In Lavizadeh v. Moghadam, a trustee purchased real estate and then had a dispute with a guarantor. No. 05-18-00955-CV, 2019 Tex. App. LEXIS 10835 (Tex. App.—Dallas December 13, 2019, no pet. history). The trial court ruled against the trustee, and the trustee objected to the failure to have a jury trial. The trial court overruled that objection, and the trustee appealed. The court of appeals first held that the trustee waived any issue on the procedure by expressly agreeing to same:

During the hearing conducted prior to jury selection, the Trust’s counsel initially stated “for the record that we’re here on a jury trial setting” and he believed “factual issues [existed] that may need to be presented to the jury. . .”, however, he subsequently agreed to Moghadam’s counsel’s proposal to stipulate all exhibits into evidence. More specifically, the Trust agreed, “it would be appropriate” to have a “summary trial by the Judge on those issues, and then if we need a jury on a fact issue . . . “ the parties would return to court for further proceedings. Following this exchange and an off-the-record discussion, the Trust offered 18 exhibits into evidence, and the court admitted them. Moghadam’s exhibits were likewise deemed admitted at the same time although submitted electronically a few days later. We conclude the Trust’s agreement with this procedure waived any objection to the court’s refusal to submit any issues to a jury.

Id. The court also held that any failure to provide a jury trial was harmless as there were no questions of fact: “The right to a jury trial attaches only when controverted questions of fact exist.” Id.

The court then suggested that the process was similar to submission on stipulated facts. “Although we acknowledge an imperfect fit, we treat this case as having been tried on stipulated facts pursuant to rule 263.” Id. “In reviewing a judgment entered pursuant to stipulated facts, we disregard the court’s findings of fact and conclusions of law, issued here pursuant to the Trust’s post-judgment request.” Id. “We also observe rule 263’s application mandates a standard of review more favorable to the Trust than the otherwise discretionary review we would employ if we credited the findings of fact and conclusions of law issued at the Trust’s request.” Id. (citing  Addison Urban Dev. Partners, LLC, LC, 437 S.W.3d at 600-01 (de novo review of judgment issued pursuant to rule 263 procedure is less deferential than the discretionary review otherwise afforded, “because a trial court has no discretion in deciding what the law is or in properly applying it.”). Based on this procedural posture, the court of appeals affirmed the trial court’s judgment because the trial court properly interpreted the guarantee agreement and applied the undisputed facts to the parties’ agreement.

In Leland House v. Webb, a husband sued his deceased wife’s executor to quiet title in real estate that she obtained from her aunt. No. 06-19-00054-CV, 2019 Tex. App. LEXIS 10012 (Tex. App.—Texarkana November 19, 2019, no pet. history). The executor argued that the transfer was not a sell of property, but was a gift. The trial court ruled for the executor, and the husband appealed. The court of appeals first reviewed the law regarding community property and presumptions concerning same:

In general, characterization of property is determined by the time and circumstances of its acquisition, often referred to as the ‘inception of title’ doctrine.” It is presumed that property possessed by spouses during marriage is community property, but this presumption can be overcome by clear and convincing evidence that it is the separate property of a spouse. Property a spouse acquires “during marriage by gift, devise, or descent” is separate property.

Id. The court then stated that it was undisputed that the aunt conveyed tracts of land to the wife while she was married to the husband. The court held that the property was presumed to be community property unless clear and convincing evidence demonstrated that it was a gift.

The court then reviewed the deed conveying the property, which stated:

I, ELIZABETH SPRADLEY BAUMAN, . . . for and in consideration of the love and affection which I have for my niece, the Grantee, have GRANTED, SOLD AND CONVEYED, and by these presents do GRANT, SELL AND CONVEY unto DIAN[N]E HOUSE . . . all of the surface (without the present merchantable timber) and mineral estate in the following described real property in Nacogdoches County, Texas, to-wit: . . . “Big Loco Farm” . . . and “Little Farm.”

Id. The husband argued that the deed does not contain the word “gift” or indicate that it is to be the wife’s sole and separate property. The court disagreed:

Leland’s argument requires us to ignore the provision that the property was granted, sold, and conveyed “for and in consideration of” love and affection. In other words, the price of the sale, as plainly stated by the terms of the deed, was love and affection. No further consideration was mentioned or implied. We find Leland’s interpretation of the deed unreasonable because the deed plainly states that the only consideration for the transfer was love and affection for a family member. Bauman’s intent to give the Property to Dianne can be ascertained from the language of the deed. Therefore, we conclude that the deed was itself sufficient to rebut the presumption favoring community property. In light of this finding, we need not address Leland’s remaining arguments.

