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In A Trust Case, A Court Affirms Judgment Against A Beneficiary/Limited Partner’s Aiding-And-Abetting-Breach-Of-Fiduciary-Duty...

In Marshall v. Ribosome L.P., a beneficiary of a trust sued a limited partnership of which the trustee was a partner. No. 01-18-00108-CV, 2019 Tex. App. LEXIS 3787 (Tex. App.—Houston [1st Dist.] May 9, 2019, no pet. history)....more

Texas Statutes Now Allow A Court To Modify Or Reform An Unambiguous Will

I. Introduction Historically, Texas courts could not resort to extrinsic evidence to construe an unambiguous will. San Antonio Area Foundation v. Lang, 35 S.W.3d 636 (Tex. 2000)....more

Federal Court Holds That Trust Beneficiaries’ Claims Against Brokerage Firm Should Not Be Compelled To Arbitration

In Freeman v. Fid. Brokerage Servs., LLC, the mother of the plaintiffs executed a living trust agreement. No 3:18-CV-0947-G, 2019 U.S. Dist. LEXIS 34694 (N.D. Tex. March 5, 2019)....more

Breach Of Fiduciary Duty Claim Against Trustee Based On Self-Dealing Real Estate Investment Was Dismissed Due To Limitations,...

In Goughnour v. Patterson, a beneficiary sued a trustee based on a failed real estate investment. No. 12-17-00234-CV, 2019 Tex. App. LEXIS 1665 (Tex. App.—Tyler March 5, 2019, no pet. history). In 2007, the trustee of four...more

OCC Announces That It Will Consider Rule Changes On Fiduciary Capacity and Non-Fiduciary Custody Activities

The OCC recently issued an advance notice of proposed rulemaking (ANPR) regarding the scope of activities that are fiduciary in nature, as well as the requirements of non-fiduciary custody activities of national banks,...more

Federal District Court Refuses To Dismiss Aiding And Abetting Breach Of Fiduciary Duty Claim Against A Law Firm

In Milligan v. Salamone, the Greenberg Taurig lawfirm represented the bankrupt company when it sued a president and board member. No. 1:18-CV-327-RP, 2019 U.S. Dist. LEXIS 41009 (W.D. Tex. March 14, 2019). Greenberg drafted...more

Texas Supreme Court Holds That A Fraud-By-Nondisclosure Claim Can Apply Outside Of A Fiduciary Or Confidential Relationship

In Bombardier Aero. Corp. v. Spep Aircraft Holdings, a plaintiff who had purchased an aircraft sued the defendant for fraud associated with representations regarding whether the aircraft was new or used. No. 17-0578, 2019...more

The Velvet Hammer: Undue Influence Based On Deceit, Fraud, and Relationship Poisoning and a Financial Institution’s Duty To Report...

The normal view of undue influence involves an actor threatening an elderly or infirm person into signing a document that he or she otherwise would not sign. One imagines the actor having control over the person and threating...more

Federal District Court Held That A Shareholder Of A Company Did Not Owe Fiduciary Duties To The Company Regarding A Transfer Of...

In Liberty Bankers Life Ins. Co. v. Lenhard, a company sued its former chief executive officer and shareholder for breaching fiduciary duties and fraudulent statements regarding an agreement to transfer his stock in the...more

Court Holds That A Bank’s Employees Cannot Conspire To Breach Fiduciary Duties And That The Bank Did Not Owe Fiduciary Duties To A...

In Herring v. Am. Paper & Janitorial Prods., the plaintiff was a subcontractor who provided janitorial services for a bank and was also a depositor of the bank. No. H-17-3474, 2018 U.S. Dist. LEXIS 215765 (S.D. Tex. December...more

Court Holds That There Was Insufficient Evidence To Establish That Account Beneficiary Designations Were Executed As A Result Of...

In Fielding v. Tullos, an administrator of a decedent’s estate brought claims against the decedent’s housekeeper for undue influence and other related claims arising from the execution of new account beneficiary designations...more

Court Discusses Diversity of Citizenship Jurisdiction Where A Trustee Removed The Case

In Thunder Patch II, LLC v. JPMorgan Chase Bank, N.A., plaintiffs filed suit against a trustee in state court seeking a declaration regarding the enforceability of a mineral lease, and the trustee removed the case to federal...more

Court Affirms Judgment That Power-Of-Attorney Holder Converted Funds By Withdrawing Them From A Joint Account

In Fletcher v. Whitaker, a brother withdrew $25,000 from a joint bank account while the owner of the funds (decedent) was still alive. No. 02-17-00138-CV, 2018 Tex. App. LEXIS 8329 (Tex. App.—Fort Worth October 11, 2018, no...more

Court Reversed A Summary Judgment For Trustee And Found That A Contingent Remainder Beneficiary Had Standing And Potentially Had A...

