Aubrey v. Aubrey, 523 S.W.3d 299 (Tex. App.—Dallas 2017, no pet.).


Trustee Removal


Remainder Beneficiary sought to remove Trustee for breach of fiduciary duty and self-dealing. Trustee responded that Remainder Beneficiary had previously brought many lawsuits unsuccessfully against Trustee and requested that the court deem Remainder Beneficiary a vexatious litigant under Tex. Civ. Prac. & Rem. Code §§ 11.001-.104 and award sanctions. The trial court granted both requests. Remainder Beneficiary appealed.


The appellate court first rejected Trustee’s assertion that Remainder Beneficiary lacked standing to seek removal. The court explained that a remainder beneficiary is a beneficiary and thus has standing to seek Trustee’s removal as an interested person under Trust Code § 111.004 defining “interested person” and Trust Code § 113.082 granting interested persons that right to petition for the removal of a trustee.


Nonetheless, the facts were sufficient to support the trial court’s determination that Remainder Beneficiary was a vexatious litigant. The court agreed with Trustee that the trial court did not abuse its discretion when it concluded that there was no reasonable probability that Remainder Beneficiary could prevail and that the other requirements for vexatious litigant status were satisfied. Although the court agreed that sanctions against Remainder Beneficiary were warranted, the court held that the trial court abused its discretion in determining the amount of the award and thus remanded the determination of the amount of sanctions to the trial court.


Moral:  Both current and remainder beneficiaries have standing to seek a trustee’s removal. However, a beneficiary should not use removal actions as a means of hassling the trustee when the trustee has not actually breached fiduciary duties.