Caldwell, Edward Meyers v. River Oaks Trust Company ( 1996 )

Judgment affirmed in part, reversed in part, and appeal dismissed in part and Opinion
filed May 2, 1996
In The
(Enurt of Appeals
For The
ZITirzi Eiztriri of mucus
N0. 01-94-00273-CV
EDWARD MEYERS CALDWELL, Appellant
v.
RIVER OAKS TRUST COMPANY, JOHN NIHISER, J OHN FOX, MARIE'ITA
SCHUMACHER, DAVID SCHUMACHER, AND MERRILL SHIELDS, Appellees
On Appeal from Probate Court No. 1 ‘
Harris County, Texas
Trial Court Cause Nos. 248,018 & 248,018-401
OPINION
Appellant, Edward Meyers Caldwell, was the plaintiff in the consolidated
lawsuits that are the subject of this appeal. The trial court granted summary judgments in
favor of defendants River Oaks Trust Company (ROTC), John Nihiser, John Fox, David
Schumacher, and Marietta Schumacher. The trial court also granted the motion for
special appearance filed by defendant Merrill Shields. We dismiss in part, affirm in part,
and reverse in part.
The Plaintiff’s Brief
Before we address the merits of this case, we address the appropriateness of
the plaintiff’s brief. The plaintiff filed a motion for leave to file a brief in excess of 50
pages in which he stated that this appeal was "difficult if not impossible to present with
clarity in fewer pages." We granted the motion. The plaintiff has burdened this Court
and the appellees with an unwieldy 70-page diatribe disguised as an appellate brief. It is
filled with invective--such as referring to ROTC as the "trustee from hell" and describing
Marietta Schumacher as a cat torturing a mouse--that has absolutely no place in an
appellate brief.1 It contains numerous confusing references to unidentified persons,
entities, and events. It contains a tremendous amount of unnecessary information. What
the brief does not contain is cogent legal argument. The rules of appellate procedure
provide that the argument in a brief shall include "a fair, condensed statement of the facts
pertinent to" the points of error. TEx. R. APP. P. 74(f)(1) (emphasis added). We have
no doubt the plaintiff could have briefed his points of error "with clarity" in 50 pages or
less if he had not sacrificed legal analysis in favor of hyperbole.
Uncontroverted Facts and Procedural Background
The plaintiffs suit against ROTC, Nihiser and Fox began as a suit to modify
a trust and to have ROTC removed as trustee; the plaintiff later added Nihiser and Fox as
defendants and alleged various tort causes of action against all three defendants. The
plaintiff’s suit against his sister Marietta, his nephew David (Marietta’s son), and attorney
Shields arose from a family dispute.
The story begins in 1938, with the death of wealthy Nebraska rancher E. P.
1 We note that the Texas Lawyer’s Creed, adopted by the Texas Supreme Court,
urges lawyers to "avoid disparaging personal remarks or acrimony toward opposing
counsel, parties, and witnesses." TEXAS LAWYER’S CREED, WES'r’S TEXAS RULES or
COURT (1996).
Marietta and David, aided by Houghton and Shields,
entered into a conspiracy to harm [the plaintiff] and to
defraud him of his potential inheritance. David acted as
.Marietta’s confidant, advisor and sub-agent. He directed
.most of the activities of Houghton and Shields. They began a
course of conduct in which they sought every opportunity to
create mental anguish for [the plaintiff] and place unnecessary
pressure and stress upon him. v
Although ROTC was not named as a defendant in this petition, the plaintiff asserted that
in 1990, ROTC became "an active participant in the scheme tolplace undue pressure on
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[the plaintiffi." The petition alleged causes of action for negligefnce, intentional infliction
of emotional distress, civil conspiracy, duress and coercion, and bZreach of fiduciary duty.
Points of Error Relating to Judge Gregoriy
Several of the plaintiff’s points of error relaite to Judge Gregory’s
involvement in the case. In point of error five, he asserts Judge Hutchison erred in not
granting a continuance of the summary judgment hearing toi allow him to take the
depositions of Judge Gregory and a representative of Compass Bancshares, and to again
depose MacIntyre. - In point of error 10, the plaintiff asserts Judge Hutchison abused his
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discretion in precluding the plaintiff from obtaining information about Judge Gregory’s
alleged disqualification. In point of error 11, the plaintiff complains that Judge Hutchison
erred in granting the motions for protective orders and the motions to quash filed by John
McMahen10 and Compass Bancshares "because this discovery was relevant and necessary."
In point of error 12, the plaintiff complains that Judge Hutchison erred in granting Judge
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Gregory’s motion for protective order and motion to quash because his testimony was
"relevant on [sic] the issues of disqualification and conspiracy." [In point of error 13, the
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10 We do not know who John McMahen is. We assume thfe plaintiff means Charles
McMahen, the chairman of the board of Compass Bancshares.
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I plaintiff asserts Judge Hutchison erred in quashing the deposition of Jerry Powell
regarding Central Bancshares’ "involvement in the litigation with R.O.T.C." In point of
error 14, the plaintiff complains that Judge Gregory abused his discretion in denying him
access to his mother’s testamentary plan. ‘
Judge Gregory recused himself in February 1993, apparently because, as a
result of actions taken in the guardianship proceedings, the plaintiff intended to call the
judge as a witness in the trust-family lawsuit.
1. The motion for continuance
On August 16, the day of the summary judgment hearing, the plaintiff filed
a verified motion for a continuance in which he stated that he discovered evidence during
MacIntyre’s July 28 deposition "of apparent fraudulent conduct by MacIntyre and Judge
Pat Gregory in entry of orders adverse to [the plaintiff]." His motion for continuance
refers to an earlier motion for reconsideration of Judge Hutchison’s orders granting the
motions for protective orders of Judge Gregory, Compass Bank and Charles McMahen,
that was denied by Judge Hutchison on August 12. The motion for reconsideration
alleged certain facts "reflecting Judge Gregory and MacIntyre joined in a conspiracy to
silence [the plaintiff]" and that Judge Gregory had been "compromised by David and
Marietta Schumacher in early 1991." In his motion for continuance, the plaintiff stated
that he intended to seek mandamus relief with reSpect to Judge Hutchison’s refusal to
allow him to depose Judge Gregory and McMahen. The plaintiff asserted this evidence
was necessary to establish whether Judge Gregory had been disqualified from presiding
over the consolidated lawsuits. He argued that he was deprived of due process from the
date Judge Gregory became disqualified, and stated, "[I]t is wrong to proceed with either
a trial or a hearing on any motion for summary judgment if Judge Gregory’s testimony
reflects that he was disqualified.” The plaintiff prayed for a continuance until the court of
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appeals ruled on his right to depose Judge Gregory. Judge Hutchison denied the motion
for continuance at the August 16 summary judgment hearing. IiI‘he plaintiff did not seek
mandamus relief.
On appeal, the plaintiff argues:
The deposition of MacIntyre, the guardian of Esther’s Estate,
taken July 28, 1993, revealed questionable activity by the
guardian and Judge Gregory which could have profound
impact on the case, including ex parte meetings between
Judge Gregory and David and Marietta Schumachér and their
representatives to discuss Edward, from which a fair inference
can be drawn that the decision to sue Edward [111 was made while
R.0.T.C. was harassing Edward in the spring of 1992.
(Emphasis added.)
We are not sure what the plaintiff’s complaint on appeal is. His motion for
continuance was based on his assertion that Judge Gregory had been disqualified from
presiding over the consolidated lawsuits. That is not his complaint on appeal. We hold
the plaintiff waived this point of error. Star Houston, Inc. v. Sifhevack, 886 S.W.2d 414,
422 n.8 (Tex. App.--Houston [lst Dist.] 1984), writ denied, 907 S.W.2d 452 (Tex. 1995);
see also Tex. R. APP. P. 74(d) (a point of error is sufficient if it directs the attention of
the appellate court to the error about which complaint is made).
We overrule point of error five.
2. Judge Gregory’s alleged disqualification
The plaintiff asserts Judge Gregory was disqualified from presiding over the
trust-family lawsuits because of his "banking relationship" with Compass Bank. According
to the plaintiff, this banking relationship gave Judge Gregory a "significant personal or
11 At some point in the guardianship proceeding, MacIntyre filed suit against the
plaintiff on behalf of Esther’s estate, apparently to recfover money the plaintiff
allegedly owed the estate.
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pecuniary interest" in the lawsuits that constitutionally disqualified him from sitting. The
plaintiff asserts in his brief:
Compass was in possession of a financial statement that was
utilized as evidence to support criminal charges against Judge
Gregory. There came a time when both Judge Gregory and
Compass knew that Compass was in possession of evidence
that could be used to incriminate him.[121 That fact had to be'
a part of the "banking relationship" between Compass and
Judge Gregory. Both of them chose to conceal this critical
fact as Compass went forward seeking favorable rulings from
Judge Gregory. This was corrupt conduct by Compass which
would count hard against it by the fact finder both in
determining liability and punitive damages. R.O.T.C. was
rewarded with a Summary Judgment while this fact was
concealed.
The plaintiff asserts that because of his disqualification, all orders entered
by Judge Gregory should be set aside, and that because many of the judge’s orders
restricted the plaintiff‘s discovery, the summary judgments, the order dismissing Shields,
and the judgment with respect to the final accounting should also be set aside.
The relevant section of the Texas Constitution provides in part:
No judge shall sit in any case wherein he may be
interested, or where either of the parties may be connected
with him, either by affinity or by consanguinity, within such a
degree as may be prescribed by law, or when he shall have
been counsel in the case. . . .
TEX. CONST. art. 5, § 11. The Texas Rules of Civil Procedure provide that judges shall
disqualify themselves if "they know that, individually or as a fiduciary, they have an
interest in the subject matter in controversy . . . TEX. R. Crv. P. 18b(1)(b). The
"interest" required for constitutional or statutory disqualification of a judge must be a
direct pecuniary or property interest in the subject matter of the litigation. Gulf Maritime
12 The criminal charges to which the plaintiff refers are unrelated to this case.
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Warehouse Co. v. Towers, 858 S.W.2d 556, 558 (Tex. App.—-Beaumont 1983, writ
denied). The value of the interest must be capable of being estimated, and it must be
something that the judge may gain or lose as a result of the judgment rendered in the
case. deey v. Citizens Nat'l Bank, 489 S.W.2d 697, 702 (Tex. App.--Amarillo 1972),
rev’d on other grounds, 507 S.W.2d 722 (Tex. 1974). The interest must be a direct, real
and certain interest in the subject matter and result of the litigation, and not merely
indirect, incidental, remote, possible or speculative. Maxey, 489 IS.W.2d at 702.
The plaintiff has not briefed this issue in a manner that would assist this
Court in determining the relationship between the parties and various entities. and the
significance of Judge Gregory’s "banking relationship" with Compass Bank. It appears
that Compass Bancshares is the parent corporation of both ROTC and Compass Bank,
and that Central Bancshares of the South is the parent corporation of Compass
Bancshares. Compass Bank was apparently never a party to this lawsuit,13 and the
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plaintiff nonsuited Compass Bancshares on February 5, 1993, The plaintiff has not
explained how a "banking relationship" with Compass Bank, a sister corporation of ROTC
that was apparently never even a party to this lawsuit, rises to the level of a "significant
personal or pecuniary interest" that disqualified Judge Gregory! from presiding over the
trust-family lawsuits.
