In Estate of Long, the plaintiff sued trustees and alleged that she was the only child of the decedent and asserted a cause of action for a will contest and for a declaratory judgment action in which she requested the trial court to declare that the residuary clause of the will admitted lapsed and that the decedent’s residuary estate passed via intestacy to her. No. 06-23-00025-CV, 2023 Tex. App. LEXIS 4313 (Tex. App.—Texarkana June 20, 2023, no pet. history). The trial court granted the plaintiff a motion for summary judgment, denied the trustees’ summary judgment, and construed the will to mean that the entire residue of decedent’s estate passed to his heirs-at-law, which would later be determined by the trial court. The court of appeals raised the issue of whether it had jurisdiction over the appeal. The court noted that in probate proceedings there was an exception to the one final judgment rule:

“Probate and guardianship proceedings present ‘an exception to the “one final judgment” rule[.]'” “[I]n such cases, multiple judgments final for purposes of appeal can be rendered on certain discrete issues.” “This exception reflects the necessity of reviewing ‘”controlling, intermediate decisions before an error can harm later phases of the proceeding[.]”‘” … [I]n probate and guardianship proceedings, “if there is a proceeding of which the order in question may logically be considered a part, but one or more pleadings also part of that proceeding raise issues or parties not disposed of, then the probate order is interlocutory.”

Id. The parties contended that multiple Texas courts have recognized that an order determining a will’s validity or construing a will is a final order for purposes of appeal. The court disagreed that the order was sufficiently final:

[T]he relevant and discrete portion of the probate proceeding presented through Zazulak’s declaratory judgment action and motion for summary judgment was a determination of the effect of the failure of the residuary clause of the Will. In her declaratory judgment action, Zazulak sought both a declaration that the residuary clause of the Will lapsed and that the Decedent’s residuary estate passed via intestacy to her. The March 1 Order determined that the residuary clause lapsed, but it did not determine that Zazulak  was the Decedent’s sole heir-at-law or that the residuary estate passed to her. Because the March 1 Order does not dispose of all parties and issues at this stage of the proceeding, it is not a final, appealable order.

Id.

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In Estate of Long, the plaintiff sued trustees and alleged that she was the only child of the decedent and asserted a cause of action for a will contest and a cause of action for a declaratory judgment action in which she requested the trial court to declare (a) that the residuary clause of the will lapsed and (b) that the decedent’s residuary estate passed via intestacy to her. No. 06-23-00025-CV, 2023 Tex. App. LEXIS 4313 (Tex. App.—Texarkana June 20, 2023, no pet. history). The trial court granted the plaintiff a motion for summary judgment, denied the trustees’ motion for summary judgment, and construed the will to mean that the entire residue of decedent’s estate passed to his heirs-at-law, which would later be determined by the trial court. The court of appeals raised the issue of whether it had jurisdiction over the appeal. The court noted that in probate proceedings there was an exception to the one final judgment rule:

“Probate and guardianship proceedings present ‘an exception to the “one final judgment” rule[.]'” “[I]n such cases, multiple judgments final for purposes of appeal can be rendered on certain discrete issues.” “This exception reflects the necessity of reviewing ‘”controlling, intermediate decisions before an error can harm later phases of the proceeding[.]”‘” … [I]n probate and guardianship proceedings, “if there is a proceeding of which the order in question may logically be considered a part, but one or more pleadings also part of that proceeding raise issues or parties not disposed of, then the probate order is interlocutory.”

Id. The parties contended that multiple Texas courts have recognized that an order determining a will’s validity or construing a will is a final order for purposes of appeal. The court disagreed that the order was sufficiently final:

[T]he relevant and discrete portion of the probate proceeding presented through Zazulak’s declaratory judgment action and motion for summary judgment was a determination of the effect of the failure of the residuary clause of the Will. In her declaratory judgment action, Zazulak sought both a declaration that the residuary clause of the Will lapsed and that the Decedent’s residuary estate passed via intestacy to her. The March 1 Order determined that the residuary clause lapsed, but it did not determine that Zazulak  was the Decedent’s sole heir-at-law or that the residuary estate passed to her. Because the March 1 Order does not dispose of all parties and issues at this stage of the proceeding, it is not a final, appealable order.

