In Ec & Sm Guerra v. Phila. Indem. Ins. Co., an insured sued its property insurer for breach of fiduciary duty and other claims arising from the insurer’s denying a claim for wind damage and disagreeing with an appraiser’s report. SA-20-CV-00660-XR, 2020 U.S. Dist. LEXIS 196735 (W.D. Tex. October 21, 2020). The insurer filed a motion to dismiss, which the court granted.
Continue Reading Court Holds That Insurers Do Not Generally Owe Fiduciary Duties To Insureds

In this presentation, David F. Johnson will cover Texas cases dealing with fiduciary issues over the survey period. Some of the issues involve the removal of a trustee, the resignation of a trustee, the production of confidential trust information, the attorney/client communication privilege, right to jury trial in trust modification proceedings, the standing of contingent

David F. Johnson presented his paper on “Trustees’ Ability to Retain and Compensate Attorneys in Texas” to the Texas Bar Association’s Fiduciary Litigation Course on December 10, 2020. This presentation discussed a trustee’s authority to retain counsel, suggestions regarding engagement letters, attorney/client communication issues, inadvertent attorney/client relationships, co-trustee administration of trusts and its impact on

A. Introduction

It is not uncommon for beneficiaries to sue a trustee for actions that the beneficiaries had knowledge of but where they failed to object to that conduct for a period of time. In this circumstance, the trustee may want to raise certain equitable defenses to those claims, such as laches, ratification, waiver, and estoppel. Equitable defenses are appropriate for breach of fiduciary duty claims as fiduciary relationships originate in equity. At the core of these equitable defenses is the concept that a party should not be allowed to act inconsistently: have knowledge of conduct and fail to object to it for a period of time (thereby tacitly agreeing to the conduct) and then later raising claims against the trustee for the same conduct.
Continue Reading Use Of Equitable Defenses In Breach Of Fiduciary Duty Litigation

David F. Johnson presented his paper on “Administering A Trust In A Recession: Trust Loans To Beneficiaries” to the Houston Bar Association’s Probate and Estate Section on October 27, 2020 via a webinar format. This presentation addressed, among other things, a trustee’s authority to loan trust assets to beneficiaries, co-trustee issues, conflicts of interest, the

In Katz v. Intel Pharma, LLC, a minority member of a limited liability company sued a former manager for breach of fiduciary duty in a derivative action. No. H-18-1347, 2020 U.S. Dist. LEXIS 120389 (S.D. Tex. July 9, 2020). The defendant filed a motion for summary judgment, alleging that he did not owe any fiduciary duties, and even if he did, the minority member could not raise them after the company was no longer in existence. The federal district court denied the motion.
Continue Reading Court Held That Manager Owed Limited Liability Company Fiduciary Duties And That A Derivative Action Could Still Be Pursued After The Company Dissolved