MARSHALL AS TRUSTEE OF MARSHALL GRANDCHILDREN TRUST v. MARSHALL (2025)

OPINION

The beneficiary of a trust, Preston Marshall, sued his mother, Elaine Marshall, concerning her actions as trustee. On cross-motions for summary judgment, the trial court granted a partial summary judgment in Preston's favor on liability and denied Elaine's motion. A jury found in Preston's favor on most of the issues submitted to it, awarding about $350,000 in actual damages. And the jury found the amount of Preston's reasonable and necessary attorney's fees to be $2 million.

The trial court signed a final judgment awarding actual damages, nominal damages, and attorney's fees to Preston. In nine issues with multiple sub-issues, Elaine asks this court to render a take-nothing judgment in her favor or remand for a new trial.

We overrule Elaine's issues concerning the trial court's denial of her motion for summary judgment. We sustain several of her other issues, concluding that (1) Preston adduced legally insufficient evidence of the amount of actual damages awarded by the jury, although there is sufficient evidence of a lesser amount of damages; (2) the trial court erred by granting a partial summary judgment to Preston because a genuine issue of material fact exists about whether Elaine's complained-of actions are excused by the trust's exculpatory clause; and (3) the issue of attorney's fees also must be reversed.

We reverse the trial court's judgment and remand the case to the trial court for further proceedings.

I. Background

In 1987, J. Howard Marshall settled The Marshall Grandchildren's Trust (the Trust) with the purpose of providing for the protection, welfare, and financial security of his grandchildren—one of whom is appellee, Preston Marshall.¹ The Trust names the trustees as Preston's parents, Elaine and E. Pierce Marshall, and Harvey Sorensen. Sorensen resigned in 1996, and Pierce died in 2006. Elaine served as a trustee until her resignation in 2021. The Trust terminated in 2023 when Preston reached the age of fifty.

By at least 2015, disputes arose between Elaine and Preston. Some of those disputes are being litigated in this case while others are litigated elsewhere.² A tipping point in this case appears to have occurred in the summer of 2015 when Preston demanded an accounting from Elaine for various trusts, including this one, and Elaine fired Preston from the family business.

The central disputes in this case have been about the appointment of a successor cotrustee, Preston's request for an accounting of the Trust, the income distributions Elaine made to Preston in 2015 and 2016, and Elaine's withdrawal of Trust funds to pay her litigation expenses. We now review some of the summary judgment evidence concerning these disputes and the procedural history of the case, though we discuss some of the evidence in greater detail below when addressing the parties’ arguments on appeal.

A. Successor Cotrustee

Article XV of the Trust delineated the responsibilities of Elaine and Sorensen or their successors. Sorensen was to be “solely responsible for making all discretionary distribution decisions with respect to which other cotrustees (or cotrustee) has or may have, in the sole judgment of [Sorensen or his successor], any legal obligation, whether of support or otherwise, or which would otherwise result in any possible direct or indirect benefit to the other cotrustees or cotrustee.” The cotrustees other than Sorensen or his successor were responsible for implementing the distribution decisions of Sorensen or his successor and “making all discretionary distributions not specifically reserved to Harvey R. Sorensen or his successor.”

Article XV provided for the appointment by Sorensen of a successor cotrustee, or in the event of a failure to appoint a successor cotrustee, appointment by the senior judge of the Probate Court of Harris County. Sorensen resigned in 1996 and named Finley Hilliard as a successor, who also resigned in 1996. Hilliard did not name a successor.

In January 2015, Elaine petitioned a Harris County Probate Court to appoint Stephen Cook as a successor cotrustee. Elaine noted that both Sorensen and his successor had resigned, and there was a need for the appointment of a successor. In March 2015, Preston responded to Elaine's petition, opposing Cook's appointment because Cook did “not qualify to serve.” Preston asked the court to appoint himself as trustee or to appoint a third-party financial institution.

In May 2015, Elaine's attorney Edwin Hunter sent a letter to Sorensen, asking Sorensen to appoint Cook as a successor cotrustee “under the authority granted to you in Article XV of the Trust.” Hunter told Sorensen, “Your appointment will also be submitted to [the Probate Court], whereby we would request [the court] ratify and confirm your appointment.” Hunter asked that the matter be kept confidential. Later that month, Sorensen signed a document purportedly appointing Cook as a successor cotrustee. In June 2015, Elaine nonsuited her petition to appoint a successor cotrustee.

In October 2015, Preston filed the instant lawsuit seeking, among other things, to appoint himself as successor cotrustee. In 2016, Sorensen sent a letter to Elaine and Preston stating that he felt he had been misled and duped into appointing Cook. He alleged that Elaine's attorney promised an indemnification agreement that was never executed or received. Sorensen doubted he had authority to appoint Cook in the first place, but in any event, he withdrew the appointment and declared it void.

Later in 2016, the court granted Preston's motion for partial summary judgment on the ground that Cook was not validly appointed. The court also granted Preston's motion to appoint a successor cotrustee, Legacy Trust Company. In 2021, Elaine resigned as trustee, and the court appointed Preston as the sole trustee.³

B. Accounting

In May 2015, Preston sent a letter to Elaine's attorneys requesting an accounting of the Trust (and other trusts) dating back to its creation in 1987. Elaine responded to Preston that she did “not intend to gratuitously slake your curiosity absent a duty to account.” She noted that she received bids from accounting firms as high as $100,000 for the various accountings. She informed Preston:

In exercising my discretion as to the choice of accountants for this purpose, price may be a minor factor. However, as I have decided to allocate accounting costs to the interest of the beneficiary or beneficiaries making the request, I do want you to have an opportunity to withdraw your demand to the extent you have already seen the financial records.

When Preston filed this suit in October 2015, he sought an accounting under Section 113.151 of the Texas Property Code. See Tex. Prop. Code § 113.151 (authorizing a suit to compel an accounting if the trustee fails or refuses to deliver the accounting within ninety days). Elaine provided the accounting to Preston in May 2017—a few months after a hearing on Preston's application for temporary injunction and a few months before the court granted the temporary injunction and ordered Elaine to provide an accounting.

C. Distributions of Income

Article VIII of the Trust concerned the distribution of income to be made in the trustee's “absolute discretion”:

During and throughout the continuation of a separate trust established for a primary beneficiary, Trustee shall keep the corpus thereof invested and reinvested and shall pay and distribute the net income thereof to or for the benefit of the primary beneficiary of such trust, at such time or times, however frequently or infrequently, as Trustee, in Trustee's absolute discretion, shall deem advisable and for the best interests of such primary beneficiary.

Article XI.B provided the trustee with the power to, among other things, make distributions in cash or in kind:

B. Trustee is hereby invested with full power and authority, in Trustee's discretion, to ․ make divisions, allocations or distributions between or among any of the separate trusts or beneficiaries hereof, in cash or in kind, or partly in cash or in kind, and, to the extent any such division, allocation, or distribution is made in kind, ․ all at valuations (based upon fair market value as of the date of such division, allocation, or distribution) to be determined by Trustee, whose good faith determination regarding any such divisions, allocations, distributions, or valuations shall be binding upon the trust beneficiaries ․

Article XI.A required the trustee to pay costs and expenses incurred in the administration of the Trust with Trust income.

An accounting of the Trust showed that it did not distribute income to Preston from its inception in 1987 through 2006. Then it distributed income to Preston in 2007, 2008, 2012, 2013, and 2014. Both Elaine and Preston testified that, when the Trust distributed income before 2015, those distributions had always been in cash. She testified that from 2006 to 2014, all the income from the Trust was distributed directly to Preston. Hunter wrote in an email to Legacy Trust that the Trust had “distributed all trust accounting income to Preston or for his benefit for each year of the trust's existence.”

In June 2015, soon after Preston demanded an accounting of the various trusts, Elaine fired Preston from the family business, MarOpCo., Inc. A few days later, Sheena Bonadona, an accountant for MarOpCo, sent Preston a letter stating that Elaine was “awaiting your response” to Elaine's letter requesting that he withdraw his demand for an accounting “before determining what portion, if any, of the [stock] distributions can be passed through to you” from the Trust. In a July 2015 letter to Charles Koch, Hunter recited Elaine's viewpoint that Preston's accounting demands were “petulant, ill-considered acts.” Earlier that year, Hunter had sent a similar letter to Koch “outlining and documenting [Elaine's] challenges with Preston” that included a “more comprehensive recounting” of “Preston's misbehavior” related to the family businesses.