Id.

In Ahlgren v. Ahlgren, plaintiffs sued a defendant alleging that the defendant was a trustee of an oral trust who breached duties by refusing to return certain property. No. 13-22-00029-CV, 2023 Tex. App. LEXIS 4182 (Tex. App.—Corpus Christi – Edinburg,  June 15, 2023, no pet. history). After the trial court entered judgment for the plaintiff, the defendant appealed. The court of appeals first discussed the requirements for an oral trust:

The Texas Trust Code provides that “[a] trust may be created by . . . a property owner’s inter vivos transfer of the property to another person as trustee for the transferor or a third person[.]” Tex. Prop. Code Ann. § 112.001(2). “A trust in either real or personal property is enforceable only if there is written evidence of the trust’s terms bearing the signature of the settlor or the settlor’s authorized agent.” Id. § 112.004. However, an oral trust in personal property “is enforceable if created by . . . a transfer of the trust property to a trustee who is neither settlor nor beneficiary if the transferor expresses simultaneously with or prior to the transfer the intention to create a trust.” Id. § 112.004(1); see Ayers v. Mitchell, 167 S.W.3d 924, 928 (Tex. App.—Texarkana 2005, no pet.).

“A trust is created only if the settlor manifests an intention to create a trust.” Tex. Prop. Code Ann. § 112.002. Although “[t]echnical words of expression” are not essential, the beneficiary, the res, and the trust purpose must be identified. Perfect Union Lodge No. 10, A.F. & A.M., of San Antonio v. Interfirst Bank of San Antonio, N.A., 748 S.W.2d 218, 220 (Tex. 1988); ETC Tex. Pipeline, Ltd. v. Addison Expl. & Dev., LLC, 582 S.W.3d 823, 840 (Tex. App.—Eastland 2019, pet. denied); Pickelner v. Adler, 229 S.W.3d 516, 526 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).

“[W]hen a valid trust is created, the beneficiaries become the owners of the equitable or beneficial title to the trust property and are considered the real owners.” Bradley v. Shaffer, 535 S.W.3d 242, 248 (Tex. App.—Eastland 2017, no pet.) (quoting City of Mesquite v. Malouf, 553 S.W.2d 639, 644 (Tex. App.—Texarkana 1977, writ ref’d n.r.e.)). “[I]t is well established that the legal and equitable estates must be separated; the former being vested in the trustee and the latter in the beneficiary.” Perfect Union Lodge, 748 S.W.2d at 220. However, “[i]t is not absolutely necessary that legal title be granted to the trustee in specific terms.” Id. Furthermore, “[p]roperty may be added to an existing trust from any source in any manner unless the addition is prohibited by the terms of the trust or the property is unacceptable to the trustee.” Tex. Prop. Code Ann. § 112.006.

An express trust establishes “a fiduciary relationship with respect to property which arises as a manifestation by the settlor of an intention to create the relationship and which subjects the person holding title to the property to equitable duties to deal with the property for the benefit of another person.” Id. § 111.004(4). “The trustee shall administer the trust in good faith according to its terms . . . .” Id. § 113.051. “[I]n administering the trust[,] the trustee shall perform all of the duties imposed on trustees by the common law.” Id. “The trustee is accountable to a beneficiary for the trust property and for any profit made by the trustee through or arising out of the administration of the trust, even though the profit does not result from a breach of trust[.]” Id. § 114.001(a). A trustee is liable for “any damages resulting from” a breach of trust, including lost trust property, profit to the trustee, and profit the trust would have realized without breach. Id. § 114.001(c); see also Williams v. Williams, No. 03-21-00109-CV, 2022 Tex. App. LEXIS 8164, 2022 WL 16702520, at *3 (Tex. App.—Austin Nov. 4, 2022, no pet.) (mem. op.).

