Court Holds That TCPA Does Not Apply To Claim Involving Beneficiaries Opposing A Trustee’s Decision To Bring Claims Against Third Parties
Wednesday, November 1, 2023

In McCoy v. McCoy, trust beneficiaries (daughters) sued the trustee (father) for maintaining a claim against a third party (mother) after they notified him of their opposition under section 113.028 of the Texas Trust Code. No. 08-23-00119-CV, 2023 Tex. App. LEXIS 6604 (Tex. App.—El Paso August 25, 2023, no pet. history). The trustee moved to dismiss that claim under the TCPA based on his right to petition. The probate court did not rule on it, and it was overruled as an operation of law. The trustee then appealed.

The court of appeals noted that the TCPA protects those who file lawsuits:

The TCPA “protects speech on matters of public concern by authorizing courts to conduct an early and expedited review of the legal merit of claims that seek to stifle speech through the imposition of civil liability and damages.” It “was designed to protect both a defendant’s rights of speech, petition, and association and a claimant’s right to pursue valid legal claims for injuries the defendant caused.”

Id. The trustee argued:

James first contends the TCPA applies to Aubrey and Lexi’s section 113.028 claim because it is a cause of action expressly based on and filed in response to his crossclaims against Denise. He also argues the TCPA’s fraud exemption does not apply, and Aubrey and Lexi failed to establish a prima facie case for each element of their claim. James thus asks us to dismiss Aubrey and Lexi’s section 113.028 claim and award him fees and costs under the TCPA.

Id. Section 113.028 of the Texas Trust Code provides: “A trustee may not prosecute or assert a claim for damages in a cause of action against a party who is not a beneficiary of the trust if each beneficiary of the trust provides written notice to the trustee of the beneficiary’s opposition to the trustee’s prosecuting or asserting the claim in the cause of action.” Id. The court disagreed and affirmed the denial of the TCPA motion:

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… 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.

Id.

 

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