When Preston filed this suit in October 2015, he sought a declaration that Elaine had “no authority to curtail distributions” to him. In December 2015, Elaine sent a letter to Preston notifying him that she and Cook had made an in-kind distribution of Trust income for 2015 in the amount of $1,050,146.99 as a purchase of about a 2% interest in a promissory note made by Preston and held by the EPM Marital Income Trust (the Marital Trust).⁴ Elaine is the trustee and sole income beneficiary of the Marital Trust. The effect of the transaction was to pay down the debt that Preston owed to the Marital Trust.

At the end of 2016, Elaine sent Preston a stock certificate for 20 shares of Trof stock “as a majority of your distribution” from the Trust and a $17,544.38 wire transfer as the remainder of the 2016 income distribution.

Preston testified by declaration that the 2015 and 2016 in-kind distributions caused him to incur taxes, but Elaine did not distribute sufficient cash from the Trust to pay those taxes.

D. Payment of Legal Fees

Article XI of the Trust provided for reimbursement of the trustee's legal fees in connection with defending against a claim concerning the trustee's duties under the Trust if a court found her to be free from liability:

G. In the event that any suit is instituted by any person, whether a beneficiary hereof or otherwise, against Trustee pertaining to or concerning any act of misfeasance, malfeasance, or nonfeasance allegedly committed or neglected by Trustee in the performance of Trustee's duties and powers under this trust indenture, and in the further event that Trustee is adjudicated or is otherwise demonstrated, to the satisfaction of the court in which such suit is instituted, to be free from liability with respect thereto, then and in such event Trustee shall be entitled to reimbursement out of the trust estate for all reasonable costs and expenses, including attorneys’ fees, incurred in resisting any such suit.

In 2016 and 2017, Elaine used Trust funds to pay about $220,000 in legal expenses. She testified by deposition: “I think we mistakenly made some legal payments out of the Grandchildren's Trust. And then when the mistake was discovered it was immediately paid back.” The mistake was discovered while she was testifying. The accounting records show that she made a deposit to the Trust for the reimbursement of legal fees in March 2017.

E. Temporary Order

Following a lengthy evidentiary hearing, the trial court signed an order granting temporary relief to Preston in July 2017.⁵ The court found, among other things, that Elaine had “exhibited a pattern of hostility towards Preston.” The court found that the “effect of the 2015 distribution was to create a tax liability for Preston without providing him with any cash to pay that liability.”

The court enjoined Elaine from making any further in-kind or non-cash income distributions from the Trust and from paying attorney's fees from the Trust. The court ordered Elaine to rescind or unwind the 2015 promissory note purchase and the 2016 distribution of Trof stock. Elaine complied with this order.

F. The Live Pleadings

Preston filed a third amended petition—the live petition—in October 2018. He asserted claims for a declaratory judgment, the failure to provide a statutory accounting, breach of fiduciary duty, and breach of trust, along with a request for attorney's fees.

Regarding breach of fiduciary duty, Preston alleged that Elaine breached a duty of full disclosure when she failed to inform Preston that she was (1) trying to direct a former cotrustee, Sorensen, to appoint Cook as a successor cotrustee; (2) using Trust funds to pay down a note to herself; and (3) using Trust funds to pay her own litigation expenses. Preston alleged further than Elaine failed to manage the Trust in good faith, engaged in self-dealing, and elevated her interests above Preston's by (1) using a distribution from the Trust to pay down a note to herself; (2) using Trust funds to pay her own litigation expenses; and (3) making a distribution to Preston that resulted solely in tax liability.

Regarding breach of trust, Preston alleged that Elaine committed breaches of specific articles of the Trust when she (1) failed to make distributions in the best interests of Preston by using distributions to pay down a note to herself and increase Preston's tax liability without giving adequate funds to pay the taxes (Article VIII); (2) used trust funds to pay litigation expenses (Article XI.G); and (3) attempted to have Sorensen appoint Cook after the former had resigned and already appointed a successor cotrustee (Article XV).

Preston requested eight declarations. Many of the requested declarations were about past conduct and duplicated his other claims.⁶ But other requests concerned present and continuing injuries, such as for declarations that Elaine “continues to fail to make an accounting” of the Trust, and Elaine “continues to act with hostility toward Preston in a manner that affects her ability to properly serve as trustee.”

Preston also requested attorney's fees “as may be found equitable and just ․ because of the breaches described herein, and for fees associated with the declaratory judgment action.”

Elaine's second amended answer asserted a general denial and multiple affirmative defenses. One of those defenses was that her “liability, if any, is barred or reduced by the enforceable exculpatory clause” in the Trust. This clause in Article XI.F provided:

Trustee, in Trustee's administration of the trust, shall not be liable for good faith mistakes of law or of fact or for good faith errors of judgment, but shall be answerable only for gross, wanton, or willful misconduct in the performance of the Trustee's functions as Trustee, or for failing to exercise that degree of honesty, good faith, full disclosure and fair dealing which fiduciary-trustees are by law required to exercise toward trust beneficiaries.

G. Summary Judgment Motions

Preston filed a traditional and no-evidence motion for partial summary judgment, contending that he was entitled to a judgment as a matter of law on the liability portion of all of his claims and the requested declarations. Elaine filed a traditional and no-evidence motion for summary judgment on Preston's claims and her affirmative defense relying on the exculpatory clause, contending that she was entitled to a take-nothing judgment as a matter of law.

H. Elaine's Defense of Good Faith

In her response to Preston's motion, Elaine argued among other things that the exculpatory clause precluded a summary judgment for Preston because Preston had not shown Elaine's gross, wanton, or willful misconduct and because fact issues existed about whether Elaine acted in good faith when she (1) issued in-kind distributions; (2) used Trust funds to pay litigation expenses; and (3) attempted to have Cook appointed as successor cotrustee. The evidence in the summary judgment record in support of her good faith defense includes the following:⁷

1. In-Kind Distributions

Elaine testified at the temporary injunction hearing that she believed the 2015 distribution was in Preston's best interest because she had learned things about him that distressed her greatly, and she did not believe that providing Preston more cash was in his best interest.

In her December 2015 letter to Preston informing him of the transaction, she wrote about her awareness that Preston wanted his debt to the Marital Trust retired:

As you know, on occasions you have stated that your attorney ․ had concerns over my marital income trust holding your promissory note. You have also stated that you wish that debt be paid as quickly as possible. You will find enclosed in this letter documents moving towards this goal.

Hunter testified similarly that Preston had “long expressed an interest in seeing that note retired as soon as possible.” Hunter testified that the transaction benefited Preston because the note obligation was reduced by more than the cash available for a distribution, so he got a “better deal” than a cash distribution.

Regarding the 2016 distribution, Elaine testified that she believed it was in Preston's best interest to receive the Trof stock because it was “a very valuable thing to receive.” She testified in her declaration that this distribution gave Preston “an ongoing stream of income, rather than one lump sum payment.” She testified that she had no reason to believe Preston would be unable to meet any tax obligations based on the amount of money she knew to have been previously distributed to him. Before making the 2016 distribution, Legacy Trust confirmed with Hunter that Legacy Trust did not believe, pursuant to Article XV of the Trust, that the 2016 distribution would result in a direct or indirect benefit to Elaine.

2. Litigation Expenses

Elaine acknowledged using Trust funds to pay her litigation expenses in 2016 and 2017. As noted above, she testified it was a mistake, and when it was discovered, it was immediately paid back.

3. Appointment of Cook

Regarding the appointment of Cook, Elaine testified by declaration that she believed Sorensen could designate a successor cotrustee after his resignation, and if she was wrong, “it was an honest mistake.”

4. Advice of Counsel

Elaine testified that she always consulted with her lawyers and followed their advice before she took any action as a trustee. Other than signing checks for income tax, everything she did relating to the Trust was based on her lawyers’ advice. Regarding her decision to stop distributing income in cash, she remembered discussing it with her lawyers. She was advised by lawyers before making the 2015 and 2016 distributions and about what to disclose to Preston.

I. Summary Judgment Rulings

The trial court denied Elaine's motions and granted Preston's. The court granted Preston five declarations:

1. Elaine failed to make an accounting of the Trust as required by Texas Property Code § 113.151.

2. Elaine failed to make required disclosures about information material to Preston's rights.

3. Elaine breached her fiduciary duties arising under the Trust by failing to provide disclosures of material information to Preston.

4. Elaine breached her fiduciary duties arising under the Trust by engaging in self-dealing and by making distributions in ways that were not in Preston's interests.

5. Elaine committed breaches of the Trust when she improperly used Trust proceeds to pay litigation expenses that she incurred in suits against the beneficiary, used a distribution to pay down a note to herself, made a distribution that resulted in Preston receiving a tax liability but insufficient funds to cover the liability, and attempted to have Sorensen appoint a successor trustee in violation of the terms of the Trust, although the note was held by her as Trustee, as the distribution resulted in a potential tax liability to Preston when he had insufficient funds to cover the liability.

