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Marilyn Burgess - District Clerk Harris County
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Envelope No. 44857523
By: Lewis John-Miller
1 AA Filed: 7/27/2020 3:12 PM
CAUSE NO. 2020-31023
ROBERTL. MOODY, JR IN THE DISTRI AO ON OF
B,D. KIN, [A
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Vv HARR ocr g $2005
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GREER, HERZ, & ADAMS, LLP.
IRWIN “BUDDY” HERZ, JR. and
ROSS RANKIN MOODY 55" JUDICIAL DISTRICT
D. EFENDANT IRWIN HERZ, JR., INDIVIDUALLY AND AS TRUSTEE OF THE
THREE R TRUSTS’S, RULE 91a MOTION TO DISMISS
20-CV- 1564
DCMODISM
Motion to Dismiss
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Table of Contents
INTRODUCTION
FACTUAL ALLEGATIONS
A The Three R Trusts
B Other Moody Entities
C Greer, Herz, & Adams LLP
LEGAL STANDARD
SUMMARY OF ALLEGATIONS
SUMMARY OF ARGUMENTS ...0...ccccccccecceecceet
es resesiteesieersrtiseetisensitessiesinsiesesesnsosiereeenaes 9
ARGUMENT & AUTHORITIES 10
I Trustee Herz Does Not Owe Plaintiff Robert Jr. Fiduciary Duties Related to
Entities or Assets Not Controlled by Trusts 10
II Trustee Herz Does Not Owe A Fiduciary Duty to Provide Perks or Other Benefits
to Robert Jr. Not Required by Trust Agreement 15
I. Trustee Herz Cannot Be Held Liable as Trustee for Actions Taken by Entities
Whose Stock is Owned by Trusts 17
IV Alleged Conflicts of Interest Are Expressly Authorized by Trust Agreement.. 20
Vv Robert Jr. Lacks Standing to Assert Harms to Third-Party Companies 23
VI. Allegations Regarding Actual Administration of Trust Are Legally Barred
And/Or Insufficiently Pled 25
Vil. The Vicarious Liability Claims Cannot Survive Alone 29
ATTORNEYS’ FEES AND COSTS 29
CONCLUSION 30
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TABLE OF AUTHORITIES
Page(s)
Cases
Beddingfield v. Beddingfield,
No. 10-15-00344-CV, 2018 WL 6378553 (Tex. App.—Waco Dec. 5, 2018) 15
Bergman v. Bergman Davidson Webster Charitable Trust,
No. 07-02-0460-CV, 2004 WL 24968 (Tex. App. —Amarillo Jan. 2, 2004, no
Pet.) cee ccecceeccceeneeseseeesenecsesesesenensuscsessaeseescesesscanavsuscaviseserereesececeeetsseeisiserereesesssitesneneeeeees 25
Boswell y. Ector Cty. Indep. School Dist.,
No. 11-15-00013-CV (Tex. App.—Eastland Apr. 7, 2016) 24
Clifton v. Hopkins,
107 S.W.3d 755 (Tex. App.—Waco 2003, no pet.).......ceececcececeeseeeseeceeeeseeeseseensneneieeeeseenens 27
Cooper v. Trent,
551 S.W.3d 325 (Tex. App —Houston [14th Dist.] 2018, pet. denied)... 29
Corpus Christi Nat. Bank v. Gerdes,
551 S.W.2d 521 (Tex. Civ. App.—Corpus Christi 1977, writ ref'd n.r.e.) oo... 22, 27
Dailey v. Thorpe,
445 S.W.3d 785 (Tex. App.—Houston [Ist Dist.] 2014, no pet.) 0... 6, 7, 15, 26
Darocy v. Abildtrup,
345 S.W.3d 129 (Tex. App.—Dallas 2011, no pet)... 0c
eee eects teetceesesnsiseeeeneneseeers 29
Ditta v. Conte,
298 S.W.3d 187 (Tex. 2009) 11
Gray v. Saint Matthews Cathedral Endowment Fund, Inc.,
544 S.W.2d 488 (Tex. App —Texarkana 1976, writ ref?d 1.1.€.)...0.00 ceceeee ereeeeee 24
Gregory v. Porter & Hedges, LLP,
398 S.W.3d 881 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) 25
Guillory v. Seaton,
LLC, 470 $.W.3d 237 (Tex. App.—Houston [Ist Dist.] 2015, no pet.) oo... 6, 7, 25
Huie v. DeShazo,
922 S.W.2d 920 (Tex. 1996) 11
Jochenc v. Clayborne.
863 S.W.2d 516 (Tex. App.—Austin 1993, writ denied) 22
iii
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Joe v. Two Thirty Nine Joint Venture,
145 S.W.3d 150 (Tex. 2004) 12
Kappus v. Kappus,
284 S.W.3d 831 (Tex. 2009) 21
Lemke v. Lemke,
929 S.W.2d 662 (Tex. App.—Fort Worth 1996, writ denied) 24
Marshall v. Ribosome L.P..,
01-18-00108-CV, 2019 WL 2041062 (Tex. App.—Houston [1st Dist.] May 9,
2019, MO Pete) ..eeeceececeeeeeeceeeeteteeseseetesssesessnsssusseesscscesesusssutatevstissnanstsitasetitavecitensessesecerse 16, 21
In re Massey,
160 A.3d at 503 24
Moody v. American Nat'l Ins. Co.,
No. 3:19-cv-00206, 2020 WL 3128259 (S.D. Tex. June 12, 2020) 2,14
Moody vy. Haas,
493 S.W.2d. at 559, 567 17
Moody v. Nat’l W. Life Ins. Co.,
Case No. 2019-SOX-31
Pike v. Texas EMC Mgmi., LLC,
--- S.W.3d ----, 2020 WL 3405812 (Tex. June 19, 2020) 23
Punts v. Wilson,
137 S.W.3d 889 11
Rankin v. Naftalis,
557 S.W.2d 940 (Tex. 1977) 12
Richard Nugent & CAO, Inc. v. Estate of Ellickson,
543 S.W.3d 243 (Tex. App.—Houston [14th Dist.] 2018, no pet.) .......0..0cccccccceseeseestesceees 19
Ritchie v. Rupe,
443 S.W.3d 856 (Tex. 2014) 15, 24
Robert L. Moody, Jr., Derivatively on Behalf of Nat'l W. Life Ins. Co. and Nat’!
W. Life Grp., Inc. v. Ross Rankin Moody et al.,
No. 17-CV-1196 (Tex. Dist.—Galveston [122nd Dist. Ct.] [filed Sept. 28,
2017))
Sneed v. Webre,
465 S.W.3d 169 (Tex. 2015) 20, 23
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Tex. Commerce Bank, N.A. v. Grizzle,
96 S.W.3d 240 (Tex. 2002) 21, 26, 27
The Moody Found. v. Estate of Moody,
No. 03-99-00034-CV, 1999 WL 1041541 (Tex. App.—Austin Nov. 18,
1999, pet. denied) 4, 11, 24, 28
Tolar v. Tolar,
No. 12-14-00228-CV, 2015 WL 2393993 (Tex. App.—Tyler May 20, 2015) 11
Univ. of Tex.—MD Anderson Cancer Ctr. v. Porter,
14-17-00107-CV, 2017 WL 5196146 (Tex. App.—Houston [14th Dist.] Nov
2, 2017, NO Pet.) oe ececececececenneeescceceseseseseeseececeesceseesseececeseeescesesesesnenensseeneeseseessseterisnenseseseees 17
Weizhong Zheng v. Vacation Network, Inc.,
468 S.W.3d 180 (Tex. App.—Houston [14th Dist.] 2015, pet. denied)
Willis v. Donnelly,
199 S.W.3d 262 (Tex. 2006) 18
Statutes
Tex. Ins. Code § 805.003(a)(1) 17
Tex. Prop. Code §§ 111.004(7), 115.01 1(a) 24
Tex. Prop. Code § 113.051 12
Tex. Prop. Code § 114.063 28
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Defendant Irwin Herz, Jr., individually and as Trustee of the Three R Trusts, files this Motion
to Dismiss (“Motion”), requesting that the Court dismiss the claims filed by Plaintiff Robert L.
Moody, Jr. (“Robert Jr.” or “Plaintiff’) on the grounds that they have no basis in law or fact,
pursuant to Texas Rule of Civil Procedure 91a, and would respectfully show the Court as follows!:
INTRODUCTION
The crux of Robert Jr.’s case is that Trustee Herz owed fiduciary duties to provide Robert
Jr. with monetary and non-monetary perks—including favorable marketing contracts; office
leases; and board seats—from a variety of entities founded in decades past by Moody family
members. But most of the entities from which Robert Jr. complains of being denied such perks—
including two publicly-traded insurance companies and a couple of charitable foundations—are
not administered by Trustee Herz and are not part of the Three R Trusts’ corpus (the Trusts for
which Herz is Trustee). Further, even if all the foundations and companies that allegedly wronged
Robert Jr. were a part of the Trusts, neither the Trust Agreement nor Texas law create any fiduciary
obligations to provide such monetary or non-monetary benefits.
Finally, to the extent that Robert Jr. has complaints against the American National
Insurance Company (“American National” or “ANICO”), the National Western Life Group
(“National Western”), Moody National Bank, or any of the other companies and foundations he
lists in his Petition—for the perceived denial of contracts or board seats or board fees—his claims
are against those entities, not against Trustee Herz. In fact, Robert Jr. tried to bring certain of these
aD
claims against both American National and National Western in prior lawsuits—all of which were
dismissed—before bringing this last ditch, Hail Mary against the 80-year-old, 49-year-long
! This Motion does not affect Trustee Herz's timely Motion to Transfer Venue to Galveston County, currently pending
before the Court. Under Tex. R. Civ. P. 91a.8, a “party does not, by filing a motion to dismiss pursuant to this rule or
obtaining a ruling on it, waive a special appearance or a motion to transfer venue.”
