[mp_image id=”2272″ size=”full” link_type=”custom_url” link=”#” target=”false” caption=”false” align=”left”] Power of Attorney A power of...Read More
Tag: Fiduciary duty
Bank is not Liable Says Texas Supreme Court
In what I consider a strange holding, the Texas Supreme Court ruled in 2015 that when a Texas bank gives money to wrong person, the bank may not be liable.
The case dealt with a joint account with right of survivorship. A husband and wife opened the account. The account was a joint account with right of survivorship meaning that when one died, the survivor owned the account. The account also had a pay on death clause that paid the money to two people equally when the
last of husband or wife died. When the bank heard that the husband died, they issued a check to the two pay on death beneficiaries instead of leaving the money in the account under the wife’s name. One of the pay on death beneficiaries (first) kept the money. The other one (second) put the money into an account for the wife. He also had a power of attorney for wife and demanded that the bank reimburse the wife for the money that had gone to the first one. The bank admitted the mistake and attempted, unsuccessfully, to get the money back from the first one. After the wife died, the executor of her estate (second) filed suit against the bank.
A jury found that the bank breached its duty to wife but found that the wife suffered no damages. The trial court entered a judgment against the bank for the full amount given to the first one, called judgment notwithstanding the verdict, JNOV. The court of appeals upheld the judge’s JNOV. However, when the case went to the supreme court, they overturned it. The supreme court ruled that the estate suffered no damage because the one half of the original account would have gone to the first one if no changes had been made! This doesn’t address the issue of what would happen if the wife had all the money and decided to spend it or to put it into another account (as she had done after the funds were disbursed.) I don’t understand how the bank is not liable for giving depositor’s money away. There was no discussion of any constraint on the wife to use that money, to give it to someone else or to just go to Las Vegas and blow it. It was wife’s money! How could giving it to someone else not cause damages!
The only way to justify this case is that the two pay on death beneficiaries were not relatives of the husband and wife and that if the bank had paid the money back to wife, it would have ended up in the account opened by the second beneficiary after the fact and he would get all of the money. There is no discussion of these issues or what the wife’s wishes were. There is a brief mention of a guardian for wife but not discussion of what wife wanted done with the money.
Intentional or Negligence Acts This post concerns fiduciary duties in Texas. The case that is discussed deals with an Executor but could also apply to a trustee or any other fiduciary in Texas. A court of appeals ruled in 2014...Read More
Failure To Follow An Order As with most legal questions, it depends. When a judge orders someone to do something and that person doesn’t do it, the judge can hold him in contempt and put him in jail. Failure To Pay A Debt...Read More
In Texas, a trustee or other fiduciary may not be able to avoid liability for breach of his fiduciary duty by relying on other professionals like accountants and attorneys. In a case in Houston, children sued their father who...Read More
In two recent cases in the San Antonio area, the Texas Supreme Court was asked to decide if two banks were required to return money to an estate that the banks had paid out to a person with fraudulent papers. The facts were that...Read More
What are the Signs The United States government’s Administration on Aging, a part of the U.S. Department of Health & Human Services, identifies the major types of elder abuse such as physical abuse, sexual abuse,...Read More
The Texas Supreme Court decided a case in 2010 that answered the question of fee disgorgement. In the case, two business partners decided that one partner would sell his interest to the other partner. Partners are fiduciaries to...Read More
Once the executor or administrator in a probate case is appointed, he must file an inventory of all of the property belonging to the estate. TPC 250. The inventory has to be filed within 90 days of his appointment. Once filed,...Read More
The short answer is, yes it can be. An informal relationship may give rise to a fiduciary duty when one person trust in and and relies on another, whether the relationship is a moral, social, domestic, or purely personal one. A...Read More
Texas has a criminal statute that makes it a felony offense to misapply fiduciary property. Many of the cases dealing with the criminal aspect of misapplication of fiduciary property deal with persons who have powers of attorney...Read More
In a case decided in 2005, a man had an account at a financial institution. He originally opened the account as a joint account with right of survivorship with his daughter. That means that he and his daughter were joint...Read More
Search this site
Subscribe to our Newsletter
Board Certified, Personal Injury Trial Law — Texas Board of Legal Specialization. We handle litigation cases related to inheritance disputes including will contest, related property disputes and associated torts throughout Texas. Our principal office is in Lantana, Texas. Contact Robert