### NUM BER 13-07- 0073 2-CV 

## COURT OF A PP EA LS T H I R T E E N T H D I S T R I C T O F T E X AS C O R P U S C H R IS T I - 

## EDI NBURG
WELLS FA RGO BA NK, N.A ., IN ITS CORPO RA TE CA PACITY A ND AS INDEP ENDENT EXECUTOR OF TH E ES TA

TE OF JOH N CR OCK ER, DEC EASED , A pp ellan t,
v . SUS A N CR OCK ER A ND JE A NN E C ROC KER , A pp ellees .

On ap pe al f rom th e C ou nty C ou rt atL awN o. 2 of Vict oria Co un ty , T exas . 

## ME MOR A N D U M OP I N I ON Be fo re C hie f J us tice Vald ez an d Ju stice s R od rigu ez an d Garza

M emo rand um Opin ion b y Ju stice R od rigu ezT hr ougho ut t he r ecor d, Jeanne C r ocker i s al so r ef er r ed t o as Jeanne Ly nne St ev ens. For ease of 1 re fe re n c e w e w i l l re fe r to h e r a s J e a n n e C ro c k e r. See T EX
. R. A PP
. P. 47. 1.

W el l s Far go f i l ed a t hi r d- par t y act i on agai nst Launa W hi t e seeki ng r ei m bur sem ent , at t or ney ' s f ees, 2 a n d e x p e n s e s
. I n it s b rie f, W e l l s F a rg o e x p l a i n s th a t b e c a u s e "i t h a d a l re a d yp a i d th e d i s p u te d fu n d s to Launa , " bybr i ngi ng h eri nt o t he p r oceedi ngs " t he co ur t s coul d sor t outwho o wed whatt o whom , " and " [ i ] ft he m oneyt ur ned out t o bel ong t o t he daugh t er s, W el l s Far go woul d si m pl yseek r ei m bur sem ent f r om Lau na so t hat no one ended up wi t h m or e or l ess t han t hey deser v ed. " W el l s Far go' s cl ai m agai nst Launa was sev er ed fr o m th e u n d e rly i n g l a w s u i t to b e h e a rd a t a d a te s u b s e q u e n t t o th e tri a l o f th e p re s e n t c a s e
. L a u n a i s n o t a p a r ty t o th is a p p e a l. 2 This i s a breach of fidu ci ar y duty cas e. A jur

y found for appe ll ees, Sus an C ro ck er and J eanne C ro ck er , and ag ain st appel lan t, W ell s Farg o Bank , N .A., ( W ell s F arg o) i n i ts 1 corpo rate cap acity and as indep e n d e n t executor of the est ate of

Susan and Jean ne's decea sed father, Jo hn C ro ck er
. The tr ial co urt entered jud g ment ag ain st W ell s F arg o and jointly awarded Su san a nd Je an ne $ 230 ,00 0 in actu al dam ages and $30 million in exemp lary

dam ages. Byf iv e issues, W ells Farg o con ten ds tha t: (1) the re is no ev iden ce of breac h of du ty (n eg li g ent or fiduci ar y ) or caus ati on of i nju ry ; ( 2) there i s n o ev ide nce of
ma lice to supp ort the pun itiv e da ma ge aw ard; (3) the re is no ev iden ce of forgery w hich is
nee ded in this case to o v ercom e the statu tory cap o n pun itiv e dam ages; (4) th e trial court
er re d i n al low ing a post -t ri al ple adi ng amendment that inc re ased the p uni ti v e damag e pl ea b y $ 2 7 , 5 0 0 , 0 0 0 ; a n d ( 5 ) t h e p u n i t i v e d a m a g e s a w a rd v i o l a t e s t h e d u e p ro c e s s c l a u s e
. We
rev erse an d rend er. I. B A CKGRO UND Je a n n e and Susa n are J ohn' s d aug hters b y hi s first w ife, w hom he d ivorced. I n 1995, John marr ied Launa W hit e. Be fore t hei r marr iag e, J ohn and Launa ex ecut ed a 2 premari tal ag re ement, w hic h c ontai ned t he foll ow ing prov is ion : Notwi thsta ndin g the foregoing, t he partie s a gree tha t all b ank accou nts he ld i n t h e n a me s o f b o t h [ J o h n a n d L a u n a ] o n t h e d a t e o f ma r r i a g e s h a l l, afterM cKni ght t est i f i ed t hat i n Apr i l 200 0 he " was i n cha r ge o fa book oft r ust and i nv est m ent accou nt s, 3 I.R .A .s a n d th a t [ h e ] w a s th e re l a ti o n s h i p m a n a g e r o n th e a c c o u n ts

. . . ."

T her e i s no di sput e r egar di ng t he se par at e acco unt John ope ned at t he sa m e t i m e as t he d i sput ed 4 account

. T he m oneyi n t hi s account passed i nt o t he e st at e, and Susan a nd Je anne r ecei v ed t hat m oneyas r esi duar yben ef i ci ar i es, aft ercl ai m s aga i nst t he e st at e wer e pa i d.