Even assuming Judge Gregory was disqualified, however, we are not
persuaded that the plaintiff was denied due process when Judge Hutchison granted the
summary judgments in favor of Marietta, David, ROTC, and Nihiser.14 The plaintiff
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13 There are no pleadings in the record that indicate Compass Bank was ever a party
to this lawsuit.
14 The summary judgment in favor. of Fox and Shields’ special appearance will be
addressed in a separate portion of this opinion.
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bases his due process argument on his assertion that Judge Gregory "made many orders
which restricted discovery by [the plaintiff]." The plaintiff complains that Judge Gregory
(1) quashed subpoenas for records that had been served -upon Houghton and his law firm,
Mayor, .Day, & Caldwell, and (2) quashed the deposition of Jerry Powell, general counsel
of Central Bancshares. However, the plaintiff cites no authority for his contention that he
was denied due process. See TEX. R. APP. P. 74(f). Further, the plaintiff ignores the fact
that the consolidated lawsuits were reassigned to Judge Hutchison in February 1993. The
plaintiff could have sought reconsideration of the discovery orders about which he now
complains.15 To the extent we understand his due process argument, we conclude that the
plaintiff was not denied due process. We overrule points of error nine and ten.
In point of error 12, the plaintiff asserts Judge Hutchison erred in granting
Judge Gregory’s motion for protective order and motion to quash because his testimony
was relevant to the issues of disqualification and conspiracy. The plaintiff offers no
argument concerning this complaint other than to assert that the trial court abused its
discretion. Any error is waived. TEX. R. APP. P. 74(f). Additionally, we are unable to
determine how the plaintiff was harmed by any order that precluded him from obtaining
discovery relatingto Judge Gregory’s alleged disqualification. Judge Gregory recused
himself in February 1993. Judge Hutchison presided over the trial after Judge Gregory’s
recusal. As we have already noted, the plaintiff could have sought reconsideration of any
orders entered by Judge Gregory. We overrule point of error 12.
3. McMahen and Compass Bank
In point of error 11, the plaintiff complains that the trial court erred by
15 The plaintiff did seek reconsideration of Judge Gregory’s orders granting Shields’
special appearance, granting summary judgment in favor of Fox, and denying a
motion to compel ROTC to produce certain documents.
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granting the motion for protective order and motion to quash of "John McMahen"16 and
Compass Bancshares. We can find no discussion of McMahen or Compass Bancshares in
the plaintiff’s argument under these points of error. Any error is waived. TEX. R. APP.,P.
74(f). We overrule point of error 11.
4. Powell and Central Bancshares
In his thirteenth point of error, the plaintiff complains that Judge Gregory
erred in quashing the deposition of Jerry Powell, general counsefl for Central Bancshares.
Specifically, the plaintiff asserts that Central Bancshares did IEIOt sustain its burden to
produce evidence to support its claim of privilege and that thei attorney-client privilege
does not apply in this case because the communications and documents were "generated
during the course of fraudulent activities."
The scope of discovery rests largely within the discretion of the trial court.
Smith v. Gayle, 834 S.W.2d 105, 107 (Tex. App.--Houston [lst Dist.] 1992, orig.
proceeding). The party resisting discovery bears the burden of showing that the
communication is protected by the asserted privilege. National Union Fire Ins. Co. v.
Valdez, 863 S.W.2d 458, 460 (Tex. 1993). i
The' plaintiff noticed Powell’s deposition. Cential Bancshares objected,
citing attorney-client privilege. In his supporting affidavit, Powell identified himself as
general counsel for Central Bancshares and stated:
Prior to the dispute with Mr. Caldwell concerning his Trust, I
had no knowledge of any facts relating to Mr. Caldwell, his
Trust, or the allegations made in this action. Any iinformation
I may have obtained since the dispute began was obtained from
representatives of either Central Bancshares or River Oaks, or
both, who are authorized by the Companies to obtain
professional legal services and act on advice rendered pursuant
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thereto. These Company representatives provided me with
information in my capacity as General Counsel for Central
Bancshares and as such this information is protected from
compulsory disclosure by the attorney-client privilege. If the
Companies are compelled to disclose such information, the
Companies will be prejudiced by revealing to [the plaintiff] the
Companies’ strategies and tactics. In addition, these clients
(i.e., the authorized representatives of the Companies ) provided
this confidential information to me with a view to obtaining legal
- advice concerning the above-styled and numbered cause and the
communications were made in furtherance of the rendition of
professional legal services to the Companies.
Prior to the dispute with [the plaintiff] concerning his Trust, I -
had in my possession no documents concerning [the plaintiff],
his Trust, or the matters alleged in this action. Any
documents that may have come into my possession since the
commencement were prepared by me, or by counsel, and are
protected from compulsory disclosure by the attorney-client
privilege or the work product doctrine, or both, because they
were prepared in connection with this litigation by me or by
counsel.
(Emphasis added.) Powell concluded by invoking the attorney-client privilege on behalf
of ROTC and Central Bancshares.
On appeal, the plaintiff contends that Powell’s affidavit is insufficient to
support the claim of attorney-client privilege because it-"simply stated that everything he
knew. and all documents reached by the subpoena had to be privileged." The plaintiff
misrepresents Powell’s affidavit. Powell specifically asserted that communications were
made to him by representatives of ROTC and Central Bancshares "with a view to
obtaining legal advice" concerning the plaintiff's lawsuit and that the communications were
made "in furtherance of the rendition of professional legal services to" ROTC and Central
Bancshares. We reject the plaintiff's argument that Powell’s affidavit was insufficient to
support a claim of privilege.
The plaintiff also asserts that the deposition testimony of John Kutak, a
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trust officer for ROTC, defeated Powell’s claim of privilege because it established that
ROTC did not seek legal advice from Powell. However, Kutatgz testified that he had no
personal knowledge of Powell’s input; he did not testify ROTC inever sought legal advice
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from Powell. 1
The plaintiff also asserts that the attorney-client pjrivilege does not apply in
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this case because of the crime-fraud exception to the privilege contained in TEX. R. Crv.
Evm. 503(d)(1).l7 The crime-fraud exception to the attorney—client privilege applies only
if the party seeking discovery makes a prima facie showing; of contemplated fraud.
Granada Corp. v. First Court of Appeals, 844 S.W.2d 223, 227 (Tex. 1992). Whether
there has been a prima facie showing of fraud is a matter for the court to determine.
Freeman v. Bianchi, 820 S.W.2d 853, 861 (Tex. Apps-Houston [lst Dist.] 1991, orig.
proceeding), approved sub nom. Granada Corp. v. First Court; of Appeals, 844 S.W.2d
223 (Tex. 1993). A prima facie showing is made by setting forth evidence that, if
believed by a jury, would establish the client was about to commit or was engaging in an
ongoing fraud. Freeman, 820 S.W.2d at 861-62. A perceptiion or allegation that a
particular action was fraudulent is insufficient by itself to make ‘la prima facie showing of
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fraud. Volcanic Gardens Management Co. v. Parson, 847 S.W.2d 343, 348 (Tex. App--
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El Paso 1993, orig. proceeding).
The plaintiff asserts that at a January 15, 1993 heai'ing, he offered sufficient
proof to establish a prima facie case of fraud. We disagree. plaintiff never argued to
the trial court that the crime-fraud exception applied. The plaintiff merely reiterated his
complaints against all the defendants in the case, asserted that Powell was "calling the
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17 Rule 503(d)(1) provides that there is no privilege if the services of the lawyer were
sought or obtained to enable or aid anyone to commit orgplan to commit what the
client knew or reasonably should have known to be a crime or fraud.
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shots" for ROTC, and stated that Powell was responsible for ROTC’s failure to produce
documents. We conclude that the plaintiff did not make a prima facie showing that the
crime-fraud exception to the attorney-client privilege applies in this case.
Finally, we note that, although the plaintiff argues the trial court abused its
discretion in quashing Powell’s deposition, he does not assert or explain that the trial
court’s alleged error was harmful. To support reversal, the trial court’s refusal to permit
discovery must have been such a denial of the "plaintiff’s rights that it was reasonably
calculated to cause, and probably did cause, the rendition of an improper judgment. TEX.
R. APP. P. 81(b)(1). The plaintiff has not adequately briefed this issue.
For all the foregoing reasons, we overrule point of error 13.
5. Esther’s will
In point of error 14, the plaintiff asserts that Judge Gregory erred in
denying him access to his mother’s testamentary plan. The plaintiff has not supported this
point of error with argument or authorities. This point is waived. TEX. R. APP. P. 74(f).
We overrule point of error 14.
The Summary Judgments
Six of the plaintiff’s points of error concern the summary judgments. In
points of error one, two, three, and seven, he asserts the trial court erred in overruling his
objections to the defendants’ summary judgment evidence and in granting summary
judgment in favor of ROTC and Nihiser (point one), Fox (point seven),18 David (point
two), and Marietta (point three). In point of error four, he asserts the trial court erred in
refusing to allow him to supplement his response to the defendants’ motions for summary
judgment, to consider the 1993 Appendix, or to grant a continuance. In point of error six,
18 We address point of error seven in our discussion of Fox’s motion to dismiss.
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Meyers. Meyers’s will left one-third of his estate to his daughier Esther Caldwell in the
form of a life estate; any part remaining at her death would go "to the children of the said
Esther Edna Caldwell then living, in equal shares." Esther had 'two children--the plaintiff
and Marietta.
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For most of his adult life, the plaintiff depended on his mother Esther for
financial support. In 1980, When the plaintiff was in his 505, Esther created a spendthrift
trust for him. ROTC was the trustee of the trust. The trust. agreement provided that
ROTC was to pay the net income of the trust to the plaintiff andf
if and to the extent such income is insufficient, such amounts
out of the principal of such Trust as, in the sole reasonable
discretion of such Trustee, are necessary or advisable for the
health, support, maintenance, comfort and welfare of the
Beneficiary.
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The trust agreement also provided:
In making any discretionary payments to a beneficiary
hereunder the Trustee shall consider the standard; of living to
which such beneficiary shall have become accustomed during
Trustor’s lifetime. ?
The trust agreement contained provisions covering the resignation of a corporate trustee.
It also designated Marietta as an advisor to the trustee, and gave her absolute veto power
over certain transactions.
Trust officer John Nihiser administered the plaintiff’s trust until April 1988,
when Nihiser was promoted. After Nihiser’s promotion, trust officer Virginia Simons was
assigned to the appellant’s trust. Nihiser was Simons’s supervisor until he left ROTC in
November 1991. t
In 1985, the plaintiff and his mother purchased a mica mine. Esther
provided the purchase price of $255,000, and made monthly payments of $8500 to keep
the project going.
he asserts the trial court erred in refusing to consider his seventEh amended petition when
it decided the defendants’ motions for summary judgment.
