Benge v. Thomas

Decision Date27 August 2020
Docket NumberNUMBER 13-18-00619-CV
PartiesDEBRA V. BENGE, Appellant, v. MARGARET THOMAS, INDIVIDUALLY, AS INDEPENDENT EXECUTOR OF THE ESTATE OF ANNE FRIAR THOMAS, AS TRUSTEE OF THE THOMAS FAMILY 2012 TRUST, THOMAS RANCH OIL & GAS JOINT VENTURE D/B/A O&G ROCKS, HAROLD JOE ADAMS, JR., INDIVIDUALLY, AS PARTNER AND MANAGER OF O&G, AS A MANAGER OF AFT PROPERTY MANAGEMENT LLC, HAROLD JOE ADAMS, JR. LLC, AS MANAGER AND GENERAL PARTNER OF O&G, AND JUSTIN G. ROBERTS & DWAYNE A. WHITLEY, AS INDEPENDENT CO-EXECUTORS OF THE ESTATE OF MARGARET A. THOMAS, Appellees.
CourtTexas Court of Appeals

On appeal from the County Court of De Witt County, Texas.

MEMORANDUM OPINION

Before Justices Hinojosa, Perkes, and Tijerina

Memorandum Opinion by Justice Tijerina

Appellant Debra V. Benge appeals the trial court's summary judgment in favor of appellees, Margaret Thomas (Missi), individually, as Independent Executor of the Estate of Anne Friar Thomas, as Trustee of the Thomas Family 2012 Trust (the 2012 Trust); Thomas Ranch Oil & Gas Joint Venture d/b/a O&G Rocks (O&G); Harold Joe Adams, Jr. (Adams), individually, as partner and manager of O&G, as a manager of AFT Property Management LLC (AFT Property); Harold Joe Adams, Jr. LLC (HJA), as manager and general partner of O&G and Justin G. Roberts and Dwayne A. Whitley, as Independent Co-Executors of the Estate of Margaret A. Thomas.1 By what we construe and renumber as nine issues, Benge contends that (1) the trial court erred in excluding her expert's testimony (issue one), granting summary judgment in favor of Missi on her breach of fiduciary duty claim (issue two) and failure to account claim (issue three), grantingappellees' pleas to the jurisdiction on her derivative claims (issue four), awarding attorney's fees to Missi (issues five through seven), dismissing her exemplary damages claims against Missi (issue eight), and (2) we should "strike the trial court's findings of fact and conclusions of law that omit the start dates for the post-judgment interest calculation" (issue nine). We affirm.

I. BACKGROUND

In 2011, Anne, a wealthy rancher, established O&G, a general partnership with Adams and her daughter, Missi. On June 26, 2012, Anne created AFT Property, a Texas limited liability company, and she appointed herself, Adams, and Jack Andrew Carson, her lawyer, as managers. Anne was AFT Property's sole owner and member. Shortly thereafter, Anne created AFT Minerals, Ltd. (AFT Minerals), a Texas limited partnership, with Anne being the sole limited partner and AFT Property being the sole general partner.

On July 23, 2012, Anne executed the 2012 Trust appointing herself and Missi as co-trustees. Anne then gave the 2012 Trust approximately $3 million in AFT Minerals' limited-partnership interests; thus, making the 2012 Trust a limited partner of AFT Minerals with a 66.389% interest along with Anne who owned the remaining percentage.2 Subsequently, Anne sold her percentage in AFT Minerals to O&G, making O&G and 2012 Trust limited partners of AFT Minerals, while AFT Property remained the general partner. During Anne's life, AFT Minerals loaned money to O&G.

Anne died on March 30, 2015. Upon her death, Anne designated Missi to serve as sole trustee and income beneficiary of the 2012 Trust and designated Benge and Dinah Voelkel, her only grandchildren and Missi's only children, as remainder beneficiaries ofthe 2012 Trust. Missi was also the sole independent executor of Anne's estate.3 At the time of this suit, Missi had become the sole manager of AFT Property. In addition to being the trustee of the 2012 Trust, Missi was also the sole beneficiary and trustee of the Missi Thomas Trust.

On May 10, 2016, Benge filed suit against Missi for removal of Missi as the executor of Anne's estate and for declaratory judgment and request for disclosure. Benge accused Missi of having "conflicts of interest that preclude her from serving as independent executor of [Anne's] estate." Benge claimed that "[r]ather than avoiding these conflicts, [Missi] knowingly engaged in numerous self-dealing transactions that have benefitted her personally at the expense of [Anne's] Estate," and that Missi "engaged in gross misconduct and gross mismanagement in the performance of her duties as independent executor." Benge stated that Voelkel and Adams, among others, both "acting individually," were "nominal defendants." Missi filed a general denial requesting attorney's fees. Voelkel filed a general denial, stating that "as named as a Nominal Defendant in the Plaintiff's Original Petition for Declaratory Judgment, and Request for Disclosure (the "Petition") filed in this Court, by [Benge]" she denied "all of the allegations contained in the Petition and demand[ed] that [Benge] be required to prove the allegations of the Petition in accordance with law." Adams filed a general denial.

