Elliott v. Weatherman, 396 S.W.3d 224 (Tex. App.—Austin 2013, no pet.).
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After settlors died, their three children became co-trustees of their trust. Two of the trustees sued the third trustee alleging that he had violated the terms of the trust, breached fiduciary duties, and converted some of the trust property. To resolve this dispute, the trial court appointed a receiver upon the request of the allegedly breaching trustee over certain assets of the trust as authorized by Trust Code § 114.008(a)(5). The other two trustees appealed.
The appellate court reversed. The court stated that “[e]ven if a specific statutory provision authorizes a receivership, a trial court should not appoint a receiver if another remedy exists at law or in equity that is adequate and complete.” Id. at 228. The court also explained that the two other trustees did not have sufficient notice that the receivership remedy was requested, that is, a minimum of three days notice under Tex. R. Civ. P. 695 because real property was involved. Even with respect to the personal property subject to the receivership, the court held that the evidence was insufficient to justify the appointment of a receiver without notice and the opportunity to be heard.
Moral: Receivership is an “extreme” remedy and will be granted “only where great emergency or imperative necessity requires it.” Id. at 229, quoting Krummnow v. Krummnow, 174 S.W.3d 820, 828 (Tex. App.—Waco 2005, pet. denied).