Twyman v. Twyman (Tex.App.- Houston [1st Dist.] Jul. 16, 2009)(Keyes)
(probate law, trustee removal, temporary injunction appeal fails, UDJA claim)
AFFIRM TC JUDGMENT: Opinion by Justice Keyes
Before Justices Keyes, Hanks and Bland
01-08-00904-CV Nancy D. Twyman v. William Earl Twyman
Appeal from Probate Court No 1 of Harris County
Trial Court Judge: Hon. Russell Austin
Appellant, Nancy D. Twyman ("Nancy"), brings this interlocutory appeal challenging the trial court's
order entering a temporary injunction enjoining her from disbursing funds from the Edna H.
Twyman Trust ("the Trust"). William Earl Twyman ("William"), acting as agent under a power of
attorney for Edna H. Twyman ("Edna"), filed an application for a temporary restraining order, a
temporary injunction, and removal of Nancy as trustee and sought declaratory judgment and
damages. In one issue, Nancy argues that the trial court erroneously issued a temporary injunction.
On September 13, 1999, Edna executed a trust that named herself as the primary beneficiary.
Edna's trust named her daughters, Nancy and Kathy Twyman Compton, as trustees. William,
Edna's son, is neither a trustee nor a beneficiary of the Trust.
Merrill Lynch at one time held a significant portion of the assets of the Trust.
Account documents dated between May 2005 and February 2006 show that multiple checks were
written from the Trust to Nancy that total $99,100. Additional checks were also written to Danny
Twyman for $15,000, to Henry Twyman, (1) for $15,000, to cash for $6,000, and to the Etowah
Water and Sewer Authority and other businesses involved in constructing Nancy's home in
Georgia for over $18,000.
On February 23, 2006, Edna executed a durable power of attorney appointing William to act as her
agent. On February 27, 2006, William and Edna's attorney sent Nancy a letter making a "formal
demand for a full accounting . . . of every action that [she had] taken as Trustee." The letter also
demanded that Nancy "pay back with interest every cent that [she had] taken from the trust in
flagrant breach of [her] fiduciary duties as Trustee." The letter also stated:
If you have a promissory note documenting the terms of your loan from the trust, including the use
of your home as collateral to secure the loan, then please provide it to us. Otherwise we see no
way that your use of trust funds under the terms of the Trust is anything but conversion.
On March 16, 2006, Nancy executed a promissory note payable to Kathy Twyman Compton, as a
Trustee of the Trust, for $153,419 payable on or before May 31, 2007. (2) The note provided for
an interest rate of 5% per annum, and stated that the note "shall be effective for the purposes of
interest calculation as of May 31, 2005." It provided for an interest rate of 12% on "outstanding
principal" if not paid when due. The note is not supported by any collateral. Although the note
contained a signature block for Edna, she did not sign it.
Nancy also took Edna to an attorney, David Munson, and Edna retained Munson for the purpose
of having herself declared incompetent. On July 3, 2007, Munson filed an application for
appointment of a permanent guardian for Edna's estate. The application stated that "the nature of
[Edna's] incapacity is dementia, and the degree of her incapacity is partial" and that no one held a
power of attorney signed by Edna. The application requested specific protection over Edna's
financial affairs. William subsequently contacted Munson and informed him of the prior power of
attorney executed by Edna naming William as her agent.
On May 30, 2008, a year after the promissory note was due to be paid in full, Nancy had Edna
extend the promissory note for another year at the same terms as the original agreement. William
testified that Nancy dictated the wording of the extension to Edna and Edna wrote what Nancy told
her to write.
On August 18, 2008, William filed an "Application for Temporary Restraining Order, Temporary
Injunction, For Removal of Trustee, Declaratory Judgment and Lawsuit for Damages." William filed
the pleading as agent under power of attorney for Edna and sought to remove Nancy as trustee.
William brought the suit pursuant to section 37.005 of the Texas Civil Practice and Remedies Code
(3) to determine whether there had been theft and conversion of the Trust's assets by Nancy and
the elder abuse inflicted on Edna by Nancy. The pleadings assert that Nancy "illegally" acted as
trustee, "converted hundreds of thousands of dollars from the Trust for her own use," and "built
herself a home, paid contractors/suppliers to do work in her home, all using [Edna's] Trust funds."