Jeanne t est i f i ed t hat aft ershe r ecei v ed a copy oft he di sput ed accountagencyagr eem ent , she cal l ed 5 M cKni ght t o ask hi m t o exp l ai n i t

. M c K ni gh t t ol d Jea nne t hat John had wr i t t en " + L auna j oi nt " on t he agr eem ent aft erhi s nam e. Je anne t est i f i ed t hat whe n she chal l enged M cKni ght say i ng t hat i t was no t her f at her ' s han dwr i t i ng, he r epl i ed, " W el l , t hat ' s what y ourf at herdi d. " At hi s dep osi t i on, howev er , M cKni ght t est i f i ed t hat he, notJohn , had wr i t t en t he p hr ase o n t he a gr eem ent and t hat he di d not t hi nk t hat John was wi t h hi m when he d i d so. 3 thei r marr iag e, be co nsi dered c ommunity proper ty and a ll b a nk acc ounts opened a fte r the d ate o f marr iag e i n the names of both [Jo hn and Launa] shall likew ise be con sidered comm unity property. The parties ag ree tha t all ban k ac c ou nt s he l d i n th e na me of bo th [J oh n an d La un a] s ha l l be held in suc h a manner as to prov ide the ri g ht of surv ivorshi p to the remai nin g par ty upo n the dea th of

the ot her. On Ap ril 28, 200 0, Joh n spoke w ith W inston McKnight, a trust ad min istrator at W ells Farg o, aboutopeni ng two new ac count s. Jo hn al so met w it h W ell s F arg o empl oy ee J .P. 3 Green . One of

the ne w accou nts w as to be a sepa rate accoun t in John 's nam e only w hich
woul d tak e i ts funds from J ohn' s s eparate p ro per ty

. M cKni g h t te st if ied thatthe sec ond 4
acc ount—the d is puted acc ount in thi s c ase— w as to be a j oin t ac countw it h Launa

. The joi nt ac counttook

i ts f u n d s from ex is ti ng ac count s t hat J ohn and Launa hel d as j oin t ten ant s w ith rig hts of

surv iv orship (ROS). Acc ordin g to Mc Kni g ht, w hen he open e d the di sput ed ac countfor J ohn, he and John "nev er

di sc uss ed [R OS]. " O n the day the dis puted acc ount w as opened Mc Kni g ht
w ro te "+ Launa joi nt" on a copy of the pur por

ted a g re ement. At tr ial , M cKni g ht ag re ed th at he w ro te "+ Launa joi nt" w it hout John know ing abouti t or tel li ng hi m to do so. M cKni g ht 5 als o tes ti f ie d that he w ro te "+ Launa joi nt" on a ph otoc opy of the s eparate p ro per ty agreem entfor his working files to remind him th at th ere w ere two accoun ts a nd to av oid4

confusi on; i n an effort t o di sti ng uis h the new j oin t ac countfrom t he new se parate a cc ount. T his agreem e n t did no t expressly provi de for ROS. In add ition, while M cKnight f irst testif ied tha t no origi nal agreem entrelating to the d ispute d acco untcould be foun d in W ells F a rg o ' s f il e , a ft e r

h is m e m o ry wa s re f re s h e d t h ro u gh G re e n ' s d e p o s it io n t e s t im o n y, Mc Kni g ht t est ified thathe h ad, i n fact, l eft the a g re ement for the dis puted a cc o u n t w it h John and t hat i t app arentl y was nev er

retur ned. By a w ill da te d Ap ril 2 6 , 2 0 0 0 , J o h n m a d e a n u m b e r o f s p e cif ic b e que st s, le a ving, for example, a l ife es tate in thei r home to Launa and a li fe est ate in his ranch to S usan and Jean ne. By

the res id u a ry

clause, John lef

t "all the rest, residue and rema inde r of [his] est ate, separate o r communi ty , of ev er y kind and charact er , real , personal and mixed, u nto [hi s] daug hters." The w il l named W ell s Farg o as ind ependent ex ecut o r of th e es tate, prov ide d tha t t he execut or had all the pow ers g iv en to a tr ust ee bythe Tex as Trus t C ode and bylaw , and specif ically directed the executor to pay out of his residua ry esta te all "just debts and cl aims " ag ain st his es tate. John die d on F ebr uar

y 22, 2001. F oll ow ing hi s d eath, a di sput e arose about the joi nt ac countthatJo hn had opened a y ear ear li er
. Launa cont act ed W ell s F arg o w hen s he fo u n d a $ 3 3 4 ,0 0 0 d isc re p a n cy in on e of th e jo in t a cc o u n ts w it h ROS . W e lls Fa rgo deter mined that the $ 334,000 had been tra nsferred at Joh n's req uestfrom t hat p arti cul ar joi nt ac counti n to t h e d isp u ted j oin t ac countthatdi d nothav e R OS. Launa' s a ttor ney cont act ed W ell s F arg o as ser ti ng that L a u n a wa s e nti tl ed to the funds i n the di sput ed
acc ount. On Febr uar

y 28, 2001, W ell s Farg o f il ed an appl ic ati on to probate John' s w il l and on M arch 2, 20 01, was appoi nted sol e i ndependen t execut or for the est ate. On Apr il 26,J e a n n e a n d S u s a n a t fi rs t c l a i m e d th e e n ti re $ 4 6 0 ,0 0 0 , b u t l a te r s o u g h t o n l yh a l f o f th e fu n d s
. 6 5 200 1, in accord ance with a dvice f rom its atto rney, M unso n Sm ith, th at La una was legally enti tl ed to the funds, W ell s Farg o dist ri buted approx imat ely $460,000 to Launa, w hic h was the t otal amount in the d is puted acc ount at t hat t ime. On May 4, 200 1, W ells Fa rg o and S mith metw ith Susa n, Jea nne , the ir attorne ys, and sev eral of

John 's g rand chi ld re n
. At that m eet ing, W ells Farg o an d Sm ith brief ly dis cus sed, for t he first ti me w it h the othe rs , t he de cis io n t o d istr ibu te t he funds from the dis puted acc ount to La una. Susa n and Jeann e s ued W ell s F arg o for neg li g ence and brea ch of fiduci ar y duty alleging tha t W ells Farg o failed to disc lo s e to the m, as residua l bene f iciaries unde r their father' s w il l, the nature of, or the probl ems w it h, do cument ati on on the di sput ed ac count before the $46 0,0 00 in th e acco untwas pa id to La una as John 's surv iv ing w ife. W ells 6 Farg o g e n e ra l l y

d e n i e d t h e c l a i ms a n d s p e c i fi c a l l y p l e a d e d t h a tJ o h n ' s w i l l g a v e i tb ro ad powe rs a s indep end entex ecut or, includin g the power to set tle dispu ted claims, if
re a s o nab le. Th roughou t the trial, W ells Farg o asse rted th at La una had a v alid claim against th e esta te for the f und s at issue and thatit properly paid those f und s to her, while the C ro ck er