Id. The court held that there was sufficient evidence of intent to create a trust:

While Nim did not describe a transfer of legal title in explaining the agreement, Nim clearly identified the beneficiary—Nim; the res—Nim’s First Tennessee assets; and the trust purpose—the management and investment of Nim’s holdings. See id. Paco’s own representations confirmed the intent of the parties—”I’m going to continue to legally transfer as much of Nim’s estate as I can into my own name”; “any money I move into my name from Nim’s accounts I intend to keep in my name until he needs me to help him out”; “I’ve been managing [Nim’s] money for four years.” See id.; see also In re Borbidge, 90 B.R. 728, 735 (Bankr. E.D. Pa. 1988), aff’d sub nom. Eckell v. Borbidge, 114 B.R. 63 (E.D. Pa. 1990) (concluding that an oral trust was intended based on testimony by son “that his mother gave him control and access to her assets to be exercised for her benefit”). Viewing the evidence in the light most favorable to the verdict, we conclude that the record would enable reasonable and fair-minded people to find that Nim intended to create an express trust.

Id. The court also held that there was evidence of a transfer of assets where the defendant liquidated certain investments and transferred them. The court held that the intent and the transfer did not have to occur at the same time.

The court also held that the statute of frauds did not defeat the oral trust where the assets at the time of the creation of the trust were personal property:

[A]appellants argue that the statute of frauds bars the enforcement of the oral trust. We disagree. As noted above, the Trust Code’s statute of frauds provision permits the enforcement of oral trusts if the trust consists of personal property at its creation. See Tex. Prop. Code Ann. § 112.004(1) (“A trust consisting of personal property . . . is enforceable if created by . . . a transfer of the trust property to a trustee who is neither settlor nor beneficiary . . . .”) (emphasis added). If the settlor funds the oral trust with personal property, the trustee cannot render the entire trust unenforceable by later converting the trust assets to real property.

Id. The court affirmed the trial court’s holding that there was an express oral trust.

The defendant also challenged an award of profit disgorgement alleging that there was no evidence of the value of the asset at the time of the breach. The court noted that there was evidence of the asset at the time of trial, which was sufficient for a breach of fiduciary duty claim:

Next, appellants argue that the Bitcoin should have been valued at the time of breach—not the time of trial—in calculating Paco’s profits. Appellants cite a rule of law applying to contract damages. See Miga v. Jensen, 96 S.W.3d 207, 214 (Tex. 2002) (“But the rule in Texas has long been that contract damages are measured at the time of breach, and not by the bargained-for goods’ market gain as of the time of trial.”). However, appellants cite no authority applying this limitation to a breach of fiduciary duty claim, and we have found none. See Tex. R. App. P. 38.1(i). Rather, “[u]nlike a contract case, the law favors granting the benefit of the delay to the victim of the fraud.”

Id. The court affirmed the judgment for the plaintiff.

In Allebach v. Gollub, the decedent had three children, and after he died, one of them filed a will contest and a claim that the decedent’s marriage to his second wife was void. No. 14-22-00272-CV, 2023 Tex. App. LEXIS 3469 (Tex. App.—Houston [14th Dist.] May 23, 2023, no pet. history). The plaintiff filed a will contest, alleging among other things that the decedent had been suffering from memory declines and that he lacked testamentary capacity. She also sought to probate an earlier will, in which she was a beneficiary. Furthermore, she asserted several causes of action against the new wife, and sought a declaratory judgment that the marriage was void as a matter of law because the new wife was the daughter of the decedent’s biological sister—which made her the niece of the decedent and the cousin of his children. The trial court granted summary judgment for the plaintiff on the claim voiding the marriage, and the new wife appealed.

The court discussed the standards for voiding a marriage:

Texas law presumes that every marriage is valid “unless expressly made void by Chapter 6 [of the Texas Family Code] or unless expressly made voidable by Chapter 6 and as annulled as provided by that chapter.” This presumption applies to the marriage between Anna and the decedent because, even though their marriage was performed in another state, they were domiciled here in Texas. To overcome this presumption, Julie had the burden of proving that the marriage between Anna and the decedent was either void or voidable. There are significant differences between these two types of invalid marriages.

Voidable marriages are identified in Subchapter B of Chapter 6, which is entitled “Grounds for Annulment,” and they include marriages that are founded on such grounds as fraud and mental incapacity. To challenge a voidable marriage, a party must bring a suit for annulment. And this suit must be brought before the death of either party to the marriage, except as provided by the Texas Estates Code. See Tex. Fam. Code § 6.111.

