Ann E. Malone v. Gary R. Malone, Individually and as Former Trustee of the Agreement of Trust for the Ann E. Malone Trust ( 2009 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-08-157-CV
ANN E. MALONE APPELLANT
V.
GARY R. MALONE, INDIVIDUALLY APPELLEE
AND AS FORMER TRUSTEE OF
THE AGREEMENT OF TRUST FOR
THE ANN E. MALONE TRUST
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FROM THE 96TH DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION 1
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I. INTRODUCTION
Appellant Ann E. Malone and Appellee Gary R. Malone are siblings. In
two points, Ann argues that the trial court erred by granting Gary’s motions for
traditional and no-evidence summary judgment regarding her claims of breach
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… See Tex. R. App. P. 47.4.
of fiduciary duty and conspiracy to breach fiduciary duty filed against Gary in
his capacity as former trustee of the Ann E. Malone Trust. We will affirm.
II. B ACKGROUND
In May 2002, the Ann E. Malone Trust was established. Gary and Ann’s
mother, Vivian J. Malone, died in November 2002. Gary served as trustee for
the trust from its inception until March 31, 2005. Then Rita Malone—also
Ann’s sibling—served as trustee until she passed away in June 2007. After
Rita’s death, Cathy O’Dell—Rita’s niece—served as trustee until March 24,
2008, when Ann and Cathy signed an agreed order that Thomas O’Dell would
serve as trustee.
In the interim, on July 8, 2004, Ann filed this suit against her four
siblings, Gary, Rita, Linda P. Chappell, and Lynn C. Malone. 2 This suit involved
twelve different causes of action, including assault, intentional infliction of
emotion distress, invasion of privacy, defamation, false imprisonment, trespass
to real property, conversion, fraud, misrepresentation, civil conspiracy, and
2
… Ann has also engaged in other litigation involving Gary and their
mother’s estate. See Malone v. Malone, No. 10-04-00011-CV, 2005 WL
1303366, at *1 (Tex. App.—Waco, June 1, 2005) (mem. op) (holding that
Vivian Malone’s estate, of which Gary is independent executor, was entitled to
funds in Vivian Malone’s bank account after Vivian’s death despite executed
signature card that purportedly made Ann and Vivian joint holders of the
account with right of survivorship).
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breach of fiduciary duty. After Rita passed away, Ann filed her fourth amended
original petition and added Patrick Conaway, executor of Rita’s estate, and
Cathy O’Dell. On February 1, 2008, Ann filed her sixth amended original
petition, deleting Patrick as a party to the suit.
On January 17, 2008, Gary and Linda filed no-evidence and traditional
motions for summary judgment. In their no-evidence motions, Gary and Linda
asserted that there was no evidence to support any of Ann’s causes of actions.
Gary and Linda also moved, in their traditional summary judgment motions, that
many of Ann’s claims were barred by the statute of limitations or that they
could conclusively establish no liability. Ann filed her response on February 8,
2008. The trial court conducted a hearing on February 15, 2008, and on
February 27, 2008, the trial court granted summary judgment on all grounds
except Ann’s claims for breach of fiduciary duty, civil conspiracy, and
intentional infliction of emotional distress. Ann then filed her seventh amended
original petition, removing Linda as a party to this suit. On March 7, 2008, the
trial court granted summary judgment in favor of Gary on these three remaining
grounds. As mentioned above, Cathy O’Dell and Ann signed an agreed order
dated March 24, 2008, whereby Thomas O’Dell became trustee of the Ann E.
Malone trust. This order also dismissed Cathy, with prejudice, from this suit.
This appeal followed.
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III. D ISCUSSION
In two points, Ann argues that the trial court erred by granting Gary’s
motions for summary judgment regarding her claims of breach of fiduciary duty
and conspiracy to breach fiduciary duty.3 We disagree.
A. No-Evidence Summary Judgment Standard of Review
After an adequate time for discovery, the party without the burden of
proof may, without presenting evidence, move for summary judgment on the
ground that there is no evidence to support an essential element of the
nonmovant’s claim or defense. Tex. R. Civ. P. 166a(i). The motion must
specifically state the elements for which there is no evidence. Id.; Johnson v.
Brewer & Pritchard, P.C., 73 S.W.3d 193, 207 (Tex. 2002). The trial court
must grant the motion unless the nonmovant produces summary judgment
evidence that raises a genuine issue of material fact. See Tex. R. Civ. P.
166a(i) & cmt.; Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.
2002).
When reviewing a no-evidence summary judgment, we examine the entire
record in the light most favorable to the nonmovant, indulging every reasonable
3
… Ann appeals only the portion of the trial court’s order granting Gary
summary judgment on her claims for breach of fiduciary duty and civil
conspiracy. Ann does not appeal the trial court’s order granting summary
judgment on her intentional infliction of emotional distress claim.