Id. The court of appeals affirmed the trial court’s judgment for the wife’s executor.

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In In the Estate of Johnson, a decedent’s daughter filed a will contest after accepting over $146,000 from the estate. No. 05-18-01193-CV, 2019 Tex. App. LEXIS 9646 (Tex. App.—Dallas November 4, 2019, no pet.). The executrix filed a motion in limine challenging the daughter’s standing and asked the trial court to dismiss the will contest, which the trial court did. The daughter appealed.

The court of appeals first addressed whether the daughter had standing to file a will contest. The court held that “[d]evisees and heirs-at-law are interested persons.” Id. (citing Tex. Est. Code § 20.018). The court concluded:

Though Lisa Jo claims that Tia did not meet this burden because she failed to introduce the Will into evidence with her petition, we assume the trial court took judicial notice of the Will and its contents, as well as the inventory, which was in the trial court’s files. Because the face of the Will established Tia’s standing as a devisee and an heir-at-law, Tia satisfied her threshold burden.

Id. The court then reviewed the estoppel defense arising from the daughter’s acceptance of estate assets. The court reviewed the law and its own precedent on estoppel in this context:

Estoppel by acceptance of benefits provides a will proponent one mechanism for challenging a will contestant’s standing. The rule of estoppel by acceptance in will contests is designed to estop a will contest by a person who previously accepted a benefit devised under the will. If the proponent seeks to challenge the contestant’s standing by way of estoppel by acceptance, he or she must assert it as an affirmative defense. Accordingly, the will proponent bears the burden of proving the affirmative defense by demonstrating that the challenge is inconsistent with the accepted benefit. To do so, this Court has held that the proponent must demonstrate that the contestant “received benefits to which she would not be entitled under [any] will, or even under the laws of intestacy.” In Holcomb, this Court held the proponent had not met this burden because he “failed to establish as a matter of law that [the contestant] accepted benefits under the probated will over those which she would have otherwise been entitled to.” Therefore, the contestant was not estopped from filing a contest because she had not received more benefits than she was entitled to under the will or intestacy.

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David F. Johnson, lead writer for the Texas Fiduciary Litigator blog, was selected for JD Supra’s “Most Popular Estate Planning Reads in 2019.”

The blog post, “Court Holds That a Will Left a Partial Intestacy,” is listed as the #9 most well-read estate planning article published by JD Supra in 2019.  Click here to view the complete list.  

David serves as the managing shareholder of Winstead’s Fort Worth office.   He maintains an active trial practice focused on advising and representing clients in the financial services industry.  David is one of twenty attorneys in the state of Texas (of 84,000 licensed) that has the triple Board Certification in Civil Trial Law, Civil Appellate and Personal Injury Trial Law by the Texas Board of Legal Specialization.

In In re Troy S. Poe Trust, trustees of a trust that was embroiled in litigation filed suit to modify the trust to increase the number of trustees and change the method for trustees to vote on issues. No. 08-18-00074-CV, 2019 Tex. App. LEXIS 7838 (Tex. App.—El Paso August 28, 2019, no pet.). After the trial court granted the modification, a party to the proceeding appealed and argued that the trial court erred in refusing him a jury trial on initial issues of fact.

The court of appeals first looked at a party’s general right to a jury trial in Texas:

 The Texas Constitution addresses the right to a jury trial in two distinct provisions. The first, found in the Bill of Rights, provides that the “right of trial by jury shall remain inviolate.” But this provision has been held to “maintain a right to trial by jury for those actions, or analogous actions, tried by jury when the Constitution was adopted in 1876.” And Richard has not shown that trust modifications were tried to a jury in 1876 or before. The Texas Constitution also contains another provision governing jury trials in its judiciary article: “In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.” This section is broader than the Section 15 right to jury in the sense that it does not depend on court practice in 1876 or before. It is narrower in the sense that it only applies to “causes.” But the Texas Supreme Court views the term “causes” expansively, and that court has only restricted the right to jury trial in specific contexts where “some special reason” made jury trials unsuitable, such civil contempt proceedings, election contests, suits to remove a sheriff, and appeals in administrative proceedings. The Texas Constitution also gives the legislature authority to regulate jury trials to maintain their “purity and efficiency.” In that regard, we look to the statutory framework to determine whether parties possess a right to a jury trial.

