In Marshall v. Ribosome L.P., a beneficiary of a trust sued a limited partnership of which the trustee was a partner. No. 01-18-00108-CV, 2019 Tex. App. LEXIS 3787 (Tex. App.—Houston [1st Dist.] May 9, 2019, no pet. history). The beneficiary asserted that the limited partnership aided and abetted a breach of fiduciary duty by making distributions to the trustee, when the trustee was refusing to make distributions to the beneficiary. The trial court granted summary judgment for the partnership, and the beneficiary appealed.

The court of appeals held that an aiding and abetting breach of fiduciary duty claim rests on an underlying breach of such a duty. The beneficiary claimed that the trustee had breached her fiduciary duty by failing to make distributions of trust income. The court rejected that theory because the trustee had broad discretion to make distributions:

Under the Trusts’ language, however, the Trustee has absolute, unfettered discretion over the decision to accumulate or distribute the Trust income. See, e.g., Caldwell v. River Oaks Tr. Co., No. 01-94-00273-CV, 1996 Tex. App. LEXIS 1798, 1996 WL 227520, at *12 (Tex. App.—Houston [1st Dist.] May 2, 1996, writ denied) (mem. op.) (“A power is considered discretionary if the trustee may decide whether or not to exercise it.”). In her “sole discretion,” the Trustee “may accumulate or distribute income accruing for the benefit of the beneficiaries,” and “determin[e] the time or frequency of any distributions” as well as “the manner, time, circumstances, and conditions of the exercise of any right, power or authority vested in the Trustee.” Preston claims that his breach of fiduciary duty claim is supported by evidence that Elaine acted unfairly, suggesting that she knew he had come to depend on the distributions and that she had treated his brother differently under the separate trusts that benefit him. Preston labels this perceived unfairness as “bad faith”; however, a decision to accumulate interest—which the plain language of the Trusts expressly allows—and the differences in treatment between the beneficiaries of different trusts does not raise a fact issue showing a breach of fiduciary duty. Neither of the Trusts contains language limiting the trustee’s discretionary authority, such as by declaring a purpose to provide living expenses or requiring the distributions to Preston to be equal to those made to Pierce, Jr. under the trusts that benefit him. See, e.g., Doherty v. JPMorgan Chase Bank, N.A., No. 01-08-00682-CV, 2010 Tex. App. LEXIS 2185, 2010 WL 1053053, at * (Tex. App.—Houston [1st Dist.] Mar. 11, 2010, no pet.) (mem. op.) (holding that trustee erred in denying funds for modification of bathroom in daughter’s home where beneficiary had moved after suffering stroke that left her physically impaired; trust required disbursement of funds on beneficiary’s request to provide for her “comfort, health, support, or maintenance”). None of the circumstances raises a fact issue as to whether Elaine abused the broad discretionary authority conferred by the Trusts.

Id. The court also noted that there was no evidence of loss or injury to the beneficiary or the trusts or of benefit to the trustee resulting from the decision to accumulate the income instead of distributing it. The court stated: “Preston claims that the withholding of Trust income ‘causes [him] damages equal to the distributions that were wrongly withheld.’ But the Trusts do not give Preston any right to override the Trustee’s decisions about how to handle the trust income. And, as he remains the beneficial owner of the interest income accumulated in the Trusts, he is not entitled to a damages award that would amount to a double recovery.” Id.

The beneficiary claimed that the partnership aided and abetted the trustee’s decision to accumulate the trust income by making distributions to the trustees, as their legal owners, rather than directly to him, as the trusts’ beneficiary. The court first discussed the concept of such a claim:

The Texas Supreme Court observed that, if it were to recognize a cause of action for aiding and abetting tortious conduct, “[c]ourts should look to the nature of the wrongful act, kind and amount of assistance, relation to the actor, defendant’s presence while the wrongful act was committed, and defendant’s state of mind.” First U. Pentecostal, 514 S.W.3d at 225 (citing Juhl v. Airington, 936 S.W.2d 640, 644-45 (Tex. 1996)). Such a claim’s purpose would be “to deter antisocial or dangerous behavior.” Juhl, 936 S.W.2d at 644; see also W. Fork Advisors, LLC v. SunGard Consulting Servs., LLC, 437 S.W.3d 917, 921 (Tex. App.—Dallas 2014, pet. denied) (aiding and abetting claim requires actor, with unlawful intent, to give substantial assistance and encouragement to wrongdoer in tortious act).

Id. The court then rejected the beneficiary’s claim under the facts of this case:

Here, the allegedly wrongful conduct—Ribosome’s distribution of proceeds to the Trusts, as limited partners, rather than to Preston, their beneficiary—is required by Ribosome’s partnership agreement. Ribosome generally distributes profits to its limited partners according to the terms of its partnership agreement. It cannot deviate from those terms without direction from its general partner and the limited partner that is legally entitled to receive the share of profits. When the Trustee expressly revoked any authorization that may previously have existed for Ribosome to distribute the proceeds it owed to the Trusts directly to the Trusts’ beneficiary, Ribosome lost any authority to distribute the Trusts’ profits directly to Preston. No evidence shows that Ribosome gave the Trustee substantial assistance and encouragement to revoke that authorization, or that Ribosome could have acted differently had it believed the Trustee acted wrongfully by doing so. Because Ribosome’s distribution of profits in compliance with its partnership agreement does not constitute conduct in furtherance of a breach of fiduciary duty, the trial court properly granted summary judgment on Preston’s aiding and abetting claim.


Finally, the court rejected the beneficiary’s accounting claim against the partnership. The court acknowledged that the beneficiary was a limited partner in his individual capacity. However, the court held that a limited partner does not generally have a right to an accounting against a partnership:

An accounting is available when (1) the parties have a contractual or fiduciary relationship; (2) the facts and accounts are “so complex [that] adequate relief may not be obtained at law”; and (3) standard discovery procedures cannot provide adequate relief at law. T.F.W. Mgmt. v. Westwood Shores Prop. Owners Ass’n, 79 S.W.3d 712, 717-18 (Tex. App.—Houston [14th Dist.] 2002, pet. denied). In its summary-judgment motion, Ribosome argued that its partnership agreement identified any rights Preston had as to Ribosome, Ribosome had provided him with all the financial information that he was entitled to under the partnership agreement, and the agreement did not entitle Preston to a common-law accounting. Ribosome’s partnership agreement identifies the rights and duties of the limited partners and their duties in relation to the partnership. With respect to financial information, the partnership agreement gives the limited partner the right to inspect Ribosome’s books and records at reasonable times. It does not, however, include any additional right to an accounting, and Preston does not identify any other source that gives him that right. See Tex. Bus. Orgs. Code § 153.105 (explaining that rights of limited partners may be created only by certificate of formation, partnership agreement, other statutory provisions, or other limited partnership provisions). Preston further argues that Ribosome owes him a fiduciary duty to provide an accounting because of his limited partner status. He cites no authority for this argument and the Business Organizations Code makes clear any fiduciary powers or liabilities belong not to the limited partnership, but to its general partner. See id. § 153.152. Because the partnership agreement does not require Ribosome to comply with a limited partner’s demand for an accounting and Ribosome does not owe Preston an independent duty that would give rise to a right to an accounting, the trial court did not err in granting summary judgment on this claim.

Id. The court affirmed the summary judgment regarding the accounting claim.

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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