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Trustee of the Three R Trusts. Moody v. American Nat'l Ins. Co., No. 3:19-cv-00206, 2020 WL
3128259 , at *1, *5 (S.D. Tex. June 12, 2020) (rejecting claims American National improperly
“removed him from his position as an advisory board member, canceled contracts with his
company, Moody Insurance Group ... and announced the termination of MIG’s office-space lease
in one of its buildings”); Robert L. Moody, Jr., Derivatively on Behalf of Nat’l W. Life Ins. Co.
and Nat'l W. Life Grp., Inc. v. Ross Rankin Moody et al., No. 17-CV-1196 (Tex. Dist —Galveston
[122nd Dist. Ct.] [filed Sept. 28, 2017]) (dismissed by the Court); Moody v. Nat'l W. Life Ins. Co.,
Case No. 2019-SOX-31 (Dep’t of Labor [filed Apr. 25, 2019]).
These claims fail too, and should likewise be dismissed.
FACTUAL ALLEGATIONS
A. The Three R Trusts
Robert Moody, Sr. (“Robert Sr.”) created the Three R Trusts in 1960. See Plaintiff's First
Amended Petition (filed 7/20/20) (hereafter “Petition”) at § 16. Robert Sr.’s four children—
Plaintiff Robert Jr., non-parties Frances Moody-Dahlberg and Russell Moody, and Defendant Ross
Moody—are all beneficiaries of the Trusts. Jd. | 17. None of the other beneficiaries of the Trusts
have joined in Robert Jr.’s complaints—and in fact—one of them is a Defendant. Although there
is only one trust indenture, the IRS has held that the Three R Trusts are four separate trusts, with
four beneficiaries. /d. § 16 n.7. Robert Sr. named Trustee Herz as the Three R Trusts’ Trustee in
April 1971, almost 50 years ago. /d. § 17. The Trusts were only “initially funded with 4,000 shares
of ANICO common stock” but, during Trustee Herz’s tenure, have grown to be worth “hundreds
of millions” of dollars. Pet. 4, 16
Robert Jr. alleges that today the Trusts “control[] hundreds of millions in cash, real estate
and business operations,” primarily Moody National Bank and the Regent Care nursing homes. Jd.
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{{ 18, 23 (‘[t]he assets of the Trusts include the controlling shares of Moody National Bank.”).
These are similarly the only companies alleged to be majority owned by the Trusts. /d. at J 18;
99, ee,
23-24 (Alleging that the trust assets comprise “real estate > multiple nursing homes” and “almost
100% of the shares of the voting stock that controls Moody National Bank.”); see also Pet. ¥ 18,
23 n.14. There is no allegation—nor could there be—that any of the other entities mentioned in
the Petition, including the Moody Endowment, the Moody Foundation, the Transitional Learning
Center, American National, National Western, or others, are part of the Trusts.
B. Other Moody Entities
Robert Jr. concedes that his father, Robert Sr., exercised control over his substantial
personal interests in the vast and complex Moody family enterprises until, in 2015, Robert Sr.
transferred “control of his substantial and complex business interests to the Moody National Bank
Trust Department.” /d. at J 1, 21. In addition, before he “stepped down,” Robert Sr. served on
the “multiple business and charitable boards that control the billions of dollars that make up the
Moody interests.” /d. In short, Robert Jr. alleges: (1) that his father’s interests in the Moody
business enterprises are under the control of the Moody National Bank Trust Department; and
(2) that the Moody businesses and charitable organizations are under the control of their respective
boards of directors.
Robert Jr. does not, and cannot, allege that the Trusts own controlling interests in American
National and National Western. Assets of Robert Sr.’s personal estate, such as his interests in
American National and National Western stock, are not part of the corpus of the Three R Trusts
and therefore Trustee Herz has no duty nor obligation to administer them. As Robert Jr. admits,
these personal assets are controlled under a Power of Attorney that was executed giving control of
Robert Sr.’s personal assets not to Trustee Herz but to the independent Trust Department of Moody
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National Bank. /d. {J 21-22 (“[T]wo large assets previously owned or controlled, directly or
indirectly, by Robert L. Moody Sr. are the controlling shares of National Western Life Insurance
Company and ANICO.”). Moody National Bank’s Trust Department is one of the oldest and
largest in Texas. /d. J 14. Robert Jr. acknowledges that the Trust Department “is supposed to be
neutral and independent of the bank and is operated apart from operations of the Bank”—as is
required by federal regulations /d. at ] 23, n. 18. He complains that Defendants “demoted the
head of the trust department” and “hired someone of their mutual choosing” without consulting
Robert Jr., but there is no allegation that the new head of the trust department was unqualified or
has done anything improper. /d. ¥ 23.
Nor could American National or National Western be part of the Trusts’ corpus. Both are
in fact publicly-traded insurance companies. Id. at 10 n. 13 (acknowledging Defendant Ross
chairs “two publicly traded entities”); Jd. 4 25 (acknowledging that National Western was “one of
the largest publicly traded companies based in Austin, Texas”). Likewise, the assets of various
charitable entities, including the Moody Foundation, Moody Endowment, the Robert L. Moody
Foundation, TLC/Moody Neuro, are not alleged to be part of the corpus of the Three R Trusts. By
law, those assets belong to those entities. For example, the Moody Foundation—which itself is
alleged to control “almost 25% of [American National’s] stock.” (/d. ¢ 27)—is one of the largest
charitable foundations in Texas and has been organized pursuant to a charitable trust created in
1942. The Moody Found. v. Estate of Moody, No. 03-99-00034-CV, 1999 WL 1041541, at *1
of
(Tex. App.—Austin Nov. 18, 1999, pet. denied). And the Moody Neurorehabilitation Institute
(formerly known as the “Transitional Learning Center” is a Texas corporation that operates
nonprofit medical rehabilitation facilities. Id. J 14.
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Robert Jr. admits that each of these entities are in fact controlled by their various Boards
of Directors. Jd. 1 (stating that Robert Sr. ceded control when he “stepped down from multiple
business and charitable boards”); id. § 3 (discussing the “various boards that manage Moody
business interests”). And he acknowledges, for example, that the Board of National Western is
elected by a “majority vote of the shareholders” and that the directors of American National are
typically “voted upon” at its annual shareholder meeting. /d. J 25, 29.
Putting this together, then, as worst Trustee Herz is alleged to have the ability to vote the
stock of some, but not most, of the companies and foundations mentioned in the Petition but he is
not alleged to control afny of these companies directly—even those that are alleged to be majority
owned by the Trusts. /d § 22 (alleging Herz has the ability to “vote stock”).
C. Greer, Herz, & Adams LLP
Robert Jr. acknowledges that his father, Robert Sr., and these Moody business and
charitable organizations have retained Mr. Herz and Defendant Greer, Herz, and Adams L.L.P.
(“GHA”) as their lawyers for more than three decades. Petition 2 & n.1 (claiming that the
relationship has existed “for more than thirty-five years). In fact, Robert Jr. acknowledges that
these relationships have in fact been in existence much longer. He alleges that GHA itself—which
he alleges is “known for nothing else other than being counsel for the sprawling Moody Interests,”
“has been in existence for eighty years.” Jd.
In other words, GHA’s relationships with American National, National Western, Moody
National Bank, and others pre-date the Trust Agreement (which was established in 1960) (Petition
at J 16) and were in place at the time Robert Sr. stepped down as Trustee and asked Trustee Herz
to become Trustee in 197]. /d. at ] 17. At the very least, these relationships continued to exist for
decades with the approval of Robert Sr.
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Throughout this period, Robert Sr. retained the ability to modify the Trust Agreement but
never did so to prevent or prohibit these legal relationships (See Irwin Herz, Jr.’s, Trustee of the
Three R Trusts’s, Motion to Transfer Venue to Galveston County, and, Subject to that Motion, His
Original Answer and Affirmative Defenses (filed 7/13/2020) (hereinafter “Herz Answer’) at Ex.
6 (the “Trust Agreement”) at Article X), which the Petition alleges included GHA representing the
Moody National Bank, American National, the Moody Endowment, and the Transitional Learning
Center. Petition at f{ 13-14, 36-40. Further, these alleged “conflicts” existed simultaneously—
again for decades and with full knowledge of everyone—along with GHA’s alleged representation
of Robert Jr. /d. at § 15 (alleging that GHA represented Robert Jr. for more than thirty years, until
October 2017).
LEGAL STANDARD
By express terms of Rule 91a.1, “[a] cause of action has no basis in law if the allegations,
taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to
the relief sought.” See Houston Specialty Ins., 569 S.W.3d at 139 n.1. Dismissal is required if the
facts alleged in the petition are inadequate to establish liability under an asserted cause of action.
See, e.g., Weizhong Zheng v. Vacation Network, Inc., 468 S.W.3d 180, 185-86 (Tex. App.—
Houston [14th Dist.] 2015, pet. denied) (upholding dismissal of fraudulent inducement claim);
Dailey v. Thorpe, 445 S.W.3d 785, 789 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (upholding
dismissal of claim for breach of fiduciary duty).
The First Court of Appeals presented a useful summary of the “two situations” in which
“{cJourts have concluded that a cause of action has no basis in law.” Guillory v. Seaton, LLC, 470
S.W.3d 237, 240 (Tex. App.—Houston [1st Dist.] 2015, no pet.). First, a cause of action has no
basis in law if “the petition alleges too few facts to demonstrate a viable legally cognizable right
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to relief.” /d. (citations omitted). Second, a cause of action has no basis in law when “the petition
alleges facts that... bar recovery.” /d. (citations omitted).
