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Defendant's Attorney: Brian Paul Sanford

Description:

Fort Worth, TX - Revocable Trust lawyer represented Appellant in a trust dispute.

A. Background from the El Paso Court of Appeals
The factual setting for this case was well stated in an earlier opinion from the
El Paso Court of Appeals:
FACTUAL SUMMARY
Russell and Dorothy Peek were the parents of [Linda] and Bruce.
During their lifetime, Russell and Dorothy set up the Peek Family
Revocable Trust (2000), a revocable trust that would benefit Bruce,
[Linda], and several other relatives. Several real properties and other
assets were placed in the trust. The trust was to become irrevocable on
the death of either Russell or Dorothy. Russell and Dorothy were
trustees until January 2010 at which time [Linda]’s daughter, [Lainie]
Latshaw, and Bruce were appointed as trustees. Latshaw was asked to
resign as trustee in October 2012.
By the time Dorothy and Russell were in their nineties, the record
reflects significant family discord. Bruce and [Linda], though brother
and sister, had not spoken to one another in thirty years. Several family
members claimed that Dorothy and Bruce had restricted access to
Russell, who at times was in an assisted living center, and at times lived
in a house that Bruce had built right next to his own residence. For the
time Russell was in the assisted living center, the facility excluded visits
from most family members, and disallowed Russell access to a phone. A
locked gate restricts access to Bruce’s property. Some family members
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called the police and adult protective services, questioning whether
Russell was being held against his will. Conversely, Dorothy alleged that
a disinherited relative had made death threats against her, and others
were taking advantage of Russell’s diminished mental capacity for
financial gain.
In 2011, Dorothy was appointed as guardian of Russell. After her
death on November 20, 2012, Bruce was appointed Russell’s guardian.
Russell passed away on May 12, 2014.
PROCEDURAL SUMMARY
The suit before us was first filed [in the district court] on April 20,
2012, by Dorothy against her niece, [Belinda], and her granddaughter,
[Jill]. After Dorothy passed away, Bruce was named independent
executor to her estate and continued the lawsuit in both his
representative and individual capacity. The last live petition, which
added [Linda] as a defendant, asserted claims of libel, slander, and
intentional infliction of emotional distress. These claims largely arose
out of the defendants’ alleged calls to the authorities expressing concern
for how Russell was being treated by Dorothy, and later by Bruce.
[Linda] filed counterclaims against Bruce alleging three claims
germane to this appeal, which we categorize as the Trust Claim, the
Guardianship Claim, and the Will Claim:
• Bruce, as trustee of The Peek Family Revocable Living Trust
(2000), violated his fiduciary duties to the trust’s beneficiaries by
using undue influence over Russell and Dorothy to amend and
ultimately terminate the trust, to remove all other beneficiaries
except for himself and to transfer all of the trust property to
another trust. The suit alleges this as a violation of his duties as
trustee (the ‘Trust Claim’).
• [Linda] asserts that Bruce and a non-party attorney applied to
make Dorothy guardian of Russell knowing she was not qualified
or capable, or alternatively, they learned that while she was
guardian, and took advantage of the situation to take for
themselves trust and estate assets. [Linda] also makes a similar
claim against Bruce in his capacity as guardian of Russell’s person
(the ‘Guardianship Claim’).
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• Bruce participated in a joint enterprise with a non-party attorney
to use undue influence over Dorothy to change her will to
disinherit [Linda] (the ‘Will Claim’).
[Linda] sought an accounting from the original trust, and the later
trust that Bruce set up, along with restitution of financial gains to Bruce
and return of any property removed. The suit also sought removal of
Bruce as trustee, and appointment of a successor trustee and receiver to
take possession of the trust assets.
Mayfield v. Peek, 546 S.W.3d 253, 256–57 (Tex. App.—El Paso 2017, no pet.)
(footnotes omitted).