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inference and resolving any doubts against the motion. Sudan v. Sudan, 199
S.W.3d 291, 292 (Tex. 2006). If the nonmovant brings forward more than a
scintilla of probative evidence that raises a genuine issue of material fact, then
a no-evidence summary judgment is not proper. Moore v. K Mart Corp., 981
S.W.2d 266, 269 (Tex. App.—San Antonio 1998, pet. denied). But when the
evidence is so weak that it does nothing more than create a mere surmise or
suspicion of a fact, less than a scintilla of evidence exists, and a no-evidence
summary judgment is proper. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63
(Tex. 1983). We review a no-evidence summary judgment for evidence that
would enable reasonable and fair-minded jurors to differ in their conclusions.
Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (citing City of Keller v.
Wilson, 168 S.W.3d 802, 822 (Tex. 2005)).
B. No-Evidence Summary Judgment on Breach of Fiduciary Duty
In her first point, Ann argues that the trial court erred by granting
summary judgment on her claim that Gary breached his fiduciary duty as trustee
of the trust. Gary counters that there is no evidence to support each element
of Ann’s claim.
To recover for a breach of fiduciary duty, a plaintiff must show that a
fiduciary duty existed, breach of that duty, causation, and damages. See
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generally Avary v. Bank of Am., N.A., 72 S.W.3d 779, 792 (Tex. App.—Dallas
2002, pet. denied).
To support her contention that the trial court erred by granting summary
judgment, Ann lists six items that she claims are evidence that create a genuine
issue of material fact as to whether Gary breached his fiduciary duty in his
capacity as trustee. We will address each of these items in turn.
First, Ann asserts that Gary and Rita funded the trust with $400,000 in
2002, which included $300,000 in General Motors bonds and $100,000 in an
interest-bearing account with Bank of Omaha. Second, Ann asserts that as of
December 12, 2007, only $405,028.15 remained in the trust. Although Ann
does not cite any authority as to why these items constitute evidence of a
breach of fiduciary duty, she does, in the analysis of her second issue, make
the proclamation that the corpus of the trust “is $143,196.11 less than it
should be.” See Tex. R. App. P. 38.1(i) (stating that a “brief must contain a
clear and concise argument for the contentions made, with appropriate citations
to authorities and to the record”). These assertions do not demonstrate any of
the elements of a breach of fiduciary duty claim. See In re M.D.C., 171
S.W.3d 361, 364 (Tex. App.—Dallas 2005, no pet.) (holding that breach of
fiduciary duty claim requires evidence that a duty by trustee is owed to
beneficiary); Brazosport Bank of Tex. v. Oak Park Townhouses, 889 S.W.2d
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676, 685 (Tex. App.—Houston [14th Dist.] 1994, writ denied) (holding that
there was no evidence that fiduciary duty was breached).
In her third listed item, Ann asserts that Gary has never provided an
accounting to her regarding the trust. But Ann does not point to any evidence
in the record demonstrating that Gary, under the trust instrument, had a duty
to account to Ann during his tenure as trustee. See In re M.D.C., 171 S.W.3d
at 364. Further, Ann provided no evidence that she ever demanded an
accounting while Gary was trustee. See Tex. Prop. Code Ann. § 113.151
(Vernon 2007) (providing the terms under which a beneficiary may make a
demand on the trustee for a trust accounting). This assertion also fails to
demonstrate evidence of any of the elements of a breach of fiduciary duty by
Gary.
In her remaining three listed items, Ann argues that Gary made a one-time
distribution of $5,000 to her but made no other distributions to her while he
was trustee; that Gary admitted that as trustee of the trust, he invested in long-
term corporate bonds intending to provide Ann with an annual income of
$20,000 but that it has not; and that Gary admitted to withholding funds of the
trust to Ann in order to keep her from being with her mother at the end of her
mother’s life and to “punish” her for past acts that Gary found unacceptable.
Gary responds that the trust is a discretionary trust and that, during his tenure
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as trustee, it was within his discretion to determine when and what amounts
were to be distributed to Ann. We agree with Gary.
Under a discretionary trust, the beneficiary is entitled only to the income
or principal that the trustee, in his discretion, shall distribute to the beneficiary.
See Kolpack v. Torres, 829 S.W.2d 913, 915 (Tex. App.—Corpus Christi 1992,
writ denied) (citing G. Bogert, The Law of Trusts and Trustees § 228 (2d ed.
1979)). The beneficiary of a discretionary trust cannot compel the trustee to
pay her or to apply for her use any part of the trust property. Id.
