In Markl v. Leake, a husband started a long-time extramarital relationship with his girlfriend in 2004. No. 05-17-00174-CV, 2018 Tex. App. LEXIS 3384 (Tex. App.—Dallas May 14, 2018, 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 $50,000 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. Apparently, the giflfriend had initiated a relationship with the husband’s nephew, which upset the husband. Two months after the breakup, the husband and his wife sued the girlfriend for breach of fiduciary duty, arguing that her breach deprived them of the community funds invested in the property. They also alleged fraud, conversion, and promissory estoppel. The trial court granted the girlfriend’s motion for directed verdict as to the breach of fiduciary duty claim, and the jury found against the husband and wife on their other claims. They appealed the trial court’s directed verdict on their breach of fiduciary duty claim.

In the appellate court, the husband solely relied on a theory that his confidential relationship with his girlfriend created fiduciary duties. The court of appeals stated:

Informal relationships, termed “confidential relationships,” may arise “where one person trusts in and relies upon another, whether the relation is a moral, social, domestic, or merely personal one.” A confidential relationship exists in those cases in which influence has been acquired and abused and confidence has been extended and betrayed. Whether a fiduciary relationship exists depends on the circumstances and is “determined from the actualities of the relationship between the parties.” The mere fact that one party to a relationship subjectively trusts the other does not indicate the existence of a fiduciary relationship…

But a fiduciary relationship is an extraordinary one and will not be created lightly. Not every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship. The law simply does not protect just any relationship between people:

Fiduciary law protects only those important social and economic interactions of high trust and confidence that create an implicit dependency and peculiar vulnerability of the beneficiary to the fiduciary. While placing ordinary trust and confidence in others may create contractual or tortious obligations, only high trust and confidence reposed within the context of the types of important social and economic relations contemplated above will give rise to fiduciary obligations. . . . Relationships, not individuals, are the prime concern of fiduciary law.

The fiduciary character of a relationship is determined by looking at both the degree of dependence and vulnerability that exists within it, and the value of the interaction to the society at large. Although we recognize the existence of a confidential relationship is ordinarily a question of fact, when the issue is one of no evidence, it becomes a question of law.

In this case, the Markls want to use fiduciary law to recoup money John spent on making repairs to the property of a woman with whom he had a ten-year clandestine relationship. The Markls argue there is no Texas case precluding as a matter of law an extramarital affair from rising to the level of a fiduciary relationship. At the same time, they direct us to no cases where such a relationship has been recognized as fiduciary in nature.

Id. (internal citations omitted). The court then discussed a case that held that having an illicit relationship does not create a fiduciary relationship. Id. (citing In re R.O., No. 03-04-00506-CV, 2005 Tex. App. LEXIS 2990, 2005 WL 910231 (Tex. App.—Austin Apr. 21, 2005, no pet.)). The court also cited to one of its prior opinions holding that a long term girlfriend/boyfriend relationship does not create a fiduciary relationship. Id. (citing  Smith v. Deneve, 285 S.W.3d 904, 911 (Tex. App.—Dallas 2009, no pet.)). The court held that no evidence showed  that the husband was accustomed to being guided by the girlfriend’s judgment or advice or that she ever gave him financial advice or assumed the role of a fiduciary toward him. The court noted:

Even though Ethel testified John could trust her and believe what she told him, that evidence does not elevate the status of their relationship into a fiduciary one. Moreover, as in R.O., although John argues their relationship was “based upon trust,” he described the stalemate dating “clear back to early in the relationship.” If John wanted out of the relationship, Ethel would tell his wife and he would lose both women; if Ethel wanted out of the relationship, she had to “settle up on the property.” Thus, the evidence shows each was acting in his or her own interest. Whether John and Ethel’s relationship contained aspects similar to a marriage is unavailing because, in this case, John was married—to Debra. Recognizing John and Ethel’s relationship as fiduciary in character, under the circumstances here, would make light of the very notion of the concepts of trust and confidence. Considering the evidence in the light most favorable to the Markls, we conclude this case does not present any evidence of justifiable trust and confidence as will create an informal fiduciary relationship. We overrule the sole issue.

Id. The court affirmed the trial court’s directed verdict order for the girlfriend.

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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