1. Standard of Review
Summary judgment is proper if the movant establishes there is no genuine
issue of material fact and that it is entitled to judgment as a rlnatter of law. Randall’s
Food Mkz‘s., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); ilBangert v. Baylor College
of Medicine, 881 S.W.2d 564, 566 (Tex. App.--Houston [lst Disin] 1994, writ denied). In
reviewing the summary judgment, we indulge every reasonableiinference in favor of the
nonmovant and resolve any doubts in its favor. Johnson, 891 S.§N.2d at 644; Bangen, 881
S.W.2d at 565-66. In reviewing the granting of a motion for! summary judgment, this
Court will take all evidence favorable to the nonmovant as true;L Johnson, 891 S.W.2d at
644; Banger-t, 881 S.W.2d at 565; Ihompson v. Vinson & EIkz'jns, 859 S.W.2d 617, 619
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(Tex. App.--Houston [1st Dist.] 1993, writ denied). ,
- A defendant is entitled to summary judgment if thie evidence disproves as a
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matter of law at least one element of each of the plaintiffs causes of action. Lear Siegler,
Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991); Gary v. Benragnd, 723 S.W.2d 957, 958
(Tex. 1987); Marchal v. Webb, 859 S.W.2d 408, 412 (Tex. Apps-Houston [lst Dist.]
1993, writ denied). A defendant is also entitled to summary jiidgment if it conclusively
establishes all elements of an affirmative defense as a matter of law. Roark v. Stallworth
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Oil & Gas, Inc., 813 S.W.2d 492, 495 (Tex. 1991); Banger-t, 881; S.W.2d at 566; Marchal,
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859 S.W.2d at 412. 1
Once the movant has established a right to a summary judgment, the burden
shifts to the nonmovant. The nonmovant then must respond to the motion for summary
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judgment and present to the trial court any issues that would pregclude summary judgment.
City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Marchal,
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859 S.W.2d-at 412. The nonmovant must expressly present issues precluding the movant’s
entitlement to summary judgment by written response or answer to the motion; the
nonmovant’s issues are not expressly presented by mere reference to summary judgment
evidence. McConnell v. Southside Sch. Dist, 858 S.W.2d 337, 341 (Tex. 1993).
When, as here, the trial court’s order granting summary judgment does not
specify the ground or grounds upon which it relied for its ruling, summary judgment will
be affirmed on appeal if any of the theories advanced are meritorious. Carr v. Brasher,
776 S.W.2d 567, 569 (Tex. 1989).
2. ROTC and Nihiser
In point of error one, the plaintiff asserts the trial court erred in considering
ROTC and Nihiser’s summary judgment evidence and in granting their motion for
summary judgment. He argues that ROTC and Nihiser did not disprove any of his causes
of action and did not prove an affirmative defense.19 ROTC and Nihiser moved for
summary judgment on the grounds that (1) the conduct that was the basis for the
plaintiff’s claims was either authorized or required by the trust instrument; (2) they had
no duty to refrain from such conduct; and (3) they breached no duty to the plaintiff by
such conduct.
A. Negligence and breach of fiduciary duty
The plaintiff asserts that the following constitute breaches of fiduciary duty
and negligence: (1) allowing the plaintiff to be evicted from the Residence Inn; (2)
disclosing information to Marietta; (3) refusing to resign as trustee; (4) "self-dealing by
19 In his brief, the plaintiff asserts that he alleged causes of action against ROTC and
Nihiser for negligence, breach of fiduciary duty, conversion, fraud, duress and
coercion, intentional infliction of emotional distress, and for conspiracy. His sixth
amended petition in the trust lawsuit does not, however, allege intention infliction
of emotional distress or conspiracy.
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refusing to produce records of [the plaintiff’s] trust"; (5) "using its power to coerce and
threaten [the plaintiff] and dissipate the trust"; and (6) paying ROTC’s legal fees from the
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trust.
‘ (i) The Residence Inn incident
ROTC and Nihiser assert that its decision not tolcontinue disbursing trust
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funds to pay for the plaintiff’s continued stay at the Residence‘Inn after two weeks was
made in compliance with the trust agreement, was based on appropriate factors, and was
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not an abuse of discretion. They further assert that whether ROTC abused its discretion
is a question of law.
The payments to the Residence Inn were made from trust principal. The
trust agreement provides that ROTC shall pay "such amounts out of the principal of such
Trust as, in the sole, reasonable discretion of such Trustee, are necessary or advisable for
the health, support, maintenance, comfort and welfare of the Beneficiary."
ROTC and Nihiser rely on the affidavit of Virginia Simons, the trust officer
assigned to the plaintiff’s trust. In her affidavit, Simons stated tI’IIC following. ROTC paid
in advance for the first two weeks of the plaintiff’s stay at the Residence Inn. At the end
of the two—week period, the plaintiff told Simons he wanted to siay at the Residence Inn,
and wanted the trust to continue paying for his stay out of the’ trust principal. Simons
asked the plaintiff to furnish her "with a statement from his Ehealth care providers to
substantiate his need to remain in the hotel from a medical standpoint." The plaintiff did
not comply. Simons then contacted the plaintiff’s doctor, who stated there was no
medical reason for the plaintiff to live in the hotel. The plaintiff told Simons that he did
not want to go back to his apartment because it was dirty. Simons arranged to have a
cleaning service meet with the plaintiff and schedule the cleaning of the apartment. She
also told him that ROTC would not make any more payments to the Residence Inn out of
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the trust principal "in view of the substantial drain on the assets of the trust" and the fact
that she had been informed that his continued stay at the hotel was not medically
necessary. She told both the plaintiff and the management of the hotel that ROTC would
not pay the plaintiff’s hotel bill after December 13. The plaintiff rejected Simons’s offer g
to have the apartment cleaned while he was staying at the hotel. Simons noted that in
1990, ROTC made discretionary principal distributions of $34,174.41. At the end of the
year, the value of the trust estate was $302,054.20. She concluded:
In light of the advice of Mr. Caldwell’s physicians, his health
care provider, and Mr. Caldwell himself, and in light of the
financial status of the Trust, I did not believe it would be
prudent to honor Mr. Caldwell’s request for distribution of
trust principal in order for him to live in a hotel at a cost of
$2,256.70 per month, particularly since Mr. Caldwell rented
an apartment (at a cost of $475 per month) in Denver,
Colorado, which was paid for from the Trust.
ROTC and Nihiser also rely on the plaintiff’s own deposition testimony.
The plaintiff admitted: he wanted to stay at the hotel because his apartment was filthy; he
rejected the cleaning service Simons chose; and he knew that ROTC was not going to pay
for his continued stay at the hotel after December 13.
The plaintiff objects that pSimons’s affidavit is a "series of opinions and
conclusions by an interested witness and is incapable of proving anything as a matter of
law. He asserts that Simons's statements regarding her conversation with the plaintiff’s
doctor and other healthcare providers are inadmissible hearsay. He also asserts his
summary judgment evidence created fact issues regarding his eviction. His summary
judgment evidence consists of: the deposition testimony of Dr. Perlman, who
. recommended that the plaintiff stay at the Residence Inn after he was discharged from the
hospital; evidence that his apartment was a "horrible mess" at the time he was staying at
the hotel; and his own deposition testimony that he was afraid if he returned to the dirty
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apartment he would "lose his leg.’
attorney Joseph Ashmore, who stated that ROTC
' He also relies on the affidavit of his expert, probate
failed to remain adequately informed as to the medical
condition and needs of [the plaintiff] when determining
whether or not to pay for [the plaintiff] to remain in the
Denver Residence Inn after December 27, L
recuperating from his three week hospital stay, and refusing to
continue these payments was a clear abuse of discretion as
trustee and a breach of the duty of reasonable care in
exercising its judgment as trustee.
1990 while
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We agree with ROTC and Nihiser that ROTC’s decision whether to pay for
plaintiff’s continued stay at the Residence Inn was an exercise
of discretion pursuant to
the terms of the trust agreement, and that whether ROTC abused its discretion is a
question of law. A power is considered discretionary if the trustee may decide whether or
not to exercise it. When discretion is given, it means reasonable discretion measured by
the intention of the trustor when construing the whole trust instrument and aided by the
surrounding circumstances.
TRANSACTION GUIDE § 50C.22[3] (1995). In general, a court will
5 HERBERT S. KENDRICK & JOHN
J. KENDRICK, Jr., TEXAS
not interfere with actions
by trustees exercising discretion unless there is a showing of fraud, misconduct, or clear
abuse of discretion. Id.; see also Corpus Christi Bank & Il'ust v. Roberts, 597 S.W.2d 752,
754 (Tex. 1980); Rekdahl v. Long, 407 S.W.2d 339, 344 (Tex. :Appn-Eastland 1966) (a
trustee’s discretion must be reasonably exercised to accomplish
the purpose of the trust
according to the settlor’s intentions and its exercise of such discretion is subject to judicial
review and control), ajfd, 417 S.W.2d 387 (Tex. 1967).
We also agree with ROTC and Nihiser that Simons’s affidavit is competent
summary judgment evidence.
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A summary judgment may be based on unciontroverted
testimonial evidence of an interested witness .f. .
if the
evidence is clear, positive and 'direct, otherwise credible and
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free from contradictions and inconsistencies, and could have
been readin controverted.
TEX. R. Crv. P. 166a(c). The portion of Simons’s affidavit dealing with the plaintiff’s stay
at the Residence Inn meets the requirements of rule 166a(c). It is clear, positive and
direct, otherwise credible and free from contradictions and inconsistencies, and could have
been readily controverted. The plaintiff did not controvert any of the assertions in the
affidavit. Additionally, deposition testimony of Dr. Perlman indicates that there was no
medical reason for the plaintiff to stay at the hotel.
ROTC’s uncontroverted summary judgment evidence reflects that Simons’s
decision not to pay for the plaintiff’s continued stay was neither arbitrary nor capricious,
but was based on "judicious and responsible considerations." We hold the trial court did
not err in granting summary judgment with respect to the plaintiff’s negligence and
fiduciary duty causes of action based on ROTC’s refusal to pay for his continued stay at
the Residence Inn.
(ii) Disclosing information to Marietta
The plaintiff asserts that ROTC and Nihiser breached their fiduciary duty by
revealing certain trust information to Marietta "well knowing there was a serious conflict
between [the plaintiff] and his sister." Marietta had requested specific information about
the trust shortly after Esther’s stroke for "estate-planning purposes," but ROTC denied
this request. 'However, ROTC did give information to Marietta in her role as advisor to
the trust.
ROTC and Nihiser moved for summary judgment on the basis that ROTC
had an express duty to confer with Marietta and an implied duty to confer with Marietta
under paragraphs 10(E) and (F) of the trust agreement. Paragraph 10(E) provides in
part:
It is my request that the Trustee consult with my daughter,
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Marietta Caldwell Schumacher, regarding the more important
matters affecting the Trusts herein established during her
lifetime, or for so long as she is able to do so, . . . and the
matters referred to above shall include, but not be limited to,
a sale of assets or a distribution of principal to a “beneficiary;
provided, however, the decision of the Trustee shall be final
and conclusive as to any such matters, and further that if for
any reason the Trustee is at any time unable to communicate
with my daughter as to an important matter, failure to do so
shall not affect the Trustee’s deCision with respect to that
matter.