William further alleged that Nancy "has threatened, begged, and intimidated [Edna] into signing
legal documents to make her actions appear justified and as though the theft was a legitimate loan,
under a pretense of being done with [Edna's] knowledge and consent." The petition also alleged
that Nancy engaged David Munson to have Edna declared incompetent and that, after Munson
"learned of the bad acts of Nancy Twyman," he "transferred" the case to another lawyer. (4)
In his accompanying affidavit, William asserted:
I have personally observed my mother, Edna H. Twyman, succumb to undue worry, stress and
pressure inflicted upon her by Nancy Twyman, regarding my mother's finances. . . . Unless Nancy
Twyman is prevented by this Court from further withdrawing, disbursing, committing, encumbering,
diminishing, or disposing of the [Trust's] funds[,] Edna H. Twyman will have no guarantee of
recovering any of the funds and assets in her Trust accounts. Further, my mother will soon be
penniless if Nancy Twyman maintains control, as Nancy Twyman has no means which to repay my
mother what she has stolen.
On August 20, 2008, the trial court signed a temporary restraining order commanding Nancy to
refrain from disposing of Trust funds until the hearing on the application for a temporary injunction
could be had before the trial court. (5)
The trial court held a hearing on William's request for a temporary injunction on September 8,
2008. Nancy did not personally attend this hearing. William testified that Edna lived on his property
in Montgomery, Texas in a trailer that William had purchased for her as a partial repayment of a
debt William owed to Edna. He testified that he became aware that Nancy was withdrawing funds
from the Trust to pay for her own expenses and expenses related to her home in Georgia at the
end of 2005, that there is no such person as Henry or Danny Twyman, and that he believed that
those names occurred in Merrill Lynch's records due to a typographical or scanning error. William
explained that Edna began to have difficulty with her financial record keeping due to poor eyesight
and asked him to take over those responsibilities and that Edna executed the power of attorney to
enable him to help her with that and other tasks. William testified that he became concerned when
Nancy took Edna to the attorney to have Edna declared incompetent and that he became even
more concerned when Nancy subsequently had Edna extend the terms of the past-due promissory
note. His conversations with Nancy led him to believe that she did not have the means to repay the
promissory note because she was having financial difficulties and had contemplated filing for
bankruptcy and that she would continue to use Trust funds to pay her own expenses. William also
testified that Nancy had the account with Merrill Lynch closed and transferred to another account
in Pennsylvania, where Kathy Compton, the other original co-trustee, lives. He testified that Nancy
had made no repayments to the Trust at the time of the hearing.
Nancy's counsel questioned William regarding a gift of $21,000 made by Edna to him in 2007, after
he began serving as Edna's agent under the power of attorney. William testified that the money
was given to him at Edna's insistence because she wanted to help him repay some outstanding
student loans. William testified that he was not involved in writing the check to himself or
transferring the money to himself in any way. Nancy's trial counsel also questioned William about a
loan of over $50,000 Edna made to William prior to the creation of the Trust. William testified that
he had repaid that loan to Edna by paying for Edna's mobile home, electricity, and various other
expenses until he and Edna had calculated that he had repaid the amount Edna had loaned him.
On October 7, 2008, the trial court signed an order granting a temporary injunction and appointing
a receiver for the Trust. The order stated that unless Nancy was "immediately restrained," she "
may continue to deplete the funds" in the Trust and that Edna "will suffer irreparable injury
because of the permanent loss of funds which belong to [her] Trust." The order also stated that
Edna had no adequate remedy at law because Nancy had spent "all the funds" and Edna "may
never recover her loss." The trial court ordered that Nancy be enjoined "from spending any of the
funds of the Edna Twyman Trust . . . except for health, support, and maintenance for [Edna]." The
trial court also appointed attorney Louis Ditta, a neutral party, as receiver of the Trust's funds
upon posting a bond and taking an oath.
In her sole issue, Nancy argues that the trial court erred in granting a temporary injunction.
Specifically, Nancy argues that the trial court did not adhere to the standard of proof because
nothing in the record supported a finding of probable injury and there was no proof of imminent
harm or irreparable injury. She also argues that William failed to prove that an adequate remedy at
law did not exist and that William should have been denied his requested relief because he has
A. Standard of Review and Burden of Proof
Whether to grant a temporary injunction lies within the sound discretion of the trial court. Ahmed v.
Shimi Ventures, L.P., 99 S.W.3d 682, 692 (Tex. App.--Houston [1st Dist.] 2003, no pet.). We will
not reverse an order granting a temporary injunction unless the trial court's action was "so
arbitrary that it exceeded the bounds of reasonable discretion." Id. (quoting Tel. Equip. Network,
Inc. v. TA/Westchase Place, Ltd., 80 S.W.3d 601, 607 (Tex. App.--Houston [1st Dist.] 2002, no
pet.)). We view the evidence in the light most favorable to the trial court's order, indulging every
reasonable inference in its favor. Id. A temporary injunction's purpose is to preserve the status quo
of the litigation's subject matter pending trial. Id. (citing Butnaru v. Ford Motor Co., 84 S.W.3d 198,
204 (Tex. 2002)). We may not review the merits of the applicant's case in an interlocutory appeal
from a temporary injunction order. Id.
