In Sanders v. Hathaway, the decedent’s estate’s representative sued her sister for various claims arising from the decedent’s beneficiary designation changes, deed transfers, and accounts payable on death changes that benefited the sister. No. 01-18-00661-CV, 2019 Tex. App. LEXIS 5708 (Tex. App.—Houston [1st Dist.] July 9, 2019, no pet. history). The sister alleged that the claims were barred by the statute of limitations. The trial court granted summary judgment for the sister, and the representative appealed. The court of appeals first held that limitations had run on the claims:

“It is settled law in Texas that a contract executed by a person who lacks mental capacity is voidable, not void.” A cause of action to void a contract is personal and belongs to the parties to a contract. The right to disaffirm a contract survives the death of an incompetent person and descends to his heirs or his personal representative. The right to disaffirm is subject to a four-year statute of limitations. Texas Civil Practice and Remedies Code section 16.062 suspends the running of an applicable limitations period for twelve months after the death of a person against whom or in whose favor there may be a cause of action. Thus, Sanders had to bring her cause of action to set aside the contracts executed by Brown no later than five years from the date of their execution. Here, … the right to disaffirm those contracts ran on March 17, 2015 and March 22, 2015—five years from the March 17, 2010 and March 22, 2010 execution dates. Sanders did not file her lawsuit until June 10, 2016.

Id. The court then held that the discovery rule did not apply to extend the statute of limitations period because the representative knew sufficient information to place her on a duty to investigate her claims:

In her summary judgment response and on appeal, Sanders admits that she knew Brown had property but that she “had absolutely no idea of the nature and extent of such property.” She argues that she “did not know and could not have known exactly when the beneficiary designations and bank accounts were changed, or when the property was transferred.” However, the summary judgment evidence demonstrates that Sanders only began investigating the extent and nature of Brown’s assets and later filed suit after she learned from an uncle that Brown had assets worth approximately $1,000,000 before he died. Sanders knew of her alleged injury, i.e., that Brown gave almost all of his property to Hathaway and left her virtually nothing, on September 12, 2010, two days after Brown died. It is the fact of the alleged injury—that Hathaway kept property that Sanders may have been entitled to—that started the running of the statute of limitations. Once Sanders knew of facts that might constitute some injury, the statute of limitations began to run even if she did not yet know “the specific cause of the injury; the party responsible for it; the full extent of it; or the chances of avoiding it.” That Sanders did not know the extent of her alleged injury, i.e., the dollar value of Brown’s assets, is irrelevant to determining when the statute of limitations began to run. Thus, applying the discovery rule, the four-year statute of limitations (plus the additional year due to Brown’s death) began to run from the date Sanders knew of her legal injury, i.e. September 12, 2010. The statute of limitations ran by September 12, 2015, nine months before Sanders filed her suit on June 10, 2016.


Finally, the court affirmed the dismissal of the estate’s claim for breach of fiduciary duty against the sister for taking the decedent’s assets:

To prove breach of fiduciary duty, Sanders must establish that (1) a fiduciary relationship existed between the plaintiff and the defendant; (2) the defendant breached her fiduciary duty; and (3) the breach resulted in injury to the plaintiff or benefit to the defendant. In her summary judgment response, Sanders argued that the evidence showed that (1) an informal fiduciary duty existed between Brown and Hathaway; (2) Hathaway breached her fiduciary duty to Brown by transferring the entirety of Brown’s estate to herself; and (3) Hathaway’s breach was detrimental to Brown and Sanders. Contrary to Sanders’s assertion, there is no evidence that Hathaway “transferred the entirety of Brown’s estate to herself.” The evidence shows that, on March 17, 2010, Brown changed the beneficiary designations on three of his four insurance policies to Hathaway but left Sanders and Hathaway as co-beneficiaries under one of his policies. That same day, Brown also executed four warranty deeds transferring his real property to Hathaway, and the deeds were signed and notarized before a notary public. Five days later, on March 22, 2010, Brown went to his credit union and executed documents in front of credit union employees to make his checking, savings, and share certificated accounts payable on death to Hathaway. This evidence shows that Brown, not Hathaway, distributed his property to Hathaway. Because Sanders has not produced any evidence showing that Hathaway breached a fiduciary duty to Brown, summary judgment on her breach of fiduciary duty claim was proper.


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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