DONALD M. DIAMOND AND ROGER A. DIAMOND, Appellants v. MAX M.
DIAMOND, Appellee
No. 01-89-00980-CV
COURT OF APPEALS OF TEXAS, First District, Houston
1991 Tex. App. LEXIS 151
January 17, 1991, Delivered
January 17, 1991, Filed
NOTICE: [*1] PURSUANT TO RULE 90 (i) OF THE TEXAS RULES OF APPELLATE PROCEDURE,
UNPUBLISHED OPINIONS SHALL NOT BE CITED AS AUTHORITY BY COUNSEL OR BY A
COURT.
PRIOR HISTORY: On Appeal from the Probate Court No. 1; Harris County, Texas; Trial Court Cause No.
199,489.
DISPOSITION: Judgment affirmed as reformed
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant sons challenged the judgment of the Probate Court No. 1 of Harris
County (Texas), which was rendered judgment in favor of appellee father in appellee's suit alleging fraud,
breach of fiduciary duty, and breach of the terms of trust, arising out of appellants' administration of a trust.
OVERVIEW: Appellant sons procured from their appellee father an irrevocable transfer of assets, and his
resignation as executor and trustee of the decedents estate. Thereafter, appellee filed an action against appellants
for wrongdoing arising from appellants' administration of the estate and appellee's personal assets. The trial
court granted appellee judgment based upon fraud, breach of fiduciary duty, and breach of the terms of trust.
Appellants challenged the trial court's judgment. On appeal, the court reformed the judgment to reflect a change
in the date from which prejudgment interest ran on the mental anguish award, and then affirmed the judgment
as reformed. The court found that prejudgment interest accrued beginning six months after the date the cause of
action accrued. The court found that there was evidence sufficient to support the jury's findings on all other
issues. Appellants' claim that the trial court erred in failing to award attorney's fees was waived because they
failed to request the trial court to make a finding on the bad faith issue of the Deceptive Trade Practices Act,
Tex. Bus. & Com. Code Ann. § 17.50(c) (1987).
OUTCOME: The court reformed the judgment to reflect a change in the date from which prejudgment interest
ran on the mental anguish award and affirmed the judgment as reformed because there was sufficient evidence to
support the jury's findings.
LexisNexis(R) Headnotes
Civil Procedure > Appeals > Standards of Review > Substantial Evidence > General Overview
[HN1] In reviewing legal insufficiency or "no evidence" points, the reviewing court considers only the evidence
and inferences, when viewed in their most favorable light, that tend to support the finding, and disregards all
evidence and inferences to the contrary. An appellate court is limited to reviewing only the evidence tending to
support the jury findings in a "no evidence" point of error. If there is any evidence of probative force to support
the finding, the point must be overruled and the finding upheld.
Civil Procedure > Appeals > Standards of Review > Substantial Evidence > General Overview
[HN2] "No evidence" points of error must be sustained when the record discloses one of the following: (1) a
complete absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence from giving
weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more
than a mere scintilla of evidence; or (4) the evidence establishes conclusively the opposite of a vital fact.
Civil Procedure > Appeals > Standards of Review > Substantial Evidence > General Overview
[HN3] If there is more than a scintilla of evidence to support the jury finding, the no evidence challenge fails. A
"scintilla" of evidence is when the evidence offered to prove a vital fact is so weak that it does no more than
create a mere surmise or suspicion of its existence.
Civil Procedure > Appeals > Standards of Review > Substantial Evidence > General Overview
[HN4] If reasonable minds cannot differ from the conclusion that the evidence offered to support the existence
of a vital fact lacks probative force, it is the legal equivalent of no evidence. If the evidence furnishes some
reasonable basis for differing conclusions by reasonable minds about the existence of the vital fact, it amounts
to more than a scintilla of evidence.
Civil Procedure > Appeals > Standards of Review > Clearly Erroneous Review
[HN5] In reviewing a factual insufficiency of the evidence point of error, the appellate court must first examine
all of the evidence, and, having considered and weighed all of the evidence, it should set aside the verdict only
if the evidence is so weak or the finding is so against the great weight and preponderance of the evidence that it
is clearly wrong and unjust.The reviewing court of appeals may not disregard a finding that has factual support
or make a contrary finding in entering judgment for one of the parties.