Paragraph 10(F) provides:
Notwithstanding the provisions of Paragraph 10(E), in the
instance of a transaction involving an amount eQual to ten
percent (10%) or more of the value of the assets in any trust
created hereunder, including, but not limited to, altransaction
involving a sale, purchase or distribution of principal to a
beneficiary, the Trustee shall obtain the written approval of
my daughter, Marietta Caldwell Schumacher, with respect to
any such transaction, . . . and if my daughteir withholds
approval of any transaction then the Trustee shall forebear
from such transaction and shall be fully protected with respect
to such forbearance and incur no liability in connection
therewith. I
ROTC and Nihiser supported their motion with the affidavits of Simons,
Nihiser, attorney W.J. Williamson, and attorney John Hopwood. .
Simons’s affidavit provides:
7. I was aware that Mr. Caldwell "was at extreme odds"
with this [sic] sister and so stated in a memoranduni dated July
26, 1989. However, Iwas n_ot of the impression then (and am
not now) that the feeling was mutual. In fact, my dealings
with Marietta have consistently led me to believe that
regardless of Mr. Caldwell’s feelings toward her frbm time to
time, she has consistently cared about her brother’s welfare
and happiness. Neither I nor anyone else at River Oaks Trust
Company to my knowledge knew of any reason to believe that
Marietta Schumacher had breached fiduciary duties to her
brother under the Trust or abused her discretion in advising
the Trustee under paragraph 10(E) or in using her veto power
under paragraph 10(F). Even more specifically,‘ I was not
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. aware of any alleged "conflict" created by the will of BF.
Meyers, or even of the existence of BF. Meyers, until I was
informed of this allegation by John Hopwood, the attorney for
River Oaks Trust Company in this matter, in approximately
April or May 1992.
9. On advice of legal counsel I have supplied Marietta
Schumacher with current information about the Trust in her
role as advisor under paragraphs 10(E) and (F). After
consultation with legal counsel in July 1989, I refused her
request for historical information about the Trust for estate
planning purposes for her mother following Esther Caldwell’s
stroke because her request was unrelated to her role as
advisor to the Trust.
The legal advice to which Simons refers was given by Williamson in response to a memo
Simons wrote in July 1989. In this memo, Simons stated:
The trustor’s daughter, Marietta Schumacher, has presented
us with [a] power of attorney and has requested that we
divulge certain information regarding the trust for the purpose
of estate planning for her mother. The trustor's son, Edward
Caldwell, is at extreme odds with his sister, Marietta, and
opposes divulging any information to his sister. Under Article
10(E) of the trust instrument we are required to consult with
Marietta concerning matters affecting the trust.
(Emphasis added.) Williamson responded, noting he had been informed that Marietta
asked for all transactions since creation of the trust:
Under section 113.151 of the Trust Code, trustee is under
duty to furnish beneficiary with statements of accounts since
last accounting or creation of the trust . . . . You would be
justified in advising Ms. Schumacher that you consider that
113.151 defines your duties. Moreover, Ms. Schumacher is
not a beneficiary and, so far as I am informed, has no
authority from the beneficiary to make this request.
In Williamson’s affidavit, he stated that this advice
related only to Ms. Schumacher’s request that she be
furnished with statements showing all transactions since
creation of the trust. No opinion was expressed at that time
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with respect to any situation that may be governed by Section
10 of the trust.
5
My view continues to be that disclosures to Mrs.
.Schumacher are permissible in her role as advisor to the
Trustee under paragraphs 10(E) and (F).
Hopwood stated in his affidavit that he was the first ROTC representative
to learn of the alleged conflict between the plaintiff and Marietta with respect to their
grandfather’s will. He stated he first saw a copy of the will in April or May 1992, and that
"[p]rior to this time [ROTC] did not possess a copy of BF. Meyers’ will and had no
knowledge of any alleged conflict between [the plaintiff] and his sister because of it."
In his affidavit, Nihiser addressed the alleged conflict between the plaintiff
and Marietta over the provisions of their grandfather’s will, and stated that "neither [the
plaintiff], any representative of his, Marietta Caldwell Schumaclier nor any other person
ever raised the existence of such an alleged conflict in my presence, nor am I aware of it
ever having been raised with any representative of River Oaks Ti'ust Company while I was
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employed there."
In his partial response to the motion for summary judgment, the plaintiff
objected to the defendants’ summary judgment evidence; he also noted his expert witness,
Ashmore, stated in his affidavit that ROTC abused its discfetion as trustee by not
inquiring into the nature and extent of any conflict between the plaintiff and Marietta, by
not seeking legal advice, and by not asking the court for guidance before turning
information about the trust over to her. On appeal, the plaintiff asserts that paragraphs
10(E) and (F) of the trust agreement do not "explain away as a matter of law (1) the
extreme conflict between [the plaintiff] and Marietta which R].O.T.C. knew about and
which would disqualify Marietta from having any voice; (2) ROTC attomey[’]s advice[;] or
(3) the wholesale providing of information to Marietta and using her as a weapon against
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[the plaintiff]."20
Simons’s affidavit reflects that while Simons knew the plaintiff was “at odds"
with Marietta, she did not have reason to suspect that Marietta was "at odds" with the
plaintiff, and she knew nothing about the alleged conflict over the provisions of ER .
Meyers’s will until April or May 1992. Nihiser’s affidavit reflects that he was unaware of
the conflict regarding the will. Hopwood’s affidavit reflects that the first time anyone at
ROTC became aware of the will and its provisions was when the plaintiff’s lawyer told
him about it and gave him a copy of the will in April or May 1992. Williamson’s affidavit
reflects that this legal advice to Simons concerned Marietta’s request for "statements
showing all transactions since the creation of the Trust"; it did not concern information
that might be given to Marietta in her capacity as advisor to the trust. These statements
are all uncontroverted. They establish that Simons and Nihiser were not aware of a
conflict between Marietta and the plaintiff that would preclude ROTC from providing her
with information in her capacity as advisor to the trust pursuant to paragraphs 10(E) and
(F) of the trust agreement.
The provisions of the affidavits of Simons, Williamson, Nihiser, and
Hopwood that relate to the alleged conflict between the plaintiff and Marietta all meet
the requirements of rule 166a(c).
The affidavit of the plaintiff’s expert, Ashmore, does not raise a fact issue.
It merely states his conclusion that ROTC breached its fiduciary duty. Legal conclusions
are not proper summary judgment evidence. Ham's v. Vara, Inc., 814 S.W.2d 520, 523
(Tex. App.--Dallas 1991, no writ).
We hold the trial court did not err in granting summary judgment with
20 We do not understand the plaintiff’s complaint that ROTC used Marietta as a
"weapon" against him.
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' On June 29, 1989, Esther had a stroke. On July 20, 1989, Esther executed
a power of attorney naming Marietta as her attomey-in-fact. The power of attorney was
drafted .by Thomas Houghton, who had been Esther’s attorney since 1980. Shortly after
Esther’s stroke, the plaintiff asked Marietta to advance him $8,500 from Esther’s funds to
make the monthly payment for the mica venture. When Marietta refused, the plaintiff
threatened to sue her.
In September 1989, Esther moved from Houston to California. In October
1989, a California court signed an order declaring Esther incompetent and appointing
Marietta as her conservator. On February 9, 1990, in a suit captioned Guardianship of
Esther Meyers Caldwell, N.CM., (the "guardianship proceeding"), Harris County Probate
Judge Pat Gregory signed an order establishing a permanent guardianship of Esther’s
estate. Judge Gregory appointed attorney Robert MacIntyre as guardian of the estate.
The plaintiff, a resident of Wyoming, also maintained an apartment in
Denver. In the fall of 1990, in a Denver hospital, he had surgery on an infected leg.
When he was released from the hospital, he moved into a room at the Residence Inn
hotel in Denver. ROTC had paid in advance for a .two-week stay. The plaintiff did not
want to leave the Residence Inn at the end of the two-week stay because his own
apartment was dirty. Virginia Simons, the trust officer assigned to his account, contacted
a cleaning service and got an estimate to clean the apartment, but the plaintiff refused to
allow the service to clean the apartment. As a result, ROTC refused to pay for the
plaintiff’s continued stay at the Residence Inn. On December 27, the plaintiff returned to
the Residence Inn to discover he had been locked out of his room.
In June 1991, the plaintiffs attorney wrote to ROTC, asserted the 1980
trust had become uneconomical, and asked ROTC to resign as trustee in favor of the
plaintiff’s cousin, Mercedes Loring. According to an ROTC statement of account for the
respect to the plaintiff’s negligence and fiduciary duty causes ofl action based on ROTC’s
disclosure of information to Marietta.
(iii) Self-dealing; coercion; dissipating the trust
support his assertion that
The plaintiff provides no argument or authority to
ROTC breached a fiduciary duty by refusing to produce trust records unless he signed a
release. Additionally, although the plaintiff claims that RO’IEI‘C "threatened him with
Marietta and eviction" and threatened him with exhausting his tirust thrOugh litigation, he
has pr0vided no argument or authority for this assertion. Turther, his only record
references are to his own pleadings, which do not constitute pfroper summary judgment
evidence. We hold that the plaintiff has waived any argument: that ROTC breached a
fiduciary. duty to him by refusing to produce records or by threatening to dissipate his
3
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trust. TEX. R. APP. P. 74(f).
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(iv) ROTC’s refusal to resign as trustee
The trust agreement contained provisions regardiirg the resignation of the
trustee. Under paragraph 7(B) of the agreement, if the trustlbecame uneconomical,21
ROTC could (1) resign and appoint an individual as a successor%trustee, or (2) terminate
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the trust by distributing the remaining corpus to the beneficiary.§ Under paragraph 7(C),
if at any time ROTC was unable or unwilling to continue to act as trustee, the trustor
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(Esther) could appoint a substitute trustee. If the trustor faileifd to appoint a successor
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trustee, ROTC could apply for court appointment of a successor trustee. The trust
agreement contained no mandatory resignation provision, and allowed ROTC to resign at
its discretion.
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In June 1991, before the trust lawsuit was filed, theI plaintiff’s attorney asked
21 The trust agreement does not define "uneconomical."
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ROTC to resign on the basis that the trust was uneconomical. The trust’s assets at that
time totaled $275,413.81. Simons, on behalf of ROTC, wrote to the plaintiff’s attorney
and stated that because the trust was not uneconomical, ROTC could not resign and
appoint a successor trustee. She stated that ROTC would be happy to resign in favor of a
court-appointed successor trustee. The plaintiff did not respond to this offer, but filed
suit in November 1991 to have Loring replace ROTC as substitute trustee. In March
1992, ROTC notified the plaintiff of its intention of resigning as soon as a successor
trustee could be appointed by Esther, her guardian, or the trial court. In April 1992,
ROTC notified Marietta and the plaintiff’s daughters that, unless they objected, it would
accede to the plaintiff’s demands and appoint Loring as successor trustee. Marietta asked
ROTC not to appoint Loring, but to ask the court to appoint a successor trustee. In May
1992, ROTC filed its resignation and application for successor trustee with the court.
