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.