Civil Procedure > Appeals > Standards of Review > Clearly Erroneous Review
[HN6] Because the trier of fact is the sole judge of the credibility of the witnesses and the weight to be given
their testimony, the appellate court may not substitute its opinion for that of the trier of fact merely because it
might have reached a different fact conclusion.
Criminal Law & Procedure > Criminal Offenses > Inchoate Crimes > Conspiracy > Elements
Torts > Procedure > Multiple Defendants > Concerted Action > Civil Conspiracy > Elements
[HN7] The essential elements of a cause of action for civil conspiracy are: (1) two or more persons, (2) an object
to be accomplished, (3) a meeting of minds on the object or course of action, (4) one or more unlawful, overt
acts, and (5) damages as the proximate result. The agreement need not be formal; the understanding may be a
tacit one, and it is not essential that each conspirator have knowledge of the details of the conspiracy. Upon
entering a conspiracy, one becomes a party to all acts previously or subsequently done by any of the other
conspirators in pursuit of the conspiracy. Each conspirator is responsible for the acts done by coconspirators in
pursuit of the conspiracy during its existence.
Torts > Damages > Compensatory Damages > Pain & Suffering > Emotional & Mental Distress >
General Overview
[HN8] The rule in Texas is that damages are recoverable for mental suffering, even if unaccompanied by
physical suffering, when the wrong complained of is a willful one, intended by the wrongdoer to produce
mental anguish or from which such result should be reasonably anticipated as a natural consequence.
Civil Procedure > Remedies > Damages > Punitive Damages
Torts > Damages > Punitive Damages > General Overview
[HN9] Exemplary damages must be reasonably proportioned to actual damages, and the determination of
exemplary damages depends upon the facts of each particular case, taking into consideration (1) the nature of the
wrong, the character of the conduct involved, the degree of the culpability of the wrongdoer, the situation and
sensibilities of the parties concerned, and the extent to which such conduct offends a public sense of propriety.
Civil Procedure > Trials > Jury Trials > Actions in Equity
Civil Procedure > Remedies > Damages > Punitive Damages
Torts > Damages > Punitive Damages > General Overview
[HN10] The amount of punitive damages to be awarded depends on the facts of the case and rests largely within
the discretion of the jury. In addition to items of actual damages, the court may take into account equitable
relief granted to the plaintiff.
Civil Procedure > Appeals > Standards of Review > Clearly Erroneous Review
Civil Procedure > Appeals > Standards of Review > Substantial Evidence > Sufficiency of Evidence
[HN11] An appellate court is not permitted to disregard the jury's answers to the issues merely because the
jury's reasoning in arriving at its figure may be unclear to it.
Civil Procedure > Appeals > Reviewability > Preservation for Review
[HN12] Where there is no argument or cited authority in support of a point of error, the point of error is
waived.
Estate, Gift & Trust Law > Trusts > Trustees > Duties & Powers > General Overview
Governments > Fiduciary Responsibilities
[HN13] In a fiduciary relationship, a party owes the principal the duties of good faith and candor, which
includes the general duty of full disclosure respecting matters affecting the principal's interests and a general
prohibition against the fiduciary's use of the relationship to benefit his personal interest, except with the full
knowledge and consent of the principal.
Contracts Law > Contract Conditions & Provisions > Exculpatory Clauses
Estate, Gift & Trust Law > Trusts > Beneficiaries > General Overview
Estate, Gift & Trust Law > Trusts > Trustees > Duties & Powers > General Overview
[HN14] The fundamental duties of a trustee include the use of skill and prudence which an ordinary capable and
careful person will use in the conduct of his own affairs, and loyalty to the beneficiaries of the trust. Neither can
an exculpatory provision in the trust instrument be effective to relieve the trustee of liability for action taken in
bad faith or for acting intentionally adverse or with reckless indifference to the interests of the beneficiary.
