McEndree v. Volke

• Decision Date: 23 September 2021
• Docket Number: No. 11-19-00351-CV,11-19-00351-CV
• Citation: 634 S.W.3d 413
• Parties: Joel A. MCENDREE, Appellant v. Jordyn G. VOLKE, Appellee
• Court: Texas Court of Appeals

634 S.W.3d 413

Joel A. MCENDREE, Appellant

v.Jordyn G. VOLKE, Appellee

No. 11-19-00351-CV

Court of Appeals of Texas, Eastland.

Opinion filed September 23, 2021

David W. Lauritzen, Jared M. Moore, Midland, for Appellant.

Jason Everett Boatright, Austin, Stephen L. Tatum, T. Derek Carson, Fort Worth, for Appellee.

Panel consists of: Bailey, C.J., Trotter, J., and Wright, S.C.J.¹

W. STACY TROTTER, JUSTICE

This appeal arises from a dispute between Joel A. McEndree, Appellant, and Jordyn G. Volke, Appellee, regarding the management of the Jordyn G. Volke Trust (the Trust), of which Appellant was the trustee and Appellee was the beneficiary. Appellee sued Appellant for breach of fiduciary duty on various grounds. Appellee moved for summary judgment, relying in part on deemed admissions that resulted from Appellant's failure to respond to Appellee's requests for admissions. See TEX. R. CIV. P. 198.2(c). The trial court granted Appellee's motion. In two issues, Appellant contends that the trial court erred (1) when it granted Appellee's motion for summary judgment in reliance on the deemed admissions and (2) when it denied Appellant's motion for new trial. For the reasons discussed below, we conclude that Appellee failed to carry her summary judgment burden. Therefore, we reverse and remand.

I. Factual and Procedural Background

Appellee's mother passed away in 1997 when Appellee was a minor. The Social Security Administration thereafter began issuing annual survivorship benefit checks to Appellee. Appellee's father, John Volke, executed a trust agreement with Appellant—his father-in-law at the time—whereby Appellant was the trustee and Appellee was to be the trust beneficiary for life. In this case, Appellee asserts that she did not become aware of the Trust's existence until 2016 because Appellant had never provided her with any distributions from the Trust, or any annual accountings.

In early 2017, Appellee filed suit against Appellant to compel an accounting of the Trust; she later amended her petition to assert claims for breach of fiduciary duty and the removal of Appellant as trustee. Appellee subsequently served Appellant with written discovery requests on August 31, 2017, which included requests for admissions. Appellant did not respond to any of the served discovery requests. On December 11, 2017, trial counsel for Appellant filed a motion to withdraw as counsel for Appellant, claiming that he was unable to effectively communicate with Appellant. The trial court granted the motion.

On May 21, 2018, Appellee filed a motion to remove Appellant as trustee and a motion to confirm the sufficiency of service. Appellant did not file a response to either motion; therefore, the trial court granted the motions. As a result, Appellant was removed as trustee and service was deemed to be sufficient when it was sent to Appellant's home address by certified and regular mail. The trial court also signed an order granting Appellee's motion to compel discovery responses and, among other things, ordered that each of Appellee's requests for admissions were deemed admitted. At some point, although the record does not clearly indicate when, Appellant produced limited discovery to Appellee, including a financial statement which showed that two distributions totaling $9,390 were made from the Trust, in 2004 and 2005, respectively.

On April 24, 2019, Appellee sent a second set of requests for admissions to Appellant's home address by certified and regular mail. These requests for admissions specifically addressed, inter alia , (1) Appellant's alleged breaches of his fiduciary duties, including his alleged failure to deposit the annual survivorship benefit checks into the Trust; (2) whether a $7,000 withdrawal from the Trust was made for Appellant's personal use; and (3) the propriety of the $9,390 in Trust distributions as referred to in Appellant's limited discovery responses. The deadline to respond to the second set of requests for admissions was May 24, 2019. As before, Appellant did not respond, and the requests were deemed admitted as a matter of law.

