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Hunter v. Marshall

Court of Appeals of Texas, Fourteenth District

January 9, 2020

EDWIN K. HUNTER, Appellant
v.
PRESTON MARSHALL, Appellee

          On Appeal from Probate Court No. 4 Harris County, Texas Trial Court Cause No. 365, 053-401

          Panel consists of Justices Wise, Jewell and Poissant.

          MEMORANDUM OPINION

          MARGARET "MEG" POISSANT, JUSTICE

         This appeal arises from the trial court's order signed September 29, 2017, denying appellant Edwin K. Hunter's special appearance. We affirm.

         Background

         In March of 2017, appellee Preston Marshall filed his fourth amended petition against appellant and Elaine T. Marshall, as Executor of the Estate of E. Pierce Marshall, Elaine T. Marshall, Individually, Elaine T. Marshall as Trustee of the EPM Marital Income Trust, Elaine T. Marshall as Trustee of the Testamentary Lead Trust, Elaine T. Marshall as Trustee of the Harrier Trust for the Benefit of Preston L. Marshall, and Elaine T. Marshall, as Trustee of the Falcon Trust for the Benefit of Preston L. Marshall (collectively "Mrs. Marshall"). Appellee claimed Mrs. Marshall breached her fiduciary duties to appellee. Appellee further alleged Hunter "assisted, encouraged, and participated in Mrs. Marshall's breaches, knowing that his actions would facilitate or induce a breach of fiduciary duty and would be a breach of his own duties to Plaintiff."

         Appellee alleged the following grounds for the trial court to assert jurisdiction over appellant:

28. This Court has jurisdiction over Edwin Hunter because his misconduct occurred while he was acting as Mrs. Marshall's agent, individually and as Trustee and Executor. Mr. Hunter advised and informed Plaintiff twice in writing that his mother as Executor was placing Plaintiff in possession of the disclaimed shares. Plaintiff was never placed in possession of the disclaimed shares and has a right to an accounting of all Estate property, including any property or funds purportedly removed to Wyoming, pursuant to his status as a party to the Disclaimer and the representations of Mr. Hunter on behalf of the Executor and as attorney for the Executor and Plaintiff with respect to the Disclaimer. "When a third party knowingly participates in the breach of fiduciary duty, the third party becomes a joint tortfeasor and is liable as such." Kastner v. Jenkens & Gilchrist, 231 S.W.3d 571, 580 (Tex. App.-Dallas 2007, no pet.).
29. Additionally, this Court may properly exercise jurisdiction over Edwin K. Hunter because Edwin Hunter routinely gave Plaintiff legal, business, tax, and estate planning advice in Texas; advises other clients in Texas; and has committed torts to others in this State.

         Appellee's pleadings alleged the following facts relating to appellant:

         B. Mrs. Marshall's Refusal To Transfer Disclaimed Trof Shares

. . .
77. In 2014, Mrs. Marshall's lawyers represented to Plaintiff that he would be receiving the 12, 811 disclaimed shares of Trof. In April 2014, Mrs. Marshall's lawyers represented to Plaintiff-as a means of convincing Plaintiff to take a pay cut and demotion at the family's business MarOpCo-that Mrs. Marshall "intends to distribute from her late husband's estate 12, 811 Trof non-voting shares" and that Plaintiff's "share of future income on the distributed shares will eclipse his current MarOpCo, Inc. compensation." Exhibit 37 (Trevino letter). Similarly, in June 2014, Defendant Edwin K. Hunter, the Marshall family's longtime lawyer and Mrs. Marshall's consiglieri, told Plaintiff that "[w]e are taking steps to place you and Pierce, Jr. in possession of the [Trof] units disclaimed by your mother." Exhibit 38 (submitted in camera).
78. Despite the promise to deliver the disclaimed shares of Trof-future income from which would "eclipse" any prior compensation-the shares have not been distributed to Plaintiff. In fact, Edwin K. Hunter never intended to place Preston Marshall "in possession of" the Trof shares. Indeed, Hunter admitted that there were no shares to distribute. Exhibit 21 (Hunter Dep. Tr.) at 14-23. When questioned why Mrs. Marshall's lawyers were offering allegedly nonexistent shares to Plaintiff, Hunter flatly testified that the representations were incorrect. Id. at 23:11-24. Hunter stated that the representation "certainly wasn't, in fact, true." Id. Of course, this means that Hunter's own statement about the disclaimed shares "certainly wasn't, in fact, true" either.
. . .