Civil Procedure > Remedies > Judgment Interest > Prejudgment Interest
Torts > Damages > Interest > Prejudgment Interest
Torts > Procedure > Statutes of Limitations > General Overview
[HN15] Under the Cavnar rule, prejudgment interest accrues beginning six months after the date the cause of
action accrues. The Cavnar rule has been applied to intentional tort and fraud cases.
JUDGES: Frank C. Price, 1 Justice. Justice Bass and Justice Bill Stephens 2 also sitting.
1 The Honorable Frank C. Price, former justice, Court of Appeals, First District of Texas at Houston,
sitting by assignment.
2 The Honorable Bill Stephens, retired justice, Court of Appeals, Fifth District of Texas at Dallas,
sitting by assignment.
OPINION BY: PRICE
OPINION
OPINION
This appeal arises from a suit by appellee, Max M. Diamond, against his two sons, appellants, Donald M.
Diamond ("Donald") and Roger A. Diamond ("Roger"), for wrongdoing related to the administration of his
deceased wife's estate, two trusts established under her will, and his own personal assets. Appellee recovered
against Donald on theories of fraud, undue influence, breach of fiduciary duty, and invasion of privacy; and
against Roger on conspiracy to self-deal and breach of the terms of trust.
Appellee recovered [*2] actual damages, exemplary damages, and attorneys fees. Appellee also recovered
declaratory relief setting aside certain instruments and transfer documents, ordering distributions from the trust
funds, reimbursements to trust funds, and an accounting. More specifically, appellee received a joint and several
judgment against appellants in the sum of $ 250,000 for past mental anguish, with punitive damages against
Donald and Roger in the amount of $ 125,000 each. A remittitur reduced the punitive damages assessed against
Roger to $ 50,000. Prejudgment interest was awarded on the damages for mental anguish. Appellants were
ordered to reimburse the marital deduction trust $ 64,000 by Don and $ 45,325 by Roger. They were ordered to
reimburse the family trust $ 12,065 each.
Appellants do not contest the setting aside of the documents.
During 45 years of marriage, appellee and his first wife, Millie, had two sons, Roger and Donald, and
accumulated assets totaling approximately $ 6,000,000. In 1974, appellee suffered a heart attack. During the
recovery period, Donald helped his parents with their business and personal affairs and continued to so assist
his father after his mother died. In [*3] 1986, appellee executed a general power of attorney, appointing Donald
his attorney-in-fact.
On April 4, 1985, Millie died leaving a will. Appellee was appointed independent executor of Millie's
estate and trustee of two trusts, the marital deduction trust and the family trust. Millie's one-half of the estate,
approximately $ 3,000,000, went into the trusts (approximately $ 400,000 into the family trust and $
2,600,000 into the marital deduction trust). Appellee was the primary beneficiary of these trusts, and appellants
were the secondary beneficiaries.
The will provided that, under the marital deduction trust, the trustee was to make quarterly distributions to
the appellee out of the income from the trust assets and, such amounts of principal, as necessary, to provide for
appellee's health, support, and maintenance. It also provided that no income or principal of the marital
deduction trust should be distributed to any person other than appellee during his lifetime. Distributions from
the income and principal of the family trust were to be made to appellee and Millie's descendants for their
health, support, maintenance, and education, at the discretion of the trustee.
On May [*4] 17, 1987, appellee suffered a stroke in Galveston while at the beach with Allison Green, in
whom appellee was romantically interested. He was taken to an emergency room in Galveston and later
transported to Pasadena Bayshore Hospital. Donald asked appellee's doctor to have all but family excluded from
visiting appellee. On May 27, 1987, appellee was taken to Plaza del Oro hospital in Houston for further
recovery and rehabilitation.
Appellee testified that on or about June 9, 1987, he contacted attorney Jack Eckels about preparing a
prenuptial contract. On June 9, 1987, in appellee's hospital room, with Donald present, Eckels presented
appellee with three documents: (1) an irrevocable transfer of appellee's $ 3,000,000 of assets into the marital
deduction trust, (2) an application to resign as independent executor of Millie's estate, and (3) a resignation as
trustee from the two trusts and an acceptance of Donald as successor trustee of the two trusts. The transfer
document had not been discussed with appellee before June 9, 1987. It contained a provision eliminating
appellee's right to remove the new trustee. Appellee testified he thought he was signing the prenuptial
agreement.
