Texas Fiduciary Litigator

Texas Fiduciary Litigator

The Intersection of Texas Courts and the Fiduciary field

David Fowler Johnson

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Texas Supreme Court Enforces Forum-Selection Clause In Breach Of Fiduciary Duty Case Arising From A Shareholder Agreement

In Pinto Tech. Ventures, L.P. v. Sheldon, the Texas Supreme Court held that business tort claims, including breach of fiduciary duty, were subject to a forum-selection clause in a shareholders agreement. No. 16-0007, 2017 WL 2200357, at *9 (Tex. May 19, 2017). The plaintiffs, two shareholders, asserted business tort claims related to the alleged dilution… Continue Reading

Texas Adopts New Legislation Protecting Vulnerable Persons From Financial Exploitation And Places New Burdens On Financial Institutions, Securities Dealers, and Financial Advisers

I.     Introduction The Texas Legislature passed, and the Governor has signed, a new act that creates new protections for vulnerable individuals. HB 3921 creates a new chapter 280 of the Texas Finance Code and a new Article 581, Section 45, of the Texas Securities Act in the Texas Civil Statutes. The Texas Legislature now requires… Continue Reading

Court Affirms Summary Judgment In Will Contest Where There Was No Evidence Of Undue Influence

In Estate of Frye, parties filed an application to set aside an order probating a will due to an allegation of undue influence. No. 07-16-00398-CV, 2017 Tex. App. LEXIS 6992 (Tex. App.—Amarillo July 26, 2017, no pet. history). The decedent left bequests to her daughters, Judy and Patsy, in her will, but left nothing to… Continue Reading

New Texas Statutes That Impact Fiduciaries Become Effective Today (9/1/2017)

The Texas Legislature passed, and the Governor has signed, a new act that creates new protections for vulnerable individuals. This impacts financial institutions, broker/dealers, and investment advisors. The Texas Legislature now requires employees to report suspected incidences of financial exploitation of vulnerable persons (those over 65 or those with disabilities) to their employers, and for… Continue Reading

Court Affirms Arbitration Decision Arising From Trust Dispute

In Saks v. Rogers, a beneficiary of a trust challenged a trial court’s enforcement of an arbitration decision. No. 04-16-00286-CV, 2017 Tex. App. LEXIS 6923 (Tex. App.—San Antonio July 26, 2017, no pet. history). The parties entered into a mediated settlement agreement (MSA) that included an arbitration agreement for “disputes aris[ing] with regard to the… Continue Reading

Court Held That Estate Representative Was Entitled To Discover Documents To Establish A Claim

In In re Cokinos, Boisien & Young, a representative of an estate of a deceased attorney sought documents from a law firm related to an alleged agreement to share fees. No. 05-16-01331-CV, 2017 Tex. App. LEXIS 6911 (Tex. App.—Dallas July 25, 2017, original proceeding). The trial court ordered that the estate representative have access to… Continue Reading

Court Affirms Submission of Mitigation Instruction In A Breach Of Fiduciary Duty Case To Affirm A Jury’s Finding Of No Damages

In E.L. & Associates v. Pabon, a company sued two former directors and their son for breaching fiduciary duties when the company lost a lease for a restaurant it operated and the directors’ son opened a nearly identical restaurant in the same location.  No. 14-15-00631-CV, 2017 Tex. App. LEXIS 4547 (Tex. App.—Houston [14th Dist.] May… Continue Reading

Court Holds That Board Of Trustees Of A Nonprofit Do Not Owe The Same Duties As A Trustee Of A Trust

In Young v. Heins, Young brought third-party claims against the board of trustees of a nonprofit home owner association for breach of fiduciary duty, breach of the duty of good faith and fair dealing, breach of contract, intentional infliction of emotional distress, and for a declaratory judgment. No. 01-15-00500-CV, 2017 Tex. App. LEXIS 5075 (Tex.… Continue Reading

Court Holds That Majority Shareholders In Closely Held Corporation Do Not Owe Fiduciary Duties To Minority Shareholders

In Herring Bancorp, Inc. v. Mikkelsen, a corporation acquired a majority of the outstanding shares of preferred stock by “repurchasing” those shares in accordance with the articles of incorporation, including the shares owned by a trustee. No. 07-15-00327-CV2017 Tex. App. LEXIS 5131 (Tex. App.—Amarillo June 2, 2017, no pet. history). This was against the wishes… Continue Reading

Court Reversed A Finding Of Breach Of Fiduciary Duty (And $470,000,000 Judgment) Because No Partnership Ever Existed Due To The Failure Of Conditions Precedent

In Enterprise Prods. Partners, L.P. v. Energy Transfer Partners, L.P., the jury found Enterprise Products Partners, L.P. (“Enterprise”) was in a general partnership with Energy Transfer Partners, L.P. (“ETP”) regarding a pipeline project and that Enterprise breached its duty of loyalty as a partner to ETP. No. 05-14-01383-CV, 2017 Tex. App. LEXIS 6658 (Tex. App.—Dallas… Continue Reading

Court Finds That Breach Of Fiduciary Duty Claims Is Preempted By Trade Secrets Claim

In Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, a Texas entity that distributes produce throughout the United States filed suit against another Texas entity that imports foreign grown produce into the United States and other related entities for a variety of claims arising from the defendants’ attempts to distribute produce without the plaintiff.… Continue Reading

Court Reverses Summary Judgment For Directors Because They Could Not Consent To Their Own Breaches of Fiduciary Duty