The court granted summary judgment on his other claims as follows:

6. Elaine failed to provide a Trust accounting under Texas Property Code § 113.151.

7. Elaine breached her duty of full disclosure of material facts by, among other things, failing to inform Preston that she was trying to direct Sorensen to appoint Cook as successor cotrustee and by using Trust funds to pay down a note to herself and to pay her own litigation expenses.

8. Elaine breached her fiduciary duties to Preston by not managing the Trust with loyalty and good faith and by acting in bad faith.

9. Elaine breached the Trust by failing to make distributions in the best interests of Preston in violation of Article VIII of the Trust when she used distributions to pay down a note to herself and to increase Preston's tax liability without giving him adequate funds to pay the taxes, although the note was held by her as Trustee, as the distribution resulted in a potential tax liability to Preston when he had insufficient funds to cover the liability.

10. Elaine breached the Trust by using Trust funds to pay litigation expenses against Preston and by setting aside reserves from the Trust funds to pay litigation expenses against Preston in violation of Article XI, Section G of the Trust.

11. Elaine breached the Trust when, in violation of Article XV of the Trust, she attempted to have Sorensen appoint a successor cotrustee after Sorensen had resigned as cotrustee and already appointed a successor cotrustee.

J. Jury Trial on Damages

The court held a jury trial on damages, exemplary damages, and attorney's fees. Robert Hancock testified about Preston's damages from the 2015 and 2016 distributions in the form of the “lost ․ opportunity to make an investment return.” Hancock testified about how the 2015 and 2016 transactions were unwound in 2017 and the cash given to Preston instead of the in-kind distributions. He noted that Preston was deprived of the 2015 distribution's $1,050,147 cash value for 605 days. Preston was deprived of the 2016 distribution's $627,000 cash value for 237 days. When the transactions were undone in 2017, Preston was not paid any interest on these amounts.

So, Hancock “wet [his] financial thumb and put it in the financial wind” to determine “what a reasonable rate of return would be expected in the marketplace” over that time period. He estimated that a “prudent or knowledgeable investor would have made” a 15% annual rate of return over both time periods based on a “well-diversified portfolio” including four major stock index funds. Hancock noted that these funds “are very popular with small and large investors.” Hancock explained that his estimate was reasonable because he put himself “in a financial time machine” that “had the benefit of foresight and hindsight.”

Hancock did not make a unique calculation for Preston. Hancock never inquired about what Preston actually spent his money on with investments in 2015 or 2016. Hancock believed his calculation was reasonable because he “perceive[d] Preston to be a knowledgeable investor.” Hancock acknowledged it was probably not possible to say “this is exactly what would have happened” if Preston had a million dollars: “So I don't really know exactly what he would have done. I mean, I could say only God knows what would have happened, but it didn't happen.”

Applying this “hypothetical knowledgeable investor” standard with a 15% annual rate of return, Hancock concluded that the amount of damages from the lost investment of the 2015 and 2016 in-kind distributions was, respectively, $273,764.17 and $59,590.56, for a total of $333,354.73.

Preston also adduced evidence that Elaine used Trust funds to pay another company, Ehlers and Associates, $5,772.50 for assisting with the Trust accounting and $11,525.00 for evaluating the 2015 distribution transaction.

In closing arguments, Preston's attorneys asked the jury to award him damages based on Hancock's calculations plus the amount of the two Ehlers invoices for several questions; and they requested $10 in nominal damages for other questions.

K. Jury's Verdict

The jury charge included seventeen questions. Seven questions asked if each of the following actions by Elaine caused damages: (1) the 2015 distribution; (2) the payment of litigation expenses; (3) the 2016 distribution; (4) her failure to comply with her duties of loyalty and good faith and acting in bad faith; (5) her failure to comply with her duty of disclosure; (6) her failure to provide timely accountings; and (7) the attempt to appoint Cook as a successor cotrustee. For each of these complained-of actions, seven additional questions asked the jury to assess damages, in separate blanks, for any (1) loss or depreciation in value of the Trust; (2) profit made by Elaine; (3) profit or interest that would have accrued to Preston; and (4) profit or interest that would have accrued to the Trust. Two questions asked about exemplary damages and another question asked about Preston's attorney's fees.

The jury awarded the most and identical damages in Question No. 8, concerning Elaine's failure to comply with her duties of loyalty and good faith and acting in bad faith, and Question No. 10, concerning Elaine's failure to comply with her duties of disclosure:

The jury awarded damages of $10 in Question No. 4 concerning damages for Elaine's payment of litigation expenses and Question No. 14 concerning her attempt to appoint Cook as a successor trustee. The jury found in Question No. 11 that Preston did not sustain any damages as a result of Elaine's failure to comply with her duty to provide timely accountings of the Trust. The jury did not answer Question Nos. 15 and 16 concerning exemplary damages. The jury found that a reasonable and necessary fee for Preston's attorneys was $2 million for representation through trial.

L. Court's Judgment and Appeal

Following post-verdict motions, including Preston's motion for an award of appellate attorney's fees, the court ordered Preston to recover actual damages of $350,652.23, nominal damages of $10 for Elaine's breach of trust by paying litigation expenses, nominal damages of $10 for Elaine's breach of trust by attempting to appoint a successor cotrustee, $2 million in attorney's fees, conditional appellate attorney's fees, prejudgment interest, and post-judgment interest.⁸

Elaine's post-judgment motions were overruled by operation of law, and she filed this appeal.

II. Damages

In her third issue on appeal, Elaine contends that (1) the jury's damages findings are immaterial because they are unrelated to the trial court's liability findings; and (2) there is no evidence of damages because Hancock provided no evidence of lost profits. We agree with Elaine that there is no evidence of the full amount of damages awarded but conclude that there is some evidence of a lesser amount of damages for “profit or interest that would have accrued,” so the remedy is a remand for a new trial on both liability and damages.

A. Immateriality Challenges

Elaine contends that any damages findings based on her failure to make all-cash distributions rather than in-kind distributions and her payment of the Ehlers invoices are immaterial because they are unrelated to the trial court's liability rulings. Elaine cites no legal authority for her arguments, and we do not find them persuasive. See Tex. R. App. P. 38.1(i) (must contain citation to authority); Bertucci v. Watkins, 709 S.W.3d 534, 542 n.9 (Tex. 2025) (“[I]f the briefing does not make arguments the court finds persuasive, its decision on an issue may reflect that failure.”).

Elaine points to only one of the trial court's liability rulings: the ninth ruling identified above. She focuses on language in the ruling about increasing Preston's tax liability out of context from the remainder of the ruling that she breached the Trust by “failing to make distributions in the best interests of Preston” when she “used distributions to pay down a note to herself.” She also does not acknowledge the court's eighth ruling identified above, i.e., that she breached her fiduciary duties to Preston by not managing the Trust with loyalty and good faith and by acting in bad faith. Part of the basis for this claim, as revealed by the live petition, included using the 2015 distribution to pay down the note to the Marital Trust. Thus, at the very least, a jury question on damages from the loss of use of the in-kind distributions’ cash value was justified by the trial court's rulings on liability. Cf. Gicor, Inc. v. Brewer, No. 09-21-00222-CV, 2023 WL 4781217, at *2, *16 (Tex. App.—Beaumont July 27, 2023, pet. denied) (mem. op.) (no error to enter judgment on jury's finding of damages because it was a proper measure of damages under the liability theories submitted and thus not immaterial).

Because we ultimately hold below that Preston adduced legally insufficient evidence to support the jury's total award of damages, we do not address Elaine's further complaint about the Ehlers invoices. See O.C.T.G., L.L.P. v Laguna Tubular Prods. Corp., 557 S.W.3d 175, 188 n.3 (Tex. App.—Houston [14th Dist.] 2018), judgm't vacated by agreement, No. 18-0906, 2019 WL 13268631, at *1 (Tex. May 10, 2019).⁹

B. Legal Sufficiency Principles

The test for legal sufficiency is whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We consider the evidence in the light most favorable to the challenged finding, crediting favorable evidence if a reasonable fact finder could and disregarding contrary evidence unless a reasonable fact finder could not. See id. at 807.

“Lost profits are damages for the loss of net income to a business measured by reasonable certainty.” Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002). Opinions or estimates of lost profits must be based on objective facts, figures, or data from which the amount can be ascertained. ERI Consulting Eng'rs, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010). Anticipated profits cannot be recovered when they are dependent upon uncertain and changing conditions, such as market fluctuations. Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994).