[*5] Following the execution of the transfer document, appellee's name was removed from an account
containing estate assets, and Donald and Roger's names were added. Beginning January 26, 1988, Donald gave
Roger and his family $ 31,825 from the marital deduction trust and $ 50,000 to himself and his family.
Donald paid investigator and attorney fees arising from this litigation out of the marital deduction trust.
Appellee hired an attorney to assist him in eliminating what he perceived to be Donald's interference in his
personal life. He sought the return from Donald of some of his credit cards, an accounting of the assets and
transactions regarding the marital deduction trust, and to compel Donald to distribute to appellee the amounts
from the trust specified in the will.
Appellants' first point of error maintains the trial court erred in rendering judgment against Roger because
there is no evidence, and, alternatively, insufficient evidence to support the jury finding of civil conspiracy.
[HN1] In reviewing legal insufficiency or "no evidence" points, the reviewing court considers only the
evidence and inferences, when viewed in their most favorable light, that tend to support the finding, [*6] and
disregards all evidence and inferences to the contrary. Davis v. City of San Antonio, 752 S.W.2d 518, 522
(Tex. 1988); Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex. 1987); Alm v. Aluminum Co. of America, 717 S.W.
2d 588, 593 (Tex. 1986); King v. Bauer, 688 S.W.2d 845, 846 (Tex. 1985). An appellate court is limited to
reviewing only the evidence tending to support the jury findings in a "no evidence" point of error. Sherman v.
First Nat'l Bank, 760 S.W.2d 240, 242 (Tex. 1988). If there is any evidence of probative force to support the
finding, the point must be overruled and the finding upheld. Id.; In re King's Estate, 150 Tex. 662, 664, 244
S.W.2d 660, 661 (1951).
[HN2] "No evidence" points of error must be sustained when the record discloses one of the following:
a. a complete absence of evidence of a vital fact;
b. the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a
vital fact;
c. the evidence offered to prove a vital fact is no more than a mere scintilla of evidence; or
d. the evidence establishes conclusively the opposite of a vital fact.
Otis Elevator Co. v. Joseph, 749 S.W.2d 920, 923 (Tex. [*7] App. -- Houston [1st Dist.] 1988, no writ).
[HN3] If there is more than a scintilla of evidence to support the finding, the no evidence challenge fails.
Stafford, 726 S.W.2d at 16. A "scintilla" of evidence is when the evidence offered to prove a vital fact is so
weak that it does no more than create a mere surmise or suspicion of its existence. Kindred v. Con/Chem, Inc.,
650 S.W.2d 61, 63 (Tex. 1983).
[HN4] If reasonable minds cannot differ from the conclusion that the evidence offered to support the
existence of a vital fact lacks probative force, it is the legal equivalent of no evidence. If the evidence furnishes
some reasonable basis for differing conclusions by reasonable minds about the existence of the vital fact, it
amounts to more than a scintilla of evidence. Kindred, 650 S.W.2d at 63.
[HN5] In reviewing a factual insufficiency of the evidence point of error, the court of appeals must first
examine all of the evidence, Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex. 1986); and, having
considered and weighed all of the evidence, it should set aside the verdict only if the evidence is so weak or the
finding is so against the great weight and preponderance of the evidence that [*8] it is clearly wrong and
unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965);
Otis Elevator Co., 749 S.W.2d at 923. The reviewing court of appeals may not disregard a finding that has
factual support or make a contrary finding in entering judgment for one of the parties. Garza, 395 S.W.2d at
823.
[HN6] Because the trier of fact is the sole judge of the credibility of the witnesses and the weight to be
given their testimony, Rego Co. v. Brannon, 682 S.W.2d 677, 680 (Tex. App. -- Houston [1st Dist.] 1984,
writ ref'd n.r.e.), the court of appeals may not substitute its opinion for that of the trier of fact merely because it
might have reached a different fact conclusion. Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988); Benoit v.
