Dolan v. Dolan (Tex.App.- Houston [1st Dist.] Jun. 18, 2009)(Op. By Higley)
(probate law, trustee, breach of fiduciary duty, preservation of error)
AFFIRM TC JUDGMENT: Opinion by Justice Higley
Before Justices Jennings, Alcala and Higley
01-07-00694-CV George Diehl Dolan v. Zelie M. Dolan
Appeal from 281st District Court of Harris County
Trial Court Judge: Hon. David J. Bernal
MEMORANDUM OPINION
Appellee, Zelie M. Dolan, is the beneficiary of a testamentary trust, of which appellant, George
Dolan, was appointed trustee. Zelie sued George for breach of fiduciary duty, breach of contract, and
negligence, alleging that George had improperly written checks from her trust fund to himself and to his
business, Never Furl; to his wife for the establishment and operation of her business, Needlepoint
Paradise; and to his son. Zelie sought actual and exemplary damages.
A jury found that, with regard to the funds advanced to Needlepoint and his son, George had
breached his fiduciary duties as trustee and had acted with gross negligence. The jury also found that
Zelie had consented to the use of her trust funds for the establishment and operation of Needlepoint and
for the payment of commissions to George as compensation. The jury awarded to Zelie $154,000.00 in
actual damages and $8,370.00 in exemplary damages. The jury found that George was entitled to
$36,475.00 in trustee’s fees.
On appeal, George presents four issues. In his first and fourth issues, George challenges the legal
sufficiency of the evidence to support the jury’s finding that he acted with gross negligence in using trust
funds for Needlepoint and in giving trust funds to his son. In his second issue, George contends that the
trial court erred by failing to give effect to the jury’s determination that Zelie consented to the use of her
trust funds for Needlepoint, which established his affirmative defense of consent. In his third issue,
George contends that the trial court erred by failing to give effect to the jury’s determination that Zelie
knew or should have known of the use of her trust funds for Needlepoint before October 15, 1997, which
established his limitations defense and barred Zelie’s claim of breach of fiduciary duty.
We affirm.
Summary of Facts and Procedural History
George and Zelie are brother and sister. When their mother died in 1976, Zelie was a member of
the Congregation of Divine Providence, a religious order that adheres to a vow of poverty. Zelie’s interest
in her mother’s estate had been preserved through a testamentary trust, of which George was appointed
trustee. The terms of the testamentary trust provide, in relevant part, that “[t]he trustee shall in no case
be liable for loss to the trust estate, except for his willful breach of trust, bad faith, or gross negligence,
nor for any other error of judgment in the exercise of good faith . . . .” The value of Zelie’s interest was
approximately $500,000.00.
For many years, Zelie was a student, earning graduate degrees in mathematics and religion, and
she worked in churches and hospitals, ministering and teaching religious classes. In addition, Zelie lived
abroad for several years. During that time, George managed the trust investments, paid Zelie’s expenses
from the trust fund, and periodically sent spreadsheet statements to Zelie showing the earnings and
disbursements from the fund. When Zelie visited, George insisted that she review her trust finances. It is
undisputed that, during this time, Zelie took very little interest in the trust.
In June 1994, Zelie visited George and his wife, Barbara. At that time, George and Barbara were
considering starting a needlepoint business. George and Barbara traveled to needlepoint shops, studied
the market, and talked with suppliers. Barbara estimated that it would take $150,000 to establish her
business over a period of time. According to George, Zelie participated in the discussions he and
Barbara had with regard to starting the business and, when George discussed finding a lender, Zelie said
that there was no need because there was money in the trust. According to Zelie, she was aware that
Barbara was planning to open a shop, but she was unaware that the trust would be the prime source of
financing.
In July 1994, Zelie moved to Seattle, Washington.
It is undisputed that, beginning in 1995, George regularly wrote checks to Barbara to establish her
shop, Needlepoint Paradise. By year 2000, the advances from the trust totaled $158,370.00. It is
undisputed there had not been any formal documentation concerning the nature of the advances, e.g.,
whether such advances were considered to be loan or an investment and whether the trust held any
security or ownership interest. It is undisputed that Barbara invested $65,000 of her own money into
Needlepoint and that George did not personally invest in the venture.