C. Insufficient Evidence of Amount of Damages Awarded

Hancock made no effort to tie his estimate of what a “prudent or knowledgeable investor would have made” by investing in a well-diversified portfolio of stock market index funds during the relevant time frame to any profits that Preston, himself, would have accrued (or to any profits that Elaine actually accrued). Hancock did not know how Preston invested his money. As Hancock acknowledged, “only God knows what would have happened.” Hancock relied on an assumption that was pure speculation, and thus, his testimony is no evidence of lost profit damages. See, e.g., Cargotec Corp. v. Logan Indus., No. 14-17-00213-CV, 2018 WL 6695806, at *8–12 (Tex. App.—Houston [14th Dist.] Dec. 20, 2018, pet. denied) (mem. op.) (expert's opinion relying on speculative assumptions in calculating lost profits amounted to no evidence of damages).

Attempting to determine what part of the stocks’ appreciation that Preston would have realized if he had used the cash to invest in the stock market is “too speculative.” See Miga, 96 S.W.3d at 216–17 (holding that the increased market value of stock never delivered under an options contract was not a proper measure of lost profits). Rather, the “proper way to compensate [Preston] for his lost investment opportunity is through the award of interest on his time-of-breach damages.” See Miga, 96 S.W.3d at 217.

Preston contends on appeal that a reasonable rate of return in the stock market is an appropriate method to determine the “time value” of money, i.e., Preston's damages for the loss of use of the money. He cites Coldwell Banker Whiteside Associates v. Ryan Equity Partners, Ltd., 181 S.W.3d 879, 892 (Tex. App.—Dallas 2006, no pet.), for the proposition that the court approved of an expert's damages figure that included the “lost time-value” of an investment. In Coldwell Banker, the expert calculated damages based on two different approaches—one for lost profits and one that included a lost time-value of money. See id. at 891. When the appellant challenged the evidence of lost profits, the court upheld the damages based on the alternative damages model that included the lost time-value of money because the appellant failed to challenge it. Id. at 892. The court did not approve of the expert's calculation.

D. Sufficient Evidence of a Lesser Amount of Damages

The jury charge authorized an award of “profit or interest that would have accrued” to Preston or the Trust. Interest can be a measure of compensatory damages. See In re Xerox Corp., 555 S.W.3d 518, 530–31 (Tex. 2018) (orig. proceeding). “Interest is an element of damages suffered by the loss of use of money.” Tenn. Gas Pipeline Co. v. Technip USA Corp., No. 01-06-00535-CV, 2008 WL 3876141, at *10 (Tex. App.—Houston [1st Dist.] Aug. 21, 2008, pet. denied) (mem. op.) (quotations omitted); see also Miga, 96 S.W.3d at 217 (interest is the measure of damages for “lost investment opportunity”).

Absent evidence of actual lost profit damages, “the measure of damages is the legal rate of interest on the money for the period of its wrongful detention.” Beutel v. Paul, 741 S.W.2d 510, 513 (Tex. App.—Houston [14th Dist.] 1987, no writ) (wrongful garnishment); see also Smith v. Nat'l Region Cmtys., Inc., 585 S.W.2d 655, 660 (Tex. 1979) (awarding interest to buyer in the rescission of a land sale on the amount of the purchase money). When a specific sum of money has been wrongfully withheld, the “rate of interest established by law, being a fixed standard of the value of the use of money, is adopted by the court as the measure of ․ the damages accruing from the loss of the use of the money.” Smelser v. Baker, 88 Tex. 26, 28 (1895) (claim for conversion); see also Smith, 585 S.W.2d at 660 (“[I]f interest be properly an element of damages in any case, then it is so as a matter of law; and that the courts have by analogy adopted the legal rate of interest fixed by statute as the standard by which to be governed in assessing damages for the detention of money.”).

Because the record contains evidence about the amount of cash not distributed due to the in-kind distributions and the period of withholding, the amount of interest damages is determinable as a matter of law using the statutory rate for judgment interest. See Miga, 96 S.W.3d at 217; Smith, 585 S.W.2d at 660. The trial court awarded judgment interest at a rate of 7.5%, which is less than the 15% from Hancock's damages model.

When, as here, the evidence is legally insufficient to support the amount of damages awarded but legally sufficient to support a lesser amount, the remedy is to reverse the trial court's judgment and remand for a new trial; and because Elaine contested liability, the remand encompasses both liability and damages. See Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 51 (Tex. 1998); O.C.T.G., 557 S.W.3d at 188–89.¹⁰

Elaine's third issue is sustained in part.

III. Summary Judgment

In her first two issues, Elaine contends that the trial court erred by not granting her motion for summary judgment and rendering a take-nothing judgment on all of Preston's claims because she established that her conduct did not amount to breaches of fiduciary duty or trust as a matter of law for numerous reasons. In her eighth issue, she contends that the trial court erred by granting the summary judgment for Preston because she raised fact issues about whether she acted in good faith under the exculpatory clause.

We reject each of Elaine's complaints about the trial court's denial of her motion for summary judgment. In the interest of judicial economy, we address and sustain her contention that the trial court erred by granting Preston's summary judgment.

A. Standard of Review

When both parties move for summary judgment, and the trial court grants one motion and denies the other, we review both sides’ summary judgment evidence and render the judgment that the trial court should have rendered. S. Crushed Concrete, LLC v. City of Houston, 398 S.W.3d 676, 678 (Tex. 2013).¹¹ When both parties file traditional and no-evidence motions and present summary judgment evidence, the differing summary judgment burdens are immaterial, and the ultimate question is whether an issue of material fact precludes the summary judgment. See Seward v. Santender, 713 S.W.3d 341, 353 (Tex. 2025); Scripps NP Operating, LLC v. Carter, 573 S.W.3d 781, 790 (Tex. 2019). We evaluate the evidence in the light most favorable to the nonmovant, indulging reasonable inferences and resolving any doubts against the moving party. Id. Our review is de novo. Id.

B. Trust Terms Can't Alter Some Trustee Duties

As part of her first issue, Elaine contends that the Trust gives Elaine absolute discretion about when and how to distribute income under Articles VIII and XI.B, precluding liability for Preston's claims about distributions.

“Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such as ‘absolute,’ ‘sole,’ or ‘uncontrolled,’ the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.” Tex. Prop. Code § 113.029; see also, e.g., First Nat'l Bank of Beaumont v. Howard, 229 S.W.2d 781, 783 (Tex. 1950) (“And, although the trustee's discretion is declared to be final and conclusive, the courts will interfere if it acts outside the bounds of a reasonable judgment.”). The terms of a trust may not limit a trustee's duty to act in good faith and in accordance with the purpose of the trust. Tex. Prop. Code § 111.0035.

In his live petition, Preston alleged that Elaine failed to manage the Trust in good faith, engaged in self-dealing, and failed to make distributions in Preston's best interests. Thus, despite the wide discretion given to Elaine under the Trust provisions, Preston's claims based on the distributions are not foreclosed as a matter of law due solely to the discretionary terms of the Trust. See id. §§ 111.0035, 113.029.

Elaine contends that a court may not undermine her absolute discretion to determine what distributions were in Preston's best interest, citing Di Portanova v. Monroe, 229 S.W.3d 324, 332 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). But Di Portanova acknowledges the common law requirement that a trustee's exercise of discretionary powers are reviewable if the trustee “did not exercise his discretion in good faith or [if] his decision was unreasonable.” 229 S.W.3d at 331 (quotation omitted). Unlike here, in Di Portanova there was “no pleading or proof that the Trustees have acted with mala fides or a lack of good faith.” Id.

Elaine also points to Marshall v. Ribosome L.P., No. 01-18-00108-CV, 2019 WL 2041062 (Tex. App.—Houston [1st Dist.] May 9, 2019, no pet.) (mem. op.), in which the court of appeals upheld a take-nothing summary judgment on Preston's claims against a Marshall family entity. See id. at *1. The court of appeals held there was no evidence of a breach of fiduciary duty based on a failure to make distributions when the trust instrument gave the trustee “sole discretion” to accumulate or distribute income. Id. at *6–7. But the court noted there was no evidence of bad faith, loss or injury to Preston, or any benefit to Elaine from the decision to accumulate trust income. Id. at *7. Thus, Ribosome does not help Elaine's argument that the Trust terms themselves preclude liability for Preston's claims; rather, the focus of the inquiry is whether Elaine profited from the distributions or failed to exercise her powers in good faith and in accordance with the purpose of the Trust and in Preston's best interest. See Tex. Prop. Code §§ 111.0035, 113.029.

Elaine was not entitled to a summary judgment on this ground.

C. Some Evidence of Breach of Duties of Loyalty and Good Faith

As part of her first issue, Elaine contends that she did not breach her duties of loyalty and good faith as a matter of law because (1) Preston's complaint about additional tax liabilities is baseless; (2) the 2015 in-kind distribution benefitted Preston, not Elaine; and (3) Preston could not get a judgment on unpleaded grounds.