Wilson, 150 Tex. 273, 281, 239 S.W.2d 792, 797 (1951).
[HN7] The essential elements of a cause of action for civil conspiracy are: (1) two or more persons, (2) an
object to be accomplished, (3) a meeting of minds on the object or course of action, (4) one or more unlawful,
overt acts, and (5) damages as the proximate result. Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex.
1983). The agreement need not [*9] be formal; the understanding may be a tacit one, and it is not essential that
each conspirator have knowledge of the details of the conspiracy. Bourland v. State, 528 S.W.2d 350, 354 (Tex.
Civ. App. -- Austin 1975, writ ref'd n.r.e.). Upon entering a conspiracy, one becomes a party to all acts
previously or subsequently done by any of the other conspirators in pursuit of the conspiracy. Id. Each
conspirator is responsible for the acts done by coconspirators in pursuit of the conspiracy during its existence.
Harang v. Aetna Life Ins. Co., 400 S.W.2d 810, 818 (Tex. Civ. App. -- Houston 1966, writ ref'd n.r.e.).
In applying the Massey elements of conspiracy to the facts of this case, we find there were two persons,
Roger and Donald. There was evidence which showed the objects to be accomplished: (1) the distribution of
cash out of the marital deduction trust to themselves and their families, (2) the minimization of distributions
out of the trust funds to appellee that would have the effect of maximizing the amount of trust funds that would
pass to themselves upon appellee's death, and (3) the payment for the legal expenses of the defense of their
actions out of the marital deduction [*10] trust funds. There was evidence of a meeting of the minds on these
objectives between Roger and Donald when Roger testified he agreed with everything Donald did as trustee in
the case. Roger selected the attorneys to defend himself and Donald against appellee's lawsuit, further
evidencing his agreement with Donald on the objectives to be accomplished. Roger met the requirement of one
or more overt unlawful acts by receiving the cash gifts and financing his legal defense from the marital
deduction trust fund when the terms of the trust specified that no person other than appellee was to receive
payments out of those funds during appellee's lifetime. The element of damages is met by the jury's finding,
which appellants do not dispute, of $ 225,139 in distributions that Donald should have made to appellee.
Thus, we find there was more than a scintilla of evidence to support the jury's finding of conspiracy on
Roger's part. Concerning appellants' factual insufficiency of the evidence challenge, we have examined all the
evidence, including that favorable to appellants, weighed it, and do not find the evidence supporting the jury's
finding of conspiracy so against the great weight and preponderance [*11] of the evidence that it is clearly
wrong and unjust.
We overrule appellants' first point of error.
In their second point of error, appellants contend the trial court erred in awarding appellee damages for
mental anguish, claiming there was no or insufficient evidence to support the jury finding of damages for past
mental anguish because it was not consistent with other jury findings, or, alternatively, it was excessive, and
the Court should suggest a remittitur.
[HN8] The rule in Texas is that damages are recoverable for mental suffering (even if unaccompanied by
physical suffering) when the wrong complained of is a willful one, intended by the wrongdoer to produce
mental anguish or from which such result should be reasonably anticipated as a natural consequence. Kramer v.
Downey, 680 S.W.2d 524, 525 (Tex. App. -- Dallas 1984, writ ref'd n.r.e.). Quoting from Trevino v.
Southwestern Bell Tel. Co., 582 S.W.2d 582, 584 (Tex. Civ. App. -- Corpus Christi, 1979, no writ) the court,
in Teledyne Exploration Co. v. Klotz, 694 S.W.2d 109, 112 (Tex. App. -- Corpus Christi 1983, writ ref'd
n.r.e.), described mental anguish as:
'Implying a relatively high degree of mental pain and distress. [*12] It is more than mere disappointment,
anger, resentment or embarrassment, although it may include all of these. It includes a mental sensation of
pain resulting from such painful emotions as grief, severe disappointment, indignation, wounded pride, shame,
despair and/or public humiliation.'
