PJC Business

PJC 104.2

F IDUCIARY D UTY

Presumption of unfairness shifts burden of proof. When a fiduciary profits or benefits in any way from a transaction with the beneficiary, a presumption of unfair ness arises that shifts the burden of persuasion to the fiduciary or the party claiming the validity or benefits of the transaction to show that the transaction was fair and equitable to the beneficiary. Keck, Mahin & Cate v. National Union Fire Insurance Co. of Pittsburgh , 20 S.W.3d 692, 699 (Tex. 2000); Texas Bank & Trust Co. v. Moore , 595 S.W.2d 502, 509 (Tex. 1980); Archer v. Griffith , 390 S.W.2d 735, 739 (Tex. 1964). A presumption of unfairness also arises and the burden of proof shifts to the fidu ciary if the fiduciary places himself in a position in which his self-interest might con flict with his obligations as a fiduciary. Stephens County Museum, Inc. , 517 S.W.2d at 260–61 (fiduciary’s positions as trusted business advisor, holding a power of attorney for donors, and as director and officer of donee created presumption of unfairness in transactions); Slay , 187 S.W.2d at 387–88 (duty of loyalty prohibits trustee from plac ing himself in any position in which his self-interest will or may conflict with his obli gations as trustee). The presumption may be rebutted by the fiduciary. Stephens County Museum, Inc. , 517 S.W.2d at 261; see also Texas Bank & Trust Co. , 595 S.W.2d at 509. Normally, a rebuttable presumption shifts the burden of producing evidence to the party against whom it operates but does not shift the burden of persuasion to that party. General Motors Corp. v. Saenz , 873 S.W.2d 353, 359 (Tex. 1993). In fiduciary duty cases, how ever, the presumption of unfairness operates to shift both the burden of producing evi dence and the burden of persuasion to the fiduciary. Sorrell v. Elsey , 748 S.W.2d 584, 586 (Tex. App.—San Antonio 1988, writ denied); Miller v. Miller , 700 S.W.2d 941, 945–46 (Tex. App.—Dallas 1985, writ ref’d n.r.e.); Fillion v. Troy , 656 S.W.2d 912, 914 (Tex. App.—Houston [1st Dist.] 1983, writ ref’d n.r.e.); Cole v. Plummer , 559 S.W.2d 87, 89 (Tex. App.—Eastland 1977, writ ref’d n.r.e.); see also Peckham , 120 S.W.2d at 788 (issue of whether beneficiary of fiduciary relationship relied on fidu ciary to perform his duties was immaterial). If there is no evidence rebutting the presumption, no breach of fiduciary duty ques tion is necessary. Texas Bank & Trust Co. , 595 S.W.2d at 509. Liability questions normally place the burden of proof on the plaintiff, who is required to obtain an affirmative finding. When the burden is shifted to the fiduciary, however, a “No” answer supports liability. Thus, when the burden is on the fiduciary to prove compliance with his fiduciary duties, subsequent questions that depend on a finding of breach of fiduciary duty may need to be conditioned on a “No” answer to PJC 104.2. See, e.g., PJC 115.15–115.18. If there is a dispute about whether the fiduciary profited or benefited from a transac tion with the beneficiary, or whether the fiduciary placed himself in a position in which his self-interest might conflict with his obligations as a fiduciary, a jury ques tion may be necessary to decide that issue. PJC 104.2, placing the burden on the fidu-

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