1. Preston's Evidence of Additional Tax Liabilities

Preston alleged in his live petition a breach of loyalty and good faith when Elaine made a distribution to Preston that resulted solely in tax liability. On appeal, Elaine contends that (1) Preston adduced no evidence on summary judgment of increased tax liability; (2) Preston's expert at trial confirmed the distributions create no additional tax liability; (3) and Elaine had no reason to believe Preston was unable to meet his tax obligations.

We reject Elaine's first contention because Preston adduced summary judgment evidence, through his declaration, that Elaine “did not distribute sufficient cash from the [Trust] for [him] to pay the taxes that the in-kind distributions caused [him] to incur.” Regarding the 2015 distribution, the trial court found in its temporary order (which was included in the summary judgment record) that the 2015 distribution “create[d] a tax liability for Preston.” Thus, there is some evidence that the in-kind distributions caused Preston to incur tax liability.

We reject Elaine's second contention because, generally, we do not consider evidence adduced at a later trial to overturn a trial court's denial of summary judgment. See Bauer v. Gulshan Enterprises, Inc., 617 S.W.3d 1, 21 (Tex. App.—Houston [1st Dist.] 2020, pet. denied) (“Generally, we restrict the scope of our review of a trial court's ruling on a motion for summary judgment to that evidence that was before the trial court at the time it ruled on the motion.”); Seldon v. S & S Aggregates Co., 410 S.W.2d 231, 234 (Tex. App.—Eastland 1966, writ ref'd. n.r.e.) (rejecting both parties’ attempts to bolster their positions about a summary judgment ruling by referring to trial testimony; “We believe that the propriety of granting the motion for summary judgment on liability must be determined from the pleadings and affidavits on file at the time the court granted such motion.”). Moreover, even if the trial court would have erred by not reconsidering its partial summary judgment following the close of the evidence at trial, the remedy would be a new trial—not a rendition—because Preston was not called upon to litigate this issue at trial in light of the trial court's prior ruling in his favor. See Bi-Ed, Ltd. v. Ramsey, 935 S.W.2d 122, 123–24 (Tex. 1996).

We reject Elaine's third contention because her belief that Preston could pay his taxes is not conclusive evidence of good faith concerning her distribution decisions. Elaine's proposed definition of “good faith” is “honesty in belief or purpose” and is purely subjective. See R.R. Comm'n of Tex v. Gulf Energy Expl. Corp., 482 S.W.3d 559, 568–69 (Tex. 2016) (reviewing dictionary definitions of “good faith” and holding that the undefined statutory term meant conduct that is “honest in fact and is free of both improper motive and willful ignorance of the facts at hand”). Preston adduced some evidence raising an inference of Elaine's lack of good faith—in particular, that she had an improper motive for making in-kind distributions—because there was evidence that (1) Elaine had distributed cash to Preston for any income distributions prior to 2015; (2) Elaine started making in-kind distributions in the same year that Preston filed suit for an accounting and challenged Elaine's petition to appoint Cook; (3) Elaine's distribution decisions were explicitly linked to his demand for an accounting, based on the June 2015 letter from Bonadona; and (4) Elaine exhibited a pattern of hostility towards Preston.

2. Evidence of Benefit to Elaine

Although Elaine adduced evidence that the 2015 distribution benefited Preston in several ways, he adduced evidence that Elaine diverted over $1 million of income from the Trust to pay down a note that Preston owed to the Marital Trust—a trust for which Elaine was the principal income beneficiary. The interest rate on the note was 3%, which was lower than the range of investment returns in Hancock's expert report. Hunter wrote to Legacy Trust in late 2016 that Elaine had “serious concerns about Preston's ability/desire to make provisions for his substantial debt owed” to the Marital Trust. Considering this evidence together, there is at least some evidence that the 2015 distribution benefited Elaine.

3. Preston's Unpleaded Factual Theories

In his motion for summary judgment, Preston included several factual theories that he did not mention in his live petition in support of his claim that Elaine breached her duties of loyalty and good faith—one concerning an indemnity agreement that Elaine entered into with her attorneys, and another concerning her alleged refusal to recognize that Legacy Trust was solely responsible for Trust distribution decisions.

The trial court's order listed eleven specific claims and declarations upon which it granted the summary judgment. The summary judgment on Preston's claim for breach of fiduciary duties of loyalty and good faith referred to five paragraphs in Preston's live petition. Those paragraphs did not mention the indemnity agreement or Legacy Trust.

Preston contends, however, that these factual theories didn't need to be pleaded and that the judgment can be upheld based on a breach of fiduciary duty concerning the indemnification agreement. We disagree with Preston because his petition does not mention the indemnification agreement while he otherwise pleaded specific factual allegations regarding his claims: in-kind distributions, appointment of Cook, and payment of litigation expenses. See Bos v. Smith, 556 S.W.3d 293, 305–07 (Tex. 2018) (judgment did not conform to pleadings when it was based on an unpleaded factual theory because the plaintiff had pleaded other specific factual theories in support of the claim).

The record does not show that the trial court granted a summary judgment to Preston on unpleaded theories, and we decline to presume error.

D. Some Evidence that Cook was Appointed and Caused Injury

As part of her first issue, Elaine contends this court should render a judgment on Preston's claims based on the “attempted appointment” of Cook as a successor cotrustee because an attempt to do something cannot be a breach of fiduciary duty, citing Santarelli & Gimer v. Atida Karr Enterprises, Inc., 1987 WL 8720, at *2 (D.D.C. Mar. 13, 1987).

However, Preston adduced evidence that Elaine did not merely “attempt” to appoint Cook. Through her attorney Hunter, Elaine instigated Sorensen's appointment of Cook. Sorensen in fact appointed Cook. Cook then approved the 2015 distribution, which is a basis for part of Preston's claimed damages. Although the trial court later granted Preston's partial summary judgment claiming that Cook was not validly appointed (and the court appointed Legacy Trust in Cook's place), there is some evidence that Preston's claim was not based on purely “attempted” conduct.

Elaine was not entitled to a summary judgment on this ground.

E. Some Evidence of Materiality for “Advance” Disclosure

As part of her first issue, Elaine contends that there is no liability as a matter of law for her failure to disclose “administrative acts in advance,” including notice of “future distributions.”

Elaine acknowledges that a trustee owes a duty to disclose material facts affecting the beneficiary's rights, citing Huie v. DeShazo, 922 S.W.2d 920, 923 (Tex. 1996). “A fact is material if it would likely affect the conduct of a reasonable person concerning the transaction in question.” Fleming v. Curry, 412 S.W.3d 723, 736 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). “Materiality thus centers on whether a reasonable person would attach importance to and would be induced to act on the information in determining his choice of actions in the transaction in question.” Id. Materiality is usually a question of fact for the jury. See Capcor at KirbyMain, L.L.C. v. Moody Nat'l Kirby Hous. S, L.L.C., 509 S.W.3d 379, 385 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (“Which facts are material to a transaction will vary with circumstances—a fact that is pertinent in one context may be inapposite in another—and absent a legal rule to the contrary, materiality is an issue of fact for the jury.”).

Here, Preston alleged a breach of the duty of full disclosure of Elaine's directing Sorensen to appoint Cook as a successor cotrustee. And Preston alleged breaches of the duty of full disclosure and self-dealing by Elaine's use of Trust funds pay down a note to herself and to pay her litigation expenses.

1. Appointment of Cook

Under some circumstances a trustee need not disclose in advance that a new trustee will be appointed. See Tex. Com. Bank, N.A. v. Grizzle, 96 S.W.3d 240, 252–53 (Tex. 2002) (holding that the corporate trustee had no duty to give “advance notice” of a merger, which resulted in a new corporate trustee—as authorized by the trust document—when the trust document did not require such disclosure and included an exculpatory clause that precluded liability except for gross negligence, bad faith, or fraud).

But here, at the time Elaine instigated the nonjudicial appointment of Cook, Elaine had already received Preston's opposition to her petition for a judicial appointment, in which Preston alleged that Cook was not qualified to serve. At least a fact issue exists about whether a reasonable person would attach importance to and would be induced to act on information that a trustee was surreptitiously seeking to appoint a cotrustee, knowing that the beneficiary explicitly objected to the cotrustee as unqualified. Cf. Avary v. Bank of Am., N.A., 72 S.W.3d 779, 793 (Tex. App.—Dallas 2002, pet. denied) (summary judgment for defendant–trustee was improper when there was some evidence that the trustee accepted a settlement offer lower than the estate's tax liabilities and knew of the estate's need for tax money before accepting the settlement offer, yet the trustee failed to disclose this information to the guardian of the estate).