Benge amended her petition adding, among other defendants, O&G, acting in its individual capacity; AFT Minerals, acting in its individual capacity; AFT Property, acting in its individual capacity; and Adams as owner, partner, and manager of O&G, acting as amanager of AFT Property, and as manager and general partner of O&G.4 On November 21, 2016, Missi filed a motion to transfer and consolidate Benge's suit against her in her capacity as trustee with Benge's suit against her as executor of Anne's estate. The trial court granted the motion on December 14, 2016.

Benge filed her third amended petition adding, among other things, claims for declaratory relief and breach of fiduciary duty against Missi in her capacity as trustee of the 2012 Trust, acting as the owner and manager of the Friar Thomas Ranch Partnership (Ranch Partnership), acting as an owner and partner of O&G, acting as a manager of AFT Property; Adams; HJA, as manager and general partner of O&G and the Ranch Partnership; O&G AFT Minerals; and AFT Property.5 Benge also brought derivative claims on behalf of the 2012 Trust, AFT Minerals, and AFT Property against Missi, O&G, Adams, and HJA, "jointly and severally, each acting in their respective individual capacities" for what she claimed constituted improper transactions.6

Specifically, Benge sought damages on behalf of the 2012 Trust for Missi's alleged breaches of her fiduciary duties as trustee. Benge claimed that Missi breached her fiduciary duties in her capacity as trustee when she, among other things, failed to maintainan accounting of the 2012 Trust, "knowingly participated [with Adams] in . . . distributions" of "millions of dollars in loans and/or capital contributions to O&G" from AFT Minerals, and along with Adams "as the managers of [AFT Property], refused to make periodic distributions of profits to AFT Minerals' limited partners." Benge accused the parties of, among other things, deriving "a profit from a breach of fiduciary duty because they have either engaged in or knowingly participated in the self-dealing transactions," breaching "their fiduciary duty of loyalty because they engaged in the self-dealing transactions," engaging "in impermissible self-dealing because they engaged in the self-dealing transactions," and breaching "their fiduciary duty to make trust/estate property productive because they engaged in the self-dealing transactions." Benge did not specifically set out how the parties engaged in self-dealing and instead stated that the parties had engaged in self-dealing "as set out above" in other portions of her third amended petition. Apparently, Benge's complaints of self-dealing stem from her belief that Missi improperly allowed AFT Minerals to loan money to O&G and that Missi did not distribute income from AFT Minerals to the 2012 Trust as required.

In her third amended petition, Benge claimed that she had "standing to sue derivatively on behalf of the [(1)] 2012 Trust because Missi, the sole trustee cannot sue herself. . . . [and (2)] the managers of AFT Property . . . and AFT Minerals because Missi and Adams, the sole managers of AFT Property . . . cannot sue themselves." In summary, Benge alleged, in pertinent part, that her suit was

a legal proceeding to remove [Missi] as executor, to force her to disgorge any executor's commissions that she has taken, and for damages for breach of fiduciary duty. Adams, O&G . . . and Ranch Partnership have knowingly participated in Missi's breaches of fiduciary [duty] and are consequently jointly and severally liable with Missi. Plaintiff originally brought two lawsuits against Missi. One was against her in her capacity astrustee of the 2012 Trust, the other was against her in her capacity as Independent Executor of the [Anne's] Estate. Over Plaintiff's objection, this Court consolidated these two cases into the present case. In light of this consolidation, Plaintiff is filing these pleadings.

Adams, HJA, Missi, and O&G each filed separate pleas to the jurisdiction arguing that Benge did not have standing to assert any derivative claims against them because Benge is merely a remainder beneficiary of the 2012 Trust and has no interest in AFT Minerals and AFT Property.7 Voelkel filed a response stating that she supported the arguments made by appellees in their pleas to the jurisdiction.

Specifically, in her plea, Missi argued that because Benge is not a limited partner or general partner of AFT Minerals, she lacked standing to bring the claims on behalf of AFT Minerals. See TEX. BUS. ORGS. CODE ANN. § 153.402 (setting out, among other things, that only a limited partner may bring a derivative claim on behalf of a limited partnership). Next, Missi argued that Benge lacked standing to bring a derivative claim on behalf of AFT Property because Benge is "not a member of [ATF Property,] a limited liability company [, and she] cannot bring a derivative suit on behalf of the company." See id. § 101.452. Missi argued that Benge lacked standing to sue on behalf of the 2012 Trust because she "is not a current income beneficiary of the 2012 Tru...

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