To obtain the temporary injunction, William, as the applicant, was required to plead and prove (1) a
cause of action against Nancy, (2) a probable right to the relief sought, and (3) a probable,
imminent, and irreparable injury in the interim. See id. (citing Butnaru, 84 S.W.3d at 204). Nancy
does not argue on appeal that William failed to plead a cause of action against her or that he failed
to establish a probable right to the relief sought. Therefore, we turn to the third requirement to
obtain a temporary injunction--William was required to prove a probable, imminent, and irreparable
injury to the Trust. See id.
B. Probable, Imminent, and Irreparable Injury
Nancy argues that William failed to prove that the Trust would suffer a probable, imminent, and
irreparable injury and, particularly, that William failed to prove that there was no adequate remedy
at law for the Trust's damages.
To establish an irreparable injury, the injured applicant must show that there is no adequate
remedy at law for its damages--in other words, that it "cannot be adequately compensated in
damages or . . . the damages cannot be measured by any certain pecuniary standard." Ahmed, 99
S.W.3d at 692 (quoting Butnaru, 84 S.W.3d at 204). "An adequate remedy at law is one that is as
complete, practical, and efficient to the ends of justice and its prompt administration as is equitable
Through his pleadings, affidavit, supporting documents, and hearing testimony, William established
that over $150,000 had been removed from the Trust by Nancy for her own personal use. Upon
receiving a request for an accounting from William, acting as Edna's agent, Nancy later executed a
promissory note. Nancy instigated proceedings to have Edna declared incapacitated for the
purpose of dealing with her financial matters, failed to repay under the terms of the promissory
note, and then subsequently pressured Edna to extend the term of the promissory note. William
also established that, although her name still appears on documents and accounts for the Trust,
Kathy Compton, the co-trustee, had resigned, leaving Nancy as the sole trustee. William testified
that Nancy told him she could not pay back the money that she had borrowed from the Trust and
that she would withdraw more money from the Trust to pay her own expenses if needed in the
Nancy argues that the Trust was not injured because it holds the promissory note executed by her
and that William failed to show that the Trust had no adequate remedy at law because it could
collect on the promissory note according to its terms. However, William testified that Nancy had
admitted to him that she was having financial difficulties and that she had considered filing for
bankruptcy. Although Nancy argues that William's allegation that she may file for bankruptcy is not
enough to establish an irreparable injury, the evidence supporting her lack of ability or desire to
repay the Trust under the terms of the promissory note goes beyond William's testimony regarding
Nancy's financial difficulties.
The evidence presented in the trial court demonstrates that the circumstances surrounding the
creation of the promissory note, including its lack of collateral, and its subsequent extension, raise
a question regarding Nancy's intention and ability to repay the funds and her potential
mismanagement as trustee for the Trust. Nancy's past behavior of withdrawing money for personal
use and executing a promissory note after William's lawyer demanded an accounting, combined
with her subsequent failure to repay any of the funds withdrawn and her efforts to extend the terms
of the note, demonstrates that allowing her continued access to the Trust funds could lead to more
withdrawals that would not be repaid. Even if the promissory note could be collected upon, it would
not protect the Trust from loss for additional amounts Nancy would be able to withdraw if a
temporary injunction were not granted. See Butnaru, 84 S.W.3d at 204 (holding that purpose of
temporary injunction is to preserve status quo of litigation's subject matter pending trial).
Nancy also argues that William failed to demonstrate imminent harm because he waited to file the
lawsuit until more than two years after he became aware of many of the transactions at issue in the
underlying suit and because he "acknowledged that the Trust account for the last year sustained
no significant drop in value." However, William did take action by having an attorney send Nancy a
demand for an accounting in February 2006. William testified that he eventually decided to file a
suit against Nancy when he became aware that Nancy had pressured Edna to extend the term of
the promissory note rather than repay it according to its terms. Likewise, the fact that Nancy had
not withdrawn any additional funds from the Trust since the 2006 demand letter was sent does not
establish that she could not do so in future were she to remain the sole trustee of the Trust during
the pending litigation. William's testimony and the documentary evidence presented at the hearing
support the trial court's implied conclusion that Nancy posed an on-going danger of loss to the
Trust's fund so long as she was acting as the sole trustee. See Ahmed, 99 S.W.3d at 692 (holding
that appellate courts view evidence in light most favorable to trial court's order and indulge every
reasonable inference in its favor).