On July 11, 2019, Appellee filed a traditional motion for summary judgment on her breach of fiduciary duty claim, which was based in part on the deemed admissions. On August 7, 2019, Appellant, now acting pro se, filed an unsworn letter as his response to Appellee's motion for summary judgment. In his letter response, Appellant asserted that he had no knowledge of the issuance of any Social Security checks or funds, that he had never received any such checks, and that he had properly administered the Trust in his capacity as trustee. Appellant also asserted that he had been gravely ill for two years and had undergone multiple organ transplants. He further denied mishandling any Trust assets. Appellant submitted no attachments in support of his letter response. After considering the filings, the trial court granted Appellee's motion for summary judgment on August 16, 2019.²

Appellant thereafter retained new trial counsel, and a motion for new trial was filed on September 13, 2019. In the motion, in addition to challenging other summary judgment evidence, Appellant, for the first time, claimed that several of the deemed admissions were improper. Appellant asserted that, because Appellee had relied on the deemed admissions to support her motion, Appellee had failed to carry her summary judgment burden. In the alternative, Appellant requested that he be permitted to withdraw the deemed admissions. On October 3, 2019, Appellant filed a supplement to the motion for new trial that included two unsworn declarations that Appellant characterized as newly discovered evidence. Appellee filed a response in opposition to the motion for new trial and a motion to strike the supplement as being untimely. On October 15, 2019, the trial court granted Appellee's motion to strike and denied Appellant's motion for new trial. This appeal followed.

II. Standard of Review – Summary Judgment

We review a trial court's ruling on a motion for summary judgment de novo. Travelers Ins. Co. v. Joachim , 315 S.W.3d 860, 862 (Tex. 2010). If a traditional summary judgment motion is filed, the movant has the burden to show that no genuine issue of material fact exists and that the trial court should grant judgment in the movant's favor as a matter of law. TEX. R. CIV. P. 166a(a), (c) ; Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 216 (Tex. 2003). If the movant meets her summary judgment burden, the burden shifts to the nonmovant, who bears the burden to raise a genuine issue of material fact that would preclude the grant of summary judgment. Amedisys, Inc. v. Kingwood Home Health Care, LLC , 437 S.W.3d 507, 510–11 (Tex. 2014). However, if the movant does not satisfy her initial burden, the burden does not shift and the nonmovant need not respond or present any evidence. Id. (citing City of Houston v. Clear Creek Basin Auth. , 589 S.W.2d 671, 678–79 (Tex. 1979) ). This is because summary judgments must stand or fall on their own merits, and the nonmovant's failure to answer or respond cannot supply by default the summary judgment proof necessary to establish the movant's right to judgment. Id. (citing McConnell v. Southside Indep. Sch. Dist. , 858 S.W.2d 337, 343 (Tex. 1993) ).

To determine if a fact issue exists, we review the evidence in the light most favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. KMS Retail Rowlett, LP v. City of Rowlett , 593 S.W.3d 175, 181 (Tex. 2019) ; Knott , 128 S.W.3d at 215. We credit evidence favorable to the nonmovant if reasonable jurors could do so, and we disregard contrary evidence unless reasonable jurors could not. Samson Expl., LLC v. T.S. Reed Props., Inc. , 521 S.W.3d 766, 774 (Tex. 2017) ; Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009). The evidence raises a genuine issue of material fact if reasonable and fair-minded jurors could differ in their conclusions in light of all the summary judgment evidence presented. Goodyear Tire & Rubber Co. v. Mayes , 236 S.W.3d 754, 755 (Tex. 2007).

As relevant to this appeal, to prove a claim for the breach of a fiduciary duty, the plaintiff must establish: (1) the existence of a fiduciary duty, (2) a breach of the duty, (3) causation, and (4) damages resulting from the breach. ETC Tex. Pipeline, Ltd. v. Addison Expl. & Dev., LLC , 582 S.W.3d 823, 840 (Tex. App.—Eastland 2019, pet. denied) (citing First United Pentecostal Church of Beaumont v. Parker , 514 S.W.3d 214, 220 (Tex. 2017) ).

III. Analysis – Summary Judgment Order and Evidence

In support of his general contention of error, Appellant presents the following six sub-issues: (1) the record contains no evidence that overcomes the Trust agreement's limitation of trustee liability; (2) the record contains no evidence that Appellant failed to deposit the Social Security benefits checks into the Trust; (3) the deemed admissions were so improper that neither answers nor objections were required to be filed; (4) alternatively, the trial court should have permitted Appellant to withdraw the deemed admissions; (5) the trial court should have considered newly discovered evidence; and (6) fairness and justice demand that Appellant have his day in court.

A. Trustee Liability Under the Trust

In his first sub-issue, Appellant complains that the record contains no probative evidence that overcomes the Trust's limitation of trustee liability. The Trust agreement provides that the trustee may only be liable for an action or default that results from the trustee's gross negligence or willful commission of an act in breach of trust. As part of this argument, Appellant further asserts that the trial court's summary judgment order is invalid.

The order granting summary judgment that was signed by the trial court recites two findings: (1) that Appellant is liable to Appellee for breach of...