In Ward v. Standford, a father and a mother set up an irrevocable trust in the 1970s and transferred many assets to it. 443 S.W.3d 334 (Tex. App.—Dallas 2014, pet. filed). In the 1980s, the father and his company borrowed money from the trust and issued a note. The father and his company defaulted, and the trustees sued to enforce the note. The trustees and father settled in the mid-1990s, and they entered into a renewal note with a principal amount of $2 million that was due in January of 2000. In 1998, the father had missed several interest payments, and the trustees discussed whether to file suit again. The trustees decided to not file suit at that time and communicated that to the beneficiary. Ultimately, the father defaulted on the interest payments and the underlying principal payment. The trustees never sued the father to enforce the debt. In 2008, the beneficiary, a son, discovered that the father denied making the renewal note and that the trustees never pursued claims thereon. The beneficiary sued the trustees for breach of fiduciary duty and later added the father for aiding same. The trial court dismissed the claims due to limitations, and the son appealed.

The court of appeals held that a cause of action generally accrues when: 1) a wrongful act 2) causes some legal injury. In this case, there were two separate claims and two different accrual dates: 1) the father’s failure to pay interest and principal payments under the note, and 2) the trustees failure to pursue the note claim. As the two-million dollar principal payment was due on February 1, 2000, the Trust’s claim for that payment was extinguished via a six-year limitations period on February 1, 2006. At a different time, the Son’s claims against the Trustees accrued for not pursuing the Trust’s claim against the Father. Those claims would accrue, at the earliest, when the “wrongful acts” occurred. The court held: “just as the question of whether a party breached a fiduciary duty is generally treated as a fact question, we conclude the date on which the Trustees’ inaction can be said to cross the line into a breach of their fiduciary obligations to appellant remains a fact question.” Id. In other words, at what point did the trustees’ inaction become a “wrongful act”? The court of appeals held that a jury must determine that issue and remanded for trial. This case is currently pending in the Texas Supreme Court.

INTERESTING NOTE: Normally, when a wrongful act occurs is not a fact issue in a breach of fiduciary duty case, e.g., the trustee took money on a certain date. Most claims involve affirmative acts, and there may be an issue on when the beneficiary should have discovered the bad act or when the bad act caused some legal injury. This is an interesting case because it involves the trustee’s failure to act and when that failure to act rises to a level of a breach of duty. The court of appeals held that there was a fact issue as to when an act of omission rises to the level of a “wrongful act.”

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Photo of David Fowler Johnson David Fowler Johnson

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David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary…

[email protected]

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. Read More

David’s financial institution experience includes (but is not limited to): breach of contract, foreclosure litigation, lender liability, receivership and injunction remedies upon default, non-recourse and other real estate lending, class action, RICO actions, usury, various tort causes of action, breach of fiduciary duty claims, and preference and other related claims raised by receivers.

David also has experience in estate and trust disputes including will contests, mental competency issues, undue influence, trust modification/clarification, breach of fiduciary duty and related claims, and accountings. David’s recent trial experience includes:

  • Representing a bank in federal class action suit where trust beneficiaries challenged whether the bank was the authorized trustee of over 220 trusts;
  • Representing a bank in state court regarding claims that it mismanaged oil and gas assets;
  • Representing a bank who filed suit in probate court to modify three trusts to remove a charitable beneficiary that had substantially changed operations;
  • Represented an individual executor of an estate against claims raised by a beneficiary for breach of fiduciary duty and an accounting; and
  • Represented an individual trustee against claims raised by a beneficiary for breach of fiduciary duty, mental competence of the settlor, and undue influence.

David is one of twenty attorneys in the state (of the 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.

Additionally, David is a member of the Civil Trial Law Commission of the Texas Board of Legal Specialization. This commission writes and grades the exam for new applicants for civil trial law certification.

David maintains an active appellate practice, which includes:

  • Appeals from final judgments after pre-trial orders such as summary judgments or after jury trials;
  • Interlocutory appeals dealing with temporary injunctions, arbitration, special appearances, sealing the record, and receiverships;
  • Original proceedings such as seeking and defending against mandamus relief; and
  • Seeking emergency relief staying trial court’s orders pending appeal or mandamus.

For example, David was the lead appellate lawyer in the Texas Supreme Court in In re Weekley Homes, LP, 295 S.W.3d 309 (Tex. 2009). The Court issued a ground-breaking opinion in favor of David’s client regarding the standards that a trial court should follow in ordering the production of computers in discovery.

David previously taught Appellate Advocacy at Texas Wesleyan University School of Law located in Fort Worth. David is licensed and has practiced in the U.S. Supreme Court; the Fifth, Seventh, and Eleventh Federal Circuits; the Federal District Courts for the Northern, Eastern, and Western Districts of Texas; the Texas Supreme Court and various Texas intermediate appellate courts. David also served as an adjunct professor at Baylor University Law School, where he taught products liability and portions of health law. He has authored many legal articles and spoken at numerous legal education courses on both trial and appellate issues. His articles have been cited as authority by the Texas Supreme Court (twice) and the Texas Courts of Appeals located in Waco, Texarkana, Beaumont, Tyler and Houston (Fourteenth District), and a federal district court in Pennsylvania. David’s articles also have been cited by McDonald and Carlson in their Texas Civil Practice treatise, William v. Dorsaneo in the Texas Litigation Guide, and various authors in the Baylor Law ReviewSt. Mary’s Law JournalSouth Texas Law Review and Tennessee Law Review.

Representative Experience

  • Civil Litigation and Appellate Law