In addition, during the period of 1996 to 2000, George wrote checks to himself from the trust fund.
The parties dispute whether Zelie had agreed that George could deduct a five percent annual
commission as compensation for managing the trust. George also advanced funds from the trust to his
business, Never Furl. In January 2000, George executed a promissory note pertaining to $14,500.00 of
the funds he had advanced to Never Furl. The note, which was due on demand, provided that George
would pay 9.5 percent interest until paid. George paid this loan off through offsets to his commissions.
Further, Zelie testified that George gave $4,000.00 to his son, Eddie Dolan.
George testified that the statements he periodically sent to Zelie reflected the sums he had written
to Barbara, to himself, and to his son.
In early 2000, Zelie decided to retire and took a class on investments. In July 2000, she asked
George to come to Seattle and to bring the trust records. Zelie testified that, during that visit, she was
“horrified” to discover that the trust had supplied $158,370.00 in funding to Needlepoint. Zelie said that,
after her discovery, she understood that the sum advanced was a loan that George would pay back.
Thereafter, George ceased writing checks from the trust to support Needlepoint and, in early 2001,
Needlepoint was closed. On the books of the trust, George wrote off the $158,370.00 loss as a bad
investment. In September 2001, George wrote a letter to Zelie, informing her that Needlepoint had been
closed, apologizing that he “had expected to be able to pay this back with interest” but that it would be
unlikely, and asking that he be forgiven.
On October 15, 2001, Zelie sued George for breach of fiduciary duty, breach of contract, and
negligence, seeking actual and exemplary damages.
In addition, because Zelie had by then left the religious order, Zelie sought a declaratory judgment
that the purpose of the trust no longer existed and that the corpus be conveyed to her.
Close George answered with a general denial and asserted the affirmative defenses of consent and
limitations, alleging that Zelie had consented to the use of her trust funds for Needlepoint and that her
claims were barred by the statute of limitations. The matter was tried to a jury. At trial, the parties
disputed whether Zelie had consented to the use of trust funds to finance Needlepoint and whether the
sums advanced constituted a loan or an investment.
The jury found that George had breached his fiduciary duties with regard to the funds written to
Needlepoint and Eddie. In addition, the jury found that George’s use of the trust funds for Needlepoint
and the payment to Eddie were committed with gross negligence. The jury also found that Zelie
consented to the use of trust funds for the establishment and operation of Needlepoint, that Zelie
consented to the payment of commissions to George, and that Zelie first knew, or in the exercise of
reasonable diligence should have known, of the use of trust funds for the operation of Needlepoint prior
to October 15,1997. The jury awarded to Zelie $154,000.00 in actual damages, plus $8,370.00 in
exemplary damages, less $36,475.00 in trustee’s fees owed to George, with final damages totaling
$125,895.00 plus interest.
George filed a “Motion to Modify or Reform the Judgment, or Alternatively For New Trial,”
contending that the evidence was insufficient to support the jury’s finding that George acted with gross
negligence and that the judgment failed to give effect to the jury’s findings in favor of George on his
affirmative defenses of consent and limitations. His motion was overruled by operation of law. This appeal
ensued.
Gross NegligenceIn his first and fourth issues on appeal, George contends that there is no evidence to
support the jury’s finding of gross negligence and therefore the trust’s exculpatory clause precluded his
liability for breach of fiduciary duty.
A. Standard of Review
George challenges the jury’s finding of gross negligence with regard to the scope ofhis liability for
loss to the estate. George does not challenge the jury’s finding withregard to the award of exemplary
damages. See Tex. Civ. Prac. & Rem. Code Ann.§ 41.003 (Vernon 2008). Gross negligence under
section 41.003 must be proven byclear and convincing evidence. See id. § 41.003(a)(3); Columbia Med.
