In In re Ruff Mgmt. Trust, the settlor and primary beneficiary sought and obtained a modification of a trust regarding who could name a successor trustee. No. 05-19-01505-CV, 2020 Tex. App. LEXIS 9467 (Tex. App.—Dallas December 3, 2020, no pet. history). The trust document provided that the settlor and her son would name a successor trustee. If they did not do so, then the settlor’s children would automatically be named co-trustees. The settlor had previously had a very contentious arbitration dispute with her son, and sought to modify the trust to have it state that she could, by herself, name a successor trustee. After the trial court granted that relief, the settlor’s other children (other than the son) appealed that decision. The court of appeals affirmed the modification, not because there was evidence to support it, but because the modification allegedly did not affect the appealing children’s rights. Continue Reading Court Affirmed An Order Modifying A Trust Where The Complaining Beneficiaries Were Not Affected By The Modification, Where The Modification Was Not Contrary To The Purpose Of The Trust, And Where The Beneficiaries Waived Their Right To A Jury Trial

In Denson v. JPMorgan Chase Bank, N.A., Sandra Denson went to her bank to deposit $730 when a $50 bill became temporarily stuck in the cash counting machine, causing the teller to miscount the amount of the deposit as $680. No. 01-19-00107-CV, 2020 Tex. App. LEXIS 9412 (Tex. App.—Houston [1st Dist.] December 3, 2020, no pet. history). Denson then cursed at the teller, calling her “stupid” and a “dumb bitch,” told her that she needed her “ass whipped,” and suggested that the teller needed to be retrained and that the teller was “going to keep that $50 for lunch.” Continue Reading Court Holds That Bank Did Not Owe Fiduciary Duties To Depositor/Customer

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In In the Estate of Hohmann, the decedent died without leaving an executed will, but his caretaker found a hand written document wherein the decedent stated his wishes for his property. No. 04-20-00237-CV, 2020 Tex. App. LEXIS 9216 (Tex. App.—San Antonio November 25, 2020, no pet. history). The decedent’s cousin filed an application to probate the hand written document as a written will, and an heir of the decedent filed an opposition. The trial court granted summary judgment for the opponent, and the applicant appealed. Continue Reading Court Holds That Holographic Will Was Not Valid As There Was No Signature

In Cohen v. Newbiss Prop., a limited partner sued a transferee of real property for aiding and abetting breach of fiduciary duty and conspiracy to breach fiduciary duty. No. 01-19-00397-CV, 2020 Tex. App. LEXIS 9190 (Tex. App.—Houston [1st Dist.] November 24, 2020, no pet. history). While the limited partners were suing the general partner, the defendants/transferees bought the property. The trial court granted the transferees’ motion for summary judgment, and the limited partners appealed. Continue Reading Court Holds That Purchaser Of Partnership Property Was Not Liable For Aiding And Abetting A General Partner’s Breach Of Fiduciary Duty

In Tomlinson v. Khoury, a judgment creditor discovered that the judgment debtor was the trustee and beneficiary of a spendthrift trust and brought a turnover action to invalidate the trust. No. 01-19-00183-CV, 2020 Tex. App. LEXIS 8427 (Tex. App.—Houston [1st Dist.] October 27, 2020, no pet. history). The judgment creditor was never sued in his capacity as trustee of the trust, but the trial court invalidated the trust and ordered a turnover of trust assets. Continue Reading Court Reverses Turnover Order That Disregarded A Trust Where The Trustee Was Not A Party To The Proceeding

In Ochse v. Ochse, a mother created a trust that provided that the trustee was authorized to make distributions to her son and the son’s spouse. No. 04-20-00035-CV, 2020 Tex. App. LEXIS 8922 (Tex. App.—San Antonio November 18, 2020, no pet. history). At the time of the trust’s execution, the son was married to his first wife, but he later divorced and married his second wife. The son’s children then sued the son for breaching fiduciary duties as trustee and joined their mother, the first wife, as a necessary party. The first wife and the son then filed competing summary judgment motions on whether the first wife or the second wife was the son’s “spouse” as referenced in the trust agreement. The trial court ruled the second wife was the correct beneficiary at the time of the suit, and the first wife appealed. Continue Reading Court Held That The Term “Spouse” In A Trust Meant The Primary Beneficiary’s Wife At The Time Of The Trust’s Execution And Not A Subsequent Wife

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 In re Equinor Tex. Onshore Props., a trustee filed two cases against different defendants in the same county regarding a royalty dispute under oil and gas leases. No. 05-20-00578-CV, 2020 Tex. App. LEXIS 8042 (Tex. App.—Dallas October 7, 2020, original proceeding). Because the second-filed case was transferred to Dallas County, Texas, lacked dominance over the interrelated case still pending in the original venue, the court of appeals held that mandamus relief was appropriate to order the trial court to grant the plea in abatement. Continue Reading Court Holds That Venue For Suit Over Royalties By A Trustee Was Proper Due To Statutory Venue Provision Even Though The Suit Did Not Pertain To The Trust

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 remainder beneficiaries to sue over trust administration issues, trust protector liability, will construction issues, and the statute of limitations.

This course has been approved for 1 MCLE and 0.25 Ethics credit hours by the State Bar of Texas Committee on MCLE. This course has also been approved for CTFA Credit, attendees will be able to self-report once the webinar has concluded.

Please contact rbond@winstead.com if you need assistance with receiving your credit.

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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 retaining counsel, authority to compensate attorneys at the end of an engagement and during the course of litigation, and injunctive relief to preclude the payment of attorneys during the course of litigation.

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