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Harrison v. Harrison Interests, Ltd.

Court of Appeals of Texas, Fourteenth District

February 28, 2017

WILLIAM B. HARRISON, INDIVIDUALLY; AS BENEFICIARY OF THE ESTATE OF BRUCE F. HARRISON, DECEASED, AND EACH TRUST HELD UNDER THE LAST WILL AND TESTAMENT OF BRUCE F. HARRISON; AS CO-TRUSTEE OF THE WILLIAM BRUCE HARRISON EXEMPT GST TRUST UNDER ARTICLE VII OF BRUCE F. HARRISON'S WILL, THE WILLIAM BRUCE HARRISON NON-EXEMPT TRUST UNDER ARTICLE VIII OF BRUCE F. HARRISON'S WILL, AND THE WILLIAM BRUCE HARRISON/DJH, JR., TRUST UNDER ARTICLE XVIII OF BRUCE F. HARRISON'S WILL; AND AS A CONTINGENT REMAINDER BENEFICIARY OF THE DANIEL J. HARRISON III TESTAMENTARY TRUST AND THE DANIEL J. HARRISON III GST NON-EXEMPT TRUST; CAT HIL, LTD; WBH RANCHING MANAGEMENT, LTD; WBH RANCHING OPERATIONS, LLC; WBH MINING MANAGEMENT, LTD; WBH MINING OPERATIONS, LLC; CAT FOG, LTD; HARRISBURG EQUITABLE MANAGEMENT LLC; AS CO-TRUSTEE OF THE WILLIAM BRUCE HARRISON EXEMPT GST TRUST, THE WILLIAM BRUCE HARRISON NON-EXEPT TRUST, AND THE WILLIAM BRUCE HARRISON/DANIEL J. HARRISON, JR., TRUST, Appellants
v.
HARRISON INTERESTS, LTD; DANIEL J. HARRISON III, INDIVIDUALLY; AS TRUSTEE OF THE BRUCE F. HARRISON TESTAMENTARY TRUST HELD UNDER THE LAST WILL AND TESTAMENT OF DANIEL J. HARRISON, JR., DECEASED; AS TRUSTEE OF THE DANIEL J. HARRISON III AS TRUSTEE OF THE DANIEL J. HARRISON III TESTAMENTARY TRUST HELD UNDER THE WILL OF DANIEL J. HARRISON, JR.; AS TRUSTEE OF THE DANIEL J. HARRISON III GST NON-EXEMPT TRUST HELD UNDER THE COMPLETE AMENDMENT AND RESTATMENT OF THE DECLARATION OF MARY ALICE SMITH REVOCABLE MANAGEMENT TRUST MASTER AGREEMENT; AS GENERAL PARTNER AND MANAGING PARTNER OF HARRISON INTERESTS, LTD; AS CO-INDEPENDENT EXECUTOR OF THE ESTATE OF BRUCE F. HARRISON, DECEASED; EDWIN H. KNIGHT, JR., INDIVIDUALLY; AS GENERAL MANAGER OF HARRISON INTERESTS, LTD; AS CO-INDEPENDENT EXECUTOR OF THE ESTATE OF BRUCE F. HARRISON, DECEASED; FULSHEAR OIL & GAS PARTNERS, LP, AND FULSHEAR OIL & GAS, LLC, Appellees

         On Appeal from the 190th District Court Harris County, Texas Trial Court Cause No. 2010-82117

          Panel consists of Justices Jamison, Donovan, and Brown.

          MEMORANDUM OPINION

          John Donovan Justice

         This appeal concerns a Master Agreement, Release and Indemnity executed to effect the premature distribution of assets to a beneficiary and divide those assets commonly held between the beneficiary and the fiduciaries. The issue presented is whether the beneficiary can maintain a claim for breach of fiduciary duty against the estate's trustees and executors despite the Master Agreement's provisions releasing and waiving their fiduciary obligations. Under the facts of this case, we determine he cannot and therefore affirm the trial court's judgment.

          Factual and Procedural Background[1]

         Harrison Interests, Ltd. ("HIL") was formed in 1979 by Daniel J. Harrison, Jr. and his sons, Bruce F. Harrison ("Bruce") and Daniel J. Harrison III ("Dan") to hold and manage the family's assets. Edwin H. Knight, Jr. ("Ed") was hired to manage HIL. When Bruce died in 2004, his estate passed to his then-seventeen-year-old son, William B. Harrison ("William"), directly and in three separate trusts. William was to receive his full inheritance upon turning thirty. Under Bruce's will, Dan and Ed were named co-independent executors of his estate, co-trustees of two trusts, and Dan was named sole trustee of the remaining trust.

         William joined HIL in 2008. Conflicts arose regarding William's role at HIL and in 2009 negotiations ensued for a premature distribution of assets that would allow William, now of legal age, and Dan to disassociate. William was represented by counsel, as were Dan and Ed. In March 2010, William filed a suit against Dan and Ed which he dismissed five days later.

         Negotiations resumed and on June 21, 2010, a Master Agreement was executed. The Master Agreement is a sophisticated all-encompassing settlement agreement involving numerous concerns - including a division of HIL's assets, options for William and Dan to purchase each other's real estate interests, and cash payments to William. In addition, the Master Agreement released and indemnified Dan and Ed for the time period before June 21, 2010. The Master Agreement further required William to sign a second set of releases for Dan and Ed which would cover the period from June 21, 2010, until the final distribution of assets scheduled for December 17, 2010. The day before the scheduled distribution, William filed suit seeking injunctive relief from signing the second set of releases. Dan and Ed counterclaimed seeking declaratory and injunctive relief to require William to sign the second set of releases. The William Parties[2] counterclaimed bringing multiple causes of action.

         Eventually, the parties filed competing traditional and no-evidence motions for summary judgment. Following a hearing, the trial court denied the motion filed by the William Parties and granted the motion filed by the Dan/Ed Parties[3] in a judgment signed December 17, 2014. The order also set a hearing date to determine the amounts to be awarded. The William Parties then demanded a jury trial on the issue of attorneys' fees.

         The William Parties also moved to reconsider and to supplement the summary judgment record. The trial court granted the request to supplement but denied reconsideration and signed an amended summary judgment order on February 2, 2015. Subsequently, the William Parties filed a notice of partial nonsuit of certain claims. On March 2, 2015, the trial court signed an order dismissing with prejudice all of the claims on which summary judgment had been granted in favor of the Dan/Ed Parties, citing Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995) (per curiam).[4] The order provides that it does not concern any of the Dan/Ed Parties' claims or the William Parties' claim for breach of contract.

          A final judgment was entered on March 11, 2015, which incorporates by reference the amended order signed February 2, 2015. From that judgment, the William Parties bring this appeal.

         Is Affirmance Warranted on the Basis of Waiver?

         As an initial matter, the Dan/Ed Parties argue this court should affirm the trial court's judgment without addressing the issues raised by the William Parties. The Dan/Ed parties contend the William Parties have failed to challenge certain portions of the judgment. In their enumerated issues the William Parties challenge the following rulings by the trial court:

• The denial of the William Parties' traditional motion for summary judgment that Dan and Ed owed him ...

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