ROTC moved for summary judgment on the basis that it complied with the
resignation procedure in the trust agreement. It argued that its decision to resign was
subject to review only for abuse of discretion, and that it did not abuse its discretion with
respect to the requested resignation.
On appeal, the plaintiff argues that his deposition testimony supports the
fair inference that "the continued administration of the Trust by R.O.T.C., both due to its
negligence and exorbitant charges, made the trust not only uneconomical but contrary to
his best interest." We have reviewed the deposition testimony to which he refers. We
find nothing in it to support an inference that the trust was uneconomical or that ROTC
charged an exorbitant fee. In that testimony, the plaintiff complains about ROTC’s
failure to pay for his extended stay at the Residence Inn and its refusal to pay for an all-
terrain vehicle. He was unable to recall other instances when ROTC refused his requests.
He did not know how ROTC calculated its fee or the amount of the fee. Nothing in this
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testimony supports an inference that ROTC’s administration of
his best interest or that the trust was uneconomical.
his trust was contrary to
The plaintiff has not shown that the trial court erlred in granting summary
judgment with respect to the plaintiff’s negligence and fiduciary duty causes of action
based on ROTC’s alleged refusal to resign. ,
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(v) Paying ROTC’s legal fees from the trust
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In his sixth amended petition, the plaintiff asserted that ROTC "negligently
supervised its employees when it permitted ROTC to pay legal fees from [the plaintiffs]
trust because such fees were for the benefit of ROTC and did n:ot benefit [the plaintiff’s]
trust." ROTC moved for summary judgment on the ground that it had a legal right to
charge those fees to the trust.
ROTC’s summary judgment evidence includedl
Hopwood, an attorney who represented ROTC from April 1992
In his affidavit, Hopwood states that he was retained by ROTC
the affidavit of John
to December 11, 1992.
when the plaintiff filed a
motion for contempt against ROTC and its chairman, John Cater, and a motion for
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sanctions against ROTC. Hopwood states:
Plaintiffs motions for contempt and for sanctions Were denied
after a two-day hearing. The substantial majority of the
expenses and attorneys’ fees which have been charged to the
Edward Meyers Caldwell 1980 Trust ($54,591.93): are those
incurred by River Oaks Trust Company in defending against
the Plaintiff’s unsuccessful motions for contempt and for
sanctions and in producing documents for Plaintiff’s attorneys.
Attorney’s fees of John Fox, my predecessor as attorney-in-
charge for River Oaks Trust Company, in the amount of
$3,505.37[,] were also charged to the Trust because such fees
were incurred in protecting the Trust against Caldwell’s suit
for termination. All of the attorneys’ fees and expenses that
have been charged to the Edward Meyers Caldwell 1980 Trust
were charged to the Trust before Plaintzfi°s Second Amended
petition (the first pleading in which any liability claims were
made against River Oaks Trust Company) was filed. j
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(Emphasis added.)
The plaintiff does not controvert ROTC’s assertion that the only legal fees
paid from the trust were those incurred in defending against the plaintiff’s suit to modify
the trust and were not incurred defending against the plaintiff’s tort charges. According to
the plaintiff’s brief, the fees paid from the trust were for attending three depositions and
for defending a motion for contempt and for sanctions. .The hearing on those motions was
in June 1992, and the trial court denied the motions.
The plaintiff asserts that there is a fact issue as to whether the amount of
$55,000 is a reasonable attorney’s fee, but it appears he raises this issue for the. first time
on appeal;22 this argument is therefore waived. See TEx. R. APP. P. 52(a). He also
asserts that the fees were caused by ROTC’s "own intransigence" and that it was not
entitled to charge those fees to the trust--in other words, that it was not reasonable for
ROTC to charge its attorney’s fees to the trust. The plaintiffs summary judgment
evidence on this issue consists of the opinion of his expert, Ashmore, that ROTC abused
its discretion as trustee by paying attorney’s fees from the trust. This conclusory statement
in Ashmore’s affidavit is not proper summary judgment evidence. Han'is, 814 S.W.2d at
523.
Section 114.063 of the Texas Trust Code provides in part:
(a) A trustee may discharge or reimburse himself from trust
principal or income or partly from both for:
(1) advances made for the convenience, benefit, or
protection of the trust or its property[.]
TEx. PROP. CODE ANN. § 114.063 (Vernon 1995). A trustee may charge the trust for
attorney’s fees that the trustee, acting reasonably and in good faith, incurs in defense of
22 The plaintiff has not referred us to any place in the record in which he raised an
objection that the amount of the legal fees was unreasonable. '
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litigation involving administration of the trust.
[W]hether a trustee should be awarded an attomfey’s fee for
defending a suit involving administration of the trust depends
on equitable considerations, . . . each case must be} decided on
its own facts, . . . the success or failure of the trustee in the
litigation may be a matter to be considered buit does not
necessarily determine the trustee’s right to the feie, and . . .
the trustee’s good faith and the reasonableness of} his actions
are matters to be considered . . . . l
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American Nat'l Bank v. Bigs, 274 S.W.2d 209, 222 (Tex. App-Beaumont 1954, writ
ref’d n.r.e.). I
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Here, ROTC incurred the legal fees in question defending against the
plaintiff’s suit to have Loring appointed as successor trustee. fI'he Trust Code allows a
trustee to reimburse itself for expenditures incurred in protecting the trust. Additionally,
most of those fees were incurred in defending against the plaintiff’s unsuccessful motions
for contempt and for sanctions. We conclude the trial court: did not err in granting
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summary judgment with respect to the plaintiff’s claim of negligence regarding the
payment of ROTC’s legal fees from the trust.
B. Conversion
The plaintiff asserted that ROTC and Nihiser converted trust funds when
ROTC reimbursed itself for its attorney’s fees from the trust? On appeal, both the
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plaintiff and ROTC and Nihiser rely on their discussion of attorjney’s fees in the sections
of their briefs dealing with the plaintiff’s negligence causes of actiéon.
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For the reasons stated above in our discussion of the plaintiffs claim of
negligence regarding the payment of ROTC’s legal fees from thfe trust, we hold that the
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trial court did not err in granting summary Judgment on the plaintiff s cause of action for
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conversion. '
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C. Fraud, Duress, and Coercion
(i) Fraud
In his sixth amended petition, the plaintiff alleged that ROTC’s conduct
constituted a "scheme by ROTC to escape liability to [the plaintiff] of causes of action for .
damages arising from wrongs by ROTC and Nihiser." This scheme "relied upon false
representations and concealments of material facts" that "would have affected [the
plaintiff’s] ability to interest lawyers in helping him pursue his claim for damages." The
plaintiff asserted he reasonably relied on the misrepresentations and omissions and "has
been fraudulently prevented from asserting his causes of action successfully." Further, he
argues that "[b]y taking advantage of [the plaintiffs] health, ROTC has placed him in a
position where his health hampers him from effectively assisting his counsel in pursuing his
causes of action against ROTC."
ROTC and Nihiser moved for summary judgment on the fraud claim on the
grounds that the filing of the plaintiff’s lawsuit defeated his claim that he was defrauded
Out of a cause of action. On appeal, the plaintiff contends that "he has been affected in
aiding his lawyers because his ill health was caused by Defendants, and has otherwise been
damaged," and that ROTC and Nihiser were not entitled to summary judgment because
they did not disprove this assertion. We do not understand how this assertion relates to
his fraud claim. However, we agree with ROTC and Nihiser that because the plaintiff
filed his lawsuit, he was not defrauded out of a cause of action. We hold the trial court
did not err in granting summary judgment in favor of ROTC and Nihiser on the plaintiff’s
fraud claim.
(ii) Duress and coercion
The plaintiff asserted that ROTC, Nihiser, and Fox schemed to prevent him
from asserting his causes of action by threatening "imminent hart [sic] or injury" to his
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business or property, that this coercion overcame his will and cai-used him to do things he
otherwise would not do, and "placed him in a position where his ‘health hampers him from
assisting his counsel in pursuing his causes of action." ROTC; and Nihiser moved for
summary judgment on the basis that ROTC had a legal right or duty to take the acts
about which the plaintiff complained.
Duress is the threat to do some act that the party: threatening has no legal
right to do. Brown v. Cain Chem. Inc., 837 S.W.2d 239, 244 (Tex. App.--Houston [1st
Dist.] 1992, writ denied). The threat must be of such charactger as to destroy the free
agency of the party to whom it is directed. Id. It must overcome his will and cause him to
do that which he would not otherwise do, and which he was not legally bound to do.
Matthews v. Matthews, 725 S.W.2d 275, 278 (Tex. Apps-Houston [1st Dist.] 1986, writ
ref’d n.r.e.). The restraint caused by such threat must be imrriinent, and must be such
that the person to whom it is directed has no present means of protection. Id. Any
coercion of another, either mental, physical, or otherwise, causing that person to act
contrary to free will, may constitute duress. Pierce v. Estate of Haverlah, 428 S.W.2d 422,
425 (Tex. App.--Tyler 1968, writ ref’d n.r.e.). i
Here, the plaintiff asserts that the following conduct of ROTC or its agents
gives rise to his causes of action for duress and coercion: ( 1) allowing the plaintiff to be
evicted from the Residence Inn; (2) disclosing information to Marietta; (3) refusing to
resign as trustee; (4) "self-dealing by refusing to produce records of [the plaintiff’s] trust";
and (5) "using its power to coerce and threaten [the plaintiff] and dissipate the trust."
We have already held that the trial court did not ‘err in granting summary
judgment with respect to the plaintiff’s negligence and fiduciary duty causes of action
based on ROTC’s refusal to pay for his continued stay at the Residence Inn, the
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disclosure of information to Marietta, and its- alleged refusal to resign. We held that the
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plaintiff waived any argument with respect to his claims that ROTC was self-dealing by
refusing to produce trust records and was using its power to coerce and threaten him and
dissipate the trust.
The plaintiff has not provided any argument regarding the conduct about
which he complains in addition to the argument in the section of this brief on negligence
and breach of fiduciary duty. Additionally, we note that nothing prevented the plaintiff
from asserting his causes of action; he filed his laWsuit.
We conclude the trial court did not err in granting summary judgment in
favor of ROTC and Nihiser with respect to the plaintiff’s duress and coercion claims.
D. Conspiracy to defraud, coerce, and harm the plaintiff
An actionable civil conspiracy is a combination by two or more persons to
accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means.
The essential elements are: (1) two or more persons; (2) an object to be accomplished;
(3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt
acts; and (5) damages as a proximate result. Massey v.Armco Steel Co., 652 S.W.2d 932,
934 (Tex. 1983).