si ste rs arg ued t hat L auna' s c lai m fail ed. Aj u r y fo u n d t h a tW e l l s F a rg o : ( 1 ) n e g l i g e n t l y d i s t r i b u t e d fu n d s fro m t h e d is puted
acc ount to Launa, prox imat ely ca usi ng i nju ry

to Susa n and Jeann e, an d resul ti ng i n actual damag es in t h e amount of $230,000; ( 2) breache d i ts fiduci ar y duti es to S usan and Jeann e, prox imat ely

ca usi ng i nju ry , a n d r e sulti ng i n actual damag es in the a mount of $230,00 0; ( 3 ) a ct e d w i t h ma l i c e ; a n d ( 4 ) c o mm i tt e d fo rg e r y w i t h t h e i n t e n t t o d e fra u d or6

har m a p p ell ees. After resol v ing l iab il ity

i ss ues and det er mini ng the amount o f actual damag es, the jur

y as ses sed $30 mi ll ion i n puni ti v e damag es ag ain st W ell s F arg o. The tr ial
cour t ent ered j udg ment on the j ur y 's v erdict of breach of f idu ci ar y duty and aw arded a joi nt actu al-dam age awa rd o f $ 2 30, 000 and a pun itiv e-da ma ge aw ard of $30 million against W ell s F arg o. This appeal ens ued. II. L I A BI LI TY By i ts firs t i ss ue, W ell s F arg o contends that Susan and Jeanne are not e nti tl ed to any a ct u a l d a ma g e s b e c a u s e t h e re i s n o e v i d e n c e o f a b re a c h o f a n y d u ty o w ed th em und er eithe r theory of reco v ery—negligence or breach of f iduciary duty. W ells Farg o also
arg ues that there i s n o ev ide nce that it s a cti ons caus ed i nju ry to Susa n and Jeann e. A . St and ard o f Rev iew W e may su sta in a no- ev ide nce or l eg al suffici ency

ch all eng e only whe n ( 1 ) the
re cord dis cl oses a compl ete absen ce of ev ide nce of a v it al fact; ( 2) the fact- finder i s b ar re d by r ule s o f law

or of evide n ce f ro m giv ing w eig ht t o the onl y ev ide nce offered to prov e a
v it al fact; ( 3) the ev ide nce offered to prov e a v it al fact i s n o more tha n a mere s ci nti ll a; or (4 ) the e v ide nce est abl is hes conc lus iv ely the oppos it e of a v it al fact. KingRanch, Inc. v. Chapm an , 118 S.W .3d 742 , 751 (Tex. 2003 ). In dete rmining w het her th e re is legally suf f icient evidence to supp ort the f inding und er rev ie w, we m u s t consid er evi den ce fav orabl e to the findin g i f a re asona ble j uror co uld and dis re g ard ev ide nce cont ra ry to the findi ng unl ess a reason abl e j uror co uld not. City of K

eller v. Wils on , 168 S.W .3d 802, 80 7, 827 ( Tex . 200 5)

. In t he c ontext of a j ur y tr ial , t he s uff ic ien cy

of the e v ide nce is rev iewed in li g ht of the ch arg e s ubmitted i f n o o bje cti on i s made to the c harg e. Rom er o v . KPH7

Conso lidation , Inc. , 166 S.W .3d 212 , 221 (Tex. 2005 ); W al- Ma rt Stor

es, Inc . v. S tu rges , 52 S. W .3d 7 11, 7 15 ( Tex . 200 1) ; see Mi nn. Lif e Ins

. Co. v. Vasq uez , 192 S.W .3d 7 74, 7 78 (Tex . 200 6) (rev iew ing the ins urer's leg al suffici ency ch all eng e ac cordin g to the c harg e as given ) (ci ti n g S w. B e l

l T e l

. C o
. v

. G a r za , 164 S.W .3d 6 07, 6 18- 19 ( Tex . 200 4) ( "In assessin g the ev iden ce, w e assu me thatthe po rtions of t he ch arge just q uot ed, beca use the y w ere giv en wi tho ut objection , correctlystate the law.")). B. Breach of Fiduciary Duty 1. A pp licab le L aw "T he e lem ent s of

a breach of

f iduciary duty c la im a re : (1) a f iduciary relatio nship between t he pl ain ti ff

and defendant, (2)a breac h by the defendant of hi s fid uci ar y duty to the p lai nti ff , and ( 3) an i nju ry to the p lai nti ff

or benefit t o t h e defendant as a resul t of the defendant' s b re ach. " Lun d y v. Ma ss on , 260 S.W .3d 4 82, 5 01 ( Tex . Ap p. H oust on [1 4th Di st. ] 200 8, pe t. deni ed)

. T o r e co v er for a breach of f idu ci ar y duty , a pla int iff has t he burden of

prov ing eac h el ement. See, e.g., Av ar y v . Ba nk of A m ., N. A ., 72 S.W .3d 7 79, 792 (Tex. App. –Dallas 20 02, pet. den ied). An exec ut or owes fi du c i ar y du ti es to th e be ne fi c i ar i es of th e es ta te —the sa me duties a p p li cabl e to tr ust ees. Lesika r v. Rapp epo rt , 3 3 S

