In Gilmore v. Rotan, a testamentary trust’s beneficiaries sued the trustees in 2015 for making a transfer of trust property in 2003 that was evidenced by a deed filed in 2010. No. 11-16-00253-CV, 2018 Tex. App. LEXIS 7705 (Tex. App.—Eastland September 20, 2018, no pet. history).  The beneficiaries claimed that the trustees engaged in self-dealing when they transferred the real property. The beneficiaries acknowledged that they each received $76,693.55 from the estate of the primary beneficiary after her death and knew of the probate proceedings. The trustees filed a motion for summary judgment on multiple grounds, and the trial court granted that motion. The beneficiaries appealed.

The court of appeals affirmed the judgment on the statute of limitations ground. The court noted that a claim for breach of fiduciary duty is subject to a four-year statute of limitations. The trustees, as summary judgment movants, had the burden to conclusively establish that the statute of limitations applied. The court of appeals held that they did so if “they (1) conclusively established that the cause of action accrued before the commencement of the statute of limitations period and (2) negate the discovery rule, if it applies, by proving as a matter of law that there is no genuine issue of material fact about when Appellees discovered, or in the exercise of reasonable diligence should have discovered, the nature of their injury.” Id.

The evidence claim accrued when the property was transferred, which was earlier than four years before suit. The issue in the appeal was the application, if any, of the discovery rule. The court described the discovery rule as follows:

The discovery rule is an exception that may defer accrual of a claim. The discovery rule has been applied in limited categories of cases to defer accrual of a cause of action until the plaintiff knew or, in the exercise of reasonable diligence, should have known of the facts giving rise to a cause of action. The discovery rule operates as a “very limited exception” to limitations, deferring accrual in cases in which the plaintiff’s injury was “both inherently undiscoverable and objectively verifiable.” The discovery rule has often been applied to a claim for a breach of fiduciary duty. In explaining why the discovery rule applies to a claim for breach of fiduciary duty, the Texas Supreme Court noted that “a person to whom a fiduciary duty is owed is either unable to inquire into the fiduciary’s actions or unaware of the need to do so.” Thus, “a person to whom a fiduciary duty is owed is relieved of the responsibility of diligent inquiry into the fiduciary’s conduct, so long as that relationship exists.” However, once “the fact of misconduct becomes apparent it can no longer be ignored, regardless of the nature of the relationship.” Thus, claims for breach of fiduciary duty generally accrue when the claimant knows or in the exercise of ordinary diligence should know of the wrongful act and resulting injury.


The trustees argued that the beneficiaries had both constructive notice and actual notice of the conveyance when the deed was filed in 2010. The trustees based their assertion of actual notice on an excerpt of the deposition of one of the beneficiaries wherein he testified that he had checked the land records in 2010, he knew in 2010 that the challenged deed had been recorded, and that he told the other beneficiaries about it in 2010. The court held that this was sufficient evidence to support actual knowledge of the conveyance in 2010.

The beneficiaries also asserted that the deed was not sufficient notice because they did not realize in 2010 that the conveyance affected an interest they owned. The court disagreed, stating that “Persons interested in an estate admitted to probate are charged with notice of the contents of the probate records.” The court concluded:

Thus, Appellants had constructive notice of their beneficial interest in the real property when Harry Dean Rotan’s will was admitted to probate. Constructive notice creates an irrebuttable presumption of actual notice. Accordingly, the summary judgment evidence establishes that Appellants had notice of their alleged injury in 2010. Since the applicable statute of limitations is four years for a claim for breach of fiduciary duty, Appellants’ suit filed in 2015 was not timely.

Id. The court affirmed the summary judgment on the statute-of-limitations ground.

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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