Ctr. of LasColinas v. Hogue, 271 S.W.3d 238, 248 (Tex. 2008) (citing Sw. Bell Tel. Co. v.Garza, 164 S.W.
3d 607, 627 (Tex. 2004)) (noting that “whenever the standard ofproof at trial is elevated, the standard of
appellate review must likewise be elevated”).
In conducting a legal sufficiency review, we “consider evidence in the light most favorable to the
verdict, and indulge every reasonable inference that would support it.” City of Keller v. Wilson, 168 S.W.
3d 802, 822 (Tex. 2005). We will sustain a legal sufficiency or “no-evidence” challenge if the record
shows one of the following: (1) a complete absence of evidence of a vital fact, (2) rules of law or evidence
bar the court from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered
to prove a vital fact is no more than a scintilla, or (4) the evidence establishes conclusively the opposite
of the vital fact. Id. at 810. If there is more than a scintilla of evidence to support the challenged finding,
we must uphold it. Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 48
(Tex. 1998). “‘[W]hen the evidence offered to prove a vital fact is so weak as to do no more than create a
mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is
no evidence.’” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004) (quoting Kindred v.
Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). However, if the evidence at trial would enable
reasonable and fair-minded people to differ in their conclusions, then jurors must be allowed to do so.
City of Keller, 168 S.W.3d at 822; see also King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.
2003). “A reviewing court cannot substitute its judgment for that of the trier-of-fact, so long as the
evidence falls within this zone of reasonable disagreement.” City of Keller, 168 S.W.3d at 822. “The final
test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-
minded people to reach the verdict under review.” Id. at 827.
B. Applicable Law and Guiding Principles
The Texas Trust Code generally prohibits a trustee from lending trust funds to himself or to a
relative of the trustee. Tex. Prop. Code Ann. § 113.052 (Vernon 2007). Section 114.007 provides,
however, that a settlor may, by the terms of the trust, “expressly reliev[e] the trustee from a duty or
restriction imposed by this subtitle or by common law . . . .” Id. § 114.007 (Vernon 2007).
Here, the terms of the trust provide, in relevant part, that “[t]he trustee shall in no case be liable for
loss to the trust estate, except for his willful breach of trust, bad faith, or gross negligence, nor for any
other error of judgment in the exercise of good faith . . . .” (Emphasis added.) Such an exculpatory clause
has been held effective in exonerating a trustee from liability for losses when no evidence of gross
negligence was shown. See Texas Commerce Bank, N.A. v. Grizzle, 96 S.W.3d 240, 251 (Tex. 2002).
The jury found in Question Number 1 of the charge that George breached his fiduciary duties with
regard to the trust funds that he advanced to Needlepoint and to Eddie. Question No. 2 of the charge
asked, “For each breach of fiduciary duty, if any, which you have found was committed by [George], do
you further find that [George’s] conduct was a willful breach of trust, was committed in bad faith, or was
committed with gross negligence.” (Emphasis added.) The jury answered that George acted with gross
negligence with regard to funds advanced to Needlepoint and to Eddie.
To prove gross negligence, a plaintiff must show (1) an act or omission that, when viewed
objectively from the defendant’s standpoint at the time it occurred, involved an extreme degree of risk,
considering the probability and magnitude of the potential harm to others and (2) that the defendant had
an actual, subjective awareness of the risk but proceeded with a conscious indifference to the rights,
safety, and welfare of others. Tex. Civ. Prac. & Rem. Code Ann. § 41.001(11) (Vernon 2008); Columbia
Med. Ctr. of Las Colinas v. Hogue, 271 S.W.3d 238, 248 (Tex. 2008).
Under the first element, an “extreme risk is not a remote possibility of injury or even a high
probability of minor harm, but rather the likelihood of serious injury to the plaintiff.” Hogue, 271 S.W.3d at
248 (quoting Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 22 (Tex. 1994)). To determine if acts or
omissions involve extreme risk, we analyze the events and circumstances from the defendant’s
perspective at the time the harm occurred, without resorting to hindsight. Id. Under the second element,
“actual, subjective awareness” means that “the defendant knew about the peril, but its acts or omissions
demonstrated that it did not care.” Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921 (Tex. 1998).