In deciding a 91a motion, a court may consider any exhibits made part of the pleadings in
accordance with Rule 59, including “all ... written instruments, constituting, in whole or part, the
claim sued on, or the matter set up in defense, ... made a part of the pleadings by copies thereof
... being attached” to the answer. TEX. R. CIV. P. 59, 91a.6. Such exhibits “shall be deemed a part
thereof for all purposes,” including deciding a Rule 91a motion. /d. 59; see Dailey v. TIhorpe, 445
S.W.3d 785, 789 (Tex. App.—Houston [1* Dist.] 2014, no pet.) (granting dismissal of conspiracy
claim pursuant to Rule 91a where “documents attached to the pleadings ... affirmatively disprove
the [plaintiff's] claim”). Here, the Court may properly consider the Trust Agreement which—
because the claims asserted against Trustee Herz are breach of trust—is the written instrument
defining Trustee Herz’s obligations and therefore defines the claims and defenses being sued over.
SUMMARY OF ALLEGATIONS
The Petition consists of four groups of claims against Trustee Herz.
First, Robert Jr. alleges claims related to a number of non-Trust assets—including claims
related to publicly-traded insurance companies and charitable foundations—that are not part of the
corpus of the Three R Trusts at all or for which the Trusts merely own a negligible amount of
stock. These allegations generally relate to Plaintiffs’ complaint that he lost out of various
monetary or non-monetary benefits from these companies or that others received benefits that he
did not. The allegations include that Trustee Herz conspired to put Ross Moody on the American
National board (Pet. §] 49(0)-(p)); was placed on the American National board himself (id. at
4 49(m)), conspired to keep Robert Jr. off of the Board of the Moody Foundation (/d. at | 49(u));
conspired to eliminate Robert Jr.’s board fees from the Moody Endowment (/d. at J 49(v));
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conspired to remove the Plaintiff from the American National Board ((/d. at § 49(q)); conspired to
cancel Robert Jr.’s marketing or consulting contracts with American National ((/d.. at 1] 49(z);
(aa)); and cancelled Robert Jr.’s company car at National Western (/d. at J] 49(dd)), amongst
numerous similar grievances. L.g., Pet. I] 49(a); (c), (1); (m); (1m); (0); (p); (q); (8); (u); (Y); OW);
(y); (2); (aa); (bb); (cc); (dd).
Second, and similarly, Robert Jr. alleges claims related to the perception that he lost out on
monetary or non-monetary perks or benefits from two companies —from Moody National Bank
and Regent Care— whose stock is alleged to be majority owned by the Trusts. For example, he
alleges that Defendants Ross and Trustee Herz conspired to “keep Bobby Moody Jr. from being
Chairman of Moody National Bank” (/d. at ] 49(r)) and complains that he was removed as agent
of record for Regent Care (/d. at § 49(ff)).
Third, Robert Jr. alleges claims related to purported conflicts of interest by Trustee Herz
and the law firm for which he works, Defendant Greer, Herz, & Adams LLP. /d. at 4 49(g)
(alleging that Trustee Herz “took advantage of his position as Trustee to perform legal services for
significant trust assets.”). E.g., Pet. {§ 49(d); (e); (f); (g); (h); (i); (ee). As Robert Jr. admits, these
alleged conflicts have existed, been disclosed, and were well-known for Trustee Herz’s entire 49-
year tenure as Trustee.
Fourth, Robert Jr. makes a few conclusory and undeveloped claims that the Trusts have
been mismanaged or that duties were improperly delegated. E.g., Pet. J] 49(b); (h); (j); (kK). For
example, Robert Jr. alleges that Trustee Herz improperly “[d]elegated his authority to preserve and
protect Trust assets to third parties” (/d. at {| 49(j))—but the Petition contains no allegations as to
what exactly was delegated, to whom it was delegated, when it was delegated, or why it was
improper.
we
SUMMARY OF ARGUMENTS
All of these claims fail as a matter of law.
e First, Trustee Herz had no fiduciary obligation related to assets or entities that are not
administered by him as Trustee of the Three R Trusts.
e Second, Trustee Herz had no fiduciary obligation to provide Robert Jr. with benefits or
board positions or monetary perks that are not required by the Trust Agreement, regardless of
whether an asset is majority owned by the Trusts or not.
e Third, Robert Jr. cannot hold Trustee Herz liable for the actions of third-party companies—
including Moody National Bank, the Moody Foundation, American National, National Western,
and others. At worst, the Trusts merely own stock in these entities and/or Trustee Herz is a director
of these entities. In both cases, however, Trustee Herz cannot be held liable as Trustee for their
actions and does not owe fiduciary duties to Robert Jr. for those entities to act in a particular way.
e Fourth, the alleged conflicts of interest, including GHA’s provision of legal services to
various Moody entities—some of which are related to the Trusts, some of which are not—were
expressly authorized and approved of by Robert Sr., the Settlor of the Trusts, and therefore his
Trust Agreement, for decades, and cannot constitute impermissible self-dealing as a matter of law.
e Fifth, Robert Jr. has no standing to complain that Defendant Ross, Trustee Herz, or any
partner of Defendant GHA was elected to the boards of various non-party entities including
American National, National Western, or others or that third-party companies hired GHA to
perform legal services. Any harm suffered as a result of those elections or actions was suffered by
the entities themselves.
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e Sixth, and finally, the few sparsely pled claims in this case against Trustee Herz that
actually relate to Trust administration fail because they have been insufficiently pled and/or are
barred by the express terms of the Trust Agreement.
ARGUMENT & AUTHORITIES
1. Trustee Herz Does Not Owe Plaintiff Robert Jr. Fiduciary Duties Related to
Entities or Assets Not Controlled by Trusts
Robert Jr. alleges that Trustee Herz breached fiduciary duties that he allegedly owed as a
Trustee of the Three R Trusts for which Plaintiff Robert Jr. is one of four adult beneficiaries.27 A
Trustee’s duties and obligations are defined by the Trust Agreement and the Trust Agreement can
limit the duties that would otherwise exist by statute or at common law. See Tex. Prop. Code.
§ 111.002 (“If the terms of this subtitle and the terms of a trust conflict, the terms of the trust
control ....”); /d. at § 1113.001 (“A power given to a trustee [under the Trust Code] does not apply
to a trust to the extent that the instrument creating the trust ... conflicts with or limits the power.”);
Herz Answer at Ex. 6 (“Trust Agreement”) at Art. II (p.50) (“The Trust herein created shall be
administered in accordance with the powers, duties and responsibilities of Trustees under the
provisions of the Texas Trust Act... as amended from time to time, except where such provisions
are in conflict herewith, in which case the provisions of this instrument shall control.”). Here, the
Trust Agreement clearly limits Trustee Herz’s duties and obligations. See infra, Parts IV, VI.
But even if the Trust Agreement did not do that, it is axiomatic that a Trustee’s fiduciary
duties are limited to those duties he performs as Trustee. Put another way, Herz’s fiduciary duties
as Trustee must objectively relate to the property of the Trusts, and do not require “loyalty”, for
example, to Robert Jr. in some purely subjective sense. “The term ‘trust’ refers not to a separate
> He is also alleged to owe duties as a lawyer and partner of Defendant Greer, Herz, & Adams L.L.P. These claims
fail for the reasons set forth in the simultaneously filed Motion to Dismiss filed by Defendant Greer, Herz. & Adams
LLP.
10
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legal entity but rather to the fiduciary relationship governing the trustee with respect to trust
property.” Huie v. DeShazo, 922 $.W.2d 920, 926 (Tex. 1996) (italic emphasis in original).
“[T]rustees ... must handle trust property solely for the beneficiaries’ benefit.” Ditta v. Conte, 298
S.W.3d 187, 191 (Tex. 2009) (emphasis added); see also the Moody bound. vy. Estate of Moody,
No. 03-99-00034-CV, 1999 WL 1041541, at *2 (Tex. App.--Austin Nov. 18, 1999, pet. denied)
(defining trust as “a fiduciary relationship with respect to property which arises as a manifestation
by the settlor of an intention to create the relationship and which subjects the person holding title
to the property to equitable duties to deal with the property for the benefit of another person”
(emphasis added) (quoting Tex. Prop. Code § 111.004(4) (West 1995)); Punts v. Wilson, 137
S.W.3d 889, 891-92 (Tex. App.—Texarkana 2004 (Executor “did not owe any fiduciary duty to
Punts with regard to the funds in the Credit Union accounts, as they were not included in Kelly’s
estate.”); Tolar v. Tolar, No. 12-14-00228-CV, 2015 WL 2393993, at *5 (Tex. App.—Tyler May
20, 2015) (“However, as we have determined that her community and separate property were not
trust property, she had no duty to account for that property.”).
1]
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Entities Alleged to be Majority Owned by | Other Moody Entities Not Alleged to Be
the Three R Trusts Majority Owned by Trusts
e Moody National Bank (and related e American National Insurance
companies Moody Bancshares, Moody Company
Bank Holding Co., and Hometown
Bank) National Western Life Group
e Regent Care Entities Moody Foundation
Robert L. Moody Foundation
Moody Endowment
Transitional Learning Center / Moody
Neurorehabilitation Institute
Moody Gardens
Moody Medical Research Institute
A plaintiff cannot prevail on a breach of fiduciary duty claim if the alleged breach concerns
acts that fall outside of the scope of the fiduciary relationship. This is clear in the common law.
See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 159-160 (Tex. 2004) (fiduciary duties
to a client “extend[] only to dealings within the scope of the underlying relationship of the
parties.”); Rankin v. Naftalis, 557 S.W.2d 940, 944-45 (Tex. 1977) (“While we recognize that the
relationship between the parties in the Melton lease was fiduciary in character, the fiduciary duties
extended only to dealings within the scope of the underlying relationship of the parties...”);
Restatement (Third) of Trusts § 2 (2003) (“[A] person in a fiduciary relationship to another is
under a duty to act for the benefit of the other as to matters within the scope of the relationship.”).
