In Gordon v. Gordon, a couple created a revocable trust and named a friend, who provided financial advice, as successor trustee. No. 03-22-00454-CV, 2024 Tex. App. LEXIS 3611 (Tex. App.—Austin May 23, 2024, no pet. history). The friend, who was not an attorney, also drafted wills for them, and named himself as the executor of their estates. The couple did not have any children and named their nieces and nephews as the beneficiaries, some of who were the friend’s sons and nieces and nephews. The husband died first, and disputes arose between the friend and the widow. There was previous litigation where the widow prevailed. She then filed claims to remove the friend as executor of her husband’s estate. After a jury trial, the court removed the friend, and he appealed.
The court noted the following fiduciary duties owed by the friend: “As independent executor, John had a fiduciary duty to protect Diane’s and the other estate beneficiaries’ interests by fair dealing in good faith with fidelity and integrity. An executor’s personal interests may not conflict with his fiduciary obligations to the estate and its beneficiaries.” Id. The court then discussed the standards for removing an executor:
When legally sufficient evidence establishes that an executor violated his fiduciary duties, such as by failing to make disclosures in required accountings or to beneficiaries about estate receipts and expenses, the trial court’s finding that the executor exercised gross mismanagement may properly be upheld on appeal. Gross mismanagement and gross misconduct include, at a minimum, (1) any willful omission to perform a legal duty; (2) any intentional commission of a wrongful act; and (3) any breach of a fiduciary duty that results in actual harm to a beneficiary’s interests.
Id. The court held that there was legally sufficient evidence that supported the jury’s finding:
Having reviewed the record, including the above-cited evidence, we conclude that legally sufficient evidence supports the jury’s finding that John engaged in gross misconduct or gross mismanagement as independent executor of the estate. The evidence supports findings that he placed the interests of his sons, niece, and nephew ahead of Diane’s interests; that he willfully distributed assets of the estate knowing that such distribution was contrary to the will’s provisions and would disproportionately benefit his sons, niece, and nephews to Diane’s detriment; that his inventory was inaccurate and misleading; that pursuing his unjust-enrichment claim was a waste of estate resources; that he violated a court injunction and reserve requirements; and that he failed to distribute portions of the estate rightfully belonging to Diane.
Id. The court then addressed multiple issues raised by the friend, including whether the will was a contractual will, which it was not, whether the will altered the provisions of financial accounts having beneficiary designations or ROS or POD provisions, which it did not, and whether the will conveyed the wife’s community property interests, which it did not. The court reversed the trial court’s attorney’s fees award and remanded that for further consideration.
Interesting Note: One interesting issue in this case is that the parties seemingly agreed to a jury trial on the removal claim. The jury was charged with answering the following question: “Did John Gordon engage in gross misconduct, or gross mismanagement in the performance of his duties as independent executor?” Gross misconduct was defined in the charge as “glaringly obvious or flagrant misconduct” and gross mismanagement as “glaringly obvious or flagrant mismanagement.” The jury found in the affirmative, and the court removed the executor. But, if one of the parties had objected to the jury trial, what would have been the result?
The Texas Estate’s Code provides: “The court, on the court’s own motion or on the motion of any interested person, and without notice, may remove a personal representative appointed under this title who…” and “The court may remove a personal representative on the court’s own motion, or on the complaint of any interested person, after the representative has been cited by personal service to answer at a time and place set in the notice, if…” Tex. Est. Code § 361.051, 361.052 (emph. added). So, the Texas Legislature may have wanted courts, not juries, to remove trustees and executors.
The Texas Trust Code and the Texas Estate Code do not create rights to a jury trial; rather, all rights to a jury are controlled by parties’ constitutional rights. In re Poe Trust, 646 S.W.3d 771, 778 (Tex. 2022). There are two constitutional provisions dealing with a right to a jury. Id. (citing Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618, 636 (Tex. 1996)). The Bill of Rights ensures that the “right of trial by jury shall remain inviolate.” Tex. Const. art. I, § 15. This provision maintains a jury right for the sorts of actions tried by jury when the Constitution was adopted and, thus, “only applies if, in 1876, a jury would have been allowed to try the action or an analogous action.” Id. At the time of the Constitution’s adoption, there was no common-law right to a jury trial in equitable actions and, consequently, courts have held that the Bill of Rights did “not alter the common law tradition eschewing juries in equity.” Id. This Bill of Right’s provision does not allow a party a right to a jury trial in a removal action under the Estate or Trust Code as such would not have been allowed in equity in 1876.
Further, Article V, the Judiciary Article provides: “In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.” Tex. Const. art. V, § 10. This provision seems broad, but “for more than a century that the Judiciary Article’s broad language ‘does not embrace’ every court proceeding.” In re Poe Trust, 646 S.W.3d at 779. The Texas Supreme Court stated:
We identified in Credit Bureau several proceedings that for “some special reason” fall outside the scope of the Judiciary Article: civil contempt proceedings, election contests, habeas corpus proceedings for custody of minor children, suits for the removal of a sheriff, and appeals in administrative proceedings. 530 S.W.2d at 293. But this list was not exhaustive. Id. (noting there are “others”). And since Credit Bureau, our courts of appeals have held other proceedings to be beyond the Judiciary Article’s purview. Thus far, we have not articulated a precise test for determining when a proceeding falls outside of the Judiciary Article’s scope, and resolution of the question has been on a “case-by-case” basis instead.
Id. So, there is still a question about whether a party is entitled to a jury trial on fact issues regarding removal claims for executors or trustees.