The plaintiff did not plead a cause of action for conspiracy against ROTC
and Nihiser in his sixth amended petition. He did include a conspiracy cause of action in
his seventh amended petition, which was not considered by the trial court at the summary
judgment hearing. The plaintiff alleged a cause of action for conspiracy against Marietta
and David in his third amended petition in the family lawsuit. In this petition, he asserted
that ROTC and Nihiser joined Marietta and David in the conspiracy to harm the plaintiff
and defraud him of his inheritance.
Although they asserted in their motion for summary judgment that the
plaintiff had not properly pled this cause of action against them, ROTC and Nihiser
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addressed the conspiracy claim in the motion, arguing that the ‘conduct about which the
plaintiff complained was in conformance with the discretionaryjpowers bestowed by the
trust, and there was, therefore, no unlawful act. They also relied on the deposition
testimony 'of Dr. Dermann, who stated that the plaintiff was "a stroke waiting to happen,"
and evidence of the plaintiff’s hypertension, diabetes, and alcohialism to establish that its
alleged acts or omissions did not cause the plaintiff’s 1991 stroke or affect his ability to
recover from the stroke. i
In his summary judgment response, the plaintiff asserted only that "fact
issues exist on conspiracy to defraud" and that the defendants’ summary judgment
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ev1dence does not negate conspiracy to defraud as a matter of law. On appeal, the
plaintiff discusses the elements of conspiracy, argues that his petition alleged a cause of
action for conspiracy, and asserts that "R.O.T.C. and Nihiser do not seriously try to
support summary judgment of this cause of action." He steites there is a fact issue
concerning whether stress caused his stroke. The plaintiff provides no argument to
support these contentions; significantly, he does not address' ROTC’s assertion that
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because it committed no unlawful acts, there could be no cbnspiracy. We hold the
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plaintiff has waived this issue. Tax. R. APP. P. 74(f).
E. Intentional infliction of emotional distress
In their motion for summary judgment, ROTC and Nihiser noted that the
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plaintiff’s sixth amended petition did not formally allege a cause of action for intentional
infliction of emotional distress. They argued, however, that if his allegations were deemed
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to raise this cause of action, he could not establish the elemerits of the tort because (1)
ROTC was "totally within its legal rights in taking all” the actioris about which the plaintiff
complained, and (2) as a matter of law, the acts did not rise tEO the level of extreme and
outrageous conduct necessary to support a claim for intentional infliction of emotional
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distress.
On appeal, the plaintiff asserts his petition was suficient to allege a cause of
action for intentional infliction of emotional distress, and that "Defendants’ summary _
judgment evidence did not establish as a matter of law that such conduct was not extreme
and outrageous . . . .
The plaintiff presents no argument or authority with respect to ROTC’s
contention that he could not establish the elements of this tort because ROTC was legally
entitled to take the actions about which he complained. See Wornick v. Casas, 856
S.W.2d 732, 735 (Tex. 1993). We conclude the plaintiff has waived any error.
F. Conclusion: point of error one
We overrule point of error one.
3. The summary judgments in favor of David and Marietta
In points of error two and three. the plaintiff complains that the trial court
erred in granting summary judgment in favor of David and Marietta. He asserts they did
not disprove any of his causes of action or prove any affirmative defense.
In his third amended petition in the family lawsuit, the plaintiff asserted that
Marietta and David, aided by Houghton and Shields,
entered into a conspiracy to harm [the plaintiff] and to
defraud him of his potential inheritance. David acted as
Marietta’s confidant, advisor and sub-agent. He directed
most of the activities of Houghton and Shields. They began a
course of conduct in which they sought every opportunity to
create mental anguish for [the plaintiff] and place unnecessary
pressure and stress upon him.
Although ROTC was not named as a defendant in this petition, the plaintiff asserted that
in 1990, ROTC became "an active participant in the scheme to place undue pressure on
[the plaintiffj." The petition alleged causes of action for negligence, intentional infliction
of emotional distress, civil conspiracy, duress and coercion, and breach of fiduciary duty.
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quarter ending June 31, 1991, the 1980 trust’s assets totaled $275,413.81. Simons
responded that, under section seven of the trust agreement, ROTC could only resign and
appoint an individual successor trustee if the trust had become uneconomical.2 Simons
went on to state:
The trust is currently not of an uneconomical size; therefore,
River Oaks Trust Company will not be able to accommodate
Mr. Caldwell’s request. We will, however, be happy to resign
in favor of a court appointed successor trustee :as provided
under Section 7(c) of the trust agreement.
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2 Section seven of the trust agreement provides: i
7. The designation and appointment of any substitute or
successor Trustee of a Trust hereunder shall be made as
follows:
(A) Any Trustee may resign or refuse to act
hereunder without court action by giving at least thirty (30)
days written notice to each income beneficiary . . . L
(B) If it should become uneconomidal for the
corporate fiduciary acting as Trustee hereunder to continue so
to act because of the value of the Trust Estate of such Trust,
such Trustee may, after giving the notice provided for in
Paragraph 7(A) hereof, (i) resign as Trustee andl appoint an
individual (other than Trustor) as successor Trustee, or (ii)
terminate such Trust by complete distribution to the income
beneficiary of such Trust, if such income beneficiary is not
under a legal disability.
(C) Except as otherWiSe provided in Paragraph 7(B)
hereof, if at any time any corporate fiduciary named or acting
hereunder is unable or unwilling to continue to act as Trustee
hereunder, Trustor may appoint within thirty (30) (days of the
receipt of written notice of such refusal or resignation, a
successor or substitute Trustee hereunder (other than
Trustor), or if such Trustor fails to so appoint a successor or
substitute Trustee, such corporate fiduciary or any' beneficiary
of a trust created hereunder may apply to a court of
coxnpetent jurisdiction for the-appointment of a Trustee of
such Trust.
3
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3
The plaintiff alleged the following acts as the bases for his causes 1of action:
(1) After Esther’s stroke, Marietta "secretly entered Esther’s
safe deposit box."
..(2) Marietta had Houghton draft the power of attorney
signed by Esther, and concealed the preparation and
execution of the power of attorney from the plaintiff.
. . l .
(3) After Marietta was appomted as Esther’s attorney in fact,
she refused to provide funds for the mica venture. '
(4) Marietta, David, and Houghton poisoned the relationship
between the plaintiff and his daughters by trying to force the
plaintiff to relinquish his inheritance to them. I
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(5) Marietta, David, and Houghton tried to implicate the
plaintiff in a scheme to cheat on Esther’s taxes. 1
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(6) Houghton tried to trick the plaintiff into signing a
promissory note for $1,535,000, to be secured by his
inheritance, even though the plaintiff did not owe this money.
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(7) In 1989, after Esther’s' stroke, Marieitta sought
information about the 1980 trust from RO'EC for the
purported purpose of "estate planning" for her mother,
despite the fact that there was a conflict between lthe plaintiff
and Marietta. {
(8) Marietta and David "encourag[ed] and coopefat[ed]" with
ROTC in a lengthy series of acts.
David and Marietta moved for Summary judgmth on the basis that the
causes of action based on the specific acts alleged in (1) through (7) were barred by a
two-year statute of limitations. The plaintiff filed the family lawsuit on August 25, 1992.
A It is uncontroverted that the acts alleged in (1) through (7) occurred in 1989.
The plaintiff asserts on appeal that he alleged a conspiracy that began in
1989 and continued even after the family lawsuit was filed. 'However, he presents no
argument or authority regarding Marietta and David’s affirmative defense of limitations
with respect to the acts alleged in (1) through (7). We therefore hold that the plaintiff
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has waived any complaint with respect to the summary judgments in favor of Marietta and
David with respect to the acts alleged in (1) through (7) on the following causes of action:
negligence, intentional infliction of emotional distress, duress and coercion, and breach of
fiduciary duty.
With respect to these tort causes of action, on appeal the plaintiff alleges,
first, that the limitations defense is not applicable to events that occurred after August
1990. We agree. The plaintiff also asserts that David and Marietta did not prove as a
matter of law that they owed him no duty. Although the plaintiff asserted a number of
bases for this duty in his third amended petition, on appeal he states that a duty existed
because (1) David and Marietta "let Esther believe they would look after" the plaintiff,
and (2) "Marietta and David assumed control over [the plaintiff] through the 1980
Edward Caldwell Trust."
Both Marietta and David moved for summary judgment on the plaintiff’s
negligence and breach of fiduciary duty claims in part on the ground that they owed the
plaintiff no duty. On appeal, the plaintiff asserts: "It is true that siblings owe no fiduciary
duty to each other as a general rule, but under the facts. alleged in this case . . . such a
duty existed." The plaintiff has presented no authority for his assertion that, under the
circumstances alleged, David and Marietta owed him a fiduciary duty. The plaintiff also
asserts, again without citation to any authority, that Marietta had a fiduciary duty to' him
because "she used her power in ways that affected [the plaintiff], despite being in a
conflict of interest situation, including using her power as guardian of their mother’s estate
to sue [him]." Because he has not cited any authority to_ support his contention that
Marietta and David owed him a fiduciary duty, he' has waived any error with respect to
the summary judgments on the cause of action for breach of fiduciary duty.
This portion of the plaintiff’s brief is almost incomprehensible. It seems to
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address only fiduciary duty; the plaintiff does not specifically argue that Marietta and
David also owed him a duty of care. The plaintiff cites Greater Houston Transportation
Co. v. Phillips, 801 S.W.2d 523 (Tex. 1991), a negligence case, for the proposition that
foreseeability of the risk is the foremost consideration in determining whether a defendant
was under a duty. Id. at 525. However, he cites this case in a paragraph that discusses
fiduciary duty. The plaintiff does not explain how this proposition relates to this case
other than to conclude, "David and Marietta owed a duty to Edward." He provides no
other argument or authority to establish that Marietta and David, did not prove, they owed
him no duty of care. We conclude that the plaintiff did not establish the trial court erred
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in granting summary judgment on his negligence cause of action.
With respect to his cause of action for coercion, the plaintiff states:
"Defendants are liable for coercion, even though they did not successfully bend [the
plaintiff’s] will to give up his inheritance, because he was damaged by their coercion." He
follows this statement with citation to two cases, but provides absolutely no argument for
this contention. The plaintiff has waived any error with respect to the summary judgments
in favor of Marietta and David on the ground of conspiracy. TEX; R. APP. P. 74(f). ‘
Finally, the plaintiff states the following: "Defendants’ conduct was
outrageous enough to trigger the cause of action for intentional infliction of emotional
distress." He then refers the reader to his legal discussion of this tort under his point of
error concerning the summary judgments in favor of ROTC and Nihiser. Again, the
plaintiff has provided absolutely no argument to support this bald statement. The plaintiff
has waived any error with respect to the summary judgments in favor of Marietta and
David on the ground of intentional infliction of emotional distress. TEX. R. APP. P. 74(f).
The plaintiff’s cause of action for civil conspiracy is also based on acts (1)
through (8) described above. He asserted that each of these acts was an overt act in
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furtherance of the conspiracy to harm him and defraud him of his expected inheritance.
