In Eng v. Kolbe, a mother sued her daughter for abusing a power of attorney document. No. 03-15-00409-CV, 2017 Tex. App. LEXIS 2680 (Tex. App.—Austin March 30, 2017). The daughter was assisting her aging parents with their finances as her father suffered from dementia and her mother suffered from macular degeneration. Later the mother revoked the power of attorney, appointed her other daughter in that role, and then sued the defendant for breach of fiduciary duty, fraud, conversion, and conspiracy to commit fraud. The petition alleged:

Moon alleged in her petition that during the time England managed her finances, England  withdrew funds from Moon’s accounts, sold stocks and other investments, retained proceeds for her own use, and transferred additional funds of Moon’s to her own bank accounts, all without permission. Moon also asserted that England engaged in real estate transactions with Moon’s funds. Some of those transactions alleged England used Moon’s funds to purchase properties titled in England’s name alone and transferred Moon’s interests in other properties to England via gift deeds.

The defendant did not turn over relevant documents and records and failed to honestly answer questions in her deposition regarding all of her various conduct and transactions. The trial court entered a sanctions order regarding some of this conduct, compelling her to respond to discovery, produce documents, and pay sanctions in the amount of $15,000 and attorney’s fees of $3,000.

The defendant still did not comply with her discovery obligations. Her conduct was finally discovered, and the plaintiff filed a second motion for sanctions. After a hearing, the trial court granted the motion for sanctions, struck all of the defendant’s pleadings, granted plaintiff a default judgment on all issues of liability, and denied the defendant’s request for a jury trial on damages. The trial court then held a damages trial in which it awarded plaintiff actual damages in the amount of $1,458,251; awarded punitive damages in the amount of $1,000,000; set aside and declared void the gift deeds for properties; and imposed a constructive trust on certain assets of the defendant, including her homestead, automobile, and bank accounts. The defendant appealed.

The court of appeals affirmed the sanctions order:

[T]he evidence shows that a direct relationship exists between the trial court’s striking England’s pleadings and England’s offensive conduct. The information about accounts and transactions withheld by England throughout the discovery period was the principal evidence that Moon needed to succeed in most of her claims against England because the existence of these banking and investment accounts went to the heart of the issues in the case. Further, the district court made a finding that it was England who had committed these bad acts and was the responsible party for the misrepresentations and withholding of evidence. Therefore, the punishment was properly directed at the perpetrator of the offensive conduct.

The trial court’s sanction of striking England’s pleadings and entering a default judgment on liability was also not excessive. The trial court made findings that England’s misconduct throughout the litigation had been egregious and that she repeatedly lied and changed her version of the events to suit her needs at the time. Specifically, England changed her testimony about her role in Moon’s finances from providing her limited assistance in bill paying to forming a “secret partnership” for the purchase of significant real-property assets. The district court had previously tested lesser sanctions against England after she had concealed bank accounts from Moon during discovery, but those sanctions did not stop England’s continued misconduct.

The court of appeals then determined that the trial court erred in denying the defendant a jury trial on the damages issue, reversed that aspect of the judgment, and remanded for a new trial.

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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