James Bergman, Co-Trustee of the Bergman-Davison-Webster Charitable Trust v. Carolyn Nixon, Co-Trustee of the Bergman-Davison-Webster Charitable Trust

NO. 07-02-0460-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
JANUARY 2, 2004
______________________________
JAMES BERGMAN,
Appellant
v.
BERGMAN-DAVISON-WEBSTER CHARITABLE TRUST,
GENE BUSH, trustee, and CAROLYN NIXON, trustee,
Appellees
_________________________________
FROM THE 411th DISTRICT COURT OF POLK COUNTY;
NO. CIV 19,791; HON. JACK R. KING, PRESIDING
_______________________________
Memorandum Opinion
_______________________________
Before JOHNSON, C.J., and QUINN and CAMPBELL, JJ.
James Bergman (James) appeals from a final judgment removing him as a trustee
and modifying the terms of the Bergman-Davison-Webster Charitable Trust (Trust). Five
issues are presented for our review. However, we need only address the first since it is
dispositive. Therein, James asserts that no evidence, or alternatively, insufficient
evidence supports the trial court’s decision to remove him as trustee of the Trust. We
affirm the decision of the trial court.
Removal as Trustee
Statute provides a trial court various grounds on which to remove a trustee. That
applicable here concerns removal for “cause.” That is, a trustee may be removed “in the
discretion of the court, for . . . cause.” TEX . PROP . CODE ANN . §113.082(a)(4) (Vernon
Supp. 2004). While the ill will or hostility of a trustee is generally insufficient cause, it
becomes so if it is determined that the “hostility, ill will, or other factors have affected the
trustee so that he cannot properly serve in his capacity.” Akin v. Dahl, 661 S.W.2d 911,
913-14 (Tex. 1983); Lee v. Lee, 47 S.W.3d 767, 792 (Tex. App.--Houston [1st Dist.] 2001,
pet. denied). In other words, if the evidence illustrates that the hostility “does or will affect”
the trustee’s performance of his duties, then cause exists for his removal. Id.
Additionally, the hostility to which we refer is not limited only to situations wherein
the trustee’s performance is affected. It also includes those wherein it impedes the proper
performance of the trust, especially if the trustee made the subject matter of the suit is at
fault. Restatement (Third) of the Law of Trusts, §37, comment e(1) (2003); A. Scott & W.
Fratcher, The Law of Trusts §107, p. 111 (4th ed. 1987).
Next, it has been the rule for some time that the decision regarding whether or not
to remove a trustee is not one that implicates the trial court’s discretion. As the Supreme
Court said in Akin, the applicable statutory provisions did not make removal a discretionary
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act. Akin v. Dahl, 661 S.W.2d at 913. However, the legislature recently amended
§113.082(a) of the Property Code. The provision now states that “. . . on the petition of an
interested person and after hearing, a court may, in its discretion, remove a trustee” upon
the enumerated grounds. TEX . PROP . CODE ANN . §113.082(a) (emphasis added). The
italicized portion of the statute was non-existent when the Supreme Court decided Akin.
Given the plain meaning of the phrase, it is clear that the legislature now wants the trial
court to exercise its discretion when determining whether to remove a trustee. So, the
statement in Akin that the decision does not implicate the trial court’s discretion has been
overruled by statute.
Question does arise, however, regarding whether the amendment to §113.082(a)
applies to the case at bar. Indeed, it is clear that the suit was filed long before September
1, 2003, the effective date of the amendment. So too is it recognized that statutes and
their amendments generally have prospective effect; that is, the amendments do not
normally operate retroactively. Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84
S.W.3d 212, 219 (Tex. 2002). Yet, that is not true when the statute or amendment is
procedural or remedial in nature. Id. Furthermore, a change that affects the power of the
court to act is one involving procedure. Id. at 220 (holding jurisdictional statutes to be
procedural because they “speak to the court’s power rather than to the parties’ rights or
obligations”). Next, it would seem that an amendment vesting the trial court with the
“discretion” to make a particular ruling would be of that ilk. This is so because the
amendment affects the power of the court to act over a given matter as opposed to the
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rights or obligations of the parties. In other words, it establishes not only the parameters
within which the trial court must make its decision but also the standard of review we utilize
in determining whether the decision was correct. And, because it does, we conclude that
the amendment to §113.082(a) is both procedural and applicable to the appeal before us.
Thus, whether the trial court erred in removing James as trustee depends on whether it
abused its discretion.
Next, a trial court abuses its discretion when it acts without reference to any guiding
rules and principles or when it acts arbitrarily and unreasonably. In re C.R.O., 96 S.W.3d
442, 446 (Tex. App.--Amarillo 2002, no pet.). That the decision may be different than the
one we may have reached had we decided the matter in the first instance is not controlling.
Id. Instead, it must be affirmed if it enjoys the support of law and some probative evidence
irrespective of what we may think of it. Id. at 446-47.1 With that said, we turn to the issue
before us.
