In Frank v. Frank, co-trustees filed suit in federal court seeking declarations regarding their authority and potential liabilities. No. 3:22-cv-01757-M, 2023 U.S. Dist. LEXIS 226439 (N.D. Tex. December 20, 2023). There was an earlier dispute, which was settled resulting in a mediated settlement. The co-trustees asserted two general types of requests for relief, one concerning the maintenance and repair of residences owned by the trusts and a second regarding a request to not pay distributions until the beneficiaries provided requested financial information. The defendants filed a Rule 12(b)(1) motion to dismiss, which the federal district court granted.

The court discussed the case or controversy requirement and declaratory relief cases:

 The federal Declaratory Judgment Act, 28 US.C. § 2201, provides: “In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.” Section 2201 does not create an independent cause of action. Instead, “the underlying cause of action which is thus actually litigated is the declaratory defendant’s, not the declaratory plaintiff’s.” For declaratory judgment cases, the Fifth Circuit instructs that district courts must take a three-step inquiry, outlined below: “First, the court must determine whether the declaratory action is justiciable. Typically, this becomes a question of whether an “actual controversy” exists between the parties to the action. A court’s finding that a controversy exists such that it has subject matter jurisdiction is a question of law that we review de novo. Second, if it has jurisdiction, then the district court must resolve whether it has the “authority” to grant declaratory relief in the case presented. Third, the court has to determine how to exercise its broad discretion to decide or dismiss a declaratory judgment action.” The Fifth Circuit has recognized that, “[a] controversy, to be justiciable, must be such that it can presently be litigated and decided and not hypothetical, conjectural, conditional or based upon the possibility of a factual situation that may never develop.”

Id. (internal citations omitted).

The court reviewed the requests for relief regarding the maintenance and repair of the residences, and held that the plaintiffs did not assert sufficient facts in the pleading to explain the significance of the requested relief. The court also held, importantly, that there was no statement that the defendants disagreed with any of the plaintiffs’ positions on these issues. The plaintiffs had attempted to interject additional facts in their response to the motion to dismiss, but the court was not satisfied by that attempt:

Such additional allegations and arguments do not create an actual controversy capable of conferring jurisdiction. As stated, none these allegations are in the pleadings, and more importantly, there is no indication that Defendants actually agree, disagree, or take any position regarding Plaintiffs’ plans and decisions as to the Exempt Trusts. Plaintiffs’ requested declarations are also contingent on future acts that may not occur, such as taxes not being paid or Defendants not providing adequate documentation for requested repairs. As such, Plaintiffs have not presented a dispute that is not hypothetical, conjectural, or conditional, and thus there is no current actual controversy relating to the San Felipe Residence to be litigated and decided.


The court then turned to the issue of whether it had jurisdiction to determine issues concerning the right of the trustees to stop distributions until requested financial information was received. The court similarly held that there was not controversy:

The remainder of the Plaintiffs’ requested declarations all purport to arise out of the same factual allegations, namely that Plaintiffs have requested information and documentation from Defendants to determine the Beneficiaries’ current needs, so as to calculate an appropriate distribution amount, but that the information and documentation has not been provided. As a result, Plaintiffs seek a declaration that they are authorized to cease distributions until, in their discretion and using their best business judgment, they receive sufficient information to make a determination about distributions, and shall not be in breach of their fiduciary duties or any terms of the Trust Agreement by refusing to make a distribution. Plaintiffs further seek a declaration that they are entitled to reimburse themselves from the Exempt Trusts for expenses and fees incurred in the Trusts’ administration.

The Second Amended Complaint alleges only that Defendants have not provided information in response to Plaintiffs’ requests; it does not allege that Defendants stated a disagreement with or objection to Plaintiffs’ plans to cease distributions until such information is received. The Trust Agreement provides that the Plaintiffs as Co-Trustees are permitted to make distributions “in the Trustee’s judgment” for the benefit of Beneficiaries. Further, during the hearing, Defendants agreed that Plaintiffs, in exercising their judgment as Co-Trustees, are empowered under the Trust Agreement to cease distribution payments entirely. As such, there is no live dispute that requires Court intervention to resolve; Plaintiffs want to stop making distribution payments until they receive certain information, and Defendants have not raised any disagreement that they are entitled to do so. Similarly, there is no indication that Defendants have disputed that Plaintiffs are permitted under the Trust Agreement to reimburse themselves for expenses for administering the Trusts, and thus issuing a declaration to that effect would be advisory…

In sum, Plaintiffs’ requested declarations all rest on the same doomed assumption: that the Defendants will and do object to Plaintiffs’ decisions regarding the Exempt Trusts, be it payments or non-payments for the Residences, the cessation of payments to Beneficiaries, or Plaintiffs reimbursing themselves for expenses incurred in the Exempt Trusts’ administration. But the Declaratory Judgment Act requires more than assumed disagreement to create a justiciable action; Plaintiffs have the burden to show the existence of an actual and immediate controversy. Here, the lack of any allegations of Defendants’ disagreement is dispositive; the Court concludes that there is no justiciable controversy, and accordingly, no subject matter jurisdiction under the Declaratory Judgment Act.


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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