Void marriages, on the other hand, are identified in Subchapter C of Chapter 6, which is entitled “Declaring a Marriage Void,” and they include marriages founded on grounds such as consanguinity. To challenge a void marriage, a party must bring a suit to declare the marriage void. And under our common law, such suits may be brought “by anyone, at any time, directly or collaterally.”

Id. (internal citations omitted). The court held that the evidence proved that the new wife was the defendant’s niece as matter of law, which was not contradicted by any evidence of the new wife.

The new wife argued that the claim to void the marriage was barred by the statute of limitations. The court stated:

 Anna relies specifically on Section 123.102 of the Texas Estates Code, which provides in material part that “if a proceeding described by Section 123.101(a) is not pending on the date of a decedent’s death, an interested person may file an application with the court requesting that the court void the marriage of the decedent if . . . the marriage commenced not earlier than three years before the date of the decedent’s death.” Anna then refers to Julie’s own summary-judgment evidence to prove the application of this statute, because Julie attested in her affidavit that the decedent married Anna more than four years before his death. By advocating for the application of this statute of limitations, Anna implicitly suggests that Section 123.102 has supplanted the common law rule that a void marriage may be challenged “at any time.”… Altogether, the text and structure of Subchapter C of Chapter 123 reflect a singular focus of invalidating a marriage on the ground of mental incapacity, which makes a marriage voidable, not void. Thus, the limitations provision contained within Section 123.102 should only be understood to apply to a challenge to a marriage made voidable on the ground of mental incapacity. This understanding comports with the plain language of the statute, and it also preserves the longstanding common law rule that challenges to void marriages are not subject to limitations.  Because Julie sought a declaration that the marriage between Anna and the decedent was void on the ground of consanguinity, rather than voidable on the ground of mental incapacity, we conclude that the limitations provision contained within Section 123.102 has no application to this case.

Id. (internal citations omitted). The court also disagreed that the plaintiff lacked capacity or standing to raise her claims. The court affirmed the trial court’s judgment voiding the marriage.

In In re Guardianship of Delp, a brother sued his sister over her actions as their mother’s power of attorney agent. No. 02-22-00300-CV, 2023 Tex. App. LEXIS 3617 (Tex. App.—Fort Worth May 25, 2023, no pet. history). The daughter had been living in her mother’s home rent free. She arranged for her mother to execute a deed transferring the home to the daughter.  Shortly after that transaction, the daughter took her mother to a new attorney, and the mother signed a new statutory durable power of attorney replacing a sister with the defendant daughter as the new agent. The defendant daughter then took control of some of the mother’s bank accounts, social-security payments, and credit cards. The plaintiff brother was then appointed the mother’s guardian, and he filed suit to remove the defendant daughter as power of attorney agent. The probate court entered a judgment that because the defendant had “breached her fiduciary duty,” the court removed her “as agent in all powers of attorney for health care and all durable powers of attorney executed by” the mother.

The court of appeals discussed the duties owned by a power of attorney agent:

Dianna does not dispute that an agent under a statutory durable power of attorney owes formal fiduciary duties to her principal and can be removed for a breach of those duties. Among them are the duties to act in good faith, to avoid conflicts, and to act loyally, which prohibits a fiduciary from using her position to benefit at the principal’s expense—that is, an agent must not engage in self-dealing. Because all transactions between a fiduciary and her principal are presumptively fraudulent, the fiduciary bears the burden to establish the validity and fairness of any particular transaction in which she is involved.

Id. The court reviewed the evidence and held that there was evidence to support at least one of the findings of breach:

If even one of these findings that underlie Dianna’s claimed fiduciary-duty breach enjoys sufficient evidentiary support, the probate court could have properly removed her as Trudy’s agent under the 2020 POA. But we need not get into the evidence supporting these findings because Dianna’s appeal fails for a more fundamental reason: she has not challenged the probate court’s additional finding that “Dianna continued to reside in Trudy’s home rent free and without paying any of the expenses for the upkeep and maintenance of the home.” Unchallenged fact-findings are entitled to the same weight as a jury’s verdict and bind an appellate court unless either the contrary is established as a matter of law or no evidence supports the finding. In other words, we defer to unchallenged fact-findings that are supported by some evidence.