Circumstantial evidence is sufficient to prove either element. Id.
C. Needlepoint Paradise
In his first issue, George contends that there is no evidence of either the objective or the subjective
components of gross negligence with regard to his actions concerning funds he advanced to
Needlepoint. George contends that, although Needlepoint was an unproven start-up business, there was
no evidence of an act or omission that, when viewed objectively from his standpoint at the time it
occurred, involved an extreme degree of risk, considering the probability and magnitude of the potential
harm to others. See Tex. Civ. Prac. & Rem. Code Ann. § 41.001(11)(A). George contends that the
evidence shows that he and Barbara both testified that they conducted extensive due diligence prior to
opening Needlepoint and that they both believed that it would become a thriving business.
The evidence also shows, however, that, at the time George began to move funds from the trust to
Needlepoint, he intended to use a total of $150,000.00 over the course of three to five years in a brand
new business venture. The record shows that this sum represented as much as 40 percent of the value
of the trust (as reflected in George’s spreadsheets admitted at trial). George did not establish with Zelie
any oral or written terms concerning his use of the funds. In addition, the record shows that George did
not pledge any collateral, offer any security, or document any ownership interest that Zelie or the trust
would have in Needlepoint. Hence, the evidence shows that George placed nearly half of the assets of
the trust—which constituted Zelie’s retirement fund—at a risk of total loss, while offering nothing as
security or compensation to the trust or to Zelie. This court has recognized that a risk of financial ruin
constitutes an extraordinary or extreme risk of harm. Cf. Bluebonnet Sav. Bank, F.S.B. v. Grayridge
Apartment Homes, Inc., 907 S.W.2d 904, 911 (Tex. App.—Houston [1st Dist.] 1995, writ denied) (citing
Moriel, 879 S.W.2d at 24).
We conclude that the record reflects evidence of acts that, when viewed objectively from George’s
standpoint, at the time they occurred, involved an extreme degree of risk, considering the probability and
magnitude of the potential harm to the trust. Hence, there is evidence to support the objective component
of the gross negligence analysis. See Hogue, 271 S.W.3d at 248.
Next, George contends that there is no evidence that he had an actual, subjective awareness of the
risk but nevertheless proceeded with conscious indifference to the rights, safety, and welfare of others.
See Tex. Civ. Prac. & Rem. Code Ann. § 41.001(11)(B). George contends that there was no evidence
that he knew that there was a high risk that the trust funds would be lost in Needlepoint, and that the
evidence shows that he believed that the business would be viable. George contends that his “belief at
the time that the business would be likely to succeed, and that the use of trust funds in the business was
reasonable and proper, conclusively negates the subjective component.”
The record also shows, however, that George is an experienced businessman who appreciated the
risks of a new business venture. He has owned companies with assets approximating five million dollars,
one or more of which ultimately failed. The record shows that George had an actual, subjective
awareness of the risk involved with starting Needlepoint, as he did not invest any of his own money into
Needlepoint and Barbara invested only $65,000.00. George was asked at trial whether the evidence that
he and Barbara were only willing to invest $65,000 into Needlepoint demonstrated that it “wasn’t even
close to a good investment.” George responded in the affirmative.
The record further shows that George nevertheless proceeded with conscious indifference to the
rights, safety, and welfare of the trust. Barbara testified that Needlepoint did not at any time yield the
$4,000 to $6,000 monthly profits she had projected and that it was fairly apparent that Needlepoint would
not become a going concern. Barbara testified that when she needed money to continue to fund
Needlepoint, she went to the trust rather than use money in her own account. George testified that he
wrote checks to Needlepoint from the trust fund whenever Barbara asked. The record also shows that, in
the beginning, George wrote “loan” on several of the checks he wrote, but, as time went by, he ceased
making any such designations on the checks. He later wrote off the entire $158,370.00 on the books of
the trust as a bad investment. George then wrote to Zelie and told her that he “had expected to be able
to pay this back with interest,” but that it had become unlikely.
