Court Opinion

ID: 9784663
Source: CourtListenerOpinion
Date Created: 2023-08-30 20:50:44.003609+00
Date Added: 2024-06-11T07:35:57.564302
License: Public Domain

JOSH R. MORRISS, III, Chief Justice,
concurring.
I agree with the disposition of this appeal made by the majority opinion of this Court. I write, however, to respectfully set out my differing analysis of Section R of the Dynasty Trust. My analysis leads me to conclude that Section R was not intended to insulate Scott from potential liability for filing the Harris County lawsuit against MRMC.
Section R is titled “Transactions with Beneficiaries and Fiduciaries.” While that title is not determinative of how that section should be interpreted, I believe the heading is consistent with its intent. The language of Section R is intended to target transactions, that is, business dealings, not lawsuits or actions beyond the commonly accepted meaning of the word “transactions.”
In essence, the first sentence of Section R gives Scott permission “to purchase from, sell to, lend funds to, or otherwise deal with” a wide array of other individuals and entities, including “any ... corporation ... in which the Trustee may have an interest,” as if the actions were between “disinterested parties, except to the extent that the Texas Trust Code (or its successor statute) may expressly prohibit Settlor from authorizing any corporate Trustee serving hereunder from engaging in any such transaction.”
Key language in that sentence provides the complete topical list of the type of transactions in which the trustee might engage. He may “purchase from, sell to, lend funds to, or otherwise deal with” various persons and entities, including MRMC,30 for example. Here, “otherwise deal with” is the “catchall,” the list’s elastic term. I believe that, in the context of this language, “deal with” means something akin to “enter into a transaction or conduct business with.”
Of course, “deal with” can, in the absence of a particular context, be understood broadly enough to include any encounter or strategy. In an obviously extreme example, one can, albeit illegally, “deal with” a rival by shooting him or her. A much less extreme example would be to “deal with” a rival by suing him, her, or it. But, when determining the intentions of the parties as expressed in a document, all parts of the document must be read together-individual clauses, words, or phrases should not be read out of context. Burlington N. & Santa Fe Ry. Co. v. S. Plains *241Switching, Ltd., 174 S.W.3d 348, 356 (Tex.App.-Fort Worth 2005, no pet.). Courts should be “wary of isolating from its surroundings or considering apart from other provisions a single phrase, sentence or section of a contract.” State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 433 (Tex.1995).
Here, in the context it is used, the term “deal with” does not suggest to me any intent to break out of the general flow of the paragraph, which addresses various forms in which parties may conduct business with each other. I do not believe “otherwise deal with” was intended to include the filing of a lawsuit by the trustee.
Therefore, I do not believe that the first sentence of Section R is intended to insulate Scott from possible liability from suing MRMC.
But, that is not the end of the analysis. There is a second sentence31 in Section R. That sentence has three sections; the first setting out examples of roles Scott might be expected to play, the last providing that Scott would be subject to the same standard of liability applicable in transactions between disinterested parties, and the middle part that might, if read out of context, provide the relief from potential liability Scott desires.
That middle part says that no rule “relating to self-dealing or divided loyalty” will apply to “any act” of Scott. Scott is accused of breaching his fiduciary duty to the trust beneficiaries in various ways, including by filing the Harris County suit against MRMC. It seems fair to say he stands accused of “divided loyalty,” which this middle provision might be interpreted to forgive. But, we are to read provisions of a contract with each other, not out of context. Beaston, 907 S.W.2d at 433. Summarizing the three parts of the second sentence, that context says (1) that Scott might wear various hats with an entity or an estate in which the trust has an interest, (2) that no rule prohibiting self-dealing or divided loyalty shall apply, and (3) that, in any such transactions, Scott would be held only to the standards applicable to those dealing with disinterested parties. I conclude that the intent of the middle part of the second sentence was to say that Scott would incur no liability for any self-dealing or any divided loyalty in any such transaction.
And, while “transaction” can be understood more broadly than a business arrangement or dealing, the context of this section suggests to me the intent to use that (what I would consider) more common understanding of the word, as a business deal, similar to a purchase, sale, or loan.32
I concur with the remainder of the majority opinion.

. Part of the extensive list of parties with which the trustee may "otherwise deal" includes "any ... corporation ... in which the Trustee may have an interest.” That would clearly include MRMC, against which Scott filed suit. But that inclusion does not, in my opinion, expand the meaning of the phrase "otherwise deal with.”

. The second sentence follows:
The provisions of this paragraph are made in full realization that said Trustee may be a partner, officer, director, member, or stockholder in any such entity or an executor, administrator or guardian of an estate, and no principle or rule relating to self-dealing or divided loyalty shall be applied to any act of said Trustee, but said Trustee shall be held to the same standard of liability in respect of such transactions as in respect of transactions with disinterested persons.

. See http://dictionary.reference.com/browse/ transaction.