Id. (internal citation omitted). The court then analyzed whether the Texas Property Code waived a party’s right to a jury trial regarding a claim to modify a trust:

[T]he Trust Code provides that “[e]xcept as otherwise provided, all actions instituted under this subtitle are governed by the Texas Rules of Civil Procedure and the other statutes and rules that are applicable to civil actions generally.” The Texas Constitution guarantees the right to trial by jury, subject to regulation by the legislature. Those regulations are largely found in the Rules of Civil Procedure and outline how one requests a jury. Compliance with those rules would thus give Richard a right to a jury trial. Bock urges, however, that the specific statutory language of Section 112.054 precludes jury trials in trust modification proceedings. That Section provides in subsection (a) that the “court may order” modifications of a trust upon certain conditions, and in subsection (b) that the “court shall exercise its discretion” in framing those modifications. And certainly, where there is an apparent conflict between two statutory provisions, the statute dealing with the specific topic controls over the general. If there were a conflict between Section 112.054 that controls trust modification, and the more general Section 115.002 that generally provides for jury trials, the specific provision would control. But we are not convinced of an actual conflict. Section 112.054 vests the trial court with the duty of redrafting the trust terms if one of five predicates are met. The statute does not explicitly provide that it is the trial court who determines whether those predicates exist. The legislature certainly knows how to unambiguously restrict the right to a jury trial on a specific issue. We find no comparable limitations in Section 112.054.

Under Texas law, the right to a jury trial extends to disputed issues of fact in equitable, as well as legal proceedings. And as a general rule, “when contested fact issues must be resolved before equitable relief can be determined, a party is entitled to have that resolution made by a jury.” “Once any such necessary factual disputes have been resolved, the weighing of all equitable considerations . . . and the ultimate decision of how much, if any, equitable relief should be awarded, must be determined by the trial court.” The trial court, and not the jury, determines the “expediency, necessity, or propriety of equitable relief.” Based on these general principles, Richard complains that the predicate question of whether there were changed circumstances, or the purpose of the trust had become impossible to fulfill, were for a jury to resolve.

Id. (internal citations omitted). The court of appeals agreed with the appellant and held that he had a right to a jury trial on those initial issues. The court reversed and remanded for further proceedings.

In In re Estate of Poe, the son of a car dealership owner who was frozen out of control of the business by the dying father’s decision to issue new stock sued his father’s estate, trust, and officers of the business. No. 08-18-00015-CV, 2019 Tex. App. LEXIS 7842 (Tex. App.—El Paso August 28, 2019, no pet. history). The court of appeals held that the son had the burden to overcome the business judgment rule as a part of his breach of fiduciary duty claim. The court held that the son’s claim that the directors breached their duty by delegating responsibilities to others failed:

Bound up within the duty of care is the obligation to actually manage the affairs of the corporation. Yet we do not read into that duty the obligation to micromanage corporate affairs. Good corporate boards often rely on skilled employees to handle day-to-day operating decisions. Nothing suggests that Bock and Castro did not do that here. They continued the employment of two long-time managers at the Dodge and Chrysler dealerships, both of which Dick had originally hired. Sergent explained they did so to keep a continuity of experienced management who had relationships with the employees. They retained John Attel and initially placed him in charge of the parts and service departments of the dealerships. No witness criticized, or even specifically analyzed the profitability of those departments. Attel was later promoted to general manager, but with the approval of Chrysler. Finally, the board regularly met with management, and reviewed financials. We find no evidence of the breach of the duty of care in this record and the directed verdict was properly granted on that claim.

Id. The court found that the issue of whether the directors breached their duties by hiring a director to do legal work should have gone to the jury:

 Officers or directors self-deal when they make a personal profit from a transaction by dealing with the corporation. The burden of proof is on the interested officer or director to show that the action under consideration is fair to the corporation. As interested director transactions, each of the billings for professional services we note above might well be justified as fair to the corporation. The rates charged may have been appropriate for the service rendered. The burden of fairness, however, fell on the interested directors and not Richard. Just as Richard failed to explain the business decisions in sufficient detail for us to conclude there was some evidence of a violation of the business judgment rule, the record is similarly limited, or at least conflicting, on the fairness issue for these billings. We therefore remand the claims for disgorgement under the fiduciary duty of loyalty claim as to Bock and Sergent.