2. 2015 Distribution and Payment of Litigation Expenses

When a beneficiary alleges that a fiduciary engaged in self-dealing, a presumption of unfairness arises, and it becomes the fiduciary's burden to prove that the questioned transaction was made, among other things, “after full disclosure of all material information.” See, e.g., Parsons v. Trichter & LeGrand, P.C., No. 14-21-00284-CV, 2022 WL 17099869, at *7 (Tex. App.—Houston [14th Dist.] Nov. 22, 2022, no pet.) (mem. op.) (emphasis added). “Self-dealing can generally be defined as an occurrence in which the fiduciary uses the advantage of his position to gain a benefit at the expense of those to whom he owes a fiduciary duty.” Id. at *7 n.2.

As noted above, there is some evidence that Elaine benefited from the 2015 distribution. And before the 2015 distribution, all income distributions from the Trust had been in cash. Before Elaine made the 2015 distribution, she would have known that Preston claimed she had “no authority to curtail distributions.” Under these circumstances, a fact finder could determine that a reasonable person would attach importance to and would be induced to act on information regarding Elaine's planned in-kind distribution in the form of paying down Preston's debt to the Marital Trust.

Similarly, using Trust funds to pay legal expenses in defense of a beneficiary's claim of breach of fiduciary duty can amount to self-dealing. See Stone v. King, No. 13-98-022-CV, 2000 WL 35729200, at *8 (Tex. App.—Corpus Christi–Edinburg Nov. 30, 2000, pet. denied) (not designated for publication) (sufficient evidence to support claim for breach of fiduciary duty when the trustee used trust funds to pay attorney's fees incurred in defending against other claims by beneficiary); Tex. Soc. v. Fort Bend Chapter, 590 S.W.2d 156, 164 (Tex. App.—Texarkana 1979, writ ref'd n.r.e.) (corporate officers as fiduciaries may not derive personal benefit by using funds of the corporation to pay legal retainer fees, advancement of lawyer expenses, and legal fees for the defense of the officers). A trustee may be liable for failing to disclose the use of trust funds to pay attorney's fees incurred in defense of the beneficiary's claims. See Mendell v. Scott, No. 01-20-00578-CV, 2023 WL 4712050, at *17–19 (Tex. App.—Houston [1st Dist.] July 25, 2023, pet. denied) (mem. op.) (sufficient evidence to support claim for breach of fiduciary duty and damages based on non-disclosure that the trustee transferred $200,000 to a separate account to pay attorney's fees).

Preston adduced evidence that Elaine used Trust funds to pay her attorney's fees and did not disclose this fact until it became known while she was testifying. A fact finder could determine that a reasonable person would attach importance to and would be induced to act on information that a trustee was paying her litigation expenses with trust funds. See Mendell, 2023 WL 4712050, at *17–19.

In sum, Elaine was not entitled to summary judgment on the ground that there can be no liability for disclosure of the planned actions of orchestrating Cook's appointment, making the 2015 distribution, and using Trust funds to pay her litigation expenses.

F. “Corrected Breaches” Argument Not Reviewable

As part of her first issue, Elaine contends that a trustee cannot be liable for “corrected breaches” as a matter of law, referring to her repayment to the Trust of the funds used to pay her attorney's fees.¹² She cites only to several out-of-state cases.

But this argument does not appear in her motion for summary judgment. As such, this court may not grant a judgment on this basis. See Tex. R. Civ. P. 166a(c) (“Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.”); Woods MFI, LLC v. PlainsCapital Bank, No. 14-15-00655-CV, 2016 WL 6465872, at *6–7 (Tex. App.—Houston [14th Dist.] Nov. 1, 2016, pet. denied) (mem. op.) (refusing to consider the appellant's new arguments raised for the first time on appeal in support of its cross-motion for summary judgment, which the trial court had denied).

G. Exculpatory Clause

In her second issue, Elaine contends that the Trust's exculpatory clause bars all claims, entitling her to a take-nothing judgment. In her eighth issue, Elaine contends that she is entitled to a new trial because she raised a genuine issue of material fact establishing her good faith under the exculpatory clause.

1. Scope of the Exculpatory Clause

Elaine contends that the exculpatory clause applies to all of Preston's claims, while he contends that it does not apply to his breach of fiduciary duty claims. In resolving this dispute, we endeavor to enforce a trust according to the settlor's intent, which we divine from the four corners of an unambiguous trust. See Rachal v. Reitz, 403 S.W.3d 840, 844 (Tex. 2013). We attempt to construe a trust to give effect to all provisions so that no provision is rendered meaningless. Lesikar v. Moon, 237 S.W.3d 361, 367 (Tex. App.—Houston [14th Dist.] 2007, pet. denied).

Ordinarily, the fiduciary duties of good faith, fair dealing, loyalty, and fidelity impose on a trustee a duty to exercise the care and judgement that a person of ordinary prudence, discretion, and intelligence would exercise when managing their own affairs. Estate of Benson, No. 04-15-00087-CV, 2015 WL 5258702, at *6 (Tex. App.—San Antonio Sep. 9, 2015, pet. dism'd) (mem. op.); Estate of Boylan, No. 02-14-00170-CV, 2015 WL 598531, at *4 (Tex. App.—Fort Worth Feb. 12, 2015, no pet.) (mem. op.). Thus, a trustee's simple negligence or lack of diligence can result in a breach of fiduciary duty. See Estate of Benson, 2015 WL 5258702, at *6; see also Estate of Boylan, 2015 WL 598531, at *4. And, a trustee's good faith or mistake does not preclude liability for a breach of fiduciary duty. See In re Estate of Bryant, 2020 WL 1174586, at *5 (Tex. App.—Amarillo Mar. 11, 2020, no pet.) (mem. op.); Estate of Boylan, 2015 WL 598531, at *4; see also Republic Nat'l Bank & Tr. Co. v. Bruce, 105 S.W.2d 882, 885 (Tex. [Comm'n Op.] 1937) (good faith is no defense when the trustee has acted unreasonably). See generally Restatement (Third) of Trusts § 71 cmt. a (2007) (mistake); Restatement (Third) of Trusts § 93 cmt. b (2012) (mistake); Restatement (Third) of Trusts § 95 cmt. d (2012) (good faith).

But here, the Trust provides that the trustee “shall not be liable for good faith mistakes of law or of fact or for good faith errors of judgment” (Part 1). The clause continues, “but shall be answerable only for” gross, wanton, or willful misconduct, or failing to exercise that degree of honesty, good faith, full disclosure, and fair dealing which fiduciary-trustees are by law required to exercise (Part 2). We understand this language to mean that conduct falling within the scope of Part 1 is mutually exclusive of conduct falling within the scope of Part 2, such that a good faith mistake of law, mistake of fact, or error in judgment could not amount to gross, wanton, or willful misconduct, or a failure to exercise the duties of honesty, good faith, full disclosure, and fair dealing. Because a claim for breach of fiduciary duty ordinarily can be brought even for a trustee's good faith mistakes, Part 1 of the exculpatory clause would be rendered meaningless if it could not apply to a claim for breach of fiduciary duty.

This construction is best understood in the context of Texas Commerce Bank, N.A. v. Grizzle, 96 S.W.3d 240 (Tex. 2002). There, an exculpatory clause provided that a trustee “shall not be liable for any act or omission except in the case of gross negligence, bad faith, or fraud.” Id. at 243. The trust also provided that the powers of the trustee “shall always be exercised only in a fiduciary capacity, and nothing herein shall be construed to limit the fiduciary obligation of the Trustee.” Id. The supreme court held that the exculpatory clause applied to the beneficiary's breach of fiduciary duty claim that the trustee engaged in “self-dealing defined as the misapplication or mishandling of trust funds, including the failure to promptly reinvest trust monies.” Id. at 249. Thus, the exculpatory language—precluding liability except for gross negligence, bad faith, or fraud—applied to claims for breach of fiduciary duty despite the trust stating that “nothing herein shall be construed to limit the fiduciary obligation” of the trustee.

Of course, no exculpatory clause in a trust may relieve a trustee of liability for any profit derived by the trustee from a breach of trust. Tex. Prop. Code § 114.007(a). Thus, to the extent Preston can prove any profit to Elaine resulting from her breaches, the exculpatory clause would not apply.

2. Meaning of “Good Faith”

The parties disagree further about the meaning of “good faith” for determining what evidence satisfies the exculpatory clause. Elaine contends it is purely subjective: “honesty in belief or purpose.” See, e.g., R.R. Comm'n of Tex v. Gulf Energy Expl. Corp., 482 S.W.3d 559, 568–69 (Tex. 2016) (reviewing dictionary definitions of “good faith”). Preston contends there should be an objective component such that any subjective belief must also be “reasonable in light of existing law.” See Lee v. Lee, 47 S.W.3d 767, 795 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (determining whether an executor could recover attorney's fees for defending a removal action in good faith, reasoning that an executor acts in good faith when she subjectively believes her defense is viable “if that belief is reasonable in light of existing law”).

