Goughnour v. Patterson, Trustee of Deborah Patterson, No. 12-17-00234-CV, 2019 WL 1031575 (Tex. App.—Tyler Mar. 27, 2019, pet. denied).


Fiduciary Duty

The appellate court agreed with the trial court that it was proper to render a summary judgment in favor of the trustee on the beneficiary’s claim for breach of fiduciary duty. The beneficiary did not timely bring her action within the statute of limitations period even with the application of the discovery rule. The court carefully reviewed the facts which showed she had sufficient knowledge about the actions she alleged constituted breaches of fiduciary duty many years prior to filing her lawsuit.

Moral:  A beneficiary must bring a timely action against the trustee for breach of duty, including violation of the prudent investor standard, once the beneficiary knows or should know by exercising reasonable diligence the facts giving rise to the breach of duty claim.


Attorney's Fees

The trial court ordered Beneficiary to reimburse the trust for over one-half million dollars in attorney’s fees Trustee expended in successfully defending Beneficiary’s claims of breach of fiduciary duty. The appellate court agreed with Beneficiary that it  was not just and equitable for her to be required to reimburse the trust for these fees. Trustee had repeatedly engaged in self-dealing which lead to Beneficiary’s lawsuit. “[A] trustee is not entitled to expenses related to litigation resulting from the fault of the trustee.” Note that Trustee prevailed on the breach duty claims not because the court found Trustee did not breach any duties but rather because Beneficiary did not timely bring her claim causing it to be barred by the statute of limitations.

Moral:  Although a trial court’s decision on an award of attorney’s fees is reviewed using an abuse of discretion standard, the award is subject to reversal if appropriate facts that the award was not reasonable or just can be proven.