And it is clear under the plain terms of the Texas Trust Code, which states,
“in administering the trust the trustee shall perform all of the duties imposed on trustees by the
common law.” Tex. Prop. Code § 113.051 (emphasis added); See also id. at§ 117.007 (“A _trustee
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shall invest and manage the trust assets solely in the interest of the beneficiaries”) (emphasis
added). Therefore any duties that Trustee Herz owes Robert Jr. are limited as a matter of law to
Trustee Herz’s performance administering the Trusts themselves.
Despite this, many of Robert Jr.’s claims relate to entities—including publicly-traded
insurance companies, charitable foundations, and others—that are not part of the Trusts’ corpus
and are not administered by Trustee Herz as Trustee. For example, Robert Jr. complains that
Trustee Herz lied to him about meetings of the Moody Foundation and/or the Robert L. Moody
Foundation (Pet. § 49(a)); that Trustee Herz helped elect Defendant Ross Moody to the boards of
American National and National Western and worked to have Robert Jr. removed from the board
of American National (/d. J] 49(c); 49(n); 49(q); that Trustee Herz acted to remove Robert Jr. as
the agent of record for the Transitional Learning Center (/d. at ] 49(cc)); that Trustee Herz worked
to cancel Robert Jr.’s marketing or consulting agreements with American National (/d. at {| 49(z);
49(aa); that he worked to remove him as agent of record for National Western (/d. at {| 49(dd);
and that he had a company for which his daughter was an employee hired by Moody Gardens and
the Moody Foundation to perform interior decoration work (/d. at n.23) amongst other claims
regarding third-party entities not part of the Trusts.
But even accepting all of these allegations as true—and they are certainly not—they would
not constitute a breach of any fiduciary duty owed by Trustee Herz as Trustee of the Three R Trusts
because none of these companies or entities are part of the Three R Trusts. The Trusts indirectly
hold controlling interests in two operating entities: the Regent Care nursing home facilities and
Moody National Bank. £.g., Pet. at § 18 (claiming that the “Trust assets also include almost 100%
of the shares of the voting stock that controls Moody National Bank” among real estate, cash
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assets, and “multiple nursing homes,” a reference to Regent Care). Trustee Herz owes no fiduciary
obligations to Robert Jr. as to entities and companies that are not a part of the Trusts.
Therefore, to the extent Trustee Herz had the ability to control such things—which he did
not—he had no obligation to tell Robert Jr. about meetings of foundations that are not a part of the
Trusts. Similarly, he had no obligation to assist Robert Jr. in getting agreements with American
National or National Western insurance company. Robert Jr. must realize this as he previously
filed multiple lawsuits raising these issues—against the appropriate Defendants, National Western
and American National. Those lawsuits were dismissed, so Robert Jr. has now repackaged the
same complaints as part of this “breach of fiduciary duty” lawsuit.” E.g., Moody v. American Nat'l
Ins. Co., No. 3:19-cv-00206, 2020 WL 3128259 , at *1, *5 (S.D. Tex. June 12, 2020) (rejecting
claims American National improperly “removed him from his position as an advisory board
member, canceled contracts with his company, Moody Insurance Group ... and announced the
termination of MIG’s office-space lease in one of its buildings”).
Nor does Trustee Herz—to the extent he had such power, which he does not—have any
fiduciary obligation to make Robert Jr. the agent of record at the charitable Transitional Learning
Center or at National Western. And, as a matter of law, it would not have been self-dealing for
Moody Gardens—an entity not part of (and not alleged to be part of) the Trusts—to hire Trustee
Herz’s daughter’s employer to redecorate their offices. Robert Jr.’s laundry list of complaints
regarding entities not administered by the Trusts—including the Moody Foundation, the Moody
Endowment, the Transitional Learning Center, American National, National Westem, and
others—cannot be the basis for a breach of fiduciary duty claim tied to Trustee Herz’s obligations
as Trustee. All such claims should be dismissed.
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I. Trustee Herz Does Not Owe A Fiduciary Duty to Provide Perks or Other Benefits
to Robert Jr, Not Required by Trust Agreement,
Many of Robert Jr.’s alleged breaches of fiduciary duty relate to complaints that both
companies whose stock is majority owned by the Trusts—Moody National Bank and Regent
Care—and other entities whose stock is not majority owned by the Trusts—including the Moody
Foundation, American National, National Western, and others—have denied Robert Jr. various
monetary and non-monetary perks. But there is no obligation in the Trust Agreement, trust law,
or corporate law to provide Robert Jr. with board seats on any of these companies, or to provide
him with preferential marketing contracts, or any other perks. Put simply, these allegations do not
state a claim for breach of Herz’s fiduciary duties as Trustee of the Three R Trusts. See, e.g.,
Beddingfield v. Beddingfield, No. 10-15-00344-CV, 2018 WL 6378553, at *4 (Tex. App.—Waco
Dec. 5, 2018) (concluding breach of fiduciary duty claim against executor and trustee was properly
dismissed under Rule 91a because although the parties had a fiduciary relationship, such
relationship did not encompass the life insurance policy at issue); Dailey v. Thorpe, 445 S.W.3d
785, 789 (Tex. App.—Houston [1* Dist.] 2014, no pet.) (upholding dismissal of breach of
fiduciary duty claim under Rule 91a where defendant’s fiduciary duties did not extend to the
matters alleged). See also. Ritchie v. Rupe, 443 S.W.3d 856, 888-89 (Tex. 2014) (“Absent a
contractual or other obligation, the officer or director has no duty to conduct the corporation’s
business in a manner that suits an individual shareholder’s interests when those interests are not
aligned with the interests of the corporation and the corporation’s shareholders collectively.”).
List of Perks Robert Jr. Alleges Denied to Him | Entity Alleged to Have Denied It
Board Position (Pet. at ] 49(q)) American National
Chairmanship of Board ((/d. at { 49(r)) Moody National Bank
Board Position (/d. at | 49(u) Moody Foundation
Board Fees ((/d. at | 49(v)) Moody Endowment
Board Position (/d. at | 49(w)) Transitional Learning Center
Consulting Agreement (/d. at § 49(z)) American National
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me
Marketing Agreement (/d. at § 49(aa)) _ American National
Health Insurance (/d. at | 49(bb)) Not Specified
Agent of Record Position and Fees (/d. at § 49(cc)) Transitional Learning Center
Agent of Record Position and Fees (/d. at | 49(dd)) | National Western
Company Car (/d. at § 49(dd)) National Western
Agent of Record Position and Fees (/d. at ¥ 49(ff)). Regent Care
Board Position (/d. at | 45(1)) Robert L. Moody Foundation
The question of whether a trustee has committed a breach of fiduciary duty “depends on
the Trusts’ terms.” Marshall v. Ribosome L.P., 01-18-00108-CV, 2019 WL 2041062, at *5-7 (Tex.
App.—Houston [1st Dist.] May 9, 2019, no pet.) (citing Hurley v. Moody Nat'l Bank of Galveston,
98 S.W.3d 307, 310 (Tex. App.—Houston [1st Dist.] 2003, no pet.)) (concluding that trust was not
breached by failure to distribute income where trust’s language gave trustee “absolute, unfettered
discretion over the decision to accumulate or distribute the Trust income” and did “not give [the
beneficiary] any right to override the Trustee’s decisions about how to handle the Trust income”).
Nowhere in Robert Jr.’s Petition does he allege a violation of any particular term of the Three R
Trusts. In complaining that he lost out on board positions, contracts, and other benefits from third
parties, Robert Jr.’s Petition reveals a fundamental lack of understanding of the nature of the trust
relationship. Robert Jr.’s property rights as a beneficiary of the Three R Trust are outlined in the
Trust instrument itself, which does not (and is not alleged to) create an entitlement to the titles,
contracts, and other benefits he clearly desires.
Even if Robert Jr.’s complaints that Herz essentially “[flailed to treat beneficiaries of the
Trust equally, and actively worked to advance the interests of Ross ... over those of [Robert Jr.]”
in terms of corporate promotion, Pet. 49(o), were found to somehow relate to the Trusts’ property,
alleged “differences in treatment between beneficiaries of different trusts does not ... show[] a
breach of fiduciary duty,” unless the trusts’ terms require equal treatment. Marshall, 2019 WL
2041062, at *7 (noting that claim for aiding and abetting breach of fiduciary duty was properly
16
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dismissed where trusts did not “contain language limiting the trustee’s discretionary authority,
such as by ... requiring the distributions to Preston be equal to those made to Pierce, Jr. under the
trusts that benefit him”). Robert Jr. does not—and cannot—allege that the terms of the Trusts
require that all beneficiaries be treated equally.
No reasonable person could believe, as Robert Jr. alleges, that Herz’s duties as Trustee
require him to treat all four beneficiaries of the Three R Trusts “equally” in the sense that Robert
Jr. demands—in other words, that they must receive the same or similar corporate positions in
affiliated and unaffiliated entities. It would be impossible. The four beneficiaries cannot, for
example, all act as the Chairman of the Bancshares board of directors. They cannot all receive
perks from the Moody-affiliated entities, such as consulting and management contracts and
appointment as agent of record—indeed, Robert Jr. admits he is the only beneficiary with a
personal insurance business. Pet. J] 28, 31. Unlike Ross, Robert Jr. cannot serve as Chairman or
as a full director of American National because he is disqualified by law from doing so. See Tex.
Ins. Code § 805.003(a)(1). The Moody Foundation can only have three trustees, not four. Pet. J
27, see also Moody v. Haas, 493 S.W.2d. at 559, 567. These examples of obvious obstacles to the
“equal” status of each beneficiary with respect to Moody-affiliated entities make it clear that
Herz’s duties as Trustee do not, and cannot, extend to the matters Robert Jr. complains of. See
TEX. R. Civ. P. 91a.1 (“A cause of action has no basis in fact if no reasonable person could believe
the facts pleaded.”); Univ. of Tex.--MD Anderson Cancer Ctr. v. Porter, 14-17-00107-CV, 2017
WL 5196146, at *1 (Tex. App.—Houston [14th Dist.] Nov. 2, 2017, no pet.).
