneficiary can only be made to hand over what she has or has a right to get. If the records the estate really wants sit with VRBO or Marriott, arguing about what the beneficiary is holding back won’t get them.
How the Court Analyzed the Sanctions Request and the Rental Records
The Wyoming Supreme Court affirmed on both issues.
Sanctions. The court started with the basics: trial courts have wide discretion over discovery, and Wyoming’s Rule 37 comes into play only when a party has actually failed to comply with a discovery order. When the estate renewed its motion at the start of trial, the judge had no way of knowing whether Hutton had violated the latest order. One side said she was holding documents back. The other said she had turned over everything.
The trial judge asked the estate’s lawyer: “Why haven’t you asked for an order to show cause?” Then: “All I hear is words. I have seen no proof. There’s been no exhibits presented. There’s no testimony.” The estate admitted it had never asked for a show-cause order and there had been no evidentiary hearing. The judge offered a continuance so the estate could make that record. The estate turned it down and chose to go to trial.
That decision was costly. Because the estate “had not proactively taken steps to provide the information that would have allowed the court to find Ms. Hutton had violated the court’s latest discovery order” and “declined the court’s offer of a continuance,” the Supreme Court held it was reasonable for the trial court to deny sanctions at that point.
The trial testimony didn’t help the estate either. The court repeated a longstanding Wyoming rule: “Rule 37 sanctions cannot be imposed for failing to produce something a party does not have and which is unavailable to her,” citing Gooder v. Roth, 788 P.2d 611 (Wyo. 1990). Hutton testified that she had produced every reservation made since Dykes died and had downloaded everything she could from the rental sites. Expedia had been cancelled, so she couldn’t get those records. She also testified that she never received tax forms from the rental sites; Dykes’s assistant had set up those accounts. The estate’s own co-representative, Christopher Dykes, said the tax paperwork probably went to the family office and that “Our accountant may have” it. Most important, the estate’s lawyers admitted they never subpoenaed VRBO, Airbnb, or Marriott for the records they said Hutton was hiding.
The trial court never ruled on sanctions in writing. The Supreme Court said an express ruling “would have been helpful,” but held that entering final judgment implicitly denied the motion, and the trial court’s findings gave a reasonable basis for that denial. The estate never showed that Hutton violated the order, gave it incomplete or inaccurate documents, or had other documents she didn’t turn over.
The rental income. The estate argued the trial court couldn’t rely on Hutton’s “secondary information” when the Marriott records were the “direct, primary source documentation.” The Supreme Court noted the estate cited no legal authority for ranking evidence that way. Weighing evidence and deciding who to believe is the trial judge’s job, and the appellate court gives that judgment significant deference because the trial judge actually watched the witnesses testify.
The record gave the trial judge plenty of reasons to doubt Marriott’s records. Marriott’s Owner Services Manager, Mr. Weber, testified that the records aren’t always accurate. The occupancy lists code paying guests “AX” and owners or non-paying guests “BX,” and some entries had them backwards. In one entry marked as a paying guest, the guest was actually Dykes’s sister. Hutton’s name showed up in the guest folio and she was charged fees in error. Marriott listed the condo as a two-bedroom unit when it has three bedrooms. Other guests’ names get added to folios so they can charge things at the resort. And the occupancy lists can’t show when a reservation was made, how it was passed along, how much the guest paid, or whether the guest paid at all. The condo owners and Marriott were in a $30 million lawsuit over alleged overcharging and misallocated fees. Another owner backed that up.
The timing issues were just as bad. Hutton showed that one guest paid on August 22, 2022 but didn’t stay at the condo until December 2023, more than a year later. The trial court also found that every guest on Hutton’s VRBO list appeared on Marriott’s occupancy list. The Colorado bank records and Hutton’s tax returns, which she produced, cut against the idea that she was hiding income.
The trial court’s conclusion, which the Supreme Court quoted and affirmed, sums up the case: “While there are undeniable inconsistencies in the rental receipts and reservations, the reason behind these discrepancies is wholly unclear. What is clear is that there is no proof of Ms. Hutton misusing funds from a rental that should have gone to the Estate.” And: “Mere suspicions are insufficient.” The more reasonable inference, the trial court said, was “that the condo was not easy to rent, the Marriott process documenting rentals was cumbersome and imprecise, and the rental value of the condo was not what the Plaintiffs allege.”
The Takeaway
Dykes shows that a claim that someone kept estate money depends on proof connecting specific dollars to that person. Gaps and inconsistencies in someone else’s records aren’t enough. An estate that suspects a beneficiary, co-owner, or caretaker is keeping rental income has to trace the money: to a bank account, a platform payout, or a tax form.
The discovery lessons carry over directly to Texas. First, if the records are held by a third party, subpoena that third party. Under Rule 205, you can get records from a rental platform, a property manager, or a bank without depending on the other side to produce them, and a court will notice if you never tried. Second, if you believe the other side is violating a discovery order, get a hearing and put on evidence well before trial. Texas Rule 215.2(b) allows sanctions only “after notice and hearing,” and a lawyer’s statement that documents are being withheld isn’t evidence. Third, don’t turn down a continuance you need. The estate in Dykes was offered time to build its sanctions record and declined it, and the Supreme Court held that against it.
For personal representatives, it works the other way too. If a beneficiary will be managing estate property before it’s distributed, set up a clear record-keeping system at the start: one account, regular statements, and a written accounting schedule. That protects the estate, and it protects the beneficiary from the kind of accusation Hutton had to defend against at trial.
Our West Texas Probate Attorneys provide a full range of probate services to our clients, including helping with estate accounting disputes and claims that someone is holding back estate property or income. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience that we can use to support and guide you with probate and estate matters. Call us today for a FREE consultation.
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The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.