Texas State Bank v. Amaro, 87 S.W.3d 538 (Tex. 2002).
Beneficiary of a multi-million dollar trust created under Property
Code § 142.005 by the 206th District Court decided that he wanted to
obtain the trust property free of trust. He eventually obtained a court
order from a different district court declaring that he had regained
full capacity after which he demanded that Trustee transfer all trust
assets to him. Trustee complied but only after obtaining a court order
from the original district court which terminated the trust and stated
that Trustee had at all times properly and appropriately administered
the trust. The order also released Trustee of all liability. Beneficiary
contends that the court lacked jurisdiction to issue these orders.
The appellate court found that the 206th District Court had continuing
jurisdiction over the trust both under § 142.005 and the order creating
the trust. Accordingly, the 206th District Court was not bound by the
other district court’s determination that Beneficiary had regained
capacity. The court also found that Trustee properly sought a
declaratory judgment to determine whether Beneficiary had regained
capacity and the trust had ended as well as to approve the final
accounting and various fees. However, the court held that the district
court exceeded its jurisdiction when it determined that Trustee had no
liability to the trust, had used a proper investment philosophy, and
that all disbursements were proper. Trustee appealed.
The Supreme Court of Texas began its analysis of this case by agreeing
that the 206th District Court had continuing jurisdiction over the trust
and was not bound by the other district court’s capacity determination.
Likewise, the court affirmed the appellate court’s holding that the
district court had exceeded its jurisdiction with regard to lack of
jurisdiction to decide the tort liability and investment philosophy
matters. However, the court held that the district court did have the
power to approve distributions, fees, costs, and expenses.
Moral: A person seeking relief should ask for all desired remedies to
avoid the problems which arise if the court grants relief beyond that
which is requested.