The evidence showed that after Trudy moved to a nursing home in June 2021, Dianna was using Trudy’s money to pay the utilities at the Cardinal Lane home. Because the Maryanna Way property was “not habitable,” Dianna was still living in Trudy’s house and testified that she intended for her mother to keep paying the utilities. The evidence also showed that in addition to the utilities, Dianna continued to use Trudy’s money to pay for lawncare and pool servicing at Cardinal Lane.

The probate court’s unchallenged finding that Dianna continued to live on Cardinal Lane “rent free and without paying any of the expenses for the upkeep and maintenance of the home” is supported by some evidence. On this basis alone the probate court could have removed Dianna as Trudy’s agent under the 2020 POA, unless Dianna established that these expenditures were fair to Trudy. We have reviewed the record and find no point at which Dianna, a fiduciary, brought forth evidence of fairness to Trudy, her principal.

Id.

In Banister v. Banister, the trial court found that a wife breached her fiduciary duty to the husband, committed fraud on the community estate, and wasted community assets. No. 03-21-00517-CV, 2023 Tex. App. LEXIS 4063 (Tex. App.—Austin June 13, 2023, no pet. history). The evidence established the wife paid attorney’s fees for her paramour from community assets, did not charge the paramour rent for a rental property belonging to the parties, and forced payment of a finder’s fee to her paramour at the closing of the marital residence. In its division, the district court valued the community estate at $3,993,630, awarded the husband $1,972,629 in net assets, or 50.15% of the estate, an awarded the wife $1,961,001 in net assets, or 49.85% of the estate. The wife appealed.

The court of appeals discussed the legal requirements for fraud and breach of fiduciary duties in the context of a divorce proceeding:

A fiduciary duty exists between a husband and a wife as to the community property controlled by each spouse. “In the divorce context, a claim for a breach of fiduciary duty is the same as a claim for fraud on the community,” which is “a judicially created concept based on the theory of constructive fraud.” No dishonesty of purpose or intent to deceive must be established to prove constructive fraud. “A presumption of constructive fraud arises where one spouse breaches the fiduciary duty owed to the other spouse and disposes of the other spouse’s one-half interest in community property without the other’s knowledge or consent.”

A related concept is waste of community assets, which occurs when one spouse, dishonestly or purposefully with the intent to deceive, deprives the community estate of assets to the detriment of the other spouse. “Evidence of a spouse using excessive funds without the other spouse’s consent supports a waste finding.” “Expenditures for the benefit of a paramour also establish waste,” as do disbursements of community funds to relatives and friends. “Further, while waste claims are often premised on specific transfers or gifts of community property to a third party, a waste judgment can also be sustained by evidence of community funds unaccounted for by the spouse in control of those funds.”

Id. (internal citations omitted). The court of appeals affirmed the trial court’s order as the evidence supported a finding of waste:

Assuming without deciding that there is insufficient evidence to support findings of breach of fiduciary duty/constructive fraud regarding those claims, we conclude that there is sufficient evidence to support findings that Janet wasted community assets. The evidence shows that Janet entered into two contracts with Mikulencak, one to repair the marital residence for $72,463.77, and the other for a “finder’s fee” that amounted to $25,230.00. It is undisputed that Greg did not sign either of these contracts and was not made aware of them until days before closing, when the title company informed him of liens on the property filed by Mikulencak. Additionally, Greg testified that Janet told him that Mikulencak would be doing repairs on the property free of charge, in exchange for him living rent-free in one of their rental properties. This representation turned out to be false. Regarding the finder’s fee, Short testified that he did not meet Mikulencak until after he had already found the house on Zillow and that his decision to purchase the residence was not based on anything that Mikulencak said or did. Greg did not believe that Mikulencak should receive any finder’s fee, but Janet offered to lower the fee from six percent to three percent “just to try to entice [Greg] to go through with the sale of the house.” Although Greg ultimately agreed to pay Mikulencak, he agreed to do so only because there were liens on the property at closing and the buyer was threatening to sue Greg if he did not follow through on the sale. As Greg explained, “The whole situation to me seemed like it was designed to force me to agree to the sale of the house with Kevin Mikulencak getting nearly $100,000 from the proceeds of the house.” A factfinder also could infer that Greg allowed Mikulencak to live in the rental house without requiring Mikulencak to pay rent or utilities because Janet caused Greg to believe that “in lieu of any rent that he would be paying” for living there, Mikulencak would be making repairs to the marital residence. Although Mikulencak made repairs to the house, they were not free, contrary to Janet’s claim. We conclude that this evidence is sufficient to prove that Janet, dishonestly or purposefully with the intent to deceive Greg, deprived the community estate of assets to Greg’s detriment.

