Texas Court Rejects Trustee’s Objection to Personal Jurisdiction
In MBM Family Trust No. 1 v. GE Oil & Gas, LLC, a plaintiff filed suit against a defendant and his companies to domesticate a foreign judgment. No. 05-20-01103-CV, 2021 Tex. App. LEXIS 7698 (Tex. App.—Dallas September 17, 2021, no pet.). Later the plaintiff added a trustee of a trust that the plaintiff alleged assisted the defendant in hiding assets. The trustee filed a special appearance and objected to personal jurisdiction. The trial court denied that objection, and the trustee appealed.
The court of appeals noted that “A trust has no legal existence; thus, claims intended to recover trust assets can only be asserted against the trust’s legal representative—its trustee.” Id. The court then stated: “The Trust and Waguespack argue that Waguespack has not taken any action in her capacity as trustee purposefully directed towards Texas.” Id. The court disagreed due to the fact that the trust owed an interest in a Texas entity and made a loan to the other defendant:
[T]his argument ignores the fact that the trial court had before it evidence that the “family trust” was Moreno’s “lender of last resort”; Waguespack “stepped in” to act as the lender in the home equity line of credit transaction; Waguespack knew that “she would never loan a dollar to Mr. Moreno and she would only be the nominal lender”; the home equity line of credit documents provided the line of credit was secured by a deed of trust from Moreno to Waguespack, “trustee”; and, separate from the home equity line of credit transaction, the Trust made a $2.3 million “undocumented loan” to Moreno.
Id. The court of appeals affirmed the trial court denial of the objection to personal jurisdiction.