         D. Disparaging Remarks About Plaintiff to Charles Koch

83. On April 6, 2015, Edwin Hunter, at Mrs. Marshall's direction, wrote a letter to Charles Koch, Chairman of Koch Industries, Inc., providing him with "information on recent changes in her succession plan together with the circumstances underlying those changes." Exhibit 43 (submitted in camera). The letter is 11 pages, but attaches over 200 pages of "exhibits," and amounts to a screed misrepresenting Plaintiffs actions, and attempting to portray him as a ne'er-do-well. Edwin Hunter's letter purports to describe Plaintiffs "emotion-driven desire to strike at his brother," attempted use of power not given to him, "interposing himself into appellate tax brief preparation," hiring a lawyer in Louisiana to harm Pierce, Jr., and "joining with one of his attorneys to surreptitiously record a confidential conversation." Id.
84. Edwin Hunter sent Mr. Koch a second letter on July 11, 2015. Exhibit 44 (submitted in camera). This time, he put further spin on Plaintiffs termination from MarOpCo, claiming for example that there was no support for his claim that he owed fiduciary duties to Chondriosome Stiftung. This letter included over 700 pages of "exhibits."
85. These letters serve no purpose but to disparage and defame Plaintiff, and to further retaliate against Plaintiff for his accounting demands, lawsuits to enforce his statutory rights, and general denial to be Edwin Hunter's puppet.

         E. Mrs. Marshall's Indemnification of Her Lawyers For Acts Against Plaintiff

86. In July 2014 and again in October or November 2014, Mrs. Marshall executed an irrevocable indemnification agreement ("Indemnity Agreement") with her attorneys, including Edwin K. Hunter, agreeing to "protect, make whole, hold harmless, and defend" those attorneys (and undisclosed others) for advice relating to, among other issues:
the termination of Preston L. Marshall's employment with MarOpCo, shutting down and/or moving the Houston based offices of MarOpCo, and all open litigation matter to which the Defended Parties or a Defended Party may be providing advice to any of the Marshall Interests or their representatives.
Exhibit 45 (submitted in camera). Indeed, Edwin Hunter and his colleagues are ostensibly indemnified regardless of the basis of the action instituted against, "including whether it is founded in whole or part upon, or includes allegations of, the alleged fault, tort, negligence, gross negligence, malpractice, breach of fiduciary duty or duty of loyalty, or criminal conduct of a defended party." In other words, Mrs. Marshall has agreed to indemnify her lawyers for any misconduct- including criminal acts-directed at Plaintiff. Moreover, the Indemnity Agreement permits Mrs. Marshall to recover indemnity payments from Mr. Hunter and his law firm provided that neither Plaintiff nor his descendants benefit from the recovery.

         Appellee's cause of action against appellant is set forth below:

         D. Aiding and Abetting Breach of Fiduciary Duty (Edwin Hunter)

108. Defendant Edwin Hunter has aided and abetted Mrs. Marshall's breaches of fiduciary duty. Mrs. Marshall unquestionably owed and breached fiduciary duties to Plaintiff. Edwin Hunter, as a lawyer admitted in Texas and practicing trust and estate law in Texas, undoubtedly understood and recognized that Mrs. Marshall's conduct constituted a breach of her fiduciary duties, and knowingly and intentionally provided substantial assistance and encouragement in the breaches of duty. Indeed, Edwin Hunter actively participated in Mrs. Marshall's breaches. Edwin Hunter's intentional assistance, encouragement, and participation was a substantial factor leading to Mrs. Marshall's breaches.
109. Edwin Hunter is Mrs. Marshall's longtime counselor and has given Mrs. Marshall and the rest of the Marshall family legal advice for several years. He assisted in Mrs. Marshall's secret move of the Marital Trust to Wyoming and its merger into the Wyoming Trust. Edwin Hunter participated in the improper appointment of five cotrustees for the Harrier and Falcon Trusts-he or his law firm filed the paperwork in Calcasieu Parish, Louisiana as "conveyances." Edwin Hunter helped devise the excessive and unfair compensation formula that the wrongly-appointed Harrier and Falcon Co-Trustees would receive. Edwin Hunter wrote and compiled the lengthy, exhibit-laden letters sent to Charles Koch that disparaged Plaintiff.
110. Furthermore, Mr. Hunter has represented Plaintiff and has acted as Plaintiffs lawyer in the past, meaning that Mr. Hunter's actions constitute a breach of his own fiduciary duties to Plaintiff.

         On June 26, 2017, appellant filed a special appearance and motion to quash service. In his motion, appellant claimed he is a nonresident individual who does not have contacts with Texas sufficient to establish jurisdiction. In his affidavit, appellant averred:

• I am not a resident of Texas. Rather, I am a resident of Florida, although I split my time living between Florida and Utah.
• I have never owned, leased, rented or controlled any real or personal property in Texas.
• I have never maintained accounts at either savings or loan associations or banks in Texas.
• Through my work as an attorney, I
o do not operate a law office in Texas;
o have not paid taxes to Texas;
o have never owned any real property located in Texas;
o do not have a registered agent for service of process in ...

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