Id.

In Kirkland v. Kirkland, a husband and wife created a revocable trust. No. 02-22-00469-CV, 2023 Tex. App. LEXIS 3598 (Tex. App.—Fort Worth May 25, 2023, no pet. history). Upon the death of one of the spouses, the right to revoke the trust by the surviving spouse was limited. An individual was listed as the first successor trustee, and the surviving spouse was limited to removing and replacing him with someone who was not related to her. The trust also limited what provisions of the trust could be amended by the surviving spouse. Notwithstanding, the surviving spouse executed a document that purported to remove the individual and replace him with the surviving spouse. The individual and the surviving spouse then filed claims against each other, and the individual obtained a temporary injunction precluding the surviving spouse from acting as a trustee, and the surviving spouse appealed that order.

The court of appeals affirmed the injunction order holding that there was evidence of a breach of fiduciary duty by the surviving spouse and that there was evidence if an irreparable harm, both of which are required for a temporary injunction. The court stated:

Here, the record demonstrates that upon Benny’s death, the trust provided for Calvin to serve as trustee. While Calvin was serving as trustee, Jerri executed the Second Amendment to remove Calvin as trustee and appoint herself as trustee. This appointment was a change to Article I of the Restated Amendment and violated 5.C. of the Restated Amendment, allowing only Articles II, III, or IV to be amended by the surviving spouse. Jerri’s appointment of herself as trustee also violated the Restated Amendment’s 3.A., which required that a successor trustee not be related to the surviving spouse. Additionally, Jerri’s appointment of herself as trustee altered the status quo.

Further, once Jerri usurped the role of trustee, she did not uphold the high fiduciary standards required of a trustee. Jerri did not exhibit fidelity to the beneficiaries of the Decedent’s Trust as she admitted that she had not taken a single action since she had purportedly appointed herself as trustee of the trust: she had not arranged to take care of the trust’s taxes; she had not investigated what assets were currently in the trust; she had not checked to see what bills were due on the New Mexico property or done anything to make sure that they were paid; and she had not reached out to the investment advisor to check on the Stifel account that had rapidly declined in value. Indeed, she professed to not knowing that she had removed Calvin as trustee.

Jerri claims that Calvin never proved that she had tried to harm him or that she intended to harm him in the future. The failures listed above are some evidence that Jerri had harmed Calvin, who was a beneficiary of the Decedent’s Trust and the Stifel account. Moreover, as stated above, “[i]n determining imminent harm, ‘the trial court may determine that, when violations are shown up to or near the date of trial, the defendant has engaged in a course of conduct[,] and the court may assume that it will continue, absent clear proof to the contrary.'” Hartwell, 528 S.W.3d at 764. The trial court was within its discretion to conclude that Jerri’s actions in removing Calvin as trustee and appointing herself as trustee—both actions in violation of specific provisions in the trust—and then failing to act as trustee demonstrated that she had engaged in a course of conduct that would continue in the future.

Id. The court also held that there was evidence that the surviving spouse did not have sufficient assets to reimburse the trust for damages associated with her inaction.

In Skeels v. Suder, a departing shareholder of a law firm sued regarding the firm’s decision to redeem his shares for no consideration. No. 21-1014, 2023 Tex. LEXIS 578 (Tex. June 23, 2023). Partners of a law firm entered into a shareholder agreement that allowed certain individuals to take action. The resolution stated:

Notwithstanding the number of shareholders, or the number of shares issued to any shareholder, Walker Friedman, Jonathan Suder and Michael Cooke, collectively, have been entitled, and shall continue to be entitled, to take affirmative action on behalf of the Firm, and veto any vote or action taken by or on behalf of the Firm, and/or by any other shareholder, whether individually, or collectively.