. W

. 3 d 2 8 2 , 2 9 6 (T e x. A p p .– T e xark a n a 20 0 0 , p e t. de n ie d ) (ci ti n g Hum an e So c ' y o f Au s ti n & T r av i s C ount y v. Aust in Nat 'l Bank, 531 S.W .2d 574 , 571 (Tex. 1975 ); Er tel v. O' Br ien , 852 S.W .2d 17, 20 (T e x. Ap p .–W a co 19 9 3 , writd e n ie d )). As i n d e p e n d e n t e xec u to r o f t h e es ta te , W e lls Fa rgo had a fiduci ar

y rela ti onshi p wit h S u san and J eanne a nd, t herefore, ow ed th em, among other thing s, "'a fiduci ar

y dutyof f ull disc los ure of al l mater ial facts kn ow n to [i t] that mig ht8

affect[t he bene ficia ries'] r ig hts .' " Avary, 7 2 S. W .3 d at79 2 (quo ti n g Montg om ery v. Kennedy, 669 S.W .2d 309 , 313 (Te x . 198 4) (holdin g tha t trustee s of trust and ex ecut ors of estat e ha d f iduciary duty of f ull disclosure to ben ef iciary )). 2. Breach By i ts firs t i ss ue, W ell s Farg o arg ues that it did not b re ach any fiduc iar y duty owed to S usan and J eanne b ecaus e i t c ompli ed w it h i ts duty t o p a y t he r ig ht pe rs on by
mars hal ing the assets of the e sta te, ex amini ng the cl aims ag ain st the e sta te, eng ag ing leg al couns el to an alyz e the clai ms, and pay ing the par ty thatwas enti tl ed to recei v e the funds. Howev er , the tri al cour t did not ins tr uctthe jur

y on a fiduc iar

y 's duty to pay the ri g ht person. R ather , t he tr ial co urt i nst ru cte d the j ur y , w it hout obj ect ion , on the fo ll ow ing fiduci ar y duti es W ell s F arg o owed to al l benefic iar iesof John' s e sta te:

• To actw it h the utmos t g ood faith and to ex erci se the mos t s cr upul ous hon esty tow ard the ben ef iciaries;

• To pla ce the i nterest s o f the benefic iari es before i ts ow n and to no t use th e a d v a n t a g e o f i t s p o s i t i o n t o g a i n a n y b e n e fi t fo r i t s e l f at t he expense of

the be nef iciaries a nd to not pla ce itself in a position w here it s se lf in t e re s tm ig h tco n f li ctwit h it s o b li ga t io n s a s a f id u c ia ry;

• To fully and fair ly dis cl ose all impor tant infor mati on to the benefic iar ies co ncer nin g thei r int erest s i n the Es tate; or

• To acti mpart ial ly by not showing fav or it is m between or among the ben ef iciaries. Therefore, W ell s Farg o's conductis measured agai nstthe precedi ng duties as i denti fied in the j ur y ch arg e. See Rom ero , 166 S.W .3d a t 221 ( Tex . 200 5)

. Smit h tes ti fied th at W ell s F arg o di d nottel l the C ro ck er daug hters a bout the dis puted acc ount before i t pai d Launa so as to "facil it ate o ur pur pose to g o ahead and9

ma ke t h a t settle me nt if you want to call it thatof the legal rig hts w ith the parties, irrespective of

the claim s bythe pa rties." It w as Sm ith's opin ion t h a tL a u na " w as legally ent itled to the f und s in that a ccoun t and t hata ny litig ation w ith regard to tha t would result in addi ti onal ex pense to the e st a te." In addi ti on, w hen t he C ro ck er si ste rs ' couns el cont act ed Smi th after

the Ma y 2001 meeti ng , Smi th i nformed him that "in our opi nio n itwas a joint acco untsubjectto the rig ht o f a s u rvi v orship pro v ided bythe pre nup [tua l] ag re ement." The ev ide nce esta bli shes thatSus an and Jeann e di d notl ear n of the dis puted
acc ount unti l the M ay

2001 meeti ng
. Jeann e tes ti fied th at w hen the meeti ng beg an, S mith tol d the m there was a j oin t ac count , t hat t he mone y in that ac counthad been g iv en to Launa, and that it w as a "done-deal ty pe thing ." In add it ion , t he ev ide nce re v eal s t hat a t th e t im e o f

t h e m e e ti n g W e lls F a rgo k n e w b u t d id n o t te ll th e C ro ck e r sis te rs th e fo llo wing:

• W ell s F arg o di d nothav e an or ig ina l si g ned ag encya gre e m e n t for the d is puted acc ount;

• W ell s F arg o had a photocopy of an ag re ement up on w hic h M cKni g ht ha d w ri tten "+ Launa j oin t" after

Jo hn's name;

• the p hotoc opy

of the dis puted acc ount ag re ement ap peared to be a phot ocopy of the s eparate a cc ount ag re ement; and

• nothi ng i n the phot ocopy of the p ur por

ted j oin t- acc ount ag ency ag re ement prov ide d for R OS. Al thoug h Sus an and Jeann e req uest ed a copy of the dis puted acc ount ag re ement
w hen t hey

l ear ned abo ut i t atthe Ma y 2001 meeti ng , W ell s Farg o di d notprov ide Sus an and J eanne w it h copie s of any documents rel ated to the dispu ted acc ount unti l Janua ry or Febr uar y 2002. W ell s F arg o al so ack now led g ed at tr ial thati t had made a mis tak e w hen itfail ed to foll ow up and g et t he or ig ina l ag ency ag re ement for

the di sput ed accoun t from10

John. W ell s F arg o c hose not t o di sc los e thi s mi sta ke to S usan and J eanne. Con si der ing ev ide nce fav orabl e to the fin din g i f a re asona ble j uror co uld , dis re g ardin g ev ide nce cont ra ry to the fin din g unl ess a reason abl e j uror co uld not, see City of K eller , 1 6 8 S. W .3 d at80 7 , 8 2 7 , a n d revie wing th e e vi d e n ce in ligh t o f th e ch a rge ins tr uct ion s reg ardin g fiduc iar y duti es ow ed, see Rom ero , 166 S.W .3d at 221, we c oncl ude that the e v ide nce offered to prov e tha t W ell s F arg o breache d i ts fiduci ar y d u ty to Susan and Jean ne " to f ully

