Matter of Trust A and Trust C, 651 S.W.3d 588 (Tex. App.—El Paso 2022, pet. filed).


Breach of Fiduciary Duty

This complex case involved an alleged breach of duty by a trustee selling trust property (stock). The lower court issued a declaratory judgment voiding the transfer. Without reaching the merits, the El Paso Court of Appeals explained that it was setting aside the lower court’s judgment because the transferees of the stock were not made parties to the action. The transferees could not be bound by a judgment adversely impacting their interest without being joined as parties as the Declaratory Judgment Act mandates. Tex. Civ. Prac. & Rem. Code § 37.006.

Moral:  When attempting to set aside an improper transfer of trust property, it is essential to join the transferees of that property.