In American Bank, N.A. v. Moorehead Oil & Gas, Inc., plaintiffs (trustees and beneficiaries) filed suit to determine the value of ownership interests in corporate stock under section 10.361 of the Texas Business Organizations Code. No-13-17-00641-CV, 2018 Tex. App. LEXIS 9703 (Tex. App—Corpus Christi November 29, 2018, no pet. history). The trial court granted summary judgment for the defendant on two grounds: the statute of limitations and standing. The plaintiffs appealed. The court of appeals first reversed as to the statute of limitations ground, and then addressed the standing issue. In its summary judgment motion, the defendant argued that the plaintiffs lacked standing in their capacity as beneficiaries because of the general rule that only trustees have the power to bring suit on behalf of a trust. The defendant argued that, although there are exceptions to this general rule, they did not apply because the plaintiffs did not plead that the trustee wrongfully refused to bring suit. Id. (citing Interfirst Bank-Hous., N.A. v. Quintana Petrol. Corp., 699 S.W.2d 864, 874 (Tex. App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.) (“It is only when the trustee cannot or will not enforce the cause of action that he has against the third person that the beneficiary is allowed to enforce it.”); In re XTO Energy Inc., 471 S.W.3d 126, 131 (Tex. App.—Dallas 2015, orig. proceeding) (noting that a “trustee’s refusal to bring suit must be wrongful for [the beneficiary] to be allowed to step into the trustee’s shoes and maintain a suit on the Trust’s behalf”)). The court of appeals held:
Here, the live petition named the following as plaintiffs: (1) the Bank as trustee or co-trustee of all three trusts; (2) John J. Buckley Jr. and Kelly Rose Kinard in their capacity as co-trustees of their respective trusts; and (3) the Buckleys in their capacity as beneficiaries of their respective trusts. Moorehead is correct that the Buckleys lacked standing in their capacity as beneficiaries because they did not assert in their petition that the trustee wrongfully refused to bring suit. See In re XTO Energy Inc., 471 S.W.3d at 131. Additionally, Moorehead is correct that the Buckleys lacked standing as “beneficial owners” of the stock under section 10.361(g) because the shares were not held “in a voting trust” or “by a nominee.” See Tex. Bus. Orgs. Code Ann. § 10.361(g).
However, Moorehead does not dispute that the Bank had capacity as trustee or co-trustee, or that John J. Buckley Jr. and Kelly Rose Kinard had capacity as co-trustees of their respective trusts, to sue under business organizations code section 10.361. We conclude that they did have such capacity, and the trial court erred in granting summary judgment against them. See Tex. Prop. Code Ann. § 113.019; Ray Malooly Tr., 186 S.W.3d at 570. On the other hand, Lisa Marie Buckley, who is not a co-trustee of her trust and therefore brought suit only in her capacity as beneficiary, does not have standing for the reasons stated above, and the trial court did not err in granting summary judgment against her.
Id. Therefore, the court reversed as to the co-trustees but affirmed the summary judgment as against the beneficiary.