The plaintiff asserts that Marietta’s motion for summary judgment does not address his
assertions regarding her alleged cooperation with ROTC in a long series of acts. The
plaintiff also asserts that, to the extent Marietta and David complain in their summary
judgment motion about deficiencies in the plaintiff’s third amended petition, the motions
are "a special exception in disguise" and cannot support summary judgment.
We agree with the plaintiff that summary judgment in favor of Marietta and
David on the conspiracy cause of action was improper. Marietta and David did not
address the plaintiff’s allegations that they encouraged and cooperated with ROTC in the
plaintiff’s lengthy list of allegedly tortious acts. Instead, Marietta stated in her motion that
because the plaintiff "enumerates no evidence of such encouragement and cooperation by
[Marietta] . . . Plaintiff’s conclusory allegations cannot withstand summary judgment."
Both Marietta and David assert in their motions that the plaintiff’s allegations of
conspiracy are "not clearly specified."
"[T]he very essence and import of special exceptions is to force clarification
of and specification in pleadings that are vague, indefinite, or uncertain. Subia v. Texas
Dep't of Human Serv., 750 S.W.2d 827, 829 (Tex. App.--El Paso 1988, no writ).
Summary judgment based on a pleading deficiency is proper if a party has had an
opportunity by special exception to amend and fails to do so, or files a further defective
pleading. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1984); see also Massey,
652 S.W.2d at 934. Here, the plaintiff was not provided an opportunity to replead. Thus,
the trial court improperly granted summary judgment in favor of Marietta and David on
the issue of conspiracy.
We sustain points of error two and three with respect to the plaintiff’s cause
of action for conspiracy. We overrule points of error two and three with respect to the
plaintiff’s remaining causes of action'.23
The 1993 Appendix
In his fourth point of error, the appellant asserts! the trial court erred in
refusing to consider the 1993 Appendix.
David filed his motion for summary judgment on July 9, 1993. ROTC and
Nihiser filed their motion for summary judgment on July 21. Marietta filed her motion on
August 2. The summary judgment hearing was set for August 16, 1993.
On August 12, the plaintiff filed summary judgment evidence he called the
1993 Appendix. The 1993 Appendix consisted of documents and deposition excerpts. It
also included a "Sequence of Events" that was apparently drafted by one of his lawyers.
The 1993 Appendix was unverified.
On August 13, ROTC filed a motion to strike the! 1993 Appendix. ROTC
stated that the 1993 Appendix was untimely and that ROTC could not adequately respond
to it and would be prejudiced by the court’s consideration of it.
At the August 16 summary judgment hearing, the plaintiff’s lawyer filed a
motion for leave to file the 1993 Appendix or, alternatively, for a continuance. In this
motion, he asserted that the July 29 deposition of MacIntyre reflected fraudulent conduct
on the part of MacIntyre and Judge Gregory, and showed that bbth MacIntyre and Judge
Gregory had been "compromised" by the defendants. The plaintiffs lawyer also filed an
affidavit to authenticate the evidence in the 1993 Appendix. The trial court denied the
plaintiff’s motion and refused to consider the 1993 Appendix in ruling on the summary
judgment motions.
23 The plaintiff asserts that he alleged a cause of action for fraud in his third amended
petition. He did not specifically allege this tort; he alleged a conspiracy to defraud.
Moreover, although he asserts on appeal that Marietta and David were guilty of
fraud, his brief contains no argument addressing this cause of action.
3
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7 ’The plaintiff asserts the trial court abused its discretion in refusing to
consider the 1993 Appendix because he had good cause for the late filing.
Texas Rule of Civil Procedure 166a(c) provides that, except upon leave of
court, ".the adverse party, not later than seven days prior to the day of the hearing may
file and serve opposing affidavits or other written response. The granting or denial of a
motion to late-file summary judgment responses and evidence is within the sound
discretion of the trial court. White v. Independence Bank, NA., 794 S.W.2d 895, 900
(Tex. App.--Houston [lst Dist.] 1990, writ denied). The trial court’s ruling will not be
disturbed absent an abuse of discretion. Id. We will not reverse the trial court’s
discretionary ruling unless the record clearly shows that the trial court disregarded the
rights of a party. Diaz v. Rankin, 777 S.W.2d 496, 500 (Tex. App.--Corpus Christi 1989,
no writ).
The plaintiff asserts he had good cause for his late filing because the 1993
Appendix contained no surprises and did not interject anything new. He states that the
1993 Appendix consisted of deposition excerpts and documents obtained in discovery that
were "known to the defendants. He additionally asserts: the three pending motions for
summary judgment were complex, and he needed more time to respond; his lawyers’ time
was "challenged" by ongoing discovery; he gave notice of the evidence at least six days
before the hearing; the court had considered this evidence at the August 12 hearing; no
defendant asked for more time to "deal with" the evidence; and the 1993 Appendix and
Sequence of Events show genuine issues of fact.
The only reasons asserted by the plaintifi that might possibly indicate good
cause for the untimely filing are his assertions that the pending motions for summary
judgment were complex, and that his lawyers were "challenged" by ongoing discovery.
However, these circumstances, by themselves, are not sufiicient to persuade us that the
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trial court abused its discretion by refusing to allow him to file the 1993 Appendix.
We overrule point of error four.
i
The Seventh Amended Petition j
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'In point of error six, the appellant asserts the trial .court erred in refusing to
consider his seventh amended petition in deciding the motions for summary judgment. He
filed his seventh amended petition on August 16, the date of the summary judgment
hearing.
Texas Rule of Civil Procedure 63 provides that pleadings may be amended
within seven days of trial only with leave of court; leave shall be granted unless "there is a
showing that such filing will operate as a surprise to the other paity." A trial court has no
discretion to refuse an amendment unless the opposing party presents evidence of surprise
or prejudice, or the amendment asserts a new cause of action or defense, and the
opposing party objects to the amendment. Chapin & Chapitt‘, Inc. v. Texas Sand &
Gravel Co., 844 S.W.2d 664, 665 (Tex. 1992).
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Here, ROTC objected on the basis that, among other things, the seventh
amended petition added new allegations. The seventh amendedlipetition added the cause
of action of intentional infliction of emotional distress, and incllided new allegations, one
of which was that Judge Gregory and MacIntyre had conspired with ROTC. We hold that
the trial court did not err in refusing to consider the seventh amended petition.
We overrule point of error six.
Shields’ and Fox’s Motions to Dismiss;
Both Shields and Fox have filed motions to dismiss. Both argue that the
plaintiff voluntarily dismissed them when he filed amended pleadings in which he did not
name them as defendants.
The trial court granted ShieldS’s special appearance and Fox’s motion for
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summary judgment on January 29, 1993, and denied Fox’s motion to sever. On April 5,
the plaintiff filed his third amended petition, which did not name Shields as a defendant
or seek relief from her. On August 16, the plaintiff filed his seventh amended petition. In
that petition, in which he incorporated the parties and claims from both the family and the _
trust lawsuits, he did not name either Shields or Fox as a defendant. In fact, he
specifically stated that Shields is not named as a party defendant. Additionally, the
seventh amended petition does not contain any allegation that Fox committed any
negligent or wrongful acts.
An amended petition completely supersedes all previous pleadings. Tax. R.
Crv. P. 65; IGrk v. Garza, 875 S.W.2d 24, 24 (Tex. App.--Houston [lst Dist.] 1994, writ
denied); Direkly v. ARA Devcon, Inc., 866 S.W.2d 652, 655 (Tex. App.--Houston [lst
Dist.] 1993, writ dism’d w.o.j.). Omitting a defendant in an amended petition operates as
a dismissal of that party. Webb v. Jams, 488 S.W.2d 407, 409 (Tex. 1972); IGrk, 875
S.W.2d at 24.
In Radelow-Giuens Real Property Management v. Pamex Foods, 735
S.W.2d 558 (Tex. App.--Dallas 1987, writ ref’d n.r.e.), the trial court granted a summary
judgment for one defendant, Pamex. After the trial court granted the summary judgment
_ but before trial, Radelow-Gittens filed an amended petition in which it omitted Pamex as
a defendant. Although the amended petition included the name Pamex in the style of the
case, it did not contain any claim against Pamex. Radelow-Gittens proceeded to trial
against the remaining defendant and lost. After final judgment was entered, Radelow-
Gittens appealed the summary judgment in favor of Pamex. Id. at 559. The court of
appeals dismissed the appeal, holding that when Radelow-Gittens amended its petition, it
abandoned all claims against Pamex, and waived any error by the trial court in rendering
the summary judgment in favor of Pamex. Id; at 560.
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This case is similar to Radelow-Gittens. the trial court granted
Shields’s special appearance and Fox’s motion for summary judgments, the plaintiff filed
an amended pleading that abandoned all claims against Shields and Fox and that
specifically stated that Shields was not a named defendant.
1
We hold that the plaintiff abandoned all claims against Fox and Shields
when he filed his seventh amended petition, and that he has waived error, if any,
committed by the trial court in granting Shields’ special appearaénce and Fox’s motion for
i
summary judgment. We grant the motions to dismiss filed by Shields and Fox. Because
we grant Fox’s motion to dismiss, we do not rule on the cross-point in his brief asking us
to impose sanctions against the plaintiff for bringing a frivolous appeal. We also overrule
plaintiff’s point of error seven (asserting the trial court erred in granting summary
|
judgment in favor of Fox), point of error eight (asserting the trial erred in granting
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Shield’s special appearance), and that portion of point of error nine (asserting that the
plaintiff was denied due process because Judge Gregory was coriistitutionally disqualified)
that relates to Shields and Fox.
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The Final Accounting )
On May 20, 1992, ROTC filed its "Resignation of Trustee, Application For
Appointment of Successor Trustee and Application for Approval of Final Account" in
which it gave notice of its resignation as trustee effective upon:‘ court appointment of a
successor trustee and asked the trial court to approve its final accounting. ROTC filed a
series of supplementary accounts, two of which reflected the payment of approximately
$53,000 in attorney’s fees paid to Hopwood’s law firm.
On October 21, 1993, the day of the hearing on IROTC’s accounting, the
plaintiff filed an objection to the final accounting and supplemental accountings in which
he generally denied each allegation and objected to the payment from trust principal of
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trustee’s fees and attorney’s fees. He also objected to ROTC’s request that it be released
from all rights, duties, and liabilities associated with the trust because of ROTC’s alleged
negligence, breach of fiduciary duty, commission of other unidentified intentional torts,
and participation in a conspiracy to defraud him.
At the hearing, the plaintiff attempted to present evidence regarding the
issues of ROTC’s charging attorney’s fees to the trust and of ROTC’s alleged bad faith,
asserting that the expenditures for trustee’s fees and attorney’s fees should not be
approved by the court. The trial court refused to allow the plaintiff to revisit these issues,
holding that they had been thoroughly briefed and ruled on in the summary judgment
proceeding.