OL Trustee Herz Cannot Be Held Liable as Trustee for Actions Taken by Entities
Whose Stock is Owned by Trusts
Even if Texas law permitted a Trustee to be sued for breach of fiduciary duty on the basis
that a benef
Preview
31 BO- CU-)s64 7/27/2020 3:12 PM Marilyn Burgess - District Clerk Harris County ad Envelope No. 44857523 By: Lewis John-Miller 1 AA Filed: 7/27/2020 3:12 PM CAUSE NO. 2020-31023 ROBERTL. MOODY, JR IN THE DISTRI AO ON OF B,D. KIN, [A Fug 1c Te Ou,gO Vv HARR ocr g $2005 Coun, N GREER, HERZ, & ADAMS, LLP. IRWIN “BUDDY” HERZ, JR. and ROSS RANKIN MOODY 55" JUDICIAL DISTRICT D. EFENDANT IRWIN HERZ, JR., INDIVIDUALLY AND AS TRUSTEE OF THE THREE R TRUSTS’S, RULE 91a MOTION TO DISMISS 20-CV- 1564 DCMODISM Motion to Dismiss Se ||| ||I Table of Contents INTRODUCTION FACTUAL ALLEGATIONS A The Three R Trusts B Other Moody Entities C Greer, Herz, & Adams LLP LEGAL STANDARD SUMMARY OF ALLEGATIONS SUMMARY OF ARGUMENTS ...0...ccccccccecceecceet es resesiteesieersrtiseetisensitessiesinsiesesesnsosiereeenaes 9 ARGUMENT & AUTHORITIES 10 I Trustee Herz Does Not Owe Plaintiff Robert Jr. Fiduciary Duties Related to Entities or Assets Not Controlled by Trusts 10 II Trustee Herz Does Not Owe A Fiduciary Duty to Provide Perks or Other Benefits to Robert Jr. Not Required by Trust Agreement 15 I. Trustee Herz Cannot Be Held Liable as Trustee for Actions Taken by Entities Whose Stock is Owned by Trusts 17 IV Alleged Conflicts of Interest Are Expressly Authorized by Trust Agreement.. 20 Vv Robert Jr. Lacks Standing to Assert Harms to Third-Party Companies 23 VI. Allegations Regarding Actual Administration of Trust Are Legally Barred And/Or Insufficiently Pled 25 Vil. The Vicarious Liability Claims Cannot Survive Alone 29 ATTORNEYS’ FEES AND COSTS 29 CONCLUSION 30 I te TABLE OF AUTHORITIES Page(s) Cases Beddingfield v. Beddingfield, No. 10-15-00344-CV, 2018 WL 6378553 (Tex. App.—Waco Dec. 5, 2018) 15 Bergman v. Bergman Davidson Webster Charitable Trust, No. 07-02-0460-CV, 2004 WL 24968 (Tex. App. —Amarillo Jan. 2, 2004, no Pet.) cee ccecceeccceeneeseseeesenecsesesesenensuscsessaeseescesesscanavsuscaviseserereesececeeetsseeisiserereesesssitesneneeeeees 25 Boswell y. Ector Cty. Indep. School Dist., No. 11-15-00013-CV (Tex. App.—Eastland Apr. 7, 2016) 24 Clifton v. Hopkins, 107 S.W.3d 755 (Tex. App.—Waco 2003, no pet.).......ceececcececeeseeeseeceeeeseeeseseensneneieeeeseenens 27 Cooper v. Trent, 551 S.W.3d 325 (Tex. App —Houston [14th Dist.] 2018, pet. denied)... 29 Corpus Christi Nat. Bank v. Gerdes, 551 S.W.2d 521 (Tex. Civ. App.—Corpus Christi 1977, writ ref'd n.r.e.) oo... 22, 27 Dailey v. Thorpe, 445 S.W.3d 785 (Tex. App.—Houston [Ist Dist.] 2014, no pet.) 0... 6, 7, 15, 26 Darocy v. Abildtrup, 345 S.W.3d 129 (Tex. App.—Dallas 2011, no pet)... 0c eee eects teetceesesnsiseeeeneneseeers 29 Ditta v. Conte, 298 S.W.3d 187 (Tex. 2009) 11 Gray v. Saint Matthews Cathedral Endowment Fund, Inc., 544 S.W.2d 488 (Tex. App —Texarkana 1976, writ ref?d 1.1.€.)...0.00 ceceeee ereeeeee 24 Gregory v. Porter & Hedges, LLP, 398 S.W.3d 881 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) 25 Guillory v. Seaton, LLC, 470 $.W.3d 237 (Tex. App.—Houston [Ist Dist.] 2015, no pet.) oo... 6, 7, 25 Huie v. DeShazo, 922 S.W.2d 920 (Tex. 1996) 11 Jochenc v. Clayborne. 863 S.W.2d 516 (Tex. App.—Austin 1993, writ denied) 22 iii e Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150 (Tex. 2004) 12 Kappus v. Kappus, 284 S.W.3d 831 (Tex. 2009) 21 Lemke v. Lemke, 929 S.W.2d 662 (Tex. App.—Fort Worth 1996, writ denied) 24 Marshall v. Ribosome L.P.., 01-18-00108-CV, 2019 WL 2041062 (Tex. App.—Houston [1st Dist.] May 9, 2019, MO Pete) ..eeeceececeeeeeeceeeeteteeseseetesssesessnsssusseesscscesesusssutatevstissnanstsitasetitavecitensessesecerse 16, 21 In re Massey, 160 A.3d at 503 24 Moody v. American Nat'l Ins. Co., No. 3:19-cv-00206, 2020 WL 3128259 (S.D. Tex. June 12, 2020) 2,14 Moody vy. Haas, 493 S.W.2d. at 559, 567 17 Moody v. Nat’l W. Life Ins. Co., Case No. 2019-SOX-31 Pike v. Texas EMC Mgmi., LLC, --- S.W.3d ----, 2020 WL 3405812 (Tex. June 19, 2020) 23 Punts v. Wilson, 137 S.W.3d 889 11 Rankin v. Naftalis, 557 S.W.2d 940 (Tex. 1977) 12 Richard Nugent & CAO, Inc. v. Estate of Ellickson, 543 S.W.3d 243 (Tex. App.—Houston [14th Dist.] 2018, no pet.) .......0..0cccccccceseeseestesceees 19 Ritchie v. Rupe, 443 S.W.3d 856 (Tex. 2014) 15, 24 Robert L. Moody, Jr., Derivatively on Behalf of Nat'l W. Life Ins. Co. and Nat’! W. Life Grp., Inc. v. Ross Rankin Moody et al., No. 17-CV-1196 (Tex. Dist.—Galveston [122nd Dist. Ct.] [filed Sept. 28, 2017)) Sneed v. Webre, 465 S.W.3d 169 (Tex. 2015) 20, 23 Iv te Tex. Commerce Bank, N.A. v. Grizzle, 96 S.W.3d 240 (Tex. 2002) 21, 26, 27 The Moody Found. v. Estate of Moody, No. 03-99-00034-CV, 1999 WL 1041541 (Tex. App.—Austin Nov. 18, 1999, pet. denied) 4, 11, 24, 28 Tolar v. Tolar, No. 12-14-00228-CV, 2015 WL 2393993 (Tex. App.—Tyler May 20, 2015) 11 Univ. of Tex.—MD Anderson Cancer Ctr. v. Porter, 14-17-00107-CV, 2017 WL 5196146 (Tex. App.—Houston [14th Dist.] Nov 2, 2017, NO Pet.) oe ececececececenneeescceceseseseseeseececeesceseesseececeseeescesesesesnenensseeneeseseessseterisnenseseseees 17 Weizhong Zheng v. Vacation Network, Inc., 468 S.W.3d 180 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) Willis v. Donnelly, 199 S.W.3d 262 (Tex. 2006) 18 Statutes Tex. Ins. Code § 805.003(a)(1) 17 Tex. Prop. Code §§ 111.004(7), 115.01 1(a) 24 Tex. Prop. Code § 113.051 12 Tex. Prop. Code § 114.063 28 eS Defendant Irwin Herz, Jr., individually and as Trustee of the Three R Trusts, files this Motion to Dismiss (“Motion”), requesting that the Court dismiss the claims filed by Plaintiff Robert L. Moody, Jr. (“Robert Jr.” or “Plaintiff’) on the grounds that they have no basis in law or fact, pursuant to Texas Rule of Civil Procedure 91a, and would respectfully show the Court as follows!: INTRODUCTION The crux of Robert Jr.’s case is that Trustee Herz owed fiduciary duties to provide Robert Jr. with monetary and non-monetary perks—including favorable marketing contracts; office leases; and board seats—from a variety of entities founded in decades past by Moody family members. But most of the entities from which Robert Jr. complains of being denied such perks— including two publicly-traded insurance companies and a couple of charitable foundations—are not administered by Trustee Herz and are not part of the Three R Trusts’ corpus (the Trusts for which Herz is Trustee). Further, even if all the foundations and companies that allegedly wronged Robert Jr. were a part of the Trusts, neither the Trust Agreement nor Texas law create any fiduciary obligations to provide such monetary or non-monetary benefits. Finally, to the extent that Robert Jr. has complaints against the American National Insurance Company (“American National” or “ANICO”), the National Western Life Group (“National Western”), Moody National Bank, or any of the other companies and foundations he lists in his Petition—for the perceived denial of contracts or board seats or board fees—his claims are against those entities, not against Trustee Herz. In fact, Robert Jr. tried to bring certain of these aD claims against both American National and National Western in prior lawsuits—all of which were dismissed—before bringing this last ditch, Hail Mary against the 80-year-old, 49-year-long ! This Motion does not affect Trustee Herz's timely Motion to Transfer Venue to Galveston County, currently pending before the Court. Under Tex. R. Civ. P. 91a.8, a “party does not, by filing a motion to dismiss pursuant to this rule or obtaining a ruling on it, waive a special appearance or a motion to transfer venue.” 1 te Trustee of the Three R Trusts. Moody v. American Nat'l Ins. Co., No. 3:19-cv-00206, 2020 WL 3128259 , at *1, *5 (S.D. Tex. June 12, 2020) (rejecting claims American National improperly “removed him from his position as an advisory board member, canceled contracts with his company, Moody Insurance Group ... and announced the termination of MIG’s office-space lease in one of its buildings”); Robert L. Moody, Jr., Derivatively on Behalf of Nat’l W. Life Ins. Co. and Nat'l W. Life Grp., Inc. v. Ross Rankin Moody et al., No. 17-CV-1196 (Tex. Dist —Galveston [122nd Dist. Ct.] [filed Sept. 28, 2017]) (dismissed by the Court); Moody v. Nat'l W. Life Ins. Co., Case No. 2019-SOX-31 (Dep’t of Labor [filed Apr. 25, 2019]). These claims fail too, and should likewise be dismissed. FACTUAL ALLEGATIONS A. The Three R Trusts Robert Moody, Sr. (“Robert Sr.”) created the Three R Trusts in 1960. See Plaintiff's First Amended Petition (filed 7/20/20) (hereafter “Petition”) at § 16. Robert Sr.’s four children— Plaintiff Robert Jr., non-parties Frances Moody-Dahlberg and Russell Moody, and Defendant Ross Moody—are all beneficiaries of the Trusts. Jd. | 17. None of the other beneficiaries of the Trusts have joined in Robert Jr.’s complaints—and in fact—one of them is a Defendant. Although there is only one trust indenture, the IRS has held that the Three R Trusts are four separate trusts, with four beneficiaries. /d. § 16 n.7. Robert Sr. named Trustee Herz as the Three R Trusts’ Trustee in April 1971, almost 50 years ago. /d. § 17. The Trusts were only “initially funded with 4,000 shares of ANICO common stock” but, during Trustee Herz’s tenure, have grown to be worth “hundreds of millions” of dollars. Pet. 4, 16 Robert Jr. alleges that today the Trusts “control[] hundreds of millions in cash, real estate and business operations,” primarily Moody National Bank and the Regent Care nursing homes. Jd. eS {{ 18, 23 (‘[t]he assets of the Trusts include the controlling shares of Moody National Bank.”). These are