The Texas Supreme Court held that arbitration clauses in trust documents may be enforced regarding claims by beneficiaries against trustees. In Rachal v. Reitz, a beneficiary sued a trustee for failing to provide an accounting and otherwise breaching fiduciary duties. 403 S.W.3d 840 (Tex. 2013). The trustee filed a motion to compel arbitration of
Texas Supreme Court Affirms The Release In A Family Settlement Agreement That Protected A Former Trustee’s Estate From Claims And Discusses the “Full Knowledge” Requirement For Enforcing Releases In Fiduciary Relationships
In Austin Trust Co. v. Houren, beneficiaries of a trust executed a family settlement agreement with the former trustee’s estate. No. 21-0355, 2023 Tex. LEXIS 285 (Tex. March 23, 2023). After the settlement agreement was executed, one of the parties sued the former trustee’s estate for over a $37 million alleged debt. The former
The Texas Supreme Court Affirms A Summary Judgment For A Fiduciary Defendant Based On The Statute Of Limitations And The Duty To Use Reasonable Diligence To Discover Claims
The Court noted that a claim generally accrues when the defendant’s wrongful conduct causes the claimant to suffer a legal injury. Id. The Court also noted that the discovery rule can defer accrual of limitations:
In Marcus & Millichap Real Est. Inv. Servs. of Nev. v. Triex Tex. Holdings, LLC, Triex purchased a gas station in 2008 from Hamilton Holdings. No. 21-0913, 2023 Tex. LEXIS 22 (Tex. January 13, 2023) (per curiam). Both the buyer and seller used Marcus & Millichap as their broker for the transaction. In 2012, the operator of the gas station defaulted on the lease. A little over three years later, Triex sued Hamilton Holdings and others for breach of contract, fraud, and related torts. After some discovery, Triex added Marcus & Millichap to the lawsuit in March 2017 and asserted claims for breach of fiduciary duty, fraud by nondisclosure, and conspiracy. Marcus & Millichap moved for summary judgment, arguing that Triex’s claims were time-barred. The trial court granted the motion, and the court of appeals reversed and remanded, concluding that a fact issue existed as to whether Triex “knew or should have known on [December 1, 2012,] that the injury was the result of wrongful acts committed by Marcus & Millichap.” The Texas Supreme Court granted review.
Texas Supreme Court Justice Authors Opinion Arguing That Claim Regarding Contingent Remainder Beneficiary Status Was Ripe
In Ackers v. Comerica Bank & Trust, N.A., a life-time beneficiary of a trust filed a claim for a declaration regarding whether certain contingent remainder beneficiaries were beneficiaries. No. 21-0233, 2022 Tex. LEXIS 997 (Tex. October 28, 2022)(Busby, J., Concurring). The trial court ruled that the claim was not ripe because the contingent remainder
Texas Supreme Court Holds That Parties May Not Be Entitled To Jury Trials For Trust Modification Proceedings And Remands For Constitutional Review
In In re Poe Trust, there were three co-trustees of a trust, and the trust required them to act jointly. No. 20-0179, 2022 Tex. LEXIS 548 (Tex. June 17, 2022). One of those trustees (Dick) effectively acted as a sole trustee during his life. After Dick died, his executors and one of the other trustees (Richard) became embroiled in litigation.
Continue Reading Texas Supreme Court Holds That Parties May Not Be Entitled To Jury Trials For Trust Modification Proceedings And Remands For Constitutional Review
Texas Supreme Court Holds That A Director Of A Corporation Cannot Hold An Informal Fiduciary Duty To A Stockowner
In In re Estate of Poe, shortly before his death, Dick, who was the sole director of Poe Management, Inc. (PMI), authorized the corporation to issue new shares that he bought for $3.2 million. No. 20-0178, 2022 Tex. LEXIS 544 (Tex. June 17, 2022). This made Dick the majority owner of PMI, which was the general partner of several Poe-owned businesses. As a result of the purchase, Dick’s death vested control of the family enterprise in the two co-executors of Dick’s estate rather than Dick’s son, Richard, who was PMI’s only other shareholder.
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Texas Supreme Court Dismisses Claims By Co-Trustee And Beneficiary Due To Statute Of Limitations And Clarifies That An Unnamed Contingent Beneficiary Can Have Standing To Sue
In Berry v. Berry, one brother sued his other three brothers regarding the leasing of a family ranch. No. 20-0687, 2022 Tex. LEXIS 405 (Tex. May 13, 2022). The family ranch was owned by a limited partnership. The largest limited partner was a trust, and all four brothers were trustees of the trust. A family business, which the plaintiff was no longer an owner of, used the family ranch under an alleged oral lease. The plaintiff alleged that the oral lease was for too long a period and was for inadequate lease payments. The plaintiff filed suit in 2016 and complained about the time period of 2000-2007. The plaintiff sued in his capacity as a co-trustee of the trust and as a beneficiary of the trust. The trial court granted summary judgment for the defendants based on the statute of limitations. The court of appeals reversed.
Continue Reading Texas Supreme Court Dismisses Claims By Co-Trustee And Beneficiary Due To Statute Of Limitations And Clarifies That An Unnamed Contingent Beneficiary Can Have Standing To Sue
Texas Supreme Court Holds That A Beneficiary May Not Accept Any Benefit From A Will And Then Later Challenging The Will
In In the Estate of Johnson, a child of the decedent accepted over $143,000 from the decedent’s estate and then decided to challenge the will due to mental capacity and undue influence. No. 20-0424, 2021 Tex. LEXIS 426 (Tex. May 28, 2021). The trial court ruled that the child could not accept a benefit under the will and then challenge the will and dismissed the child’s claim. The court of appeals reversed, holding that the child did not receive anything that the child would not also receive if there was no will, and therefore, she was not inconsistent and was not estopped from bringing her will contest. The court held that the executor “failed to satisfy her burden, as the Will’s proponent, by failing to demonstrate that [MacNerland] accepted greater benefits than those to which she was entitled under the Will or intestacy laws.” Id. The Texas Supreme Court accepted the will proponent’s petition for review and reversed the court of appeals.
Continue Reading Texas Supreme Court Holds That A Beneficiary May Not Accept Any Benefit From A Will And Then Later Challenging The Will
Texas Supreme Court Holds That There Was No Trust Protecting Church Assets And A Withdrawing Faction Was Entitled To Those Assets
In Episcopal Diocese of Fort Worth v. Episcopal Church, the Texas Supreme Court addressed whether a withdrawing faction was entitled to church property and also addressed a trust issue. No. 18-0438, 2020 Tex. LEXIS 434 (Tex. May 22, 2020). Following a disagreement over religious doctrine dealing with homosexuals, the Episcopal Diocese of Fort
Texas Supreme Court Held That The Reformation Statute For The Rule Against Perpetuities Could Apply To An Instrument Created By A Corporation Because Corporations Can Create Inter Vivos Trusts
In Yowell v. Granite Operating Co., the Texas Supreme Court reviewed the validity of an interest in a mineral lease regarding the rule against perpetuities (“Rule”). No. 18-0841, 2020 Tex. LEXIS 425 (Tex. May 15, 2020). The court of appeals held the reserved overriding royalty interest (“ORRI”) in new leases violated the Rule and