On appeal, the plaintiff asserts that the trial court erred "in deciding that
[ROTC’s] accounting and request for discharge as trustee . . . were decided by summary
judgment because there was no such ground for summary judgment stated in" the motion
for summary judgment. The trial court did not grant summary judgment on these matters;
it approved ROTC’s accounting and request for discharge, and overruled the plaintiff’s
objections to the payment of trustee’s fees and attorney’s fees from the trust on the basis
that these issues had been decided when it granted ROTC’s motion for summary
judgment. We hold that the trial court did n0t err in granting ROTC’s final accounting.
.The plaintiff also asserts the trial court erred in making the following
rulings: denying him a jury trial or evidentiary hearing on his objections to the final
accounting; overruling his objections to the payment of trustee’s fees and attorney’s fees
from the trust; and not considering the 1993 Appendix in ruling on the final accounting.
The plaintiff has provided no argument or authority for these contentions, and has
therefore waived any complaint. See TEx. R. APP. P. 74(f).
We overrule points of error 15 and 16.
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On November 20, 1991, the plaintiff filed suit against ROTC (the "trust
lawsuit"), seeking to have ROTC replaced as trustee. ROTC hired attorney John Fox to
represent it in this lawsuit. At some point (probably in 1992),3 the plaintiff amended his
petition to include Nihiser and Fox as defendants and to allege various tort causes of .
action against all three defendants.
I In October 1991, the plaintiff had a stroke and was hospitalized. He was
released on November 22, and moved to a two-bedroom apartment in the Brooks
Towers, the apartment building in which he already maintained a one-bedroom
apartment. In January 1992, Sirnons wrote to the plaintiff and told him that although
ROTC had paid two-months rent on the apartment, it had not approved further
payments:
In order to consider future disbursements of this nature, we
will require a complete evaluation of your current situation.
Furthermore, we will require written authorization from your
sister, Marietta Schumacher.l4l The suite, combined with your
regular monthly rent, in addition to sitter, physical therapists,
utility bills on both apartments, and other various expensesl5l
are adding up to a large enough amount that it may be more
economical for you to consider moving into a retirement
center or other similar facility.
Until' such time as we have evaluated the situation and
obtained your sister’s approval of any action taken, we will not
distribute funds to cover rental on the suite.
Despite this letter, ROTC paid for two additional months rent on the two-bedroom
3 The record contains only the plaintiff’s original petition and sixth amended petition
in the trust lawsuit.
4 It is not clear from the record whether ROTC actually sought the written
authorization from Marietta.
5 All of these expenses were paid by ROTC from the trust directly to the party to
whom the expense was owed.
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Conclusion j
We grant the motions to dismiss filed by Fox and Shields. We affirm the
summary judgments in favor of ROTC and Nihiser. We reverse lhe summary judgment in
favor of .Marietta and David on the issue of conspiracy. We affirm the summary
judgments in favor of Marietta and David on the remaining causes of action. We affirm
the final accounting.
/s/ Michol O’Coringr
MICHOL O’CONNOR
_ 4
Justice ‘
I
Justices Cohen and Wilson also sitting.
Do not publish. TEX. R. APP. P. 90.
Judgment rendered and opinion delivered MAY " 2 1395
True Copy Attest:
/ g /\
Margie T mpson
Clerk of Court ' ‘
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n 7 Conclusion
We grant the motions to dismiss filed by Fox and Shields. We affirm the
summary judgments in favor of ROTC and Nihiser. We reverse the summary judgment in
favor of Marietta and David on the issue of conspiracy. I We affirm the summary
judgments in favor of Marietta and David on the remaining causes of action. We affirm
the final accounting.
/s/ Michl O’Connor
MICHOL O’CONNOR
Justice
Justices Cohen and Wilson also sitting.
Do not publish. TEX. R. APP. P. 90.
Judgment rendered and opinion delivered HAY " 2 ‘995
True Copy Attest:
,{fl
Margie Thompson
Clerk of Court
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apartment, and was able to arrange for the plaintiff to move in’éo another, less expensive
two-bedroom apartment in Brooks Towers (on the same floor as his one-bedroom
apartment). ROTC paid the rent on both apartments from the tirust.
In March 3, 1992, ROTC notified the plaintiff of its intention to resign as
trustee as soon as a successor trustee could be appointed by Estiher, her guardian, or the
court. ROTC sent copies of this letter to the plaintiff, Marietta, Esther, and Esther’s
guardian. ROTC also later notified the plaintiff’s daughters, the contingent
remaindermen of the trust, of its intent to resign.
On April 2, 1992, ROTC notified Marietta andI the plaintiff’s daughters
that, unless they objected, it would appoint the plaintiff’s cousin, Mercedes Loring, as
successor trustee. In a letter written on behalf of herself and her nieces, Marietta asked
ROTC not to appoint Loring, but to petition the court to appoii’lt a successor trustee. In
May, ROTC filed its "Resignation of Trustee, Application for Successor Trustee and
Application for Approval of Final Account." I
On August 25, 1992, plaintiff filed a lawsuit in Bra!zoria County (the "family
lawsuit"). The appellate record does not contain a copy of his original petition in the.
family lawsuit, but according to the plaintiff’s brief, the original defendants in the family
lawsuit were Marietta, David, Thomas Houghton, Merrill Shields, Compass Bancshares,
Inc.,6 Charles McMahen,7 and "others." The trial court granted Shields’ special
appearance. The plaintiff nonsuited Houghton and Compass Bancshares, and apparently
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6 Although it is not entirely clear from the record or plaintifi’s brief, it appears that
ROTC and Compass Bank are subsidiaries of Compass Bancshares, which is, itself,
a subsidiary of Central Bancshares of the South, Inc. The plaintiff asserts in his
brief that he filed suit against these entities because Compass Bancshares and
Central Bancshares "refused to stop R.O.T.C.’s activities."
7 McMahen was chairman of the board of Compass Bancshares, Inc.
omitted McMahen and the "others" from later amended petitions. In his third amended
petition in the family lawsuit, only Marietta and David are named as defendants.
On September 4, 1992, ROTC filed an original third-party petition in the
trust lawsuit naming Marietta and David as third-party defendants. ROTC asserted that
in the family lawsuit, the plaintiff alleged "that the Third Party Defendants and others are
liable to him for, inter alia, the exact same damages which he claims against [ROTC] in
this cause."
The trust lawsuit was pending in Judge Gregory’s court, Harris County
Probate Court Number Two. On September 8, 1992, both ROTC and Marietta and
David filed motions in that court to transfer the family lawsuit pending in Brazoria County
to Harris County. On September 25, Judge Gregory granted the motions and transferred
the family lawsuit to his court. On December 18, Judge Gregory granted Marietta’s
motion to consolidate the trust and family lawsuits.
As of December 18, 1992, Compass Bancshares was still a defendant in the
family lawsuit. At a hearing on December 18, Judge Gregory said to the plaintiff’s lawyer:
In all fairness, Mr. Moore, I think it’s incumbent upon me as
a trial judge to disclose to you I have a banking relationship
with Compass Bank. It would not affect my judgment in any
manner, but I believe it is incumbent by the Canons of Ethics
that I disclose that to you.
Moore replied, "Well, with the representation that it’s not going to affect your judgment
in this case [sic]."
On January 29, 1993, Judge Gregory sustained Merrill Shields’ special
appearance, and granted Fox’s motion for summary judgment. On February 5, the
plaintiff nonsuited Houghton and Compass Bancshares, Inc.
At this time, the guardianship proceeding was also pending in Judge
Gregory’s court. On February 5, 1993, “Judge Gregory recused himself from the
consolidated trust-family lawsuits. The record does not regflect why Judge Gregory
recused himself, but in his brief, the plaintiff asserts that the judge recused himself "after
it was pointed out to him that his g 1% meetings with the guardian of Esther’s estate
and representatives of David and Marietta Schumacher meant that he would be a witness
[in the trust-family lawsuits]." Judge Gregory transferred the coinsolidated cases to Harris
County Probate Court Number One, over which Judge John Hutchison presided. The
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alleged ex parte meetings took place in the guardianshipjproceeding, not in the
consolidated trust-family lawsuits.
In June 1993, the plaintiff sought to depose Judgef: Gregoryvand served him
with a subpoena duces tecum. He wanted to depose Judge Gregory to investigate the
judge’s banking relationship with Compass Bank. The plaintiff also noticed the deposition
of Charles McMahen, chairman of the board of Compass Bancshares, Inc., in his
individual capacity and as custodian of Compass Bank records. fOn June 25, 1993, Judge
Hutchison granted the motions to quash and motions for protective orders filed by Judge
Gregory and McMahen.
In August 1993, the plaintiff filed motions for reconsideration of the
following rulings: granting of Fox’s motion for summary judgment; the granting of
Shields’s special appearance; and the protective orders granted in favor of Judge Gregory,
McMahen, and Compass Bancshares. Judge Hutchison denied these motions.
The motions for summary judgment of Marietta, David, and ROTC and
Nihiser were set for a hearing on August 16, 1993. On August 12, the plaintiff filed
summary judgment evidence he called the "1993 Appendix," which contained a "Sequence
of Events" (apparently drafted by one of the plaintiff’s attorneys) and 124 exhibits. The
1993 Appendix totalled 384 pages. At the summary judgment fhearing, Judge Hutchison
denied the plaintiff’s motion for consideration of that evidence and denied his request for
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a continuance. ‘At the hearing, the plaintiff also presented a seventh amended petition.8
Judge Hutchison refused to consider it for purposes of the summary judgment hearing.
Judge Hutchison denied all of the plaintiff’s objections to the evidence submitted in
support of the defendants’ motions for summary judgment and granted the motions for
summary judgment filed by Marietta, David, and ROTC and Nihiser.
On October 21, 1993, Judge Hutchison conducted a hearing on ROTC’s
"Resignation of Trustee, Application for Successor Trustee and Application for Approval
of Final Account" and all supplemental accountings filed. Judge Hutchison overruled the
plaintiff’s objections to the final accounting and supplemental accountings, held that the
1980 trust was uneconomical, and ordered the trust dissolved and the remaining corpus
distributed to the plaintiff.
The Plaintiff’s Claims in the Trust Lawsuit
The plaintiff’s first cause of action in the trust lawsuit was a request that the
court appoint Mercedes Loring to replace ROTC as trustee. Additionally, the plaintiff
alleged causes of action against ROTC, Nihiser, and Fox for negligence, breach of
fiduciary duty, conversion, duress and extortion, and violation of the DTPA.9
The Plaintiff’s Claims in the Family Lawsuit
In his third amended petition in the family lawsuit, the plaintiff asserted that
8 At the time of the hearing, the live pleadings consisted of a sixth amended petition
in the trust lawsuit and a third amended petition in the family lawsuit. The seventh
amended petition incorporated the parties and causes of action (except intentional
infliction of emotional distress) from both lawsuits into one pleading, and added a
cause of action for conspiracy against ROTC and Nihiser and a cause of action for
fraud against David and Marietta.
9 The plaintiff’s brief contains no argument concerning the summary judgment in
favor of ROTC, Nihiser, and Fox on his DTPA cause of action. The plaintiff has
therefore waived any appellate complaint regarding his DTPA cause of action.
TEX. R. APP. P. 74(f).
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