and fairly

disclose all impo rtantinforma tion . . . con cerning their int ere st s i n the [e] sta te" i s more tha n a mere s ci nti ll a. See King Ran ch , 118 S.W .3d a t 751. Thus, the ev ide nce is l eg all y su ff ic ien t t o es tabl is h W ell s F arg o's breach. Non et he l es s , W el l s F arg o arg ue s t ha t th ere i s n o ev i de nc e of b rea c h be c ause Susa n an d Jea n n e o f fered no expert testim ony on this elem ent . How ever, ex pert tes ti m o n y i s o nly

nec ess ar

y w hen t he s ubj ectl iesouts ide the re alm of w hat a l ay person
woul d unders tand. Ma ck T ru ck s, Inc . v . T am ez , 206 S.W .3d 572 , 583 (Te x . 200 6); Roark
v. Al len , 633 S.W .2d 804 , 809 (Tex. 1982 ). D isclosing all imp ortan t in fo rmat ion th at is know n to the e x ecut or

and that conc er ns a benef ic iar y 's interestin the estate ispar t of the fiduci ar y duty owed to bene f ici a rie s b y a n execut or
. See Avary, 7 2 S

. W. 3 d a t7 9 2

. W e
canno t c oncl ude t hat e x per t tes ti mony

i s n eces sar

y to est abl is h a b re ach of thissi mple and straightforw ard du ty. Th e disclosu re of deta ils concerning the Crocke r sisters' intere st in thei r father' s est ate, inc lud ing the $230,00 0 from the dis puted acc ount, i s n ot ou tsi de th e
common ex per ien ce and und ersta ndi ng of the a v erag e l ay man
. An ex per t was not required to te s ti fy th at W el l s F arg o, ha v i ng th e fi du c i ar y du ty to di s c l os e ma te r i al facts, shoul d hav e di sc los ed i nformati on to the beneficia ri es conc er nin g the dis puted acc ount.U nder bot h negl i gence and br each off i duci ar ydut y , t he t or t t heor i es pl eaded and char ged, Susan 7 a n d J e a n n e h a d th e b u rd e n to p ro v e th a t a n yw ro n g d o i n g b yW e l l s F a rg o "p ro x i m a te l yc a u s e d a n i n ju ry" to th e m
. See W est er

n I nvs. , I nc. v. U rena , 16 2 S

. W

. 3d 54 7, 55 0-5 51 (T ex
. 20 05 ) (co nc l ud i ng eve n i f t he re w ere a br each ofdut yi n t hi s neg l i gence case, t her e was no ev i dence t hat such a br each pr oxi m at el y caused t he tra g i c o c c u rr e n c e ); S i K y u Kim v . H a rs ta n , L td

. , 286 S. W

. 3d 6 29, 635 ( T ex. App. –El Paso 20 09, pe t

. f i l ed) ( set t i ng o ut t hat br each off i duci ar ydut yr equi r es a showi ng t hat t he b r each caused an i nj ur y ) ( ci t i ng Jones v . B l u me , 1 9 6 S .W .3 d 4 4 0 , 4 4 7 (T e x . A p p .– D a l l a s 2 0 0 6 , p e t. d e n i e d ); Punts v. Wi lson , 137 S

. W

. 3d 8 89, 891 (T ex
. A pp
. –T ex ark an a 2 00 4, no pe t

. )) 11 W e ov er ru le W ell s F arg o's first is sue to t he extent itch all eng es the b re ach ele ment. 3. Cau sat io n of

Inj ur y By its f irst issue , W ells Farg o also cha llenges the legal suff iciency of the evidence t o e s t a b li s h t h a tt h e b re a c h ca u s e d a n i nju ry. See A lex ander v. T ur tur & A ss ocs ., Inc ., 7 146 S.W

. 3 d 1 13, 119 (Tex. 2004 ) ( "Bre ach o f the sta nda rd of

care and causa tion a re sepa rate inquirie s
. . . a n d an ab und ance of ev iden ce as to o ne ca nno t subst itute for a defici ency

of evide n ce a s t o the othe r. "). W ell s F arg o c ontendsthatSus an and Jeann e failed t o c a rry t h e ir burden of provi ng causat ion be cause they fa iled to sho w thatW ells Farg o's acti o n s or

i nact ion s c aused any

co g niz abl e i nju ry
. It ass erts that the C ro ck er si ste rs are i g nor in g t h e ef fect of Launa' s c lai m to t he funds. I n respon se, Sus an and Jeann e c ontend that W ell s F arg o's arg ument on ly as sumes thatthe money bel onged to Launa. They

urg e thi s i s n ot t he c ase and as sert th at, but for the W ell s F arg o's nondis cl osure and it s c onduct in conc eal ing the nature of the acc ount and i ts document ati on, they woul d hav e k now n the ter ms of the dis puted acc ount, made an appropr iat e c lai m to th e $2 3 0 ,0 0 0 , a n d o b ta in e d th e f u n d s t o w h ich th e y we re en ti tl e d . B y thi s re a so n in g, Susa n and Jeann e c ontend they es tabl is hed t he el ement of c ausat ion