Tim Blacklock, a medical attendant who cared for appellee after appellee left the hospital to recuperate at
home, testified that, upon being hired, Donald told him that Allison Green was not to contact appellee. Later,
Donald asked Tim how appellee was doing with his exercising and therapy. Tim told Donald, when appellee
was denied the opportunity to see Green, he was depressed and did not have the initiative to go on, but when
he saw her it made him strive to get better. Tim testified, at this time, Donald was considering letting appellee
see Green again. Tim also testified that the arguments appellee had with his son and his concern over his
finances kept appellee depressed.
Olga Villareal, another of appellee's nursing aides, during his recuperation at home, testified that in a
telephone conversation with Donald, appellee got upset about Donald having appellee's credit cards. She heard
appellee [*13] tell Donald that he wanted him to stop interfering with his affairs. Villareal also testified
appellee "really got upset" about a mink coat that he had bought for Green, which she had returned. Appellee
wanted to give it back to Green, but said Donald lied to him saying he had disposed of it.
Appellee's doctors told his family it was important to his treatment to remember appellee was an adult and
needed the opportunity to control his own life. Appellee was concerned over Donald's control of his life and
Donald's restrictions of his movements that prevented him from leaving his house. Appellee testified that
Donald told him he had full control of him. Appellee's attorney testified appellee told him Donald claimed that
he was appellee's guardian. One witness, who talked to appellee in the late fall of 1987, said appellee was sad
and said "I don't have control. Donny has power of attorney." Appellee wrote Donald to describe his negative
feelings toward him and to tell him if he came around appellee's house anymore or opened his mail anymore he
would report him to the authorities.
On taking the witness stand, appellee testified he was upset. He testified Donald's freezing of his assets
[*14] had humiliated him. Appellee stated he had not seen his grandchildren lately because "there's such hatred
in my heart for these boys that I can't go there and try to converse decently with them."
As in the Teledyne case, where the plaintiff said he felt "violated" when his land was bulldozed without his
consent, we feel the evidence of appellee's feelings of loss of control of his life, as well as the other evidence
discussed above, reflect that degree of mental pain, severe disappointment, and indignation sufficient to support
the jury's verdict. See Teledyne, 694 S.W.2d at 112.
The fact that the jury found past mental anguish but not future mental anguish is not a conflict in the jury's
verdict. The jury evidently concluded there was sufficient evidence of past mental anguish, but were not
convinced appellee would suffer future mental anguish from Donald's and Roger's actions.
Concerning appellants' request for a remittitur, we have reviewed all of the evidence and cannot say that the
award is so excessive as to shock the conscience of this Court. Dover Corp. v. Perez, 587 S.W.2d 761, 768
(Tex. Civ. App. -- Corpus Christi 1979, writ ref'd n.r.e.). See also Mahan Volkswagen, [*15] Inc. v. Hall,
648 S.W.2d 324, 334 (Tex. App. -- Houston [1st Dist.] 1982, writ ref'd n.r.e.).
We overrule appellants' second point of error.
Appellants contend in their third point of error that the trial court erred in awarding appellee punitive
damages against appellants.
[HN9] It has been held exemplary damages must be reasonably proportioned to actual damages, and the
determination of exemplary damages depends upon the facts of each particular case, taking into consideration
(1) the nature of the wrong, the character of the conduct involved, the degree of the culpability of the
wrongdoer, the situation and sensibilities of the parties concerned, and the extent to which such conduct offends
a public sense of propriety. Wright v. Gifford-Hill & Co., Inc., 725 S.W.2d 712, 714 (Tex. 1987). [HN10] The
amount of punitive damages to be awarded depends on the facts of the case and rests largely within the
discretion of the jury. See Voskamp v. Arnoldy, 749 S.W.2d 113, 121 (Tex. App -- Houston [1st Dist.] 1987,
writ denied). In addition to items of actual damages, the court may take into account equitable relief granted to
the plaintiff. Fillion v. Troy, 656 S.W.2d 912, 915 (Tex. App. -- Houston [*16] [1st Dist.] 1983, writ ref'd
n.r.e.).
