Ward v. Stanford, 443 S.W.3d 334 (Tex. App.—Dallas 2014, pet. denied).
Beneficiary sued Trustee alleging that Trustee did
not timely attempt to collect on a promissory note which the Settlor
executed payable to the trust. The trial court
rendered summary judgment against Beneficiary on a variety of grounds
based on the running of the statute of limitations or res judicata.
Beneficiary appealed.
The appellate court first examined whether the
promissory note was negotiable because the statute of limitations
applicable to the Trustee’s ability to sue on the note would be six
years if the note were negotiable but only four years if it were
non-negotiable. After a detailed review of the note
and the elements of negotiability, the court held as a matter of law
that the note was negotiable and thus the six year statute of
limitations applied. After a further review of the
evidence, the court concluded that there were fact issues regarding
whether the note’s due date was accelerated and if it was, whether that
acceleration was withdrawn, revoked, or abandoned.
The court then addressed the key issue, that is,
when did Beneficiary’s cause of action for breach of fiduciary duty
accrue. Beneficiary claims it accrued on the last
date the Trustees could have sued on the note without being barred by
the statute of limitations. Trustees claim it accrued
on the first date Trustees could have filed suit on the note.
The court rejected both of these claims as they were extreme.
If it accrued immediately, the breach could occur unreasonably
soon, but if accrued on the last date, then the breach could occur
unreasonably late. Accordingly, the court held the
date on which Trustee’s failure to sue on the note breached a fiduciary
duty by causing Beneficiary an injury is a fact question.
Likewise, there remained genuine issues of material fact which
need to be resolved to determine when Beneficiary discovered or should
have discovered Beneficiary’s injury which may have delayed the running
of statute of limitations.
Moral: Beneficiaries should closely monitor
the actions of their trustees, request regular and timely accountings,
and bring actions for breach of fiduciary duties promptly.