Id. The court then reviewed the conspiracy to breach fiduciary duty claims against the individual defendants, and held that those claims were properly dismissed because there was no evidence that they knew of an improper purpose in the transactions.

David F. Johnson presented his paper “The Use of Arbitration, Forum-Selection, and Jury-Waiver Clauses in Trust and Estate Litigation in Texas” to the Texas Bar Association’s Fiduciary Litigation Course in San Antonio on December 5, 2019. This presentation discussed the general purposes for those clauses, the standards for enforcement, procedural aspects of enforcement, the impact of choice-of-law clauses, and most importantly, current authority from across the county on using those clauses in trust and estate disputes. The paper and presentation are attached below.

Read Here: 


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In Klinek v. Luxeyard, Inc., a company sued its majority shareholder in a suit for breach of fiduciary duty arising from a pump-and-dump scheme and later settled that claim. No. 14-17-00899-C, 2019 Tex. App. LEXIS 9421 (Tex. App.—Houston [14th Dist.] October 29, 2019, no pet. history). The company then sued a third party for common-law fraud, unjust enrichment, and for conspiring in a breach of fiduciary duty, but asserted no claims for breach of fiduciary duty. After a lengthy bench trial, the trial court ordered the defendant to pay the company $395,146.63 as equitable disgorgement of profits from the sale of free-trading shares. The defendant appealed.

The defendant alleged that the trial court should have dismissed the conspiracy to breach fiduciary duty claim because the party who owed the fiduciary duty was not a party to the case and had previously settled his claim. The court of appealed disagreed:

We are not persuaded that the underlying tortfeasor must be sued in the same suit with the conspirators. If this were so, then a plaintiff who learned of the conspiracy or of additional conspirators after successfully suing the tortfeasor could not prevail against the tortfeasor’s confederates. The claims would be defeated not because the plaintiff was unable to prove the underlying tort, but because the plaintiff already had proved it. Such a result seems inconsistent with the Texas Supreme Court’s recent statement that “a civil conspiracy claim is connected to the underlying tort and survives or fails alongside it.” Nor do we think the result is changed if the plaintiff settled the claims against the tortfeasor. The legislature has declared that “[i]t is the policy of this state to encourage the peaceable resolution of disputes . . . and the early settlement of pending litigation through voluntary settlement procedures.” Texas courts likewise “promote a public policy that encourages settlements.” If the plaintiff and the tortfeasor have reached a compromise agreement, requiring the plaintiff to continue litigating the resolved claim in order to prove a different defendant’s liability “would contravene the policy of the courts to encourage settlements and to minimize litigation.” Further, “[c]ivil conspiracy depends entirely on the injury caused by the underlying tort,” and a party may prosecute consecutive suits against different defendants for a single indivisible injury. This is true regardless of whether the various defendants are joint tortfeasors. The plaintiff may even bring the second suit after the first case settles… On the particular facts presented in this case, we conclude that LuxeYard’s claim against Klinek for conspiring in Casey’s breach of fiduciary duty is not foreclosed by LuxeYard’s settlement of such claims against Casey in a separate suit.


The court of appeals then reviewed whether the majority shareholder owed fiduciary duties. The court held that that issue was controlled by Delaware law as the company was a Delaware company. Under Delaware law, a controlling shareholder who exercises actual control of the board of directors has the same fiduciary duties as a director. The court also found that there was evidenced that the majority shareholder breached his duties by conducting concealed transactions, that put free-trading shares in the hands of his confederates, who used them to execute, and to profit by, the pump-and-dump scheme.