B. The El Paso Court of Appeals’ Disposition
Ultimately, the El Paso Court of Appeals disposed of the Will Claim and the
Guardianship Claim with instructions that they be dismissed on remand; it reversed
and remanded the Trust Claim for further development of the record on the
dominant jurisdiction issue; and it affirmed the unchallenged portion of the final
judgment disposing of Linda’s, Belinda’s, and Bruce’s other claims. Id. at 267–68.
After the El Paso court’s disposition, the only surviving claim was the Trust Claim,
which is Linda’s counterclaim for breach of fiduciary duty. In it, Linda alleged that
Bruce “violated his fiduciary duties to the trust’s beneficiaries by using undue
influence over the trust settlors and beneficiaries” in an effort “to terminate the trust,
to remove all other beneficiaries except for himself and to transfer all of the trust
property” to his own trust. According to the El Paso court, the key issue as to the
Trust Claim was dominant jurisdiction, and the “only question” that had bearing on
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whether another court had dominant jurisdiction was whether another proceeding had
previously “been filed in a county court at law that raised the Trust Claim.” Id. at 266.
C. After Remand
On remand, Bruce filed a motion to dismiss on the basis of dominant
jurisdiction in district court, and he appended documents meant to better develop the
issue.
The district court initially granted Bruce’s motion and dismissed the case.
Linda filed a motion for new trial. Within plenary power, the district court granted a
new trial. See Tex. R. Civ. P. 329b.
The district court then held a bench trial. On March 17, 2020, the district court
rendered an “interim judgment” on the merits in which it found:
• that Bruce had breached his fiduciary duties to the trust beneficiaries;
• that he had exerted undue influence over Dorothy;
• that various deed transfers should be voided;
• that Bruce should account for the trust property;
• that Linda was entitled to compensation for lost profits and any depreciation in
the value of her share of the trust property;
• that Linda should be awarded $1,000,000 in punitive damages;
• that Bruce should be removed as trustee and that a receiver should be
appointed in his place;
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• that Bruce should be enjoined from taking any action in administering the trust
except providing an accounting; and
• that a lien should be placed on all property transferred from the trust to Bruce
or his own trust.
The district court indicated that it would sign a final judgment upon consideration of
a report provided by the newly appointed receiver. Bruce filed this interlocutory
appeal.
II. JURISDICTION ON INTERLOCUTORY APPEAL
In their briefs, Bruce and Linda argue the gamut of issues in the case, which
range from the question of dominant jurisdiction to the sufficiency of the evidence to
support the district court’s findings of undue influence and breach of fiduciary duty,
and to the propriety of the receivership and punitive damages. However, the district
court’s order is not a final judgment, and many of these issues are beyond the limited
scope of this interlocutory appeal.
As to the finality of the judgment, “[a]s a general rule, appeals may be taken
only from final judgments.” Sabre Travel Int’l, Ltd. v. Deutsche Lufthansa AG, 567
S.W.3d 725, 730 (Tex. 2019). This rule serves the interests of consistency, finality,
and judicial economy, and it ensures that appellate courts “decide issues on a full
record, do not unnecessarily delay the underlying trial, avoid futility, and consider all
issues in a single round of review.” Id. “[A] judgment is final either if it actually
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disposes of every pending claim and party or it clearly and unequivocally states that it
finally disposes of all claims and all parties.” Bella Palma, LLC v. Young, 601 S.W.3d
799, 801 (Tex. 2020) (per curiam) (cleaned up). Neither of those conditions is
satisfied here. Just the opposite, the interim judgment unequivocally states that the
district court was reserving final judgment in the case; the interim judgment indicates
that the district court “will sign a final judgment upon consideration of a report
provided by the receiver.” Cf. In re S.L., No. 05-11-00560-CV, 2012 WL 5355708, at
*3–4 (Tex. App.—Dallas Oct. 30, 2012, no pet.) (mem. op.); Able Cabling Servs., Inc. v.
Aaron–Carter Elec., Inc., 16 S.W.3d 98, 100–01 (Tex. App.—Houston [1st Dist.] 2000,
pet. denied).
