In Markl v. Leake, a husband started a long-time extramarital relationship with his girlfriend in 2004. No. 05-15-00455-CV, 2015 Tex. App. LEXIS 11261 (Tex. App.—Dallas November 2, 2015, no pet. history). The husband gave her money, placed her on the payroll of his business, provided her a credit card, and maintained her vehicle and real property. The husband invested approximately $35,000 in his girlfriend’s real properties. The relationship ended when the girlfriend caused the husband to be indicted for four felony charges related to an “altercation” and obtained a protective order prohibiting his entry upon her real property. The husband and wife then sued the girlfriend for breach of fiduciary duty and other tort claims arising from the benefits bestowed upon her during the relationship. They sought a temporary injunction to prevent the girlfriend from disposing of the two parcels of real property in which they purportedly invested money. The trial court denied the injunction, and the husband and wife appealed.

 The court of appeals held that there are two types of fiduciary relationships: formal fiduciary relationships that arise as a matter of law, such as partnerships and principal-agent relationships, and informal fiduciary relationships or “confidential relationships” that may arise from moral, social, domestic, or personal relationships. The court also held that a fiduciary relationship is an extraordinary one and will not be created lightly. The test for an informal fiduciary relationship is: “A person is justified in placing confidence in the belief that another will act in his or her best interest only where he or she is accustomed to being guided by the judgment or advice of the other party, and there exists a long association in a business relationship, as well as a personal friendship.”

 The court first addressed whether the girlfriend owed an informal fiduciary duty to the wife. The court noted that it had located no authority recognizing a fiduciary relationship between the wife of a husband involved in an extramarital affair and the woman with whom the husband was carrying on that affair. The court affirmed the trial court’s finding that the girlfriend did not owe any such duty to the wife.

The court then addressed whether the girlfriend owed an informal fiduciary duty to the husband. The court held that while a marital relationship is a fiduciary one, that the relationship of girlfriend and boyfriend, without more, is generally not a fiduciary relationship. Once again, the court could not find any authority declaring the existence of a fiduciary relationship based on an extramarital affair. The husband argued that the following evidenced a fiduciary relationship between them: his longstanding romantic and sexual relationship with the girlfriend and the sums he expended on her behalf, coupled with her executing a will declaring him as the beneficiary and their mutual life insurance policies naming the other as a beneficiary. The court held that the trial court had discretion to find that no fiduciary relationship existed via the girlfriend’s testimony that they were simply girlfriend and boyfriend, a dating relationship substantively different from a marital union. The court held that the husband’s expenditures merely demonstrated donative gifting of labor and sums of money to a girlfriend and did not create any fiduciary duties on her part. The court affirmed the trial court’s denial of the requested injunction because the evidence supported the trial court’s finding of no fiduciary duty.

 Interesting Note: Informal fiduciary relationships are difficult to sustain in Texas. There generally has to be evidence that the plaintiff relied upon the defendant’s advice and counsel regarding business or financial matters. There needs to be evidence to justify a plaintiff subjectively believing that the defendant will place the plaintiff’s interests above the defendant’s own interests. However, depending on the facts of the case, there are instances where Texas courts have sustained an informal fiduciary duty with less evidence. This case makes clear that sexual relationships do not, in and of themselves, create fiduciary relationships.

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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