Id. (emphasis added). The firm’s governing documents did not address redemption, and after the firm terminated a shareholder’s employment, he did not agree to the founders’ proposed redemption terms. The founders then purported to redeem his shares at no cost, arguing that a resolution generally authorizing the founders “to take affirmative action on behalf of the Firm” unambiguously encompasses redemption. The trial court ruled for the lawfirm and rejected the departing shareholder’s claim regarding the redemption.

The majority of the court of appeals affirmed that under the various documents, it had the right to do so: “The plain language of the Resolution—a shareholder agreement—broadly allowed Friedman, Suder, and Cooke as the Firm’s governing authority to take affirmative action on behalf of the Firm; thus, the trial court did not err by finding that the Resolution governed the redemption of Skeels’s shares on the terms dictated by the Firm’s governing authority.”

The Texas Supreme Court reversed. The court noted that the Texas Organizations Code provides that corporate shares are personal property, but a professional corporation may redeem them if the redemption price and other terms are (1) “agreed to between the board of directors” and either “the shareholder” or his “personal representative,” (2) “specified in the governing documents” or “an applicable agreement,” or (3) determined according to a statutorily authorized “shareholders’ agreement.” Id.

The Texas Supreme Court held that:

[M]odifying “affirmative action” with “on behalf of the Firm,” the resolution authorized the founders to take action the firm could take, but it did not constitute the departing shareholder’s agreement that the founders may set redemption terms of their own accord on his behalf. Nor does the resolution itself “specif[y]” any redemption terms. And because the firm was not authorized—by statute, governing document, or shareholders’ agreement—to set the redemption terms without the departing shareholder’s agreement, the resolution did not independently authorize the founders to unilaterally determine those terms.

Id.

In Eho360 LLC v. Opalich, an employer sued its former employee for breaching fiduciary duties and other related claims regarding the former employee setting up a competing business. No. 3:21-CV-0724-B, 2023 U.S. Dist. LEXIS 45076 (N.D. Tex. March 17, 2023). The employee filed a motion for summary judgment, which the district court denied. The court stated the law in Texas as follows:

Under Texas law, “[t]he elements of a breach of fiduciary duty claim are: (1) a fiduciary relationship 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.” A fiduciary duty generally entails “fair dealing and good faith” and “integrity and fidelity.” When a fiduciary relationship exists between an employer and an employee, an employee “has a duty to act primarily for the benefit of the employer in matters connected with his [employment].” But, “an employer’s right to demand and receive loyalty must be tempered by society’s legitimate interest in encouraging competition.” Under Texas law, “[a]n at-will employee may properly plan to go into competition with his employer and may take active steps to do so while still employed.” And a fiduciary relationship “does not preclude the fiduciary from making preparations for a future competing business venture; nor do such preparations necessarily constitute a breach of fiduciary duties.” However, the Texas Supreme Court has imposed limitations on an employee’s right to prepare to compete with his employer. “[An employee] may not appropriate his employer’s trade secrets . . . . He may not solicit his employer’s customers while still working for his employer . . ., and he may not carry away certain information, such as lists of customers. . . . Of course, such a person may not act for his future interests at the expense of his employer by using the employer’s funds or employees for personal gain or by a course of conduct designed to hurt the employer.” And while “[f]iduciary duties generally terminate at the end of an employment relationship,” some duties survive the termination of employment. One such duty “forbids an employee from using confidential or proprietary information acquired during the relationship in a manner adverse to his employer.” “Although this duty does not bar use of general knowledge, skill, and experience, it prevents the former employee’s use of confidential information or trade secrets acquired during the course of employment.”

Id. (internal citations omitted).

The court held that the evidence created a fact issue as to whether the defendants, who were executives, used confidential information from their former employer to set up their new competing business. This was true even though the defendants had no restrictions on competition. Further, regarding damages, the court held that even though the plaintiff did not lose any business, the evidence showed that the defendants benefited from their fiduciary breaches, which is sufficient to sustain a breach of fiduciary duty. Based on this evidence the court denied the summary judgment motion as to both defendants.