John Bird, Individually: John Bird, as De Facto Trustee of the Carl C. Anderson, Sr. and Marie Jo Anderson Charitable Remainder Trust and John Bird, as Former De Facto Trustee of the Carl C. Anderson, Sr. and Marie Jo Anderson Family Trust F/B/O JenniferJo Bird v. the Carl C. Anderson, Sr. and Marie Jo Anderson Charitable Foundation ( 2021 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-21-00140-CV
John Bird, Individually; John Bird, as de facto Trustee of the Carl C. Anderson, Sr. and
Marie Jo Anderson Charitable Remainder Trust; and John Bird, as former de facto Trustee
of the Carl C. Anderson, Sr. and Marie Jo Anderson Family Trust f/b/o JenniferJo Bird,
Appellants
v.
The Carl C. Anderson, Sr. and Marie Jo Anderson Charitable Foundation, Appellee
FROM THE PROBATE COURT NO. 1 OF TRAVIS COUNTY
NO. C-1-PB-20-001327, THE HONORABLE GUY S. HERMAN, JUDGE PRESIDING
MEMORANDUM OPINION
John Bird (John) petitions for permissive appeal from an interlocutory order
denying his Rule 91a motion to dismiss the underlying lawsuit involving two trusts: the Carl C.
Anderson, Sr. and Marie Jo Anderson Charitable Remainder Trust (Farm Trust) and the Carl C.
Anderson, Sr. and Marie Jo Anderson Family Trust f/b/o Jennifer Jo Bird (Family Trust).1 See
Tex. R. Civ. P. 91a. The Carl C. Anderson, Sr. and Marie Jo Anderson Charitable Foundation
(Foundation),2 plaintiff below, has filed a response opposing John’s petition. When an interlocutory
order “involves a controlling question of law as to which there is a substantial ground for
difference of opinion” and “an immediate appeal from the order may materially advance the
1
Jennifer Jo Bird (Jennifer) is John’s wife and the sole primary beneficiary of both trusts,
which were established by her parents.
2
The Foundation is the remainder beneficiary of both trusts.
ultimate termination of the litigation,” a trial court may permit an appeal from the interlocutory
order, and we have discretion to accept the appeal. Tex. Civ. Prac. & Rem. Code § 51.014(d), (f);
see Sabre Travel Int’l, Ltd. v. Deutsche Lufthansa AG, 567 S.W.3d 725, 730–33 (Tex. 2019); see
also Tex. R. App. P. 28.3 (establishing procedure for permissive appeals in civil cases). Because
we conclude that John has not demonstrated “how an immediate appeal from the order may
materially advance the ultimate termination of the litigation,” we deny his petition.3
In the underlying suit, the Foundation sued Jennifer4 for breach of fiduciary
duty and John5 for breach of fiduciary duty, conversion, and knowing participation in breach of
fiduciary duty related to administration and management of the two trusts.6 As to John, the
Foundation alleges that he “took advantage of Jennifer’s incapacity by improperly usurping her
role as trustee.” It alleges that John sold the trusts’ assets against the express wishes of both the
grantors and Jennifer and reinvested the proceeds into “high-risk and non-diversified investments
that exposed the trusts and [their] beneficiaries to inappropriate levels of risk,” causing the trusts
to substantially diminish in value; distributed assets to himself, Jennifer, and perhaps others to the
3
We express no opinion as to whether the order involves a controlling question of law as
to which there is a substantial ground for difference of opinion.
4
The Foundation sued Jennifer (1) individually, (2) as trustee of the Farm Trust, and (3) as
former trustee of the Family Trust.
5
The Foundation sued John (1) individually, (2) as “de facto trustee” of the Farm Trust,
and (3) as “former de facto trustee” of the Family Trust.
