Myrick v. Moody National Bank
336 S.W.3d 795
| Tex. App. | 2011Background
- Trust created in 1934; Moody National Bank (trustee) holds Rio Bonito Ranch in trust for Moody III's issue.
- Trust instrument authorizes possession, holding, and management of the stock and assets, with distribution to beneficiaries after termination.
- Ranch operated under leases since 1966; ABG, Inc. leased the ranch and later held over after lease terms expired.
- Trustee negotiated a new lease with ABG allowing continuation for up to 180 days after termination and 90 days to remove non-native game animals; trustee cited Trust Code § 113.011(b) as authority to extend beyond termination.
- Myrick, a beneficiary, objected to the proposed lease terms and sued for declaratory relief challenging trustee’s authority to extend beyond termination.
- Trial court granted partial summary judgment in favor of trustee on lease-extend authority, and later granted declaratory relief on borrowing authority; final judgment incorporated these rulings; Myrick appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to lease beyond trust termination | Myrick contends trust instrument limits authority | Moody National Bank argues Trust Code allows extension | Yes; no conflict between trust and Code; trustee may enter lease extending beyond termination. |
| Authority to borrow against the trust estate | Contends no ripe controversy; advisory opinion | Trustee has right to borrow to cover expenses; controversy ripe given threats | Yes; controversy ripe; trustee may borrow and encumber the estate. |
Key Cases Cited
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (summary-judgment standards; de novo review applicable)
- Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (burden on movant; summary judgment standard)
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (evidence in evaluating issues on appeal)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (rigorous standard for summary judgment; reasonableness)
- Hurley v. Moody Nat’l Bank of Galveston, 98 S.W.3d 307 (Tex.App.-Houston 2003) (trust interpretation principles)
- Conte v. Conte, 56 S.W.3d 830 (Tex.App.-Houston 2001) (trust interpretation and power limits)
- Sorrel v. Sorrel, 1 S.W.3d 867 (Tex.App.-Corpus Christi 1999) (trust termination distribution per stirpes)
- Dierschke v. Cent. Nat'l Bank, 876 S.W.2d 377 (Tex.App.-Austin 1994) (Trust Code conflict rule; instrument governs when inconsistent)
- Bonham State Bank v. Beadle, 907 S.W.2d 465 (Tex. 1995) (jurisdiction for declaratory judgments in trust matters)
- Harris Cnty. Mun. Utility Dist. No. 156 v. United Somerset Corp., 274 S.W.3d 133 (Tex.App.-Houston 2008) (ripe controversy may arise from threats and ongoing litigation)