Probate, trust, guardianship and inheritance litigation
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Texas Supreme Court: No Right To a Jury Trial In Trust Modification Actions

On June 17, 2022, in In the Matter Of Troy S. Poe Trust , the Texas Supreme Court determined that there is no right to a trial by jury in a judicial trust-modification action.

A Review of the Facts

In the lower court, the two trustees, who could not agree on anything, were involved in a trust modification action.  One of the trustees moved to modify the trust to add a trustee, to require a majority for decision making, and to define acceptable expenditures from the Trust.  The other trustee moved for a jury trial.  The probate court denied the request for a jury trial and modified the trust.

The appellate court reversed the probate court, determining that the probate court abused its discretion in denying the trustee’s demand for a jury trial because the question of whether the trust needed to be modified was a fact question.  The court of appeals reasoned that the Trust Code “generally provides for jury trials” by incorporating the Texas Rules of Civil Procedure, which in turn set forth the procedures for requesting a jury. The Texas appellate court declined to address the appropriateness of the modification, since doing so would have been purely academic.  For more background, read Jury Trials In Texas Trust Actions, where we wrote about the appellate court decision.

The case arrived at the Texas Supreme Court when Bock (one of the trustees) and Troy (the sole beneficiary) sought rehearing, challenging the appellate court’s statutory analysis and arguing, for the first time, that no jury right attaches in a Section 112.054 judicial trust-modification proceeding because it is a “special proceeding” outside the scope of Article V, Section 10 of the Texas Constitution.  The court of appeals denied rehearing, and both Bock and Troy petitioned for review.

The Texas Trust Code Does Not Create a Jury Right In a judicial Trust-Modification Proceeding

Section 112.054, titled “Judicial Modification, Reformation, or Termination of Trusts,” currently provides that “[o]n the petition of a trustee or a beneficiary, a court may order” certain changes to a trust. TEX. PROP. CODE § 112.054(a).  But, before a court may do so, one or more enumerated statutory predicates must be shown:

(1) the purposes of the trust have been fulfilled or have become illegal or impossible to fulfill;

(2) because of circumstances not known to or anticipated by the settlor, the order will further the purposes of the trust;

(3) modification of administrative, nondispositive terms of the trust is necessary or appropriate to prevent waste or impairment of the trust’s administration;

(4) the order is necessary or appropriate to achieve the settlor’s tax objectives or to qualify a distributee for governmental benefits and is not contrary to the settlor’s intentions; or

(5) subject to Subsection (d):

(A) continuance of the trust is not necessary to achieve any material purpose of the trust; or

(B) the order is not inconsistent with a material purpose of the trust.

This statutory is not unbounded – any modification must conform as nearly as possible to the probable intention of the settlor.

As to a right to a jury trial in a trust modification action, the Texas Supreme Court stated:

Section 112.054 does not confer a right to a jury trial in a judicial trust-modification proceeding. Indeed, the heading contemplates “Judicial Modification” and the text does not mention a jury at all. Id. § 112.054 (emphasis added). Instead, the statute repeatedly references the “court,” “its discretion,” and “its decision.” Id. § 112.054(a), (b). There is no indication in the text that the Legislature intended to confer a jury-trial right in these proceedings. See Broadway Nat’l Bank v. Yates Energy Corp., 631 S.W.3d 16, 23 (Tex. 2021) (“Our objective in construing a statute is to effectuate the Legislature’s intent as we find it in the statute’s text.”). All the textual evidence shows it did not.

The Texas Rules Of Civil Procedure Do Not Confer a Jury Right In a Trust Action

The Texas appellate court reasoned that the Trust Code “generally provides for jury trials,” relying on Section 115.012 of the Rules of Civil Procedure.  The Texas Supreme Court disagreed:

Nothing in the text of Section 115.012 can be understood to establish a jury right. Section 115.012 simply states that actions brought under the Trust Code are controlled by the ordinary procedures for civil actions. The court of appeals correctly noted that the rules articulate procedures for requesting a jury. See TEX. R. CIV P. 216 (titled “Request and Fee for Jury Trial”). But as we have explained, these procedural requirements are “prerequisites to a jury trial, not guarantees of one.” In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 130 (Tex. 2004). Such rules merely reflect that a jury right in a civil case is “not self-executing” and that a litigant must take certain steps “to invoke and perfect” his jury right. Sunwest Reliance Acquisitions Grp., Inc. v. Provident Nat’l Assurance Co., 875 S.W.2d 385, 387 (Tex. App.—Dallas 1993, no writ). They presume that the litigant has a jury right to invoke in the first place.

The Trust Code’s incorporation of the Rules of Civil Procedure cannot be construed to create a jury right where one does not already exist. The procedures established by those rules are “not meant to alter the parties’ . . . right to a jury trial.” Sw. Refin. Co. v. Bernal, 22 S.W.3d 425, 437 (Tex. 2000) (discussing TEX. R. CIV. P. 42); see also TEX. R. CIV. P. 815 (“These rules shall not be construed to enlarge or diminish any substantive rights or obligations of any parties to any civil action.”). In short, no right to a jury trial in a judicial trust-modification proceeding was created by Trust Code Section 112.054, Trust Code Section 115.012, or the Texas Rules of Civil Procedure, whether they are viewed alone or in combination.

Constitutional Questions Remain As To The Right To a Jury Trial

The Judiciary Article, Article V of the Texas Constitution, provides:

In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.

Texas courts have held for more than a century that the Judiciary Article’s broad language does not embrace every court proceeding.  No precise test exists for determining when a proceeding falls outside of the Judiciary Article’s scope.  Instead, resolution of the question has been on a case-by-case basis.

Petitioners raise multiple theories about why a judicial trust modification proceeding falls outside the Judiciary Article. Richard responds that, as he argued in the Texas court of appeals, a judicial trust modification action is a “cause” within the meaning of the Judiciary Article, and therefore a right to a jury trial exists.

The Texas Supreme Court declined to address the constitutional arguments, but remanded to the court of appeals to address the arguments, stating:

The court of appeals confronted none of these constitutional arguments, which were first presented on rehearing. By that time, the court of appeals had concluded that the Trust Code’s incorporation of the Rules of Civil Procedure conferred a right to a jury trial. That holding made in-depth treatment of the constitutional arguments unnecessary. Our holding today, however, changes that. The question is whether these novel and difficult questions on an issue of great importance should be addressed by this Court in the first instance. G.T. Leach Builders, 458 S.W.3d at 519 (explaining that this Court’s decision to address asserted error arising from the court of appeals’ judgment is “discretionary” and informed by prudential considerations)….

Following our preferred practice, we remand the case to the court of appeals to address petitioners’ constitutional arguments in the first instance. And we echo the concurrence’s view that amici input could greatly aid the court of appeals’ decisional process.

Standby for more decisions involving the Poe Trust.

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