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

  1. Introduction

A plaintiff in a trust or estate dispute often needs to seek a remedy before trial to protect it from immediate injury, to protect the assets made the basis of the suit, or to discover the real condition of the parties’ relationship or business. There are different types of relief that a plaintiff can seek.
Continue Reading Receiverships in Trust and Estate Litigation in Texas

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

In Gill v. Grewal, the suit arose out of a failed business venture between old college friends. No. 4:14-CV-2502, 2020 U.S. Dist. LEXIS 104461 (S. D. Tex. June 15, 2020). Gill and Grewal attended college together in the late 1960s. After falling out of touch with each other for over thirty years, the two reconnected at a wedding. The day after the wedding, Grewal pitched Gill an entrepreneurial venture related to the healthcare industry. The parties then formed Healthema. After a dispute arose, Grewal sued his former friend for breaching fiduciary duties arising from the formation and operation of the business. Gill filed a motion for summary judgment, alleging that he did not owe any fiduciary duties to Grewal. The district court granted the summary judgment motion on this issue.
Continue Reading Old College Friends Do Not Generally Owe Fiduciary Duties To Each Other

On April 9, 2020, the governor suspended certain statutes concerning appearance before a notary public to execute a self-proved will, a durable power of attorney, a medical power of attorney, a directive to physician, or an oath of an executor, administrator, or guardian. These suspensions temporarily allow for appearance before a notary public via videoconference when executing such documents, avoiding the need for in-person contact during the COVID-19 pandemic.

The following conditions will apply whenever this suspension is invoked:

A notary public shall verify the identity of a person signing a document at the time the signature is taken by using two-way video and audio conference technology.

A notary public may verify identity by personal knowledge of the signing person, or by analysis based on the signing person’s remote presentation of a government-issued identification credential, including a passport or driver’s license, that contains the signature and a photograph of the person.

The signing person shall transmit by fax or electronic means a legible copy of the signed document to the notary public, who may notarize the transmitted copy and then transmit the notarized copy back to the signing person by fax or electronic means, at which point the notarization is valid.


Continue Reading Notary Services In A World of Social Distancing: Texas Temporarily Allows For Videoconference Notarization In Addition To Online Notary Services

In Gooden v. Mackie, a borrower sued a mortgage servicer after the servicer foreclosed on the property. No. 4:19-CV-02948, 2020 U.S. Dist. LEXIS 25142 (S.D. Tex. January 22, 2020). Among other claims, the borrower filed a breach of fiduciary duty claim. The federal magistrate recommended dismissing that claim. The magistrate held:

The mortgagor-mortgagee relationship

When the economy has a downturn, trustees are under more pressure to make distributions. Beneficiaries lose jobs, their individual asset portfolios decrease, and they may make the decision to go back to school. Moreover, with the current COVID-19 pandemic, health care expenses may increase. Due to these factors, trustees are under more pressure to make