This Week in Probate and Guardianship Appeals

Doherty v. JPMorgan Chase Bank, First Court of Appeals Houston

This week’s entry comes to us from the 1st District Court of Appeals in Houston. Lois Doherty appealed the order of Mike Wood, Judge of Harris County Probate Court Number Two, who granted JPMorgan’s motion for summary judgment.

Background

Mrs. Doherty is the beneficiary of the Lois Doherty Trust, created by her late husband Wilfred T. Doherty in his Will. JPMorgan is the trustee of this Trust. Paragraph 3.3 of the Trust states that the Trustee must distribute such amounts of Trust principal as Mrs. Doherty may request to provide for her comfort, health, support or maintenance. In 2005, Mrs. Doherty suffered a stroke that left her physically impaired and she moved into her daughter’s home. This house lacked a handicap-accessible bathroom and therefore Mrs. Doherty requested funds to modify the bathroom in her daughter’s home. Mrs. Doherty requested that all of the funds in the trust be released and placed into another account that she owned.

The bank decided that they did not agree with this request and instead asked her to send them quotes for the repairs to the bathroom and they would review such quotes and make the distribution. Obviously this did not sit well with Mrs. Doherty. She therefore hired an attorney and requested that JPMorgan resign as trustee. JPMorgan refused to resign and instead requested a full judicial release. They then denied the request for funds to install a handicap accessible bathroom and continued to hold the funds.

Mrs. Doherty filed a petition for declaratory judgment seeking a declaration that in light of JPMorgan’s refusal to act, the Will allowed her to appoint a successor trustee. Both Parties then filed motions for summary judgment. Mrs. Doherty’s motion sought summary judgment on the issue that JPMorgan had refused to act under the mandatory terms of the trust and such an act entitled Mrs. Doherty to appoint a successor. JPMorgan’s motion sought summary judgment on the issue that it had not failed to act under the terms of the trust and that all of Doherty’s claims were invalid. Even though JPMorgan expressly denied Mrs. Doherty’s request for funds under a mandatory provision of the Trust, Judge Wood found in favor of the bank and granted its request for summary judgment.

The Court of Appeals reviewed the terms of the trust, acknowledged that the provisions under Paragraph 3.3 required mandatory distribution when requested for maintenance, and therefore ruled that JPMorgan had in fact refused to act under the terms of the trust. This meant that Mrs. Doherty was well within her rights to appoint a successor trustee and JPMorgan was not entitled to summary judgment. The Court reversed Judge Wood’s ruling and rendered judgment in favor of Mrs. Doherty on her declaratory judgment claim.

What does all of this mean for you? First of all, if you have a trust, make sure it says exactly what you want it to say. Secondly, if you are a beneficiary of a trust and have concerns regarding the Trustee, call us today and schedule an appointment to discuss your matter. Even where a Judge has ruled against you there may still be options available, but the timelines are short so do not put off calling an attorney that is qualified in probate matters.