Hence, there is evidence from which the jury could have concluded that George had actual,
subjective awareness that Needlepoint was failing, yet he continued to advance funds to Barbara, without
limitation, and that he simply shifted the character of the advances from a loan to an investment, which
shifted the risk of the failing venture from George to Zelie. We conclude that the evidence shows that
George had an actual, subjective awareness of the risk but proceeded with a conscious indifference to
the rights, safety, and welfare of others. See id. Hence, there is evidence to support the subjective
component of the gross negligence analysis. See Hogue, 271 S.W.3d at 248.
Viewing the evidence in the light most favorable to the judgment and indulging every reasonable
inference that supports the judgment, we conclude that this evidence would enable reasonable and fair-
minded people to reach the conclusion that George acted with gross negligence with regard to the trust
funds that he advanced to Needlepoint. See City of Keller, 168 S.W.3d at 822. Therefore, we hold that
the evidence is legally sufficient.
Accordingly, we overrule George’s first issue.
D. Eddie Dolan
In his fourth issue, George contends that there is that there is no evidence of either the objective or
the subjective components of gross negligence with regard to funds that he gave to his son, Eddie.
George does not in his brief on appeal present any specific argument for this contention, provide record
references, or cite authority. Hence, nothing is presented for our review. See Tex. R. App. P. 38.1(i).
Accordingly, we overrule George’s fourth issue.
Consent
In his second issue, George contends that the trial court failed to give effect to the jury’s finding that
Zelie consented to the use of her trust funds for Needlepoint.
The questions at issue and the jury’s answers are the following, in relevant part:
Question Number 1
Did George Diehl Dolan fail to comply with his fiduciary duty to Zelie M. Dolan? Unless the terms of the
trust instrument provide otherwise, a Trustee fails to comply with his fiduciary duty if:
a. He violates his duty to refrain from any self dealings which extends to dealing with the
fiduciary’s spouse, agent, employees and other persons whose interest[s] are closely identified with
those of the fiduciary.
b. He violates his duty to refrain from lending trust funds to himself, to an affiliate of the trust, . . .
.
c. He violates his duty of good faith, fair dealing, loyalty, and fidelity over the trust’s affairs and
its principal.
d. He violates his duty to make assets of the trust productive while at the same time preserving
the assets.
e. He violates his duty to disclose all material facts known to the trustee that might affect the
beneficiary’s rights.
f. He violates his duty to account to the beneficiary for all trust transactions.
g. He violates his duty to properly manage, supervise, and safeguard trust funds.
Answer “yes” or “no” as to each of the following transactions or occurrences:
1. Use of Trust funds for Needlepoint Paradise: Yes . . . .
. . . .
If you have answered any part of [Q]uestion Number 1 “yes[,]” then answer the following question. . . .
Question No. [sic] 2
For each breach of fiduciary duty, if any, which you have found was committed by George Dolan, do you
further find that George Dolan’s conduct was a willful breach of trust, was committed in bad faith, or was
committed with gross negligence? Answer “Yes” or “No” as to each.
1. Use of Trust funds for Needlepoint Paradise
Willful breach: No
Bad Faith: No
Gross Negligence: Yes
. . . .
If you have answered “Yes” as to any part of Question Number 2, then answer Question Number 8. . . .
Question No. 8
Did Zelie M. Dolan know of and consent to the use of trust funds for the establishment and operation of
the business known as Needlepoint Paradise? Answer “Yes” or “No[.]”
Answer: Yes
George contends that the jury’s answer in Question Number 8 established that Zelie consented to
the use of her trust funds for Needlepoint and that, “[a]lthough [he] moved for judgment on the grounds
that this answer established the affirmative defense of consent, the trial court failed to give effect to this
answer and instead rendered judgment for Zelie.” George relies on Slay v. Burnett Trust, 187 S.W.2d
377, 391 (Tex. 1945), for the proposition that
[a] beneficiary who consents to an act or omission by the trustee which would constitute a breach of trust
cannot hold him liable for the consequences of the act or omission, if the beneficiary was sui juris and
had full knowledge of all relevant facts and of his legal rights and if his consent was not induced by any
improper conduct of the trustees.