Therefore, William established that Edna would suffer a probable, imminent, and irreparable injury
if Nancy was not enjoined from disbursing money from the Trust. See id. We conclude that the only
way to preserve the status quo and prevent further harm to the Trust was to deny Nancy the ability
to withdraw any additional funds from the Trust while the litigation is pending. See id. There was no
remedy at law that was as complete, practical, and efficient to the ends of justice and its prompt
administration as temporarily enjoining Nancy from making withdrawals from the Trust. See id.
C. Unclean Hands
Nancy also argues that the trial court should not have granted the temporary injunction requested
by William because he has unclean hands. Specifically, Nancy argues that William received
$21,000 from Edna in 2007 and that he did not act promptly in enforcing his rights.
Injunctive relief is an equitable remedy, and the complaining party must come into court with clean
hands and must have acted promptly to enforce its right. Landry's Seafood Inn & Oyster
Bar-Kemah, Inc. v. Wiggins, 919 S.W.2d 924, 927 (Tex. App.--Houston [14th Dist.] 1996, no writ);
Foxwood Homeowners Ass'n v. Ricles, 673 S.W.2d 376, 379 (Tex. App.--Houston [1st Dist.] 1984,
writ ref'd n.r.e.). The doctrine of unclean hands will be applied only to "one whose conduct in
connection with the same matter or transaction has been unconscientious, unjust, or marked by a
want of good faith, or one who has violated the principles of equity and righteous dealing." In re Jim
Walter Homes, Inc., 207 S.W.3d 888, 899 (Tex. App.--Houston [14th Dist.] 2006) (orig. proceeding)
(quoting Thomas v. McNair, 882 S.W.2d 870, 880-81 (Tex. App.--Corpus Christi 1994, no writ.)). In
addition, the complaining party must show serious injury to himself arising from the conduct that
cannot be corrected without applying the doctrine. Id.
Here, the trial court heard conflicting testimony about the gift and loan to William. It resolved the
issue, at this early stage of the proceedings, in favor of William. We defer to its implied finding that
William is acting in good faith. See Ahmed, 99 S.W.3d at 692 (stating that reviewing court must
indulge every reasonable inference in favor of trial court's order).
We conclude that the trial court did not abuse its discretion in granting the temporary injunction.
See id. (holding that appellate courts may not reverse order granting temporary injunction unless
trial court's action was "so arbitrary that it exceeded the bounds of reasonable discretion").
We overrule Nancy's sole issue.
We affirm the order of the trial court.
Evelyn V. Keyes
Panel consists of Justices Keyes, Hanks, and Bland.
1. Danny Twyman and Henry Twyman do not exist. As we discuss below, William testified that the
inclusion in the account records was an error and that these funds also went to Nancy.
2. Kathy Compton subsequently withdrew as trustee, leaving Nancy as the sole trustee for the
Trust. However, Compton's name remains on the Trust's documents and accounts as a co-trustee.
3. See Tex. Civ. Prac. & Rem. Code Ann. § 37.005 (Vernon 2008). Section 37.005 provides,
A person interested as or through an executor or administrator, including an independent executor
or administrator, a trustee, guardian, other fiduciary, creditor, devisee, legatee, heir, next of kin, or
cestui que trust in the administration of a trust or of the estate of a decedent, an infant, mentally
incapacitated person, or insolvent may have a declaration of rights or legal relations in respect to
the trust or estate:
(1) to ascertain any class of creditors, devisees, legatees, heirs, next of kin, or others;
(2) to direct the executors, administrators, or trustees to do or abstain from doing any particular act
in their fiduciary capacity;
(3) to determine any question arising in the administration of the trust or estate, including
questions of construction of wills and other writings; or
(4) to determine rights or legal relations of an independent executor or independent administrator
regarding fiduciary fees and the settling of accounts.
4. According to William's appellate brief, the proceeding to have Edna declared incompetent "has
since been dismissed by the Judge as not having been brought with authority."
5. Nancy filed a special appearance, which the trial court denied. This Court affirmed the trial
court's denial of the special appearance in Twyman v. Twyman, No. 01-08-00888-CV, 2009 WL
1331341 (Tex. App.--Houston [1st Dist.] May 14, 2009, no pet. h.) (not designated for publication).