United States District Court, N.D. Texas, Dallas Division
ALBERT G. HILL, III, Plaintiff,
WILLIAM SCHILLING, et al., Defendants.
MEMORANDUM OPINION AND ORDER
Lindsay United States District Judge
the court is the Temporary Administrator of the Estate of
Albert G. Hill, Jr.'s (“Hill Jr.”) Motion to
Substitute (Doc. 1839), filed April 17, 2018. Having
considered the motion, response, reply, supplemental briefing
concerning the effect of Hill Jr.'s death on his pending
claims, record, and applicable law, the court
grants the Temporary Administrator of the
Estate of Albert G. Hill, Jr.'s Motion to Substitute
(Doc. 1839), and substitutes Margaret
Keliher (“Keliher”), the duly appointed Temporary
Administrator of the Estate of Hill Jr., in the place of
decedent Hill Jr.
Factual History & Procedural Background
court assumes the parties' familiarity with the
protracted and contentious eleven-year litigation history in
this family dispute and limits its discussion to those
background facts related to the relief sought. In December
2007, Albert G. Hill, III (“Hill III”) brought a
lawsuit in Texas state court in his individual capacity and
on behalf of the Margaret Hunt Trust Estate
(“MHTE”) and the Haroldson Lafayette Hunt, Jr.
Trust Estate (“HHTE”) against specific
beneficiaries of the MHTE and HHTE, including his father
(Hill Jr.), Hill Jr.'s siblings, and the trustees and
members of the advisory boards of the MHTE and HHTE. Among
other things, Hill III alleged wrongdoing in the management
and administration of the MHTE and HHTE by their respective
trustees and violations of the Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C § 1961, et
seq. He also sought a declaration that he was a direct
and vested beneficiary of the MHTE as a consequence of his
father's disclaimer of various interests he held in the
MHTE. Following removal to federal court on
December 3, 2007, the case was randomly assigned to United
States District Judge Reed C. O'Connor.
The Settlement Agreement
Hill III agreed to a settlement of the dispute. On May 13,
2010, the parties entered into the Global Settlement and
Mutual Release Agreement (the “Settlement
Agreement”) (Doc. 879) that settled this action and
related state court actions. The Settlement Agreement
affirmed Hill Jr.'s 2005 disclaimer (see supra
note 1) and provided, among other things, that the MHTE would
be divided, pro rata, into separate sub-trusts for all
beneficiaries, including Hill III, who would become the sole
beneficiary to one of the new subdivided trusts containing
his individual interest, the MHTE-Albert G. Hill III Trust.
Each sub-trust was to be separately administered by a new
successor trustee. Pursuant to the Settlement Agreement, Hill
Jr. also agreed to make installment payments totaling $30,
675, 000 to Hill III between 2010 and 2015 to be used by Hill
III to establish trusts for Hill Jr.'s grandchildren,
namely, Albert G. Hill, IV, Nance H. Hill, and Caroline M.
Hill (the “Grandchildren's Trusts”). Doc. 879
parties also agreed that monetary damages might not
adequately recompense the parties for every breach and that,
therefore, specific performance and injunctive relief would
be available for any breach of any term of the Settlement
Agreement. Id. § III(5)(r). Section III(5)(r)
(r) Specific Performance: The Parties agree that
monetary damages alone may not be adequate recompense for any
breach of this Agreement. In the event any Party breaches any
of the obligations or responsibilities places upon such Party
in this Agreement, then any other Party may seek any legal or
equitable remedy that may be available for such breach . . .
. The Parties agree that the remedy of specific performance
and/or injunctive relief (whether mandatory or by restraint)
shall be available for the breach of any term, condition,
covenant, or warranty of this Agreement.
Id. § III(5)(r).
Hill III agreed not to contest Hill Jr.'s will:
(f) No Contest of Al Jr.'s Last Will and
Testament: Al III, Erin, the Grandchildren, and all of
their descendants and heirs agree not to contest the Last
Will and Testament of Al Jr. or file any additional action,
lawsuit, or legal proceeding challenging the disposition of
Id. § III(1)(f). The parties additionally
agreed that the rights, obligations, and benefits under the
Settlement Agreement would survive their death:
(m) Binding Successors: This Agreement shall inure
to the benefit of, and shall be binding upon the Agreeing
Parties hereto, their heirs, executors, administrators,
successors, employees, transferees, trustees, agents, and
Id. § III(5)(m). Finally, the parties agreed
that this court would have continuing jurisdiction over any
claim or controversy arising out of the Settlement Agreement:
(c) Federal Court's Continuing Jurisdiction: Any
controversy or claim arising after the date of execution of
this Agreement arising out of this Agreement and the
Documentation shall be resolved by the Federal Court, the
Honorable Reed O'Connor, who shall retain continuing
jurisdiction over this Agreement.
Id. § III(5)(c).
The Final Judgment
November 8, 2010, Judge O'Connor issued a final judgment
(the “Final Judgment”) implementing and
memorializing the parties' Settlement Agreement.
See Final J. (Doc. 999). Among other things, the
Final Judgment: affirmed Hill Jr.'s 2005 disclaimer of a
portion of his interest in the MHTE (see supra note
1) (id. ¶ 5); divided the MHTE and HHTE into
separate sub-trusts in accordance with the parties'
agreement (id. ¶¶ 6-8); required Hill Jr.
to make four annual installment payments of $7.5 million each
into the court's registry (id. ¶ 21); and
required Hill III to establish the Grandchildren's
Trusts, which were separate irrevocable trusts for Hill
Jr.'s grandchildren, and to irrevocably assign his rights
to receive the installment payments to the
Grandchildren's Trusts. Id. ¶¶ 19, 22.
trust document that governs the Grandchildren's Trusts is
“The Albert G. Hill, III 2010 Gift Trust, ” which
is Exhibit 5 to the Final Judgment (the “Trust
Instrument”). The Trust Instrument provides that until
the primary beneficiary reaches the age of twenty-five, the
income and principal of the Grandchildren's Trusts may
only be used for the “health and education of the
primary beneficiary . . . .” Doc. 999-1, ¶ 2.01.
The Trust Instrument also provides that the Donor (Hill III)
is required to provide support for his children.
3.04 Donor's Support Obligation. Despite any other trust
provision of this instrument, the trustee shall make no
payment to any beneficiary that would directly or indirectly
discharge the legal ...