In Waldron v. Susan R. Winking Trust, a daughter was a beneficiary of a trust set up by her parents. No. 12-18-00026-CV, 2019 Tex. App. LEXIS 5867 (Tex. App.—Tyler July 10, 2019, no pet. history). The original trustee resigned, and the trust document provided:

Successor. If the original trustee fails or ceases to serve for any reason, then Southside Bank, Tyler, Texas, shall be successor trustee. If this or any other successor trustee fails or ceases to serve for any reason, then any bank or trust company may be appointed successor trustee by delivery of written notice to the successor trustee signed by the grantor, or if either grantor is legally disabled or deceased, then signed by the other grantor, or if both grantors are legally disabled or deceased, then signed by the beneficiary, or the beneficiary’s attorney-in-fact or legal guardian.

Id. When the proposed corporate trustee declined to serve, the daughter could not find any other bank or trust company to serve. She then filed suit to appoint an individual as trustee, which was granted. Later, she then filed an application asking the court to name her as successor trustee. The successor trustee then responded and stated: “Trustee is willing to resign and/or has no objection to his removal upon appointment of a qualified trustee as provided for in the Trust or as otherwise determined by the Court.” He asked for a declaratory judgment and requested a finding that he complied with the Trust’s terms, that he be removed or allowed to resign, that an appropriate successor trustee be appointed, and that he be discharged from any further liability. The trial court held a bench trial and found that the final accounting fairly and accurately set forth the trust’s assets, liabilities, income, and expenses and the court approved it. The trial court further found that the successor trustee administered the trust in accordance with its terms and the applicable law and was not liable to the daughter on any claims. The judgment appointed another individual as successor trustee, her term to begin ten days after the judgment became final or all appeals exhausted, whichever was later. The trial court also found that all expenses and professional fees paid or incurred by the successor trustee were reasonable and necessary. The daughter appealed and complained that she had the right to terminate the trustee by letter and that the successor trustee’s fees and compensation should not have been paid by the trust after his termination.

The court of appeals first addressed the law regarding appointing a successor trustee:

The terms of the trust prevail over any provision of the Texas Trust Code with certain exceptions which are not applicable in this case. In this case, the Trust provided that the beneficiary could terminate a trustee by letter and appoint a successor bank or trust company that was willing to serve. But no bank or trust company was willing to serve. Therefore, the trust instrument did not provide a procedure for the appointment of a successor trustee under these circumstances. In such situation, the Trust Code provides that “[i]f for any reason a successor is not selected under the terms of the trust instrument, a court may and on the petition of any interested person shall appoint a successor in whom the trust shall vest.” A trustee’s fiduciary duties are not discharged until the trustee has been replaced by a successor trustee.

Id. The court affirmed the trial court’s order:

Waldron contends that she can remove the trustee at any time by written letter. In her view, Cozby was no longer trustee after the receipt of her termination letter. Therefore, he was not thereafter entitled to claim reimbursement from the Trust for expenses or professional services. Although Article 4.3 of the Trust provides for termination by letter, Article 4.2 requires that any successor trustee be a bank or trust company. Since no bank or trust company could be found that was willing to serve, Waldron could not appoint a successor and her attempt at removal by letter without naming a bank or trust company as successor was ineffective. The only procedure available for the trustee’s replacement under these circumstances was by petition to the district court for the appointment of a trustee. Although ready and willing to be replaced, Cozby, as trustee, was obligated to continue in the performance of his duties until replaced by a successor trustee. The trial court correctly interpreted the trust instrument and correctly applied the pertinent provisions of the Texas Trust Code. The trial court’s judgment is supported by the evidence.

Id. The court affirmed the trial court’s judgment.

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of David Fowler Johnson David Fowler Johnson

[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…

[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