The jury found actual damages to appellee of $ 250,000 for mental anguish and that Roger and Donald
should reimburse the trusts in the amount of $ 133,455. Neither Roger nor Donald challenged the jury's
findings that they breached the terms of the marital deduction and family trusts. They do not contest the setting
aside of the three documents that allowed Donald to take control of $ 6,000,000. Considering the evidence that
within weeks of appellee having a serious stroke, and while he was still recuperating in the hospital, Donald
fraudulently obtained appellee's signature allowing the transfer of all asset documents and authorizing Donald's
and Roger's actions thereafter, in their giving and receiving large gifts from the trusts, their interference with
appellee's personal life, and the wrongful invasion of the trust for their own legal fees, we cannot say the
amount of punitive damages awarded by the jury was excessive.
We overrule appellants' third point of error.
In their fourth point of error, appellants contend the trial court erred in paragraph 10 and 11 of the
judgment in ordering appellants, Donald and Roger, to reimburse respectively [*17] $ 64,000 and $ 45,325 to
the marital deduction trust. Specifically, appellants argue that since the gifts to Donald's family out of the
marital deduction trust fund only amounted to $ 50,000 and the gifts to Roger's family only amounted to $
31,825, there is no evidence or insufficient evidence to support the jury's verdict and the judgment awarding the
higher amounts.
Appellee introduced into evidence a list of disbursements on the Merill Lynch account of the marital
deduction trust. It showed payments of $ 12,974.46 to Donald and his company, D&M Enterprises, from July
17, 1988, through January 28, 1989. The jury heard evidence that Donald was paying himself a fee for the years
1987, 1988, and 1989 for managing appellee's financial affairs. Based on the irrevocable transfer of all of
appellee's assets to Donald's control his failure to pay income from the trust to appellee until he hired an
attorney, the freezing of appellee's accounts, and other activities of Donald after June 9, 1987, the jury could
very well have concluded that Donald was no longer acting on behalf of appellee, but, instead, for himself, and
therefore, Donald should reimburse those fees to the marital deduction [*18] trust.
The jury also heard evidence that both Donald and Roger were paying their own attorney's fees out of the
marital deduction trust. The jury could have concluded that Donald and Roger should return that money to the
trust since the terms of the will relating to distributions from the marital deduction trust could be made only to
appellee during his lifetime. The amount of money taken out of the marital deduction trust fund by Donald and
Roger for payment of their own legal fees from June 14, 1988, to January 24, 1989, was $ 23,500, and there
was an additional $ 4,883.34 paid to investigators hired on their behalf to assist in the preparation of their
defense in this action.
[HN11] We are not permitted to disregard the jury's answers to the issues merely because the jury's
reasoning in arriving at its figure may be unclear to us. Adams v. Petrade Intern. Inc., 754 S.W.2d 696, 710
(Tex. App. -- Houston [1st Dist.] 1988, writ denied). We hold there was evidence sufficient to support the
jury's answers concerning the amount of money to be reimbursed to the marital deduction trust fund by Donald
and Roger. We overrule appellants' fourth point of error.
In the fifth point of error, Donald [*19] challenges the sufficiency of the evidence to support the jury's
affirmative answers to jury questions 2(a), that Donald unduly influenced appellee on June 9, 1987; to 2(b),
that Donald constructively defrauded appellee on June 9, 1987; to 2(d) that Donald breached his fiduciary duty;
and to 2(e) that Donald engaged in self-dealing. Donald and Roger both complain the trial court erred in
rendering judgment against them for punitive damages based on findings of malice.
Donald does not challenge the sufficiency of the evidence to support the jury's answers to questions 2(c),
that he committed common law fraud on June 9, 1987; 2(f), that he invaded appellee's privacy, or 2(g), that he
breached the terms of the trust. In the brief, Donald presents no argument, authorities, or references to the
statement of facts concerning the issues of undue influence or constructive fraud. [HN12] Where there is no
argument or cited authority in support of a point of error, the point of error is waived. See J. B. Custom Design
and Bldg. v. Clawson, 794 S.W.2d 38, 41 (Tex. App. -- Houston [1st Dist.] 1990, no writ). Thus, the portions
of Donald's fifth point of error related to these issues where there is [*20] no argument, no citation to
authority, nor citation to the record, are waived.
