In In re McIntire, trust beneficiaries sued a trustee for multiple allegations of breach of fiduciary duty. No. 07-22-00249-CV, 2023 Tex. App. LEXIS 60 (Tex. App.—Amarillo January 5, 2023, original proceeding). The trust beneficiaries filed a motion for partial summary judgment, which the trial court denied. The trust beneficiaries also sought an order requiring the trustee to reimburse trust assets used to pay his attorneys and also ordering him to deposit trust assets into the registry of the court. The trial court denied those motions as well, and the beneficiaries filed a petition for writ of mandamus.
The court of appeals first determined whether it could grant mandamus review for the denied summary judgment motion. The court note that the Texas Supreme Court has held that utilizing mandamus to review a decision rendered upon a summary judgment motion may be appropriate when it ends the litigation. “We too have recognized this when observing that ‘[i]n those cases where the benefits of mandamus relief outweigh the detriments, an appellate court should not allow the hyper-technical application of procedural devices and constructs to thwart the rule of law and the ends of justice.’” Id. However, the court noted that in this case the summary judgment motion was a partial one and did not resolve all of the issues. The court determined that it was not appropriate to use mandamus relief to review the denied summary judgment motion in this case.
The court then turned to the issue of the trial court denying the injunction requiring the trustee to reimburse the trust for funds used to pay his attorneys in defending against the breach of fiduciary duty claims. The beneficiaries argued that there was not an adequate remedy at law (which is a requirement for mandamus relief) because the trustee did not have sufficient personal assets to reimburse the trust if he lost the case. The court disagreed with the factual component of this argument:
Assuming the temporary injunction lens to be an appropriate means of analyzing a mandamus question, the McIntires’ argument would seem influential only if Jahnel could not respond to an award of damages. Logically, if he could so respond, then there would be no need to act in the interim. In other words, assets would be available to pay what they fear would be lost. Yet, the McIntires directed us to no evidence indicating Jahnel lacked the ability to reimburse the attorney’s fees paid or to be paid as the trial progressed. Nor did we find any. Indeed, at the hearing below, they represented to the trial court that they do not know if he could or could not so respond. That means the financial risk they claim to face is mere speculation, and, speculation does not prove impending injury.
Id. Regarding a clear abuse of discretion element for mandamus relief, the court of appeals noted that the authority cited by the beneficiaries allowed a court to provide the requested relief, but did not require it:
Their effort to carry that burden consisted of citing authority recognizing a trial court’s ability to act. See, e.g., Tex. Prop. Code Ann. § 114.008(a); 760 ILCS 3/1001; Castilleja v. Camero, 414 S.W.2d 431 (Tex. 1967). Yet, the two statutes they mentioned speak of what the trial court “may” do to “remedy a breach of trust.” Tex. Prop. Code Ann. § 114.008(a); 760 ILCS 3/1001(b). Neither specify what a court must do. Nor do they mandate a court to sequester the trust estate, order the reimbursement of previously paid fees, and effectively place the trustee in the position of funding his own defense against claims which may ultimately prove baseless. In short, the implementation of any remedies mentioned in the two statutes is discretionary, and none required the court to grant the relief sought by the McIntires.
In conclusion, the court also held that, absent a finding of a breach, the trial court did not err in refusing the interim relief sought by the beneficiaries:
[T]here had and has been no formal adjudication that any breach occurred. So, given the rule that “a trustee may charge the trust for attorney’s fees the trustee, acting reasonably and in good faith, incurs defending charges of breach of trust,” Moody Found. v. Estate of Moody, No. 03-99-00034-CV, 1999 Tex. App. LEXIS 8597, at *15-16 (Tex. App.—Austin Nov. 18, 1999, pet. denied) (mem. op.), a finding of breach would seem a prerequisite to barring a trustee from turning to the trust for payment. In short, the legal authority offered does not establish that the trial court had but one choice, which was to grant the specific relief sought by the McIntires. This is not to say the court is unable to fashion other relief which protects all involved as this aging suit winds its way to final disposition. It is to say that the McIntires failed to prove their entitlement to a writ of mandamus when the trial court denied their motion below.