. W e di sag re e.Som e l angua ge u sed i n Susan and Jeanne ' s appel l at e ar gum ent s appear s t o sug gest t hat t heynee d 8 not pr ov e causat i on and i nj ur yi n t hi s case. For exam pl e, t heym ake t he fol l owi ng a r gum ent s: ( 1) " num er ous f i duci ar ydut i es ha v e be en b r eached whi l e [ W el l s Far go] has wor k ed t o conceal i t s m i st akes by , am ong ot her t hi ngs, f or gi ng d ocum ent s. I n t hi s case, causat i on l i es i n t hat conce al m ent , " ( 2) t he p r oxi m at e cau se f i ndi ng
" m us t be an al y z ed i n l i gh t of [ W el l s F arg o' s ] brea c h, w hi c h a ri s es from i t s c on du c t i n c on c ea l i ng t he na t ure oft he a ccountand t he n at ur e of t he docum ent at i on f ort he accountfr om t he C r ocker s" and " t he f or ger yof an agencyagr eem ent f ort he d i sput ed a ccount , " and ( 3) " [ i ] n ar gui ng ' al l ' s wel l t hat end s wel l , ' [ W el l s Far go] sl oughs offi t s pl ace i n t he ca usat i on ch ai n by cont endi ng t hat t he m oney i n t he a ccountbel onged t o La una a l l a l o n g
. B u t t h a t a rg u m e n t a s s u m e s n o w r o n g d o in g a n d c o n v e n i e n tl yi g n o re s [W e l l s F a rg o 's ] e ff o rts to conceal i t s i ni t i al m i st ake t hr ough f or ger yand m i sr epr esent at i on. " I n t hei rsuppl em ent ar yst at em ent of f act s, t he C r ocker si st er s al so st at e t hat W el l s F ar go " com pl et el yi gnor es t he hear t oft hi s case— m al i ci ous b r each off i duci ar ydut yand t he for ger yaccom pany i ng t hat brea c h." Fi nal l y , i n r esponse t o t he l egal
- suff i ci ency c h a l l e n g e to th e b re a c h e l e m e n t, S u s a n a n d J e a n n e s u m m a rize th e i r re s p o n s e a s fo l l o w s : "[W e l l s F a rg o ] w i th It s C o r p o r a te H a t o n M a d e a M is ta k e It A tt e m p te d w ith It s In d e p e n d e n t E x e c u to rH a t o n to C o v e r ; a n d T h e r e in L i e s T h i s V e rd i c t." T o t he ex t en t S us an an d J ea nn e' s a rg u m e n ts a re as k i ng us t o d i s pe ns e w i t h t he ne ed t o p rove c a u s a ti o n a n d i n ju ry i n th i s c a s e , w e d e c l i n e to d o s o
. See Bur rowv. Arce , 99 7 S

. W

. 2d 22 9, 24 0 (T ex
. 19 99 ). Br each i s eno ugh onl ywhen a pl ai nt i ffseeks t o f or f ei t som e por t i on offe es ear ned i n connect i on wi t h a br each o f f i d u c i a ry d u ty

. S i K y u Kim , 286 S. W

. 3d a t 635 ( ci t i ng Lon ga k er v. Evans , 32 S. W

. 3d 7 25, 733 n. 2 ( T ex. App. –San Ant oni o 20 00, pet

. wi t hdr awn) )

. T he C r ocker s ar e not seeki ng " f ee d am ages. " T heyar e see k i ng to re c o v e r a c tu a l d a m a g e s
. See Slay v. Bur ne t t Trust , 143 T ex. 621 , 187 S. W

. 2d 3 77, 391 ( 1945) ( op. on r eh' g) ( en banc) (e xpl ai ni ng t hat a t r ust ee woul d be l i abl e t o t r ust benef i ci ar i es f orany act ual l oss t o a t r ust r esul t i ng f r om t he l oan of t r ust asset s m ade i n br each of t he t r ust ee' s f i duci ar y dut y t o av oi d sel f
- deal i ng, but i n t hi s case t her e was a quest i on offa ct as t o whet hert he t r ust act ual l yl ost any t hi ng on t he l oan)

. I nj ur yand c a u s a tio n a r e s till r e q u ir e d w h e n a p la in tiff s e e k s to r e c o v e r a c tu a l d a m a g e s f o r a b r e a c h o f f id u c ia r y d u t y. S i K y u Kim , 286 S. W

. 3d a t 635 ( ci t i ng Longa ker , 3 2 S .W .3 d a t 7 3 3 ); H o o v e r v . L a r k in , 196 S. W

. 3d 2 27, 233 ( T e x . A p p .– H o u s to n [ 1 s t D is t. ] 2 0 0 6 , p e t. d e n ie d ) ( s e tt in g o u t, in a b r e a c h o ff id u c ia r y d u ty c a s e , t h a t w h ile a p l a i n ti ffn e e d n o t p ro v e c a u s a ti o n to re c o v e r d i s g o rg e m e n t o f f e e s , th e p l a i n ti ffm u s t p ro v e c a u s a ti o n to rec ove r ac t ua l da m ag es ). 12 B re a c h o f

f id u c ia ry d u ty re qu ire s a s h o win g t h a tt h e b re a c h c a u s e d a n in ju ry. Si Kyu 8 Ki mv. Har sta n, Ltd ., 2 8 6 S. W .3 d 62 9 , 6 3 5 (T e x. Ap p .– El Pa so 20 0 9 , p e t. f ile d ) (ci ti n g Jones
v . B lu me , 196 S.W .3d 440, 447 (Tex

. App.–D all as 2006, pet. deni ed) ; Punts v. Wils on , 137 S.W .3d 8 89, 8 91 ( Tex . Ap p.–Tex ar kana 2004, no pet .) ); Lundy, 260 S.W .3d a t 501

. Susa n and J eanne h ad th e burden t o prov e tha t W ell s F arg o "prox ima te ly ca used an i nju ry " to them. See Edwards

v. Pena , 38 S.W .3d 1 91, 1 98 ( Tex . App.–C or pus Chr is ti 2001, no p et.) (h old ing thatthe pla int iff all eg ing breach of f idu ci ar y duty bears t he burden of

proof) ( ci ti ng Mar. Overseas Corp. v. Ellis , 977 S.W .2d 5 36, 5 38 ( Tex. 1 9 9 6 )). " Cau se in fact and proximate cause are butspecif ic applicat ions of the rule th at a p laintif f mustprodu ce13

ev ide nce from w hic h the [j uror] may re asona bly

i nfer t hat t he [i nju ry

su ffered and the] damag es sued for hav e resul ted from the condu ct of the defendant. " Sele ctou ch Corp. v. P e rf ect Sta rch, Inc. , 111 S.W .3d 8 30, 8 35 ( Tex . Ap p.–D all as 2003, no pet .) ; s e eHa y nes & Boo ne v