That being the case, the interim judgment remains interlocutory. To the extent
that the interlocutory order appoints a receiver, it is appealable; “[a] person may
appeal from an interlocutory order of a district court . . . that . . . appoints a receiver
or trustee.” Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(1).
But in handling interlocutory appeals under this provision, courts have
generally refused to consider any issues beyond the propriety of the receivership itself.
See A-Med. Advantage Healthcare Sys. v. Shwarts, No. 10-18-00050-CV, 2019 WL
7374735, at *2–3 (Tex. App.—Waco Dec. 31, 2019, pet. denied) (mem. op.); Krumnow
v. Krumnow, 174 S.W.3d 820, 826 (Tex. App.—Waco 2005, pet. denied); Alert Synteks,
Inc. v. Jerry Spencer, L.P., 151 S.W.3d 246, 249 (Tex. App.—Tyler 2004, no pet.); In re
Estate of Dillard, No. 07-00-0504-CV, 2001 WL 139082, at *2 (Tex. App.—Amarillo
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Feb. 5, 2001, no pet.) (not designated for publication).
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These opinions have often
relied on the interpretive rule that courts should “strictly apply statutes granting
interlocutory appeals because they are a narrow exception to the general rule that
interlocutory orders are not immediately appealable.” CMH Homes v. Perez, 340
S.W.3d 444, 447 (Tex. 2011); accord Sabre Travel, 567 S.W.3d at 736. Likewise, courts
dealing with interlocutory appeals under other parts of Section 51.014(a) have
declined to consider issues unrelated to the topic that is expressly authorized for
appeal. See Dall. Symphony Ass’n, Inc. v. Reyes, 571 S.W.3d 753, 761 & nn. 34, 36 (Tex.
2019) (collecting cases in which courts refused to consider unrelated issues under
various provisions of Section 51.014(a), though setting out an exception for appeals
under Section 51.014(a)(6)).
True to these holdings, we decline to consider the many issues briefed by the
parties that are not germane to the propriety of the receivership.
2 Those questions are
beyond the limited scope of this appeal.
1
But see Kenworthy v. Kenworthy Corp., 149 S.W.3d 296, 297 n.1 (Tex. App.—
Eastland 2004, pet. denied) (reviewing issues unrelated to the receivership but offering
no citations or reasoning to justify this approach).
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Nor does the scope of this appeal properly include the issue of dominant
jurisdiction. Dominant jurisdiction has been described as “more of a venue issue than
a true jurisdictional one,” 1 McDonald & Carlson Tex. Civ. Prac. § 3:13 (2d. ed.); see
Barcroft v. Walton, No. 02-16-00110-CV, 2017 WL 3910911, at *2 n.5 (Tex. App.—Fort
Worth Sept. 7, 2017, no pet.) (mem. op.), and the proper vehicle to raise it is a plea in
abatement rather than a plea to the jurisdiction, In re Puig, 351 S.W.3d 301, 303 (Tex.
2011) (orig. proceeding) (per curiam).
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III. RECEIVERSHIP
Bruce’s fourth issue is the only one that falls within the limited scope of this
appeal. In it, he contends that the district court abused its discretion by appointing a
receiver without first requiring Linda to post a bond, as required by Rule 695a of the
Texas Rules of Civil Procedure. Linda does not dispute this argument.
We review the appointment of a receiver for an abuse of discretion. Templeton
v. RKR Invs. Inc., No. 02-18-00024-CV, 2018 WL 2344675, at *3 (Tex. App.—Fort
Worth May 24, 2018, no pet.) (mem. op.); Dale v. Fin. Am. Corp., 929 S.W.2d 495, 497
(Tex. App.—Fort Worth 1996, writ denied). “A trial court abuses its discretion if it
acts without reference to guiding rules and principles such that the ruling is arbitrary
or unreasonable.” Brewer v. Lennox Hearth Prods., LLC, 601 S.W.3d 704, 717 (Tex.