similarly the only companies alleged to be majority owned by the Trusts. /d. at J 18; 99, ee, 23-24 (Alleging that the trust assets comprise “real estate > multiple nursing homes” and “almost 100% of the shares of the voting stock that controls Moody National Bank.”); see also Pet. ¥ 18, 23 n.14. There is no allegation—nor could there be—that any of the other entities mentioned in the Petition, including the Moody Endowment, the Moody Foundation, the Transitional Learning Center, American National, National Western, or others, are part of the Trusts. B. Other Moody Entities Robert Jr. concedes that his father, Robert Sr., exercised control over his substantial personal interests in the vast and complex Moody family enterprises until, in 2015, Robert Sr. transferred “control of his substantial and complex business interests to the Moody National Bank Trust Department.” /d. at J 1, 21. In addition, before he “stepped down,” Robert Sr. served on the “multiple business and charitable boards that control the billions of dollars that make up the Moody interests.” /d. In short, Robert Jr. alleges: (1) that his father’s interests in the Moody business enterprises are under the control of the Moody National Bank Trust Department; and (2) that the Moody businesses and charitable organizations are under the control of their respective boards of directors. Robert Jr. does not, and cannot, allege that the Trusts own controlling interests in American National and National Western. Assets of Robert Sr.’s personal estate, such as his interests in American National and National Western stock, are not part of the corpus of the Three R Trusts and therefore Trustee Herz has no duty nor obligation to administer them. As Robert Jr. admits, these personal assets are controlled under a Power of Attorney that was executed giving control of Robert Sr.’s personal assets not to Trustee Herz but to the independent Trust Department of Moody eS National Bank. /d. {J 21-22 (“[T]wo large assets previously owned or controlled, directly or indirectly, by Robert L. Moody Sr. are the controlling shares of National Western Life Insurance Company and ANICO.”). Moody National Bank’s Trust Department is one of the oldest and largest in Texas. /d. J 14. Robert Jr. acknowledges that the Trust Department “is supposed to be neutral and independent of the bank and is operated apart from operations of the Bank”—as is required by federal regulations /d. at ] 23, n. 18. He complains that Defendants “demoted the head of the trust department” and “hired someone of their mutual choosing” without consulting Robert Jr., but there is no allegation that the new head of the trust department was unqualified or has done anything improper. /d. ¥ 23. Nor could American National or National Western be part of the Trusts’ corpus. Both are in fact publicly-traded insurance companies. Id. at 10 n. 13 (acknowledging Defendant Ross chairs “two publicly traded entities”); Jd. 4 25 (acknowledging that National Western was “one of the largest publicly traded companies based in Austin, Texas”). Likewise, the assets of various charitable entities, including the Moody Foundation, Moody Endowment, the Robert L. Moody Foundation, TLC/Moody Neuro, are not alleged to be part of the corpus of the Three R Trusts. By law, those assets belong to those entities. For example, the Moody Foundation—which itself is alleged to control “almost 25% of [American National’s] stock.” (/d. ¢ 27)—is one of the largest charitable foundations in Texas and has been organized pursuant to a charitable trust created in 1942. The Moody Found. v. Estate of Moody, No. 03-99-00034-CV, 1999 WL 1041541, at *1 of (Tex. App.—Austin Nov. 18, 1999, pet. denied). And the Moody Neurorehabilitation Institute (formerly known as the “Transitional Learning Center” is a Texas corporation that operates nonprofit medical rehabilitation facilities. Id. J 14. eS Robert Jr. admits that each of these entities are in fact controlled by their various Boards of Directors. Jd. 1 (stating that Robert Sr. ceded control when he “stepped down from multiple business and charitable boards”); id. § 3 (discussing the “various boards that manage Moody business interests”). And he acknowledges, for example, that the Board of National Western is elected by a “majority vote of the shareholders” and that the directors of American National are typically “voted upon” at its annual shareholder meeting. /d. J 25, 29. Putting this together, then, as worst Trustee Herz is alleged to have the ability to vote the stock of some, but not most, of the companies and foundations mentioned in the Petition but he is not alleged to control afny of these companies directly—even those that are alleged to be majority owned by the Trusts. /d § 22 (alleging Herz has the ability to “vote stock”). C. Greer, Herz, & Adams LLP Robert Jr. acknowledges that his father, Robert Sr., and these Moody business and charitable organizations have retained Mr. Herz and Defendant Greer, Herz, and Adams L.L.P. (“GHA”) as their lawyers for more than three decades. Petition 2 & n.1 (claiming that the relationship has existed “for more than thirty-five years). In fact, Robert Jr. acknowledges that these relationships have in fact been in existence much longer. He alleges that GHA itself—which he alleges is “known for nothing else other than being counsel for the sprawling Moody Interests,” “has been in existence for eighty years.” Jd. In other words, GHA’s relationships with American National, National Western, Moody National Bank, and others pre-date the Trust Agreement (which was established in 1960) (Petition at J 16) and were in place at the time Robert Sr. stepped down as Trustee and asked Trustee Herz to become Trustee in 197]. /d. at ] 17. At the very least, these relationships continued to exist for decades with the approval of Robert Sr. eS Throughout this period, Robert Sr. retained the ability to modify the Trust Agreement but never did so to prevent or prohibit these legal relationships (See Irwin Herz, Jr.’s, Trustee of the Three R Trusts’s, Motion to Transfer Venue to Galveston County, and, Subject to that Motion, His Original Answer and Affirmative Defenses (filed 7/13/2020) (hereinafter “Herz Answer’) at Ex. 6 (the “Trust Agreement”) at Article X), which the Petition alleges included GHA representing the Moody National Bank, American National, the Moody Endowment, and the Transitional Learning Center. Petition at f{ 13-14, 36-40. Further, these alleged “conflicts” existed simultaneously— again for decades and with full knowledge of everyone—along with GHA’s alleged representation of Robert Jr. /d. at § 15 (alleging that GHA represented Robert Jr. for more than thirty years, until October 2017). LEGAL STANDARD By express terms of Rule 91a.1, “[a] cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought.” See Houston Specialty Ins., 569 S.W.3d at 139 n.1. Dismissal is required if the facts alleged in the petition are inadequate to establish liability under an asserted cause of action. See, e.g., Weizhong Zheng v. Vacation Network, Inc., 468 S.W.3d 180, 185-86 (Tex. App.— Houston [14th Dist.] 2015, pet. denied) (upholding dismissal of fraudulent inducement claim); Dailey v. Thorpe, 445 S.W.3d 785, 789 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (upholding dismissal of claim for breach of fiduciary duty). The First Court of Appeals presented a useful summary of the “two situations” in which “{cJourts have concluded that a cause of action has no basis in law.” Guillory v. Seaton, LLC, 470 S.W.3d 237, 240 (Tex. App.—Houston [1st Dist.] 2015, no pet.). First, a cause of action has no basis in law if “the petition alleges too few facts to demonstrate a viable legally cognizable right eS to relief.” /d. (citations omitted). Second, a cause of action has no basis in law when “the petition alleges facts that... bar recovery.” /d. (citations omitted). In deciding a 91a motion, a court may consider any exhibits made part of the pleadings in accordance with Rule 59, including “all ... written instruments, constituting, in whole or part, the claim sued on, or the matter set up in defense, ... made a part of the pleadings by copies thereof ... being attached” to the answer. TEX. R. CIV. P. 59, 91a.6. Such exhibits “shall be deemed a part thereof for all purposes,” including deciding a Rule 91a motion. /d. 59; see Dailey v. TIhorpe, 445 S.W.3d 785, 789 (Tex. App.