The trust in this case specifically states that “The Trustee shall have
complete discretion to pay or use . . . the net income and/or corpus of the Trust
as the Trustee, in its sole discretion, may determine to be reasonably necessary
for [Ann].” We first note that Gary has not been the only trustee of the Ann
E. Malone Trust. But regardless of who was the trustee, it was within the
trustee’s discretion to make distributions to Ann, and a court cannot substitute
its discretion for that of the trustee. See Beaty v. Bales, 677 S.W.2d 750, 754
(Tex. App.—San Antonio 1984, writ ref’d n.r.e.). We conclude and hold that
Ann presented no evidence that Gary breached any fiduciary duty he may have
owed to Ann under the trust and that the trial court did not err by granting
Gary’s no-evidence summary judgment on Ann’s breach of fiduciary duty claim.
We overrule Ann’s first point.
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C. No-Evidence Summary Judgment on Civil Conspiracy Claim
In her second point, Ann argues that the trial court erred by granting
Gary’s summary judgment on her claim that Gary conspired to breach his
fiduciary duty to her. Gary counters that Ann “put forth no evidence of a
breach of fiduciary duty that proximately caused damage to Ann.” We agree
that Ann presented no evidence that Gary was involved in a civil conspiracy to
breach any alleged fiduciary duty he owed to Ann. Thus, the trial court did not
err by granting Gary’s no-evidence summary judgment.
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. Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex.
1983). The essential elements of a civil conspiracy are (1) two or more
persons; (2) an object to be accomplished; (3) a meeting of the minds on the
object or course of action; (4) one or more unlawful, overt acts; and
(5) damages as the proximate result. Juhl v. Airington, 936 S.W.2d 640, 644
(Tex. 1996); Triplex Commc’ns, Inc. v. Riley, 900 S.W.2d 716, 719 (Tex.
1995). It is not the agreement itself but an injury to the plaintiff resulting from
an act done pursuant to the common purpose that gives rise to a cause of
action for civil conspiracy. Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d
922, 925 (Tex. 1979). In other words, recovery is not based on the conspiracy
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but on an underlying tort. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.
1996). Thus, a conspiracy claim is a derivative tort. Id. Ann alleged that Gary
breached his fiduciary duty as the underlying tort to support her conspiracy
claim. Breach of fiduciary duty is a recognized cause of action that will support
a civil conspiracy claim. See Lesikar v. Rappeport, 33 S.W.3d 282, 302 (Tex.
App.—Texarkana 2000, pet. denied). But, as explained above, Ann has failed
to show any evidence as to how Gary breached his fiduciary duty to Ann as
trustee of the trust.
Furthermore, Ann cannot point to any evidence, circumstantial or
otherwise, supporting her claim of civil conspiracy. The only potential evidence
that Ann points to this court is that Gary, as trustee, made loans to himself in
his capacity as executor of the Estate of Vivian Malone from the trust; that
Gary accepted loan proceeds from Rita, who succeeded Gary as trustee; that
the loans were not documented in the accountings pertaining to the Estate of
Vivian Malone; that the corpus of the trust is less than Ann expects it to be;
and that Gary made only a one-time $5,000 distribution to Ann while he was
trustee. But these facts are nothing more than events that might give rise to
speculative inferences compounded upon one another that Gary and Rita had
a meeting of minds with the object being to breach their alleged fiduciary duties
to Ann and are insufficient to prove that Gary engaged in a civil conspiracy to
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harm her. See Rayon v. Energy Specialties, Inc., 121 S.W.3d 7, 16 (Tex.
App.—Fort Worth 2002, no pet.) (holding that party may not establish a vital
fact by piling one inference upon another).
Vital facts may not be proved by unreasonable inferences from other facts
and circumstances. Schlumberger Well Surveying Corp. v. Nortex Oil & Gas
Corp., 435 S.W.2d 854, 858 (Tex. 1969) (citing ‘No Evidence’ and ‘Insufficient
Evidence,’ 38 Tex. L. Rev. 359, 363). A party may not establish a vital fact
by piling one inference upon another. Id. To permit proof in this fashion would
violate the long-established rule that requires proof of any vital fact by evidence
amounting to something more than a mere scintilla. Joske v. Irvine, 91 Tex.
574, 582, 44 S.W. 1059, 1063 (1898). We conclude and hold that Ann
presented no evidence that Gary engaged in a civil conspiracy to breach any
potential fiduciary duty he owed to Ann. Thus, we hold that the trial court did
not err by granting Gary’s no-evidence summary judgment as to Ann’s civil
conspiracy claim and overrule Ann’s second point.
IV. C ONCLUSION
Having overruled both of Ann’s points, we affirm the trial court’s
judgment.
PER CURIAM
PANEL: MEIER, LIVINGSTON, and WALKER, JJ.
DELIVERED: August 20, 2009
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