Court Held That The TCPA Does Not Apply To Claim Involving Texas Trust Code Section 113.28 And Suits Against Third Parties
Friday, December 1, 2023

In McCoy v. McCoy, trust beneficiaries sued the trustee for breaching his fiduciary duties by pursing claims against a third party when they instructed him not to do so. No. 08-23-00119-CV, 2023 Tex. App. LEXIS 6604 (Tex. App.—El Paso August 25, 2023, no pet. history). The trustee filed a motion to dismiss under the TCPA, alleging that the beneficiaries’ claims were based on his right to petition. The trial court denied the motion, and the trustee appealed. 

The court of appeals affirmed. The beneficiaries cited the TCPA’s language that it does not abrogate the application of other statutory rights and argued that the legislature passed the TCPA with full knowledge of and with no intent to abrogate that the Trust Code provision allowing beneficiaries to stop a trustee from suing third parties. The court held:

" Though the right to petition is protected under the TCPA, it is protected only “to the maximum extent permitted by law[.]” Section 113.028 of the Trust Code acts as a limitation on those rights by defining permissible litigation conduct by trustees. According to Aubrey and Lexi’s allegations, James exceeded the “maximum extent” of his permissible right to petition by pursuing a claim for damages against Denise, who is not a beneficiary to their trusts, in his capacity as co-trustee, even after Aubrey and Lexi provided James with written notice of their opposition. Indeed, by agreeing to serve as co-trustee to Aubrey and Lexi’s trusts, James agreed to limit his normally unrestricted constitutional right to petition. Nothing in Aubrey and Lexi’s petition seeks to directly limit James’s right to petition to the maximum extent permitted by law.

To interpret the TCPA otherwise would frustrate the purpose of section 113.028 of the Trust Code and undermine the TCPA’s “clear directive” that it “does not abrogate or lessen any other defense, remedy, immunity, or privilege available under other constitutional, statutory, case, or common law or rule provisions.”… Section 113.028 of the Trust Code predates the TCPA and expressly provides that a trustee may not maintain a claim for damages against a non-beneficiary of that trust if the trust beneficiary provides written notice of her opposition. In light of that specific limitation on a trustee’s petitioning rights, we presume the legislature did not intend to undermine or override section 113.028 by passing the TCPA but instead passed the TCPA with full knowledge of the Trust Code and the limitations it imposes on trustees. This conclusion is consistent with that of courts interpreting the TCPA alongside other statutory schemes."

"James did not carry his burden to show the TCPA applies to Aubrey and Lexi’s section 113.028 claim. Because we conclude the TCPA does not apply, we do not reach the parties’ remaining arguments which address the following steps in the TCPA analysis."

Id. The court affirmed the trial court’s order denying the TCPA motion to dismiss.

 

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