—Houston [1* Dist.] 2014, no pet.) (granting dismissal of conspiracy claim pursuant to Rule 91a where “documents attached to the pleadings ... affirmatively disprove the [plaintiff's] claim”). Here, the Court may properly consider the Trust Agreement which— because the claims asserted against Trustee Herz are breach of trust—is the written instrument defining Trustee Herz’s obligations and therefore defines the claims and defenses being sued over. SUMMARY OF ALLEGATIONS The Petition consists of four groups of claims against Trustee Herz. First, Robert Jr. alleges claims related to a number of non-Trust assets—including claims related to publicly-traded insurance companies and charitable foundations—that are not part of the corpus of the Three R Trusts at all or for which the Trusts merely own a negligible amount of stock. These allegations generally relate to Plaintiffs’ complaint that he lost out of various monetary or non-monetary benefits from these companies or that others received benefits that he did not. The allegations include that Trustee Herz conspired to put Ross Moody on the American National board (Pet. §] 49(0)-(p)); was placed on the American National board himself (id. at 4 49(m)), conspired to keep Robert Jr. off of the Board of the Moody Foundation (/d. at | 49(u)); conspired to eliminate Robert Jr.’s board fees from the Moody Endowment (/d. at J 49(v)); te On conspired to remove the Plaintiff from the American National Board ((/d. at § 49(q)); conspired to cancel Robert Jr.’s marketing or consulting contracts with American National ((/d.. at 1] 49(z); (aa)); and cancelled Robert Jr.’s company car at National Western (/d. at J] 49(dd)), amongst numerous similar grievances. L.g., Pet. I] 49(a); (c), (1); (m); (1m); (0); (p); (q); (8); (u); (Y); OW); (y); (2); (aa); (bb); (cc); (dd). Second, and similarly, Robert Jr. alleges claims related to the perception that he lost out on monetary or non-monetary perks or benefits from two companies —from Moody National Bank and Regent Care— whose stock is alleged to be majority owned by the Trusts. For example, he alleges that Defendants Ross and Trustee Herz conspired to “keep Bobby Moody Jr. from being Chairman of Moody National Bank” (/d. at ] 49(r)) and complains that he was removed as agent of record for Regent Care (/d. at § 49(ff)). Third, Robert Jr. alleges claims related to purported conflicts of interest by Trustee Herz and the law firm for which he works, Defendant Greer, Herz, & Adams LLP. /d. at 4 49(g) (alleging that Trustee Herz “took advantage of his position as Trustee to perform legal services for significant trust assets.”). E.g., Pet. {§ 49(d); (e); (f); (g); (h); (i); (ee). As Robert Jr. admits, these alleged conflicts have existed, been disclosed, and were well-known for Trustee Herz’s entire 49- year tenure as Trustee. Fourth, Robert Jr. makes a few conclusory and undeveloped claims that the Trusts have been mismanaged or that duties were improperly delegated. E.g., Pet. J] 49(b); (h); (j); (kK). For example, Robert Jr. alleges that Trustee Herz improperly “[d]elegated his authority to preserve and protect Trust assets to third parties” (/d. at {| 49(j))—but the Petition contains no allegations as to what exactly was delegated, to whom it was delegated, when it was delegated, or why it was improper. we SUMMARY OF ARGUMENTS All of these claims fail as a matter of law. e First, Trustee Herz had no fiduciary obligation related to assets or entities that are not administered by him as Trustee of the Three R Trusts. e Second, Trustee Herz had no fiduciary obligation to provide Robert Jr. with benefits or board positions or monetary perks that are not required by the Trust Agreement, regardless of whether an asset is majority owned by the Trusts or not. e Third, Robert Jr. cannot hold Trustee Herz liable for the actions of third-party companies— including Moody National Bank, the Moody Foundation, American National, National Western, and others. At worst, the Trusts merely own stock in these entities and/or Trustee Herz is a director of these entities. In both cases, however, Trustee Herz cannot be held liable as Trustee for their actions and does not owe fiduciary duties to Robert Jr. for those entities to act in a particular way. e Fourth, the alleged conflicts of interest, including GHA’s provision of legal services to various Moody entities—some of which are related to the Trusts, some of which are not—were expressly authorized and approved of by Robert Sr., the Settlor of the Trusts, and therefore his Trust Agreement, for decades, and cannot constitute impermissible self-dealing as a matter of law. e Fifth, Robert Jr. has no standing to complain that Defendant Ross, Trustee Herz, or any partner of Defendant GHA was elected to the boards of various non-party entities including American National, National Western, or others or that third-party companies hired GHA to perform legal services. Any harm suffered as a result of those elections or actions was suffered by the entities themselves. te e Sixth, and finally, the few sparsely pled claims in this case against Trustee Herz that actually relate to Trust administration fail because they have been insufficiently pled and/or are barred by the express terms of the Trust Agreement. ARGUMENT & AUTHORITIES 1. Trustee Herz Does Not Owe Plaintiff Robert Jr. Fiduciary Duties Related to Entities or Assets Not Controlled by Trusts Robert Jr. alleges that Trustee Herz breached fiduciary duties that he allegedly owed as a Trustee of the Three R Trusts for which Plaintiff Robert Jr. is one of four adult beneficiaries.27 A Trustee’s duties and obligations are defined by the Trust Agreement and the Trust Agreement can limit the duties that would otherwise exist by statute or at common law. See Tex. Prop. Code. § 111.002 (“If the terms of this subtitle and the terms of a trust conflict, the terms of the trust control ....”); /d. at § 1113.001 (“A power given to a trustee [under the Trust Code] does not apply to a trust to the extent that the instrument creating the trust ... conflicts with or limits the power.”); Herz Answer at Ex. 6 (“Trust Agreement”) at Art. II (p.50) (“The Trust herein created shall be administered in accordance with the powers, duties and responsibilities of Trustees under the provisions of the Texas Trust Act... as amended from time to time, except where such provisions are in conflict herewith, in which case the provisions of this instrument shall control.”). Here, the Trust Agreement clearly limits Trustee Herz’s duties and obligations. See infra, Parts IV, VI. But even if the Trust Agreement did not do that, it is axiomatic that a Trustee’s fiduciary duties are limited to those duties he performs as Trustee. Put another way, Herz’s fiduciary duties as Trustee must objectively relate to the property of the Trusts, and do not require “loyalty”, for example, to Robert Jr. in some purely subjective sense. “The term ‘trust’ refers not to a separate > He is also alleged to owe duties as a lawyer and partner of Defendant Greer, Herz, & Adams L.L.P. These claims fail for the reasons set forth in the simultaneously filed Motion to Dismiss filed by Defendant Greer, Herz. & Adams LLP. 10 eG legal entity but rather to the fiduciary relationship governing the trustee with respect to trust property.” Huie v. DeShazo, 922 $.W.2d 920, 926 (Tex. 1996) (italic emphasis in original). “[T]rustees ... must handle trust property solely for the beneficiaries’ benefit.” Ditta v. Conte, 298 S.W.3d 187, 191 (Tex. 2009) (emphasis added); see also the Moody bound. vy. Estate of Moody, No. 03-99-00034-CV, 1999 WL 1041541, at *2 (Tex. App.--Austin Nov. 18, 1999, pet. denied) (defining trust as “a fiduciary relationship with respect to property which arises as a manifestation by the settlor of an intention to create the relationship and which subjects the person holding title to the property to equitable duties to deal with the property for the benefit of another person” (emphasis added) (quoting Tex. Prop. Code § 111.004(4) (West 1995)); Punts v. Wilson, 137 S.W.3d 889, 891-92 (Tex. App.—Texarkana 2004 (Executor “did not owe any fiduciary duty to Punts with regard to the funds in the Credit Union accounts, as they were not included in Kelly’s estate.”); Tolar v. Tolar, No. 12-14-00228-CV, 2015 WL 2393993, at *5 (Tex. App.—Tyler May 20, 2015) (“However, as we have determined that her community and separate property were not trust property, she had no duty to account for that property.”). 1] te Entities Alleged to be Majority Owned by | Other Moody Entities Not Alleged to Be the Three R Trusts Majority Owned by Trusts e Moody National Bank (and related e American National Insurance companies Moody Bancshares, Moody Company Bank Holding Co., and Hometown Bank) National Western Life Group e Regent Care Entities Moody Foundation Robert L. Moody Foundation Moody Endowment Transitional Learning Center / Moody Neurorehabilitation Institute Moody Gardens Moody Medical Research Institute A plaintiff cannot prevail on a breach of fiduciary duty claim if the alleged breach concerns acts that fall outside of the scope of the fiduciary relationship. This is clear in the common law. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 159-160 (Tex. 2004) (fiduciary duties to a client “extend[] only to dealings within the scope of the underlying relationship of the parties.”); Rankin v. Naftalis, 557 S.W.2d 940, 944-45 (Tex. 1977) (“While we recognize that the relationship between the parties in the Melton lease was fiduciary in character, the fiduciary duties extended only to dealings within the scope of the underlying relationship of the parties...”); Restatement (Third) of Trusts § 2 (2003) (“[A] person in a fiduciary relationship to another is under a duty to act for the benefit of the other as to matters within the scope of the relationship.”). And it is clear under the plain terms of the Texas Trust Code, which states, “in administering the trust the trustee shall perform all of the duties imposed on trustees by the common law.” Tex. Prop. Code § 113.051 (emphasis added); See also id. at§ 117.007 (“A _trustee 12 eS shall invest and manage the trust assets solely in the interest of the beneficiaries”) (emphasis added). Therefore any duties that Trustee Herz owes Robert Jr. are limited as a matter of law to Trustee Herz’s performance administering the Trusts themselves. Despite this, many of Robert Jr.’s claims relate to entities—including publicly-traded insurance companies, charitable foundations, and others—that are not part of the Trusts’ corpus and are not administered by Trustee Herz as Trustee. For example, Robert Jr. complains that Trustee Herz lied to him about meetings of the Moody Foundation and/or the Robert L. Moody Foundation (Pet. § 49(a)); that Trustee Herz helped elect Defendant Ross Moody to the boards of American National and National Western and worked to have Robert