6
The Foundation also sought to: (1) remove Jennifer as trustee of the Farm Trust, alleging
without specificity that she is an “incapacitated person”; (2) appoint a guardian ad litem for
Jennifer in these proceedings, see Tex. Est. Code § 1102.001; (3) appoint a successor trustee of the
Farm Trust; (4) modify provisions of both trusts pertaining to successor trustees; (5) obtain certain
declarations concerning the Farm Trust’s capital gains for federal-income-tax purposes; and
(6) obtain an accounting from both trusts. The Foundation brought into the litigation as interested
persons the bank currently serving as trustee of the Family Trust and Carl C. Anderson, III, the
Farm Trust’s first successor trustee after Jennifer.
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Foundation’s detriment; and had Jennifer sign all of the transactional documents in her role as
trustee even though she was and is incapacitated.
John filed a Rule 91a “Motion for Partial Dismissal.” See Tex. R. Civ. P. 91a
(“Dismissal of Baseless Causes of Action”). In his motion, John argued that the “alleged, but
bogus ‘de facto trustee’ capacity and the alleged, but bogus ‘former de facto trustee’ capacity are
not recognized legal capacities under Texas law” and asked the trial court to dismiss the
Foundation’s claims or requests for relief against him in those “bogus” capacities because “such
claims do not exist and have no basis in law or fact.” The trial court denied John’s motion but
granted his subsequent motion to certify the order for interlocutory appeal. In an amended order
denying John’s Rule 91a motion, the trial court found that “Texas law recognizes the legal
capacity of ‘de facto trustee’ in the context of the administration of private trusts” and granted
John permission to file and pursue an interlocutory appeal of the question of “whether Texas
law recognizes the legal capacity of ‘de facto trustee’ in the context of the administration of
private trusts.”
John contends that an immediate appeal of the trial court’s legal determination
“may materially advance the ultimate termination of the litigation” in three ways. First, he argues
that if the “de facto trustee” and “former de facto trustee” capacities do not exist in Texas, the
trial court “does not have jurisdiction” over him in those capacities, and “any action by the trial
court in relation to John in those supposed capacities would be void.” However, to the extent that
capacity is the relevant issue,7 “[c]apacity is not a jurisdictional issue.” City of Port Isabel v.
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The Foundation responds that the salient legal issue is not the legal capacity in which it
has sued John but, rather, whether he owed the beneficiaries a fiduciary duty: “The crux of the
question is whether Texas law imposes fiduciary duties on a person who is not otherwise a formal
fiduciary, but voluntarily takes actions that can only be properly performed by someone with
fiduciary duties.”
3
Pinnell, 161 S.W.3d 233, 238 (Tex. App.—Corpus Christi–Edinburg 2005, no pet.) (“Capacity is a
party’s legal authority to sue or be sued.”); see Pike v. Texas EMC Mgmt., LLC, 610 S.W.3d 763,
779—80 (Tex. 2020) (concluding that party’s challenge to capacity of partner to bring claim that
“actually belongs to the partnership” is “matter of capacity” and “does not implicate subject-
matter jurisdiction”). Secondly, John argues that if the de facto capacity does indeed exist in
Texas and the trial court determined that he acted in that capacity and therefore owed a fiduciary
duty to the beneficiaries, then the burden of proof would shift from the Foundation to him, citing
Gray v. Sangrey, 428 S.W.3d 311, 316 (Tex. App.—Texarkana 2014, pet. denied), and Sorrell v.
Elsey, 748 S.W.2d 584, 586 (Tex. App.—San Antonio 1988, writ denied). He contends that such
burden shifting would “substantially increase . . . the claims the Foundation may bring against
[him] and . . . his potential liability.” However, the rule in Gray and Sorrell, requiring a fiduciary
to prove the fairness of a challenged transaction, applies only in situations where a fiduciary is
alleged to have engaged in a transaction between himself and his principal, which is not what the
Foundation has alleged. See Gray, 428 S.W.3d at 316; Sorrell, 748 S.W.2d at 586. John’s
arguments about jurisdiction and burden shifting are therefore inapposite.