The court then held that there was sufficient evidence that the defendant conspired with the majority shareholder even though there was no evidence of direct communications about the scheme:

In arguing that there is no evidence to support the trial court’s determination that Klinek conspired in Casey’s breach of fiduciary duty, Klinek states that his only direct contact with Casey was a single email confirming that Klinek would proceed with the investment, although Bahr also forwarded to Klinek emails written by Casey. But direct communication with the primary tortfeasor is not an essential element of conspiracy, and there is evidence supporting an inference that communications with Klinek about the conspiracy were passed through Bahr. For example, on March 9, 2012, 105,000 shares of LuxeYard were traded, and the 100,000 shares Klinek bought had been sold by Friedlander’s company Equity Highrise to fund the unauthorized “marketing blitz” that artificially inflated the price of LuxeYard’s shares. While there is no evidence that Klinek and Friedlander spoke together directly, each of them had frequent phone conversations with Bahr preceding the trade, from which the trial court could infer that this trade was a “matched order.” Bahr also testified that he had over a hundred phone calls with Casey after Casey introduced him to LuxeYard, and about a dozen emails; however, Bahr claimed that his computer hard-drive crashed in April 2012 so that there is no record of the emails. Presumably, the trial court did not find this explanation credible.

Id. The court affirmed the judgment for the plaintiff company against the conspiracy defendant.

In Budri v. FirstFleet, Inc., an employee sued his employer and supervisor for a number of causes of action, including a claim for breach of fiduciary duty. No. 3:19-CV-0409-N-BH, 2019 U.S. Dist. LEXIS 188251 (N.D. Tex. September 20, 2019). The federal magistrate recommended dismissing the breach of fiduciary duty claim because there were no allegations that supported the defendants owing a fiduciary duty to the employee:

Under Texas law, the essential elements of a breach of fiduciary duty claim are “(1) a fiduciary relationship must exist between the plaintiff and defendant; (2) the defendant must have breached his fiduciary duty to the plaintiff; and (3) the defendant’s breach must result in injury to the plaintiff or benefit to the defendant.” Hunn v. Dan Wilson Homes, Inc., 789 F.3d 573, 581 (5th Cir. 2015) (quoting Graham Mortg. Corp. v. Hall, 307 S.W.3d 472, 479 (Tex. App.—Dallas 2010, no pet.)). Whether a party owes a fiduciary duty is a question of law. Meyer v. Cathey, 167 S.W.3d 327, 330 (Tex. 2005). Courts impose fiduciary duties on parties based on the special nature of the relationships between such parties. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 199 (Tex. 2002). A fiduciary duty arises from certain formal relationships as a matter of law, such as an attorney-client or trustee relationship. Id. Courts also recognize an informal fiduciary duty that arises from “a moral, social, domestic or purely personal relationship of trust and confidence.” Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 287 (Tex. 1998). Here, Plaintiff alleges that on January 30, 2017, he put in a request to purchase a new headlamp bulb to replace the burnt-out bulb in his commercial truck as was necessary to comply with safety regulations, but Supervisor denied his request. Plaintiff contends by denying his request, Supervisor breached his fiduciary duty by failing to comply with a provision in the employee handbook that required him to assist Plaintiff while he was on the road, and to authorize electronic payments to allow him to pay for “parts and/or accessories of the truck equipment for minor repairs . . . to be made by the . . . [him] on the road” in order to comply with safety regulations. (Id.) Although Plaintiff appears to allege that Supervisor owed him a duty to assist him while on the road, he fails to identify any “special relationship” between him and Supervisor or any other Defendant, and he fails to allege how any breach directly resulted in an injury to him. (See id.) Even accepting all of his allegations as true, Plaintiff fails to state a claim for breach of fiduciary duty, and this claim should be dismissed. See Richardson v. Ocwen Loan Servicing, LLC, No. 3:13-CV-2578-O, 2014 U.S. Dist. LEXIS 177318, 2014 WL 7336890, at *7-8 (N.D. Tex. Dec. 24, 2014) (dismissing breach of fiduciary duty claims where plaintiff failed to allege existence of a “special relationship of trust and confidence”); see also Johnson v. Affiliated Computer Servs., Inc., No. 3:10-CV-2333-B, 2011 U.S. Dist. LEXIS 102128, 2011 WL 4011429, at *6 (N.D. Tex. Sept. 9, 2011) (dismissing breach of fiduciary duty claim where plaintiff failed to plead sufficient facts that would indicate the existence of a fiduciary duty owed by the defendant); cf. Kardell v. Union Bankers Ins. Co., No. 05-01-00662-CV, 2002 Tex. App. LEXIS 5760, 2002 WL 1809867, at *7 (Tex. App.—Dallas Aug. 8, 2002, no pet.) (finding that a fiduciary duty did not exist between an employer and employee “based solely on the length of the employment relationship and the employee’s subjective trust of the employer.” (citing cases)).