Jr. removed from the board of American National (/d. J] 49(c); 49(n); 49(q); that Trustee Herz acted to remove Robert Jr. as the agent of record for the Transitional Learning Center (/d. at ] 49(cc)); that Trustee Herz worked to cancel Robert Jr.’s marketing or consulting agreements with American National (/d. at {| 49(z); 49(aa); that he worked to remove him as agent of record for National Western (/d. at {| 49(dd); and that he had a company for which his daughter was an employee hired by Moody Gardens and the Moody Foundation to perform interior decoration work (/d. at n.23) amongst other claims regarding third-party entities not part of the Trusts. But even accepting all of these allegations as true—and they are certainly not—they would not constitute a breach of any fiduciary duty owed by Trustee Herz as Trustee of the Three R Trusts because none of these companies or entities are part of the Three R Trusts. The Trusts indirectly hold controlling interests in two operating entities: the Regent Care nursing home facilities and Moody National Bank. £.g., Pet. at § 18 (claiming that the “Trust assets also include almost 100% of the shares of the voting stock that controls Moody National Bank” among real estate, cash 13 ae assets, and “multiple nursing homes,” a reference to Regent Care). Trustee Herz owes no fiduciary obligations to Robert Jr. as to entities and companies that are not a part of the Trusts. Therefore, to the extent Trustee Herz had the ability to control such things—which he did not—he had no obligation to tell Robert Jr. about meetings of foundations that are not a part of the Trusts. Similarly, he had no obligation to assist Robert Jr. in getting agreements with American National or National Western insurance company. Robert Jr. must realize this as he previously filed multiple lawsuits raising these issues—against the appropriate Defendants, National Western and American National. Those lawsuits were dismissed, so Robert Jr. has now repackaged the same complaints as part of this “breach of fiduciary duty” lawsuit.” E.g., Moody v. American Nat'l Ins. Co., No. 3:19-cv-00206, 2020 WL 3128259 , at *1, *5 (S.D. Tex. June 12, 2020) (rejecting claims American National improperly “removed him from his position as an advisory board member, canceled contracts with his company, Moody Insurance Group ... and announced the termination of MIG’s office-space lease in one of its buildings”). Nor does Trustee Herz—to the extent he had such power, which he does not—have any fiduciary obligation to make Robert Jr. the agent of record at the charitable Transitional Learning Center or at National Western. And, as a matter of law, it would not have been self-dealing for Moody Gardens—an entity not part of (and not alleged to be part of) the Trusts—to hire Trustee Herz’s daughter’s employer to redecorate their offices. Robert Jr.’s laundry list of complaints regarding entities not administered by the Trusts—including the Moody Foundation, the Moody Endowment, the Transitional Learning Center, American National, National Westem, and others—cannot be the basis for a breach of fiduciary duty claim tied to Trustee Herz’s obligations as Trustee. All such claims should be dismissed. 14 we I. Trustee Herz Does Not Owe A Fiduciary Duty to Provide Perks or Other Benefits to Robert Jr, Not Required by Trust Agreement, Many of Robert Jr.’s alleged breaches of fiduciary duty relate to complaints that both companies whose stock is majority owned by the Trusts—Moody National Bank and Regent Care—and other entities whose stock is not majority owned by the Trusts—including the Moody Foundation, American National, National Western, and others—have denied Robert Jr. various monetary and non-monetary perks. But there is no obligation in the Trust Agreement, trust law, or corporate law to provide Robert Jr. with board seats on any of these companies, or to provide him with preferential marketing contracts, or any other perks. Put simply, these allegations do not state a claim for breach of Herz’s fiduciary duties as Trustee of the Three R Trusts. See, e.g., Beddingfield v. Beddingfield, No. 10-15-00344-CV, 2018 WL 6378553, at *4 (Tex. App.—Waco Dec. 5, 2018) (concluding breach of fiduciary duty claim against executor and trustee was properly dismissed under Rule 91a because although the parties had a fiduciary relationship, such relationship did not encompass the life insurance policy at issue); Dailey v. Thorpe, 445 S.W.3d 785, 789 (Tex. App.—Houston [1* Dist.] 2014, no pet.) (upholding dismissal of breach of fiduciary duty claim under Rule 91a where defendant’s fiduciary duties did not extend to the matters alleged). See also. Ritchie v. Rupe, 443 S.W.3d 856, 888-89 (Tex. 2014) (“Absent a contractual or other obligation, the officer or director has no duty to conduct the corporation’s business in a manner that suits an individual shareholder’s interests when those interests are not aligned with the interests of the corporation and the corporation’s shareholders collectively.”). List of Perks Robert Jr. Alleges Denied to Him | Entity Alleged to Have Denied It Board Position (Pet. at ] 49(q)) American National Chairmanship of Board ((/d. at { 49(r)) Moody National Bank Board Position (/d. at | 49(u) Moody Foundation Board Fees ((/d. at | 49(v)) Moody Endowment Board Position (/d. at | 49(w)) Transitional Learning Center Consulting Agreement (/d. at § 49(z)) American National 15 me Marketing Agreement (/d. at § 49(aa)) _ American National Health Insurance (/d. at | 49(bb)) Not Specified Agent of Record Position and Fees (/d. at § 49(cc)) Transitional Learning Center Agent of Record Position and Fees (/d. at | 49(dd)) | National Western Company Car (/d. at § 49(dd)) National Western Agent of Record Position and Fees (/d. at ¥ 49(ff)). Regent Care Board Position (/d. at | 45(1)) Robert L. Moody Foundation The question of whether a trustee has committed a breach of fiduciary duty “depends on the Trusts’ terms.” Marshall v. Ribosome L.P., 01-18-00108-CV, 2019 WL 2041062, at *5-7 (Tex. App.—Houston [1st Dist.] May 9, 2019, no pet.) (citing Hurley v. Moody Nat'l Bank of Galveston, 98 S.W.3d 307, 310 (Tex. App.—Houston [1st Dist.] 2003, no pet.)) (concluding that trust was not breached by failure to distribute income where trust’s language gave trustee “absolute, unfettered discretion over the decision to accumulate or distribute the Trust income” and did “not give [the beneficiary] any right to override the Trustee’s decisions about how to handle the Trust income”). Nowhere in Robert Jr.’s Petition does he allege a violation of any particular term of the Three R Trusts. In complaining that he lost out on board positions, contracts, and other benefits from third parties, Robert Jr.’s Petition reveals a fundamental lack of understanding of the nature of the trust relationship. Robert Jr.’s property rights as a beneficiary of the Three R Trust are outlined in the Trust instrument itself, which does not (and is not alleged to) create an entitlement to the titles, contracts, and other benefits he clearly desires. Even if Robert Jr.’s complaints that Herz essentially “[flailed to treat beneficiaries of the Trust equally, and actively worked to advance the interests of Ross ... over those of [Robert Jr.]” in terms of corporate promotion, Pet. 49(o), were found to somehow relate to the Trusts’ property, alleged “differences in treatment between beneficiaries of different trusts does not ... show[] a breach of fiduciary duty,” unless the trusts’ terms require equal treatment. Marshall, 2019 WL 2041062, at *7 (noting that claim for aiding and abetting breach of fiduciary duty was properly 16 we dismissed where trusts did not “contain language limiting the trustee’s discretionary authority, such as by ... requiring the distributions to Preston be equal to those made to Pierce, Jr. under the trusts that benefit him”). Robert Jr. does not—and cannot—allege that the terms of the Trusts require that all beneficiaries be treated equally. No reasonable person could believe, as Robert Jr. alleges, that Herz’s duties as Trustee require him to treat all four beneficiaries of the Three R Trusts “equally” in the sense that Robert Jr. demands—in other words, that they must receive the same or similar corporate positions in affiliated and unaffiliated entities. It would be impossible. The four beneficiaries cannot, for example, all act as the Chairman of the Bancshares board of directors. They cannot all receive perks from the Moody-affiliated entities, such as consulting and management contracts and appointment as agent of record—indeed, Robert Jr. admits he is the only beneficiary with a personal insurance business. Pet. J] 28, 31. Unlike Ross, Robert Jr. cannot serve as Chairman or as a full director of American National because he is disqualified by law from doing so. See Tex. Ins. Code § 805.003(a)(1). The Moody Foundation can only have three trustees, not four. Pet. J 27, see also Moody v. Haas, 493 S.W.2d. at 559, 567. These examples of obvious obstacles to the “equal” status of each beneficiary with respect to Moody-affiliated entities make it clear that Herz’s duties as Trustee do not, and cannot, extend to the matters Robert Jr. complains of. See TEX. R. Civ. P. 91a.1 (“A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.”); Univ. of Tex.--MD Anderson Cancer Ctr. v. Porter, 14-17-00107-CV, 2017 WL 5196146, at *1 (Tex. App.—Houston [14th Dist.] Nov. 2, 2017, no pet.). OL Trustee Herz Cannot Be Held Liable as Trustee for Actions Taken by Entities Whose Stock is Owned by Trusts Even if Texas law permitted a Trustee to be sued for breach of fiduciary duty on the basis that a benef