In In the Interest of K.K.W., an ex-wife sued an ex-husband and the trustee of a trust that they created for breaches of fiduciary duty and sought to remove the trustee, among other claims, arising out of the trustee’s...more

Court Held That Equitable-Forfeiture Claims Arising From A General Partner’s Compensation Should Be Remanded For Consideration By...

In Cruz v. Ghani, a limited partner sued a general partner over breach of fiduciary duty claims arising from, among other allegations, that the general partner should not have compensated himself from the business in addition...more

Court Rules On Lost Profits, Lost Good Will, Disgorgement, and Forfeiture Remedies Against A Former Employee For Breach of...

In Samuel D. Orbison & Am. Piping Inspection v. Ma-Tex Rope Co., a jury found that a former employee breached fiduciary duties by working for a competitor while being employed by the plaintiff. No. 06-17-00112-CV, 2018 Tex....more

Court Holds That Administrator Is Not Bound By Arbitration Clause In A Will

In Ali v. Smith, a successor administrator of an estate sued the former executor for breach of fiduciary duties arising from his management of the finances of the estate, converting assets of the estate, and using estate...more

Fiduciary Duties Meet Jerry Springer: Court Holds That Participants To An Extra-Marital Affair Do Not Owe Each Other Fiduciary...

In Markl v. Leake, a husband started a long-time extramarital relationship with his girlfriend in 2004. No. 05-17-00174-CV, 2018 Tex. App. LEXIS 3384 (Tex. App.—Dallas May 14, 2018, no pet. history)....more

Court Held That Real Estate Broker Did Not Owe Fiduciary Duties To Other Parties In A Transaction

In Van Duren v. Chife, the buyers of a home sued the sellers as well as the sellers’ real estate broker and his company regarding water penetration that damaged the home. No. 01-17-00607-CV, 2018 Tex. App. LEXIS 3494 (Tex....more

Court Rejects Claim That Ex-Spouses Owed Each Other Fiduciary Duties

In Robins v. Robins, an ex-wife sued her ex-husband for breaching fiduciary duties regarding the sale of their former marital residence. No. 02-16-00285-CV, 2018 Tex. App. LEXIS 3534 (Tex. App.—Fort Worth May 17, 2018). ...more

[Webinar] Joint Account Litigation In Texas With An Emphasis On Fiduciary Relationships - May 22nd, 10:00am CT

This presentation will cover the creation of joint accounts, the ownership of funds in these accounts, Texas Estate’s Code provisions and Texas common law regarding the requirements for effective survivorship language,...more

Bankruptcy Court In Texas Held That Client Did Not Adequately Plead An Aiding and Abetting Breach of Fiduciary Duty Claim Against...

In In re Westech Capital Corp., a bankruptcy trustee sued a company’s former attorneys for breaching fiduciary duties and also for aiding and abetting the breach of fiduciary duty. No. 16-10300-TMD, 2018 Bankr. LEXIS 969...more

Texas Fiduciary Litigation Update

David F. Johnson presented his paper on “Litigation Update, Including Fiduciary Issues” to the Texas Bankers Association’s Legal Conference in Austin, Texas, on April 5, 2018. This presentation covered recent Texas precedent...more

Court Holds That There Is A Fact Issue By Former Employer Against Employee For Breach Of Fiduciary Duty In Self-Dealing...

In Roberts v. Overby-Seawell Co., an employee sued his former employer for the failure to pay commissions. No. 3:15-CV-1217-L, 2018 U.S. Dist. LEXIS 47821 (N.D. Tex. March 23, 2018). ...more

Magistrate Recommends Denying A Motion To Dismiss Against A Bank For Aiding and Abetting Breach Of Fiduciary Duty

In Schmidt v. JP Morgan Chase Bank, N.A., the plaintiff’s employee opened credit cards in the employer’s name, used those credit cards for the employee’s own personal use, and paid those credit card bills with funds from the...more

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