Id. In essence, George complains that he cannot be liable in Question Number 1 because consent was
found in Question Number 8.
Zelie contends that the issue is waived because the record does not reflect that George objected to
the jury’s answer to Question Number 8 or to the manner in which the trial court dealt with it before the
jury was discharged. Rather, George first raised the issue of how the trial court handled the jury’s answer
in his motion for new trial.
Rule of Civil Procedure 295 provides as follows:
If the purported verdict is defective, the court may direct it to be reformed. If it is incomplete, or not
responsive to the questions contained in the court’s charge, or the answers to the questions are in
conflict, the court shall in writing instruct the jury in open court of the nature of the incompleteness,
unresponsiveness, or conflict, provide the jury such additional instructions as may be proper, and retire
the jury for further deliberations.
Tex. R. Civ. P. 295 (emphasis added).
It is well-settled that, to preserve error, an objection to conflicting jury findings must be made before
the jury is discharged. Oyster Creek Fin. Corp. v. Richwood Inv. II, Inc., 176 S.W.3d 307, 324 (Tex. App.—
Houston [1st Dist.] 2004, pet. denied) (citing string of authority); see Fleet v. Fleet, 711 S.W.2d 1, 3 (Tex.
1986).
Here, as Zelie notes, the trial transcript before us concludes when the jury was sent to deliberate.
The record does not reflect, and George does not contend, that he raised his objection to any conflict in
the jury answers prior to the discharge of the jury. Although George raised the issue in his motion for new
trial, later raising the issue in a motion for new trial is insufficient to preserve the complaint. See e.g., City
of San Antonio v. Esparza, No. 04-04-00631-CV, 2005 WL 3477826, at *2 (Tex. App.—San Antonio, Dec.
21, 2005, no pet.) (mem. op.) (declining to hold that issue concerning conflict in jury answers may be
raised for first time in motion for new trial). We conclude that George has waived his complaint. See Tex.
R. App. P. 33.1; Tex. R. Civ. P. 295; Oyster Creek Fin. Corp., 176 S.W.3d at 324.
Even if we conclude that the issue has been preserved, it cannot be sustained. When
determining whether jury findings can be reconciled, we apply a de novo standard of review. See Bender
v. S. Pac. Transp. Co., 600 S.W.2d 257, 260 (Tex. 1980); Adams v. Allstate County Mut. Ins. Co., 199 S.
W.3d 509, 512 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). The threshold question is whether the
findings address the same material fact. Bender, 600 S.W.2d at 260. We must then presume that jurors
did not intentionally make conflicting findings. Trans-Amer. Van Serv., Inc. v. Shirzad, 596 S.W.2d 587,
593 (Tex. Civ. App.—Houston [1st Dist.] 1980, no writ). We must reconcile apparent conflicts in the jury’s
findings if reasonably possible in light of the pleadings and evidence, the manner of submission, and the
other findings considered as a whole. Bender, 600 S.W.2d at 260. We do not determine whether the
findings may reasonably be viewed as conflicting; to the contrary, the question is whether there is any
reasonable basis upon which the findings may be reconciled. Id. We must uphold the verdict if there is
any reasonable basis upon which the jury answers can be reconciled. Id.; Adams, 199 S.W.3d at 512.
Here, Question Numbers 1 and 8 expressly inquire about the same material fact, that is, the
propriety of George’s use of trust funds for Needlepoint. And, the instructions tend to tie them together.
The jury’s findings, however, may be reasonably reconciled. As Zelie points out, the term “consent” was
not defined in the charge. Hence, based on the evidence discussed above, the jury could have
reasonably determined that Zelie consented to a loan of some money from her trust fund to establish
Needlepoint, but that George nevertheless breached his fiduciary duty, as defined in Question Number 1,
by “violat[ing] his duty to disclose all material facts known to the trustee that might affect the beneficiary’s
rights” or violating his duty to “preserv[e] the assets” of the trust. We must uphold the verdict when, as
here, there is any reasonable basis upon which the jury answers can be reconciled. See Bender, 600 S.