In construing an undefined term to determine the settlor's intent, we give common words their plain meaning and may consult dictionary definitions. See Lesikar, 237 S.W.3d at 367. In consulting various dictionary definitions, our supreme court has noted that definitions of good faith “focus overwhelmingly on subjective state of mind.” Gulf Energy, 482 S.W.3d at 568. In determining the meaning of good faith in a statute, the court rejected imposing an objective standard and relied on its earlier decision concerning a surety agreement, holding that “good faith” refers to conduct that is “honest in fact and is free of both improper motive and willful ignorance of the facts at hand.” Id. at 569; see also Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285 (Tex. 1998).

Lee involved an award of attorney's fees that depended upon whether a party's position in a lawsuit was maintained in good faith. See 47 S.W.3d at 792. Requiring a party's position in a lawsuit to be “reasonable in light of existing law” is consistent with the nature of the proceedings (a lawsuit) and the award to be gained (attorney's fees). But we cannot rely on public policy, as this court did in Lee when construing a statute, to add a requirement of “reasonable in light of existing law” to the words used by the settlor in a trust. See Grizzle, 96 S.W.3d at 250, 256 (holding that the court of appeals erred by relying on public policy concerns to exempt all self-dealing from an exculpatory clause because the State's public policy is reflected in its statutes).

As noted above, a trustee ordinarily may be liable for breach of fiduciary duties even when her actions are made in good faith if her actions nonetheless fall below an objective standard of reasonableness. See Estate of Benson, 2015 WL 5258702, at *6. See generally Restatement (Third) of Trusts § 87 cmt. c (2007) (noting that a trustee may abuse its discretionary powers by acting in bad faith or by acting unreasonably; “a good-faith decision of a trustee [may] be found unreasonable”). To give effect to the exculpatory clause here, as the settlor intended, we cannot impose an objective or reasonableness standard for the trustee's good faith mistakes of law, mistakes of fact, or errors of judgment. See Gulf Energy, 482 S.W.3d at 568 (reasoning that it makes sense not to include a reasonableness standard because then the “good-faith defense merely duplicates the negligence standard and serves no purpose”). We follow the Supreme Court of Texas for the common and ordinary meaning of good faith: honesty in fact and free of both improper motive and willful ignorance of the facts at hand. See id. at 569.

With this definition in mind, we review the evidence filed with the parties’ competing motions for summary judgment.¹³

3. Some Evidence of Bad Faith

Elaine contends that she was entitled to a take-nothing judgment as a matter of law because she conclusively established her good faith or because Preston adduced no evidence of her bad faith, i.e., a lack of good faith.

Generally, whether a party breached a fiduciary duty is a question of fact. Fleming v. Curry, 412 S.W.3d 723, 734 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). Similarly, whether a party acted in good faith usually is a question of fact to be determined under all the circumstances. See Mittelsted v. Meriwether, 661 S.W.3d 867, 906 (Tex. App.—Houston [14th Dist.] 2023, pet. denied) (attorney's fees for an executor). “An inquiry into a party's state of mind turns on motives and credibility.” McLaurin v. McLaurin, No. 01-14-00710-CV, 2016 WL 3023020, at *15 (Tex. App.—Houston [1st Dist.] May 26, 2016, pet. denied) (mem. op.) (addressing bad faith under Tex. R. Civ. P. 13). “Intent is a fact question uniquely within the realm of the trier of fact because it so depends upon the credibility of the witnesses and the weight to be given to their testimony.” Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986) (intent to defraud).

Preston adduced some evidence raising an inference of Elaine's bad faith—in particular, that she had an improper motive or was willfully ignorant of the facts—regarding her decisions to make in-kind distributions, to have Cook appointed, and to use Trust funds to pay her attorneys.

As noted above regarding distributions, there is evidence that (1) Elaine had distributed cash to Preston for any income distributions prior to 2015; (2) Elaine started making in-kind distributions in the same year that Preston filed suit for an accounting and challenged Elaine's petition to appoint Cook; (3) Elaine's distribution decisions were explicitly linked to his demand for an accounting, based on the June 2015 letter from Bonadona; and (4) the distributions caused Preston to incur tax liabilities without the cash to pay them.

As noted above regarding the appointment of Cook, Elaine sought and achieved Cook's appointment at a time that she knew Preston opposed the appointment because Preston believed Cook to be unqualified. And Sorensen's letter alleged that Elaine's attorneys misled and duped him into making the appointment with promises that were never fulfilled.

As noted above regarding the payment of litigation expenses, Elaine's withdrawal of Trust funds to pay her expenses to litigate against a beneficiary is some evidence of self-dealing. This evidence raises an inference of bad faith. See InterFirst Bank Dall., N.A. v. Risser, 739 S.W.2d 882, 897–98 (Tex. App.—Texarkana 1987, no pet.) (finding of self-dealing “establishes an improper motive” to satisfy bad faith); see also Dandachli v. Active Motorwerks, Inc., No. 03-19-00494-CV, 2021 WL 3118437, at *6 (Tex. App.—Austin July 23, 2021, no pet.) (mem. op.) (transfer of partnership funds from joint account to sole account reflected “an attempt at self-dealing” and “a failure to act in good faith”).

Moreover, Elaine otherwise exhibited a pattern of hostility towards Preston. She fired him from the family business. In letters written on her behalf, Hunter described Preston's “petulant, ill-considered acts” and described a “comprehensive recounting” of “Preston's misbehavior.” She also signed an indemnification agreement with her lawyers, which she testified might “slow [Preston] down on litigation.”

Considering all of the circumstances, a fact finder could infer that Elaine's alleged breaches of fiduciary duty were not merely the result of good faith mistakes of fact, mistakes of law, or errors in judgment. Elaine is not entitled to a take-nothing judgment under the exculpatory clause.

Elaine's second issue is overruled.

4. In the Interest of Judicial Economy, Some Evidence of Good Faith

Although the resolution of Elaine's third issue above concerning damages results in a reversal of the trial court's judgment and remand for a new trial on liability, we will address Elaine's contention that the trial court erred by rendering the partial summary judgment on liability for Preston because there is some evidence of her good faith under the exculpatory clause. The issue has been raised and briefed; the trial court ruled on it below; and there is no point in causing the parties and courts to waste further time and money. See, e.g., Clay Expl., Inc. v. Santa Rosa Operating, LLC, 442 S.W.3d 796, 802–03 (Tex. App.—Houston [14th Dist.] 2014, no pet.).

Elaine's evidence of good faith is detailed above in Part I.H of this opinion. In sum, Elaine testified that she believed both in-kind distributions were in Preston's best interest, the withdrawal of funds to pay litigation expenses was a mistake and was immediately reimbursed when it was discovered, and the attempt to have Cook appointed was an honest mistake. Moreover, she always consulted with lawyers and followed their advice before she took actions as a trustee, which can provide some evidence that she acted in good faith. See Neuhoff Bros. Packers Mgmt. Corp. v. Wilson, 453 S.W.2d 472, 474–75 (Tex. 1970) (holding that there was no evidence of a lack of good faith; “consultation with an attorney is not evidence of bad faith; on the contrary, it was a wise and cautious procedure”); Gray v. City of Galveston, No. 14-12-00183-CV, 2013 WL 2247386, at *5 & n.7 (Tex. App.—Houston [14th Dist.] May 21, 2013, no pet.) (mem. op.) (noting that an inference of reasonableness and good faith may arise when following advice of counsel); cf. Jacobs, Bernheim & Co. v. Crum, 62 Tex. 401, 417 (1884) (evidence of the reliance on the advice of counsel is admissible to prevent exemplary damages).

We agree with Elaine that there is some evidence that her actions resulted from good faith mistakes of fact, mistakes of law, or errors in judgment as honest mistakes or errors free from improper motive and willful ignorance. Her motives and credibility should be assessed by the trier of fact. See McLaurin, 2016 WL 3023020, at *15; see also Spoljaric, 708 S.W.2d at 434. But as noted above, to the extent Preston can show Elaine's profits from the challenged actions, he may recover regardless of whether Elaine acted in good faith. See Tex. Prop. Code § 114.007(a).

Elaine's eighth issue is sustained.¹⁴

IV. Declaratory Judgment and Accounting

In her fourth issue, Elaine contends that the trial court abrogated its summary judgment declarations when it did not repeat those declarations in the final judgment and, in any event, Preston's request became moot because there is no ongoing injury. As part of her first issue, Elaine makes a similar argument that if this court remands any part of the case, it should not remand Preston's accounting claim because the final judgment does not award relief on that claim; it is undisputed that Elaine ultimately provided an accounting; and the jury found that her failure to provide a timely accounting did not cause any damages.