Upon the death of Secrest Webster in 1995 the Trust arose. According to the
instrument creating it, James and five others were appointed its trustees. They were
assigned the duty of disbursing the corpus and income thereon “at such time, in such
manner, and in such amounts as they deem advisable, to provide scholarships or grants
to worthy individuals to assist them in obtaining instruction or education . . . .” So too were
1
Given that the decision must be affirmed if it comports with the law and enjoys the support of some
evidence, no longer are claims of legal and factual insufficiency independent grounds of error. In re C.R.O.,
96 S.W.3d 442, 447 (Tex. App.--Amarillo 2002, no pet.); Crawford v. Hope, 898 S.W.2d 937, 940 (Tex. App.-
-Amarillo 1995, writ denied). Instead, dispute about the quantum of evidence supporting a particular decision
is subsumed into the test of abused discretion. Crawford v. Hope, 898 S.W.2d at 940 -41.
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they authorized to use the trust assets “for other purposes that will promote, assist and
further the cultural, artistic, educational, literary, recreational, charitable and historical
activities and facilities . . . [of] Livingston and Corrigan, Texas and Polk County.” Though
once harmonious, the trustee meetings convened to fulfill these goals became less so over
time, and according to the trial court, James “figured prominently in much of the confusion
and discord that occurred in the meetings and prevented said board from functioning in an
orderly manner.”
For instance, several witnesses, who were also board members, testified that James
did not follow the majority’s vote. He also opted and continued to tape record trustee
meetings despite the fact that a majority of the trustees disapproved of it. This act cast a
chill upon the conversation of the trustees. At least one witness stated that it became
“impossible to have a decent conversation,” that the taping was “disruptive,” and that it
precluded the trustees from expressing “sensitive data or ideas . . . .” “You can’t express
a devil’s advocate type position . . . because somebody will take that out of context and
can be devastating to you,” he opined.
Additionally, two witnesses described an instance wherein James sought to use his
position as a trustee to further his son’s interests. The incident involved James’ attempt
to induce them, through the use of a “[k]ind of threatening tone,” into approving
scholarships to a set of young applicants. The latter apparently were children of an
individual who had a job for James’ son. According to one trustee, James told them that
the father of the applicants had “‘a very good job that [James’ son could] have if the . . .
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[particular applicants] get these scholarships.’” His son’s “‘whole future depended on
getting this job.’” And, though the trustees did not vote on the applications, James’ conduct
grew more “intolerable” thereafter, so testified a trustee.
In another instance, trustees described how James made statements in an affidavit
they believed to be false in effort to secure a restraining order against them. The order
was needed to prevent a sale of trust property with which James disagreed.
Several other witnesses described how James used profanity and intimidation
during the meetings. So too did he threaten his fellow trustees with suit if they did not
agree with him. He would become “hostile” and “rude” when the trustees “don’t do what
he wants to do right then . . . if we disagree[d].” When asked if she felt threatened by him,
a trustee replied: “[h]e scares me . . . [h]e just gets so upset, and so violent . . . and it just
gets worse and worse.” Another testified that James’ conduct caused him to leave a
trustee meeting. The environment was not one “in which trustees can work,” he opined.
It gave him “a stomach ache every time [he went] to a meeting.” And, that the environment
was not conducive to the performance of trust duties was confirmed by another trustee
when she told the trial court that the meetings were “not a very pleasant experience” and
that it was not possible to conduct trust business under the circumstances.
The foregoing litany of testimony provides some probative evidence upon which a
trial court could reasonably conclude not only that James caused hostility and friction
within the board meetings but also that his conduct affected or impeded the operation of
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the Trust. Admittedly, James attempted to justify his conduct at trial. Yet, his credibility,
like that of the other witnesses, was something the trial court, as factfinder, was entitled
to assess.2 And, that there may have been other evidence suggesting that his actions
were legitimately motivated does not alone entitle us to hold the trial court’s decision to
remove him as an instance of abused discretion. This is so because discretion is not
abused where the trial court bases its decisions on conflicting evidence. Davis v. Huey,
571 S.W.2d 859, 862 (Tex. 1978). So, as long as the ruling comported with guiding
principles and enjoyed the support of some probative evidence, we cannot change it. That
is the case here; so, we overrule James’ first issue.
Our having upheld the trial court’s decision to remove James as trustee leaves no
one else to complain of its judgment. He can no longer do so given that he now is neither
a trustee nor beneficiary of the Trust. See Lemke v. Lemke, 929 S.W.2d 662, 664 (Tex.
App.--Fort Worth 1996, writ denied). And, while other trustees were also removed, none
of them appealed. Nor has any beneficiary of the trust perfected an appeal.
Consequently, the remaining issues presented by James are moot.
We affirm the judgment of the trial court.
2
We recognize that the office of trustee carries with it fiduciary duties. So too do we understand that
trustees are entitled to opinions independent from the other trustees and must voice them when they believe
something is wrong. Yet, that does not entitle the dissenting individual to become so hostile or violent that
the effective operation of the trust is impeded. Persistence and persuasion are the characteristics to be
invoked to correct perceived error. Litigation may also be an alternativ e. But, violence, hostility, profanity,
or intimidation are not, especially when they impede trust purposes.
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Brian Quinn
Justice
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