Lastly, John argues that “every facet of the case and trial preparation depends on
and is affected by whether John is to be treated as a trustee, including discovery, the scope of
document production, his approach to witness testimony, application of privilege, [and] assessing
his exposure to the caprices of a jury.” However, John’s conduct will be the subject of discovery
and will be submitted to the jury regardless of whether the jury is asked to assess his conduct
under the theory of conversion, breach of fiduciary duty, or knowing participation in Jennifer’s
alleged breach of fiduciary duty. See Lara v. Streamline Ins. Servs., No. 03-19-00474-CV,
2020 WL 7776080, at *6 (Tex. App.—Austin Dec. 31, 2020, no pet.) (mem. op.) (noting that party
4
who knowingly participates in breach of duty of fiduciary “becomes a joint tort-feasor with
the fiduciary and is liable as such”); see also Insurance All. v. Lake Texoma Highport, LLC,
452 S.W.3d 57, 78 (Tex. App.—Dallas 2014, pet. denied) (noting that party may sue and seek
damages on alternative theories of liability and that if jury awards damages on separate theories,
plaintiff is entitled to finding that affords greatest recovery). Neither the scope of discovery nor
the length of trial proceedings is likely to be substantially affected if the claims against John in the
de facto capacities were dismissed, and John does not explain how the termination of this
litigation would be materially advanced by a determination that a “de facto” trustee capacity does
not exist. Instead, the related alternate theory the Foundation is pursuing against John—knowing
participation in Jennifer’s alleged breach of fiduciary duty—is based on the same underlying
factual allegations and would require substantially the same proof and impose the same liability as
the direct claim against him for breach of fiduciary duty.
Moreover, even assuming the trial court wrongly determined that a “de facto”
trustee capacity exists under Texas law, the Foundation also sued John in his individual capacity,
and a person is liable for his own torts in an individual capacity. See Alexander v. Marshall,
No. 14-18-00425-CV, 2021 WL 970760, at *2 (Tex. App.—Houston [14th Dist.] Mar. 16, 2021,
no pet.) (mem. op.). While the precise legal issue the trial court determined at this stage, per
John’s motion, is the viability of the de facto trustee “capacity” in which the Foundation has sued
John, the trial court has yet to make the more salient determination of whether John owed the
beneficiaries a fiduciary duty—either as a “de facto trustee” or under equitable principles—which
is a question of law for the court that turns on the specific facts yet to be developed rather than on
the legal capacity in which John was sued, considering that “fiduciary duties are equitable in
nature and generally not subject to hard and fast rules,” see National Plan Adm’rs, Inc. v. National
5
Health Ins., 235 S.W.3d 695, 702 (Tex. 2007); see also Ritchie v. Rupe, 443 S.W.3d 856, 868
(Tex. 2014) (noting that “those acting as directors” owe fiduciary duty to corporation even if not
formally appointed as such); Strebel v. Wimberly, 371 S.W.3d 267, 281 (Tex. App.—Houston
[1st Dist.] 2012, pet. denied) (“Even where no fiduciary duties normally arise, they spring into
existence when a limited partner actively engages in control over the operation of the business so
as to create duties that otherwise would not exist.” (internal quotations and citations omitted)).
Even if this Court were to determine that the “de facto” capacity does not exist, such
determination would not materially advance the litigation’s termination because the issue of
whether John owed the beneficiaries a fiduciary duty—in his individual capacity by allegedly and
informally acting in the role of a trustee—would nonetheless remain a live issue. Furthermore,
this litigation involves several parties and issues besides the damages claims relating to John’s and
Jennifer’s actions in managing and administering the trusts; John has not explained how the
dismissal of claims against him in the “de facto” trustee capacities would materially advance the
litigation’s termination in the context of the other issues and parties.
Having carefully reviewed the petition, the response, and the reply, we conclude
that John did not establish the statutory requirements for a permissive appeal. See Tex. Civ. Prac.
& Rem. Code § 51.014(d)(2), (f). Accordingly, we deny John’s petition for permissive appeal.
__________________________________________
Thomas J. Baker, Justice
Before Chief Justice Byrne, Justices Baker and Smith
Petition for Permissive Appeal Denied
Filed: June 24, 2021
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