This leaves under the fifth point of error, the question of the sufficiency of the evidence to support the
jury's finding of Donald's breach of fiduciary duty, engagement in self-dealing, and the finding of malice by
Donald and Roger.
As trustee of the two trusts and executor of his mother's will, Donald was in a fiduciary relationship to
appellee. [HN13] In such a relationship, Donald owed appellee the duties of good faith and candor, which
includes the general duty of full disclosure respecting matters affecting the principal's interests and a general
prohibition against the fiduciary's use of the relationship to benefit his personal interest, except with the full
knowledge and consent of the principal. Chien v. Chen, 759 S.W.2d 484, 495 (Tex. App. -- Austin 1988, no
writ). As stated in Interfirst Bank Dallas, N.A. v. Risser, 739 S.W.2d 882, 888 (Tex. App. -- Texarkana 1987,
no writ):
[HN14] The fundamental duties of a trustee include the use of skill and prudence which an ordinary capable
and careful person will use in the conduct of his own affairs, and loyalty to the beneficiaries of the trust.
Neither can [*21] an exculpatory provision in the trust instrument be effective to relieve the trustee of
liability for action taken in bad faith or for acting intentionally adverse or with reckless indifference to the
interests of the beneficiary.
For over a year from the time Donald assumed the responsibility of trustee, he did not make the quarterly
distributions of income to appellee mandated by the terms of the will. It was not until appellee hired a lawyer
to make demands on Donald to make the distributions that Donald made some distributions to appellee of
some of the income of the marital deduction trust. Donald cut back the hourly wage of appellee's medical
attendant from $ 6.00 per hour to $ 5.50 per hour, saying there was not enough money to cover the expenses of
appellee's maintenance. However, he made $ 10,000 cash gifts out of the marital deduction trust to himself,
Roger, and their families. This had the effect of minimizing the income distribution to appellee. Donald
admitted he did not distribute to appellee all the income that had been earned from the marital deduction trust.
He paid out of the marital deduction trust funds, the legal fees to defend himself and Roger against appellee's
[*22] lawsuit for defrauding appellee of the control of appellee's assets.
Appellee's attorney asked Donald for supporting documentation concerning the assets in the trust and
transactions on the trust and received from Donald two grocery bags of bank statements. He did not receive
balance statements or any books on the trusts. The accounts were all commingled, and the records were
disorganized. Donald admitted he did not even know how much income per month was generated from the
marital deduction trust.
We hold there was sufficient evidence to support the jury's findings of breach of fiduciary duty, selfdealing,
and malice.
In their sixth point of error, appellants contend the trial court erred in its award of prejudgment interest for
mental anguish in the judgment.
The judgment awards prejudgment interest on the amount awarded for mental anguish commencing June 9,
1987, the date the fraud was committed. [HN15] Under the rule announced in Cavnar v. Quality Control
Parking, Inc., 696 S.W.2d 549, 555 (Tex. 1985), prejudgment interest accrues beginning six months after the
date the cause of action accrues. The Cavnar rule has been applied to intentional tort and fraud cases, Voskamp,
749 S.W.2d [*23] at 124. The cause of action in this case accrued June 9, 1987. Therefore, prejudgment
interest on damages for mental anguish began to accrue on December 9, 1987.
We sustain appellants sixth point of error.
In point of error seven, appellants contend the trial court erred in failing to award appellants' attorney's fees
for a groundless and bad faith or harassment suit under the Deceptive Trade Practices Act (DTPA), TEX. BUS.
& COM. CODE ANN. § 17.50(c) (Vernon 1987). Under Donwerth v. Preston II Chrysler-Dodge, Inc., 775
S.W.2d 634, 637 (Tex. 1989), the court must determine if the DTPA action was groundless, brought in bad
faith, and for the purposes of harassment. Appellants did not request the court to make a finding on the bad
faith DTPA issue. Therefore, they have waived any such claim. TEX. R. APP. P.52(a).
We overrule appellants seventh point of error.
We reform the judgment to reflect December 9, 1987, as the date from which prejudgment interest runs on
the mental anguish award and affirm the judgment as reformed.
Posts
No comments:
Post a Comment