We need not decide whether the trial court impliedly vacated its summary judgment rulings by not repeating the declarations verbatim or referring explicitly to the accounting in the final judgment. The record is clear that the trial court granted Preston some declarations in the summary judgment and ruled that Elaine failed to provide an accounting under Section 113.151 of the Property Code, and then the trial court awarded attorney's fees in the final judgment. Preston had pleaded in his live petition for attorney's fees as may be equitable and just “associated with the declaratory judgment action” and because of “the breaches described herein.” Preston also cited Section 113.151 in his petition, which authorizes the recovery of costs and attorney's fees.

Even if the dispute underlying Preston's requested declarations and the accounting claim had become moot by the time of trial because all of the complained of actions had been resolved or “undone,”¹⁵ Preston's “claim is not moot because [he] sought attorney's fees under the Declaratory Judgments Act.” Ward v. Lamar Univ., 484 S.W.3d 440, 451 (Tex. App.—Houston [14th Dist.] 2016, no pet.) (citing Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005)). A case brought under the Declaratory Judgments Act “remains a live controversy, even if all requests for substantive declaratory relief become moot during the action's pendency, as long as the claim for attorneys’ fees under the Act remains pending.” Id. (quotation omitted). Elaine's reliance on Robinson v. Alief Independent School District, 298 S.W.3d 321 (Tex. App.—Houston [14th Dist.] 2009, pet. denied), is inapposite because there was no issue of attorney's fees raised in that case. See id.

Moreover, Elaine does not cite any legal authority concerning her request that we not remand the accounting claim, nor does she address whether the claim and associated attorney's fees are separable without unfairness to the parties under Rule 44.1. See Tex. R. App. P. 44.1(b); see also Bertucci v. Watkins, 709 S.W.3d 534, 542 n.9 (Tex. 2025) (“[I]f the briefing does not make arguments the court finds persuasive, its decision on an issue may reflect that failure.”).

Elaine's fourth issue and the part of her first issue regarding the accounting claim are overruled.

V. Attorney's Fees

In her ninth issue, Elaine contends that the award of attorney's fees should be reversed and remanded because the extent to which Preston prevailed has changed. We agree with Elaine. Regardless of whether the trial court awarded fees under the Declaratory Judgments Act or the Trust Code, we will remand the issue of attorney's fees to the trial court in light of the resolution of other issues in this appeal. See Morath v. The Tex. Taxpayer & Student Fairness Coalition, 490 S.W.3d 826, 885 (Tex. 2016) (declaratory judgment); Alpert v. Riley, 274 S.W.3d 277, 295 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (Section 114.064 of the Trust Code); see also Tex. Prop. Code § 113.151 (court may, in its discretion, award attorney's fees against the trustee).

Elaine's ninth issue is sustained.

VI. Conclusion

We overrule all of Elaine's rendition points except the part of her third issue complaining about the sufficiency of the evidence concerning the amount of damages. Because the record contains sufficient evidence of some lesser amount damages, the remedy is a remand for a new trial on both liability and damages. In the interest of judicial economy, we sustain Elaine's eighth issue concerning the trial court's summary judgment on her affirmative defense under the exculpatory clause. And finally, we sustain her ninth issue concerning attorney's fees.

We reverse the trial court's judgment and remand for a new trial.

FOOTNOTES

1.   Consistent with its terms, the initial Marshall Grandchildren's Trust was divided into two separate trusts—one each for the benefit of the settlor's grandchildren. This dispute concerns only one of the trusts.

2.   Elaine contends, “[T]his case is not about money—it is about the leverage the final judgment creates for Preston in other lawsuits against his mother.” Pierce contends, “Elaine Marshall has opened many battlefronts in a byzantine campaign to take her son Preston's inheritance from him․ This case is about just one of those fronts.” See, e.g., Marshall v. MarOpCo., Inc., 714 S.W.3d 724 (Tex. App.—Houston [1st Dist.] 2025, pet. filed); Marshall v. Marshall, No. 14-18-00094-CV, 2021 WL 208459 (Tex. App.—Houston [14th Dist.] Jan. 21, 2021, pet. denied) (mem. op.); Marshall v. Ribosome L.P., No. 01-18-00108-CV, 2019 WL 2041062 (Tex. App.—Houston [1st Dist.] May 2019, no pet.) (mem. op.); Marshall v. Marshall, 340 So.3d 921 (La. App. 1st Cir. 2021).

3.   Article XV required a successor cotrustee for Sorensen only if “E. Pierce Marshall and/or Elaine T. Marshall are serving as cotrustees or cotrustee.”

4.   In 2008, the Marital Trust sold Preston 3,500 shares of Trof, Inc. stock in exchange for a promissory note from Preston in excess of $53 million.

5.   The court later admitted the order as summary judgment evidence.

6.   For example, Preston sought a declaration that Elaine “breached her fiduciary duties arising under the [Trust] by failing to provide disclosures of material information to Preston, by engaging in self-dealing, and by making distributions in ways that were not in Preston's best interests.”

7.   Preston objected to some of this evidence, but it does not appear that the record contains a ruling on these objections; the parties don't cite to one. Thus, we consider it in determining whether she raised a fact issue. See FieldTurf USA, Inc. v. Pleasant Grove Indep. Sch. Dist., 642 S.W.3d 829, 837 (Tex. 2022) (“Without both an objection and a ruling, the complained-of evidence remains part of the summary judgment record and should be considered by the court of appeals in reviewing the trial court's judgment.”).We note that Elaine submitted much of the same evidence with her own motion for summary judgment, and the trial court signed an order granting Preston's separate objections to that evidence. In her sixth issue on appeal, Elaine challenges several of those rulings, but we do not address this issue because, even considering the excluded evidence, we ultimately hold that Elaine was not entitled to a summary judgment. See Tex. R. App. P. 47.1; see also Wu v. Lumber Liquidators, Inc., No. 14-20-00765-CV, 2024 WL 3160554, at *5 n.7 (Tex. App.—Houston [14th Dist.] June 25, 2024, no pet.) (mem. op.).

8.   The court ordered prejudgment interest to begin accruing on different dates for the $333,354.73 “related to the in-kind distributions” and the $17,297.50 “related to the Robert Ehlers invoices.”

9.   For the same reason, we do not address Elaine's similar complaint about the damages related to the Ehlers invoices as part of her first issue on appeal, wherein she contends that the judgment awards Elaine damages for an “unpleaded claim for conduct expressly allowed by the Trust.”

10.   We do not suggest a remittitur because Elaine contests her liability and we address one of her new-trial liability issues in the interests of judicial economy. See Rente Co. v. Truckers Exp., Inc., 116 S.W.3d 326, 335 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (declining to suggest a remittitur because court of appeals was remanding another claim for retrial and the issues of damages for both claims were related).

11.   But unlike the trial court, we may not render a partial judgment on liability and remand the issue of damages to trial. See Juen v. Rodriguez, 615 S.W.3d 362, 365 (Tex. App.—El Paso 2020, no pet.). Compare Tex. R. Civ. P. 166a(a), with Tex. R. App. P. 44.1(b).

12.   Elaine also refers to the fact that her accountant mistakenly deposited the money from the 2015 distribution transaction into the wrong bank account, but this fact does not appear to be a basis for the summary judgment.

13.   The parties agree that, generally, an exculpatory clause is an affirmative defense. They disagree about who bears the burden to establish evidence of good or bad faith, at least at the summary judgment stage, and how this impacts the standards for traditional and no-evidence summary judgment motions. See Kohlhausen v. Baxendale, No. 01-15-00901-CV, 2018 WL 1278132, at *3 (Tex. App.—Houston [1st Dist.] Mar. 13, 2018, no pet.) (mem. op.) (“After the trustee establishes the existence of the exculpatory clause, the burden shifts to the nonmovant to bring forward evidence negating its applicability.”). Because the record contains some evidence of Elaine's good faith and bad faith, and the ultimate issue is whether there is a genuine issue of material fact when both parties filed cross-motions and evidence, see Scripps NP Operating, LLC v. Carter, 573 S.W.3d 781, 790 (Tex. 2019), we need not resolve this dispute about burden-shifting, which Elaine makes the basis of her seventh issue on appeal.

14.   We do not address Elaine's arguments, as part of her eighth issue, regarding Elaine's temporary deposit of the 2015 distribution funds into the wrong bank account because it does not appear from the record that the trial court granted a summary judgment for Preston based on this allegation.

15.   Elaine notes that she provided an accounting to Preston, unwound the in-kind distributions, and reimbursed the Trust for the withdrawn attorney's fees; and the Trust ultimately terminated and distributed all assets to Preston.

Ken Wise, Justice