Dawson v. Lowrey, 441 S.W.3d 825 (Tex. App.—Texarkana 2014, no pet.).


Power of Attorney



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.