In Corley v. Hendricks, three individuals (Gaylen, Dan, and Corley) operated a business as shareholders, officers, and directors. No. 02-16-00293-CV, 2017 Tex. App. LEXIS 3846 (Tex. App.—Fort Worth April 27, 2017, no pet. history). Galen then terminated Corley and removed him as an officer and director. Corley then sued the other two for breach of… Continue Reading

Court Reviews Damages For Mental Anguish, Exemplary Damages, and Other Categories For A Trustee’s Breach Of Fiduciary Duty

In Wells Fargo v. Militello, a trustee appealed a judgment from a bench trial regarding a beneficiary’s claims for breach of fiduciary duty, negligence, and fraud. No. 05-15-01252-CV, 2017 Tex. App. LEXIS 5640 (Tex. App.—Dallas June 20, 2017, no pet. history). Militello was an orphan when her grandmother and great-grandmother created trusts for her. She… Continue Reading

Courts Hold That Fiduciaries Waived Complaints About Trial Court Orders

In In re Estate of Roach, a trial court removed an executor for multiple grounds, including: (1) Texas Estates Code Section 404.0035(b)(5), which authorizes removal when an independent executor becomes incapable of properly performing his fiduciary duties due to a material conflict of interest, and (2) Section 404.0035(b)(3), which authorizes removal when an independent executor… Continue Reading

Texas Supreme Court Will Decide Whether Texas Recognizes A Tortious Interference With Inheritance Claim

In Anderson v. Archer, the trial court’s judgment awarded the plaintiffs $2.5 million in damages based on a tortious interference with inheritance claim. No. 03-13-00790-CV, 2016 Tex. App. LEXIS 2165 (Tex. App.—Austin March 2, 2016, pet. granted). The defendants appealed and argued that Texas law does not recognize such a claim. The court of appeals… Continue Reading

In A Usurpation Of Corporate Opportunity Case, The Texas Supreme Court Reversed A Constructive Trust Due To A Failure To Trace The Property To The Alleged Fiduciary Breaches And Reversed A Disgorgement Award Because There Was No Finding Of The Fiduciaries’ Profits

In Longview Energy Co. v. The Huff Energy Fund, LP, Longview Energy Company sued two of its directors and their affiliates after discovering one affiliate purchased mineral leases in an area where Longview had been investigating the possibility of buying leases. No. 15-0968, 2017 Tex. LEXIS 525 (Tex. June 9, 2017). A jury found that… Continue Reading

Texas Supreme Court Refuses To Rule On Whether Texas Recognizes Tortious Interference With Inheritance Rights And Affirms A Constructive Trust Based On A Finding Of Mental Incompetence

In Jackson Walker LLPO v. Kinsel, Lesey and E.A. Kinsel owned a ranch, and when E.A. died, he divided his half between his children and Lesey. Jackson Walker, LLPO v. Kinsel, No. 07-13-00130-CV, 2015 Tex. App. LEXIS 3586 (Tex. App.—Amarillo April 10, 2015), aff’d in part, 2017 Tex. LEXIS 477 (Tex. May 26, 2017). Lesey… Continue Reading

Court Affirms Jury Finding Of No Breach Of Fiduciary Duty In Partnership Dispute

In Thunder Rose Enters. v. Kirk, the plaintiffs sued the defendant for various claims, including breach of fiduciary duty based on an alleged partnership dispute. No. 13-15-00431-CV, 2017 Tex. App. LEXIS 3481 (Tex. App.—Corpus Christi April 20, 2017, no pet. history). The jury determined that the defendant did not breach a duty, and the plaintiffs… Continue Reading

Court Held That Submission Of Jury Question On Fiduciary Duty Was Harmless Due To Duplication Of Damages

In Hughes v. Hughes, a husband and wife sued each other for various claims, including breach of fiduciary duty. No. 13-15-00496-CV, 2017 Tex. App. LEXIS 3489 (Tex. App.—Corpus Christi April 20, 2017, no pet. history). In the charge conference, the wife objected to the question as having an improper definition of fiduciary duty and objected… Continue Reading

Court Held That Settlor Had Standing To Assert Extra-Contractual Misrepresentation Claims Regarding Insurance Policies He Previously Transferred To An Irrevocable Insurance Trust

In Lee v. Rogers Agency, Lee purchased three whole-life insurance policies in the 1980s where each had a face value of $1,000,000. No. 06-15-00037, 2017 Tex. App. LEXIS 1069 (Tex. App.—Texarkana February 8, 2017, pet. filed). It was represented to Lee that the policies provided that Lee could shorten the premium payment period by tendering… Continue Reading

Court Holds That Shareholders In Closely Held Business Do Not Owe Each Other Fiduciary Duties

In In re Fritz, a bankruptcy court determined whether an exception to dischargeability was present. No. 15-347950BJH, 2017 Bankr. LEXIS 930 (N.D. Tex. Bankr. April 3, 2017). Although the state court judgment jointly awarded the plaintiffs $100,000 in damages and post-judgment interest, it did not specify which of the claims pled in the underlying state… Continue Reading

Court Holds That Family Member Did Not Owe Fiduciary Duties To Other Family Member

In Walker v. Walker, a son sued his father and brother regarding the ownership of a beach house. No. 14-16-00357-CV, 2017 Tex. App. LEXIS 2742 (Tex. App.—Houston [14th Dist.] March 30, 2017, no pet. history). The son alleged that the father made an oral gift of the property to the son. The son alleged that… Continue Reading
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