Dawson v. Lowrey, 441 S.W.3d 825 (Tex. App.—Texarkana 2014, no pet.).
Decedent named Son as a party to a joint bank
account with rights of survivorship. Several years
later, Decedent also named Son as his agent under a durable power of
attorney. Two days before Decedent’s death, a former
step-child assisted Decedent in opening a pay on death account which
named Son, Daughter, and two former step-children as the P.O.D. payees.
The money came from Decedent’s joint account.
Shortly thereafter, Son used his authority as Decedent’s agent to close
this account. After Decedent’s death, one of the
stepchildren brought suit against Son to recover the funds he would have
received as a P.O.D. payee. The trial court granted
Son a summary judgment and this appeal followed.
The appellate court affirmed.
The court began its analysis by examining the signature card for the
P.O.D. account. It determined that it was properly
signed and created a P.O.D. account even though the signature card did
not precisely track the statutory language.
The court next evaluated whether the former
stepchild had standing to assert that Son breached his fiduciary duties
to Decedent and then obtain a constructive trust on the P.O.D. account
proceeds. Son replied that his duties were owed to
Decedent and that it is Decedent’s estate that would have standing to
complain about his conduct. The court agreed and
declined to recognize “an estate in anticipation” in a P.O.D. account.
The court also explained that although Son may have engaged in
self-dealing, “the statutory scheme establishing and governing the use
of durable powers of attorney does not authorize a stranger to the ceded
power to request an accounting.” Id. at 836.
The legislature could expand the right to demand an accounting to
persons who at one time had the potential of receiving a largess from
the principal but it has not done so.
A dissenting judge argued that the disgruntled
P.O.D. payee had standing to assert a breach of fiduciary duty against
Son.
Moral: An agent’s breach of duty could
escape remedy if the injury is not to the principal’s estate,
beneficiaries, or heirs because third parties lack standing to complain.