. Bo wser Bouldin , Ltd. , 896 S.W .2d 1 79, 1 81- 82 ( Tex . 199 5) ( ex pla ini ng thatthe
caus al nex us re q uirement i s metw hen a jur y i s p re sent ed with pleadi ng and proof that est abl is hes a di re ct caus al li nk between t he ac ti o n s of the defendant, the inj ur y su ffered, and the damag es aw arded) ; see als o Adam e v . Law O ffice of A ll

is on & Hue rt

a , N o. 13 -0 4- 670- CV , 200 8 Tex . Ap p. LE X IS 3 912, at * *11- 12 ( Tex . Ap p.–C or pus Chr is ti M ay 22, 2008, pet. deni ed) ( mem. op.)( setti ng out, i n an appeal f ro m the g ra nti ng of a summary

j udg ment in a l eg al malpract ic e acti on, t hat p ro of o f a c ausal nex us is nec ess ar y to asc ertai n the
am oun t of

dam ages to w hich a pla intif f is entitled). Ques ti on 5 of the j ur

y ch arg e as ked, "D o you find from a preponderance of the
ev ide nce that the b re ach of f idu ci ar y duty , if any

you hav e found i n ans w er to Ques ti on 4, prox imat ely

ca used an i nju ry

to Susa n and Jeann e C ro ck er?" The jur y respon ded, "W e do. " T he jury charge def ined "proximate cause " as, that caus e w hic h, i n a n atural and c onti nuous se q uence , produce s a n ev ent, and w it hout w hic h c ause suc h ev ent woul d nothav e oc cur re d. In order to be a prox imat e c ause, the actor omi ss ion co mplai ned of mustbe su ch thata person usi ng the deg re e of c are re q uired of him woul d hav e fores een t hat t he ev ent, or so me si mil ar

ev ent, mig ht reas onabl y resul t t herefrom. There may be more tha n one prox imat e c ause of an ev ent. Con ti n g e n to n fi n d i n g W e l l s F a rg o ' s a ct i o n s c a u s e d a n i nj u r y , t h e j u r y wa s a s k ed "W hat s um of money , if any , if pai d now in cas h, woul d fair ly and re asona bly

co mpensat e S u s a n a n d Je a n n e Cro c k e r fo r t h e ir d a m a ge s , if

a n y, t h a t re s u lt e d f ro m t h e in ju ry yo u h a ve foun d?" The jury

was instructe d to con sider only the followi ng eleme nts of d a m a ges:W e n ote t ha t t hi s de t erm i na t i on co ul d b e c ha rac t eri z ed as an i s s ue of l aw ; ho w eve r, on ap pe al , 9 nei t herpar t yhas r ai sed ch ar ge er r ori n t hi s r egar d. T her ef or e, we wi l l consi dert he ch ar ge a s a pr operchar ge a n d th e ju ry a s th e p ro p e r p a rty to d e te rm i n e th i s i s s u e
. See R om er o v. KPH C onsol

idation, I nc. , 166 S. W

. 3d 2 1 2 , 2 2 1 (T e x . 2 0 0 5 ); W al
- M art S t or es, I nc. v. St ur

ges , 5 2 S .W .3 d 7 1 1 , 7 1 5 (T e x . 2 0 0 1 ); s e e a ls o M in n . L ife I ns. C o. v. Vasquez , 19 2 S

. W

. 3d 77 4, 77 8 (T ex
. 20 06 ).

A copyof

t he di sput ed j oi nt accou nt sum m ar yf r om Apr i l t hr ough June 2000 was adm i t t ed a s 10 D e fe n s e E x h i b i t 1 6

. T h e s u m m a ry i d e n ti fie d th e a c c o u n t a s J o h n a n d L a u n a C ro c k e r's "In v A g e n c yA c c o u n t." T he h ol di ngs i n t he a ccountconsi st ed o fm oneym ar k et and f i xed i ncom e f unds.

Susan an d Jea nne cont end t hat W el l s Far go' s posi t i on t hat i t pai d t he r i ght per son i s wr ong because 11 t her e was n o r i ght of sur v i v or shi p cr eat ed i n t he d i sput ed a ccount

. T heysupp or t t hei rco nten t i on wi t h t he f ol l owi ng ar gum ent s: ( 1) t he absence ofa si gned agencyagr eem ent pr ecl uded t he a ppl i cat i on o fsect i on 4 39 o f th e p ro b a te c o d e , see T EX
. P ROB
. C OD E A NN
. § 43 9 ( Ver non 2003) ( r egar di ng r i ght s ofsur v i v or shi p) ; ( 2) t he p r e m a r ita l a g r e e m e n t a p p lie d o n ly to "b a n k a c c o u n ts ," w h ic h t h e y c o n te n d th e ju r y im p lic itly d e te r m in e d d id n o t i n c l u d e th e d i s p u te d a c c o u n t; a n d ( 3 ) e v e n if th e d i s p u te d a c c o u n t c o u l d b e c o n s i d e re d a b a n k a c c o u n t, t heywer e ha r m ed b yt he br each because ( a) t he pr em ar i t al agr eem ent onl y r ef er r ed t o a cont r act ual obl i gat i on t o est abl i sh a R O S and d i d not cre at e a R O S i t sel f , and ( b) W el l s Far go was bound byt he for m of t he a ccount r egar dl ess of

t he t hr eatof a f ut ur e l awsui t or cl ai m agai nst t he est at e f r om Lau na. However , al t hough Susan a n d J e a n n e p re s e n te d th e fo re g o i n g a rg u m e n ts a t tri a l a n d n o w o n a p p e a l , t h e yd i d n o t p ro ff e r te s ti m o n yto s u b s ta n ti a te th e s e a rg u m e n ts a n d to e x p l a i n h o w th e yw e re e n ti tl e d to th e d i s p u te d fu n d s
. See King Ranch , 118 S. W