2020). A decision is arbitrary when it is made without fair, solid, and substantial cause
Even if it were a true jurisdictional issue, dominant jurisdiction would not be
before us. If dominant jurisdiction were truly jurisdictional, Bruce’s motion
concerning dominant jurisdiction would qualify as a plea to the jurisdiction for
purposes of an interlocutory appeal, because whether a motion qualifies as a plea to
the jurisdiction is determined not by the motion’s label but by “the substance of the
issue raised.” Tex. Dep’t of Criminal Justice v. Simons, 140 S.W.3d 338, 349 (Tex. 2004).
But Section 51.014(a)(8) provides for interlocutory appeals only of the grant or denial
of “a plea to the jurisdiction by a governmental unit.” Tex. Civ. Prac. & Rem. Code Ann.
§ 51.014(a)(8) (emphasis added). Thus, this court has consistently rejected appeals
from denials of pleas to the jurisdiction when brought by private parties rather than
governmental units. See, e.g., In re C.V., No. 02-20-00281-CV, 2020 WL 7063680, at
*1 (Tex. App.—Fort Worth Dec. 3, 2020, no pet.) (per curiam) (mem. op.); Liverman v.
Denton Cty., No. 02-17-00240-CV, 2017 WL 6377437, at *2 (Tex. App.—Fort Worth
Dec. 14, 2017, no pet.) (mem. op.); Clifton v. Burroughs, No. 2-08-404-CV, 2008 WL
5401489, at *1 (Tex. App.—Fort Worth Dec. 23, 2008, no pet.) (per curiam) (mem.
op.). Because Bruce is not a governmental unit, he could not bring an interlocutory
appeal of a district court’s ruling on its jurisdiction.
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or reason. Burlington N. & Santa Fe Ry. Co. v. S. Plains Switching, Ltd., 174 S.W.3d 348,
352 (Tex. App.—Fort Worth 2005, no pet.). “The burden to show the existence of
circumstances justifying the appointment of a receiver rests on the party seeking the
appointment.” Estate of Hoskins, 501 S.W.3d 295, 306 (Tex. App.—Corpus Christi–
Edinburg 2016, no pet.); Spiritas v. Davidoff, 459 S.W.3d 224, 232 (Tex. App.—Dallas
2015, no pet.); see Langlois v. Martin, 105 S.W.2d 440, 442 (Tex. App.—Fort Worth
1937, no writ).
Rule 695a provides that no receiver shall be appointed with authority to take
charge of property until the party requesting the appointment has filed “a good and
sufficient bond . . . payable to the defendant in the amount fixed by the court.” Tex.
R. Civ. P. 695a. “The purpose of the bond is to ensure that the defendant can be
reimbursed for any damages caused by the appointment of the receiver in the event
that the receiver was wrongfully appointed.” Ahmad v. Ahmed, 199 S.W.3d 573, 575
(Tex. App.—Houston [1st Dist.] 2006, no pet.) (citing Tex. R. Civ. P. 695a, and Cont’l
Homes Co. v. Hilltown Prop. Owners Ass’n, Inc., 529 S.W.2d 293, 295 (Tex. App.—Fort
Worth 1975, no writ)). The applicant’s bond is a prerequisite to the appointment of a
receiver, and the trial court’s failure to require the bond necessitates reversal. Id.;
Cont’l Homes, 529 S.W.2d at 295. “The filing of a bond by the receiver pursuant to
Texas Civil Practice and Remedies Code section 64.023 will not satisfy this
requirement.” Ahmad, 199 S.W.3d at 575; Cont’l Homes, 529 S.W.2d at 295.
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In this case, the district court’s order does not require Linda to file a bond
payable to Bruce, nor does it indicate an appropriate amount for such a bond. Bruce
brought this deficiency to the district court’s attention in his motion to vacate
appointment of the receiver, but the district court took no action to correct the error,
and the record does not show that Linda posted such a bond. Therefore, the
requirements of Rule 695a have not been met, and the receivership must be dissolved.
We sustain Bruce’s fourth issue.

Outcome: We reverse the district court’s interim judgment to the extent that it appoints a
receiver, and we remand for further proceedings consistent with this opinion

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