Jones v. Wells Fargo Bank, N.A., 858 F.3d 927 (5th Cir. 2017).
Beneficiary sued Trustee for
breach of fiduciary duty in state court and Trustee removed the case to
federal court. The district court dismissed all of Beneficiary’s claims
except for one which arose out of the trustee’s nonsuiting a case
against an inspector for not competently performing a pre-purchase
inspection of a house which the trust was purchasing for Beneficiary.
The jury found that a breach occurred but determined that the lawsuit
had no value. However, the jury awarded damages on a theory not pleaded,
that is, that the trustee should have nonsuited the case sooner once it
became clear that the trustee would not prevail against the inspector.
The jury then awarded damages and the trustees appealed.
The court reversed finding in
favor of the trustees. The court explained that because Beneficiary did
not plead the claim and Trustee never consented to try the unpleaded
claim, it was improper for the court to award damages on the theory that
Trustee breached for not non-suiting the case earlier. The court also
affirmed the district court’s rejection of Beneficiary’s other claims
because they were barred by the Texas statute of limitations on breach
of fiduciary duty claims.
Moral:
A beneficiary should ascertain the theories behind
a claim for breach of duty and plead them in a timely manner.