. 3d at 751. R at her , t he onl y per son who t est i f i ed a s t o t he r am i f i cat i ons o ft he t r ansact i on was Sm i t h, who consi st ent l yt est i f i ed t hat t he m oneywas pr oper l ydi st r i but ed t o La un a and who al so t est i f i ed t hat t he d i s p u te d a c c o u n t w a s a b a n k a c c o u n t. S ee su pra n. 9. 14 "[p]roper ty bel ong ing to the [ e]s ta te w ro ng fully di str ibu ted t o a p erson
. . . not e nti tl ed to
re cei v e the proper

ty under the ter ms of the W il l. " The j ur y ans w ered "$230 ,000. 00." Base d on th e damag e q uest ion , the jur y impli ci tl y

determi ned that an injur y occur re d because the dis puted funds bel ong ed to the est ate a nd were w ro ng fu llydi str ibu ted t o Launa w ho was notentitle d to rece iv e tho se f und s und er John 's w ill. 9 In deter mini ng w hether there is leg all y

suff ic ien t ev ide nce to s uppor t t he prox imat e
ca u se f in d in g, we co n sid e r th e fo llo wing e vide n ce fa vora b le to th e f in d in g: (1 ) W e lls Fa rgo set up the disp ute d acco unt as a joint acco untw ithou t ROS; (2) W ells Farg o pa id 10 $230,00 0 to Launa a fter s he c lai med a r ig ht t o the funds i n the di spute d ac count ; ( 3) the f und s w ere pa id to La una and did notente r the est a t e ; a nd (4) Susa n an d Jea nne were
re si dual benefic iar ies under thei r father' s w ill a n d s to o d to inh er itthe re mainde r of the est ate. W hil e thi s e v ide nce suppo rt s a findi ng that , t hroug h W ell s F arg o's acti ons, the

1115

mo ney di d no t be c om e pa rt of th e J oh n' s es ta te , th i s ev i de nc e i s no mo re th an a me re scintil la to esta blish tha t the disput ed f und s actua lly belon ged to the estat e an d w ere
w ro ng fully

di str ibu ted t o Launa

. King Ran ch , 118 S.W .3d a t 751

. Thus, w e f in d no
ev ide nce that an i nju ry

was show n. Mo re ov er , t he jur

y also heard the foll ow ing testi mony put on byW ell s F arg o: (1 ) the joi nt ac countat is sue took i ts funds f ro m two other j oin t ac count s w hic h c ontai ned communi ty

proper ty and prov ide d for RO S; ( 2) Jo hn and L a u n a 's premari tal ag re ement prov ide d tha t "al l bank acc ounts ope ned after the date of marr iag e i n the names of both [Jo hn and Launa] shal l be c onsi dered c ommunity proper ty " and "shal l be hel d i n su ch a
manner as to prov ide the ri g ht of s ur v ivorshi p to the re maini ng par ty upon the d eath of the other"; ( 3) after

Jo hn's death , Lau na not ic ed th at $3 34,000 w as mis si ng from one of her joi nt acc o u n t s w i t h R O S ; ( 4 ) a tJ o h n ' s re q u e s tt h a tm o n e y h a d b e e n t ra n s fe r re d i n t o the dispu ted joint accou nt; (5 ) L a u n a's atto rney contacte d W ells Farg o to asse rt Laun a's enti tl ement t o the funds in the d is puted acc ount; ( 6) W ell s F arg o di sc uss ed th is matte r w it h
couns el w ho adv is ed i t that Launa w as enti tl ed to the funds; (7 ) Smit h tes ti fied th at i t was his opi nio n tha t Lau na "was leg all y enti tl ed to the funds i n tha t ac countand that any litig ation w ith regard to tha t would result in add itiona l ex pen se to the esta te" ; (8) Smith also testif ied th at th e dispu ted accou nt w as a "b ank accou nt" a nd w as a joint acco untsubject to th e rig ht of

a surv iv orship pro v ided bythe pre ma rital agreem ent ; and (9) w hen W ells Fargo met wi th La una , in accorda nce wi th Sm ith's advice, itd istribute d to La una the f ull $460,00 0 from t he di sput ed j oin t ac count

. W e c onsi der thi s c ontrar

y ev ide nce in our

l eg al
s u f f ic ie n cy re vie w o f

t h is i s s u e b e c a u s e we c o n c lu d e t h a ta re a s o n a b le ju ro r c o u ld n o th a ve dis re g arded i t. See Cit y o f Ke ller

, 168 S.W .3d a t 807 , 827

.16

In s um, Sus an and Jeann e fail ed to carr y their burden to establ is h c ausat ion ; t hey faile d to est abl is h tha t t hey w ere ent it led to re cei v e the $230,000. See King Ran ch , 118 S.W .3d at 751 . W e susta in W ells Farg o's f irst issue on this ba sis. III . P U N I TI VE D A M A GES Hav ing su sta ine d W e ll s F arg o's actual damag e i ss ue, we need not rev iew i ts
rema ining issue s ch allenging p unitive dam ages. Th ere can be no pun itiv e da ma ge aw ard
w it hout a recov er

y of act ual damag es. See Nabou rs v. Long view Sav. & Lo an Ass'n , 700 S.W .2d 9 01, 9 04 ( Tex . 198 5) ; Doub leda y & Co., Inc. v. Rog ers , 674 S.W .2d 7 51, 7 53- 54 (Tex . 198 4) ; see als o T EX
. C IV
. P R AC
. & R EM
. C OD E A NN
. § 41. 004( a) ( Ver non 200 8) (codif y ing the com mo n-law

rule in actions governed by the exemp lary dam age statu te). IV. C ONCL US I ON W e reverse and rend er judgme nt th at Su san Crocker an d Jea nne C ro cker take
n o th in g.

NE LDA V. RO DR IGU EZ J u s t i c e Del iv ered and filed the 29th day of Dec ember , 200 9.