W.2d at 260; Adams, 199 S.W.3d at 512.
Accordingly, we overrule George’s second issue.
Limitations
In his third issue, George contends that the trial court failed to give effect to the jury’s answer in
Question Number 10, which established his affirmative defense of limitations, with regard to Needlepoint.
The question at issue and the jury’s answer is as follows, in relevant part:
Question No. 10
Did Zelie M. Dolan first know, or in the exercise of reasonable diligence should have known, of the use of
any trust funds . . . for the operation of the business known as Needlepoint Paradise, before October
15,1997?
Answer “Yes” or “No” as to each.
. . . .
Needlepoint Paradise: Yes
George directs us to Texas Civil Practice and Remedies Code section 16.004, which provides a four-
year statute of limitations to a breach of fiduciary duty claim. See Tex. Civ. Prac. & Rem. Code Ann. §
16.004(a)(5) (Vernon 2002). George contends that Zelie’s cause of action accrued at the time Zelie knew
or, in the exercise of reasonable diligence, should have known, of her injury, citing In re Estate of
Fawcett, 55 S.W.3d 214, 219 (Tex. App.—Eastland 2000, pet. denied). George contends that, because
the jury established that Zelie knew or, in the exercise of reasonable diligence, should have “first” known
of the “use of any trust funds” for the operation of Needlepoint prior to October 15, 1997, and because
she did not file her lawsuit until October 15, 2001, Zelie’s breach of fiduciary duty claim is time-barred,
which established his limitations defense.
Again, nothing in the record before us shows that George raised his complaint in the trial court prior
to the discharge of the jury, as is required. See Oyster Creek Fin. Corp., 176 S.W.3d at 324. Raising the
issue in a motion for new trial, as here, is insufficient to preserve the complaint. See Esparza, 2005 WL
3477826, at *2. We conclude that George has waived his complaint. See Tex. R. App. P. 33.1; Tex. R.
Civ. P. 295; Oyster Creek Fin. Corp., 176 S.W.3d at 324.
Again, even if we conclude that the issue has been preserved, it cannot be sustained. The jury’s
findings that George breached his fiduciary duty and owed damages, but that Zelie “first” knew about “the
use of any trust funds” (emphasis added) prior to October 17, 1997 may be reasonably reconciled.
George and Barbara both testified that they discussed the Needlepoint venture with Zelie in 1994. It is
undisputed that George sent periodic statements to Zelie prior to 1997 that showed disbursements to
Needlepoint, but that Zelie did not examine the documents. Zelie testified that, in July 2000, when she
asked George to come to Seattle and to bring the trust records, she was “horrified” to learn that the trust
had supplied $158,370.00 in funding to Needlepoint. Zelie testified that she then thought it was a loan.
The record shows that George wrote “loan” on some of the early checks that he wrote from the trust to
Needlepoint and that, in September 2001, George wrote a letter to Zelie stating that he had indeed
intended to pay back the $158,370.00 with interest, but that he no longer could.
The jury’s answers may be reasonably reconciled as having found that, although Zelie “first” knew,
or in the exercise of reasonable diligence should have known, of the use of “any” trust funds prior to
October 17, 1997 for Needlepoint, the actual injury did not occur until George wrote off the entire
$158,370.00 as a loss in November 2001 and told Zelie that he would not be paying it back to her as he
had earlier intended. We must uphold the judgment when, as here, there is any reasonable basis upon
which the jury answers can be reconciled. See Bender, 600 S.W.2d at 260; Adams, 199 S.W.3d at 512.
Accordingly, we overrule George’s third issue.
Conclusion
We affirm the judgment of the trial court.
Laura Carter Higley
Justice
Panel consists of Justices Jennings, Alcala, and Higley.