June 28, 2023 714 PM
MARFA — A Presidio County jury last week found that Jim White breached his fiduciary duty to the beneficiaries of the family trust he oversees, and that his brothers are entitled to $3 million in damages because that breach was “intentional or fraudulent” — the beginning of the end of a five-year legal dispute over the White family’s vast land holdings in the county.
The jury also concluded that Jim White owes $1 million to the trust his mother began, to compensate for alleged damages to the estate caused by a failure to comply with his fiduciary duty as trustee, and an additional $1,206,513 in legal fees to brothers Mac and Beau White.
The legal battle began in 2018, when Mac and Beau brought a lawsuit against their brother Jim, alleging his actions as trustee benefited him and his family but not the trust beneficiaries, including themselves, signaling a breach of his fiduciary duty. The plaintiffs have sought more than just monetary compensation — they have argued that Jim should be removed as trustee and that the White Trust should be modified to allow for the sale of the 61,548-acre Brite Ranch.
The verdict was entered Friday morning, after a three-day trial in a sweltering courtroom. Lawyers for the warring siblings made their closing entreaties on Thursday to a sea of jurors who sat fanning themselves as the local temperature soared to 100 degrees. The defense painted a portrait of Jim as a flawed but well-meaning caretaker of the family estate, trying to carry out his ancestors’ wishes; the prosecution presented Jim as a profiteer who left his brothers in the dust while he reaped the benefits of the Brite Ranch.
The jury, ultimately, was swayed by Mac and Beau’s tale of familial betrayal. But the matter is far from settled. The conjoined fates of the trust and the land remain unresolved. The jury verdict makes no recommendations on the prosecution’s more sweeping and consequential asks. The presiding judge, Judge Melvin “Rex” Emerson of Kerrville, has yet to render a final judgment on the case.
Ted Lyon, the attorney leading Jim White’s defense, said his team plans to appeal the verdict and to oppose any attempts to remove Jim as trustee or to modify the trust. The fate of the ranch land that has been in the family since 1885 is at stake, argued Lyon — the siblings’ great-grandmother, Mrs. Edward McMinn Brite, stipulated in her will that it should not be sold, and the trust created by their mother makes the same mandate.
“That’s what [Jim’s] been dedicated to preserving his whole life,” said Lyon. “He’s been out there for 47 years, working out there, and trustee since 2010. So [selling is] not something that he wants to do. He wants to honor what his parents wanted.”
And as for Mac and Beau, Lyon didn’t mince words: “Those two brothers just want to destroy it.”
But Mac and Beau, in their ninth amended petition filed with the court, paint a very different picture of Jim as trustee — that of a man who has used his position to pour money and resources into bettering the ranch, which he used to maintain the family cattle business and employ his own son and wife while failing to generate income for his siblings.
Crucially, the trust terminates upon the deaths of all four siblings, at which point the trust estate will go to their descendants. Jim and sister Hester — who is not a party to the lawsuit — have children who will benefit from the ranch. (Though the suit states Mac and Beau are without descendants, legal counsel for the brothers confirmed that they both adopted the same adult, who they say legally is a descendant).
Mac and Beau argue that the purpose of the trust is to use the ranch to generate income for its beneficiaries, which Jim has failed to do — but also that their ancestor could not have foreseen the “impossible” nature of generating income with the ranch when she penned her last will and testament. Judicial modification of the trust, they say, is necessary to fulfill its intended purpose.
For Mac and Beau, the long-awaited verdict means they may finally benefit from the trust they feel their brother has monopolized and mismanaged, say their attorneys, Steve Skarnulis, Frank Ikard and Deborah McClure. They expect the judge to enter a final judgment in their favor.
“We are pleased with the unanimous verdict and look forward to getting a judgment entered on behalf of our clients,” wrote Mac and Beau’s attorneys in a joint statement. “It has been a long road but this was a big step towards allowing them to benefit from their trust as their family intended. We thank the jury for their hard work and dedication over 2 weeks of evidence.”
The family’s presence in Presidio County began in 1885 with the arrival of patriarch Lucas Charles Brite — one of the first cattle ranchers in the area. He settled near Capote Mountain, located West of Marfa, having driven a small herd of cattle over 600 miles from Frio County, Texas. In the early days of settlement in Presidio County, the state granted land to settlers who filed for what was considered “unoccupied land.”
Over time, he established the Brite Ranch, then a 125,000 acre estate complete with a post office, store, and a large herd of Highland Hereford cattle, a breed which defined early cattle ranching in the region.
At one time, the ranch maintained a herd of three to four thousand purebred breeding Hereford cows marked by the family’s Bar-Cross brand. “[L.C. Brite’s] herd has furnished the foundation stock for many Presidio County’s ranches, which has made Marfa famous as being the ‘Heart of the Cattle Country,’” writes Kate Adele Hill in Home Builders of West Texas.
A 1926 headline in the Fort Worth Star-Telegram featuring the Brite Ranch read, “Herd Declared Best in Country — No Better Hereford Breeder Can Be Found.” That same year, the Brites set a record for selling 1,000 purebred bulls a year for 14 consecutive years.
But the hard-won cattle ranching success wasn’t L.C.’s alone. In 1896, Brite married a young woman by the name Edward “Eddie” McMinn Anderson, who came to Presidio County to serve as a school teacher and live on her family’s ranch, the McMinn Ranch, located 45 miles outside of Marfa — land that eventually became part of the Brite Ranch.
The Brites’ impact on the area spread beyond the ranch as the pair became involved with local organizations, philanthropic endeavors and Marfa’s developing infrastructure. They participated in the Bloys Camp Meetings, annual religious retreats in Jeff Davis County, donated $60,000 to Texas Christian University for the creation of what is referred to today as the Brite Divinity School, and — according to Lonn Taylor’s collection of essays, Marfa for the Perplexed — commissioned architect Leighton Green Knipe to design the First Christian Church in Marfa, a 500-capacity worship center that has since closed, located to the west of the courthouse.
“In the history of the Big Bend, both in the development of the livestock industry and in the building of a cultured civilization Mr. and Mrs. Lucas Brite have written a colorful chapter,” writes Hill in Home Builders of West Texas.
The Brites are also responsible for two additional local architectural landmarks: the Brite Building, located in downtown Marfa at 103 North Highland Avenue, conceived as an office and store, and the Brite Mansion, located at 601 North Ridge Street, the family home on the edge of town abutting ranchland.
What was referred to as the Bar-Cross Ranch, or Headquarters, at Capote Peak was also the site of a historically significant raid in 1917, now called the Brite Ranch Raid. Outlaws from Mexico, thought to have ties to Pancho Villa, robbed goods from the Brite Store, seized horses and murdered a mail carrier and his two passengers on Christmas Day.
In the aftermath of the Brite Ranch Raid, paranoia and fear gripped the county, leading to the Porvenir Massacre –– the extrajudicial killing of 15 Mexican-American men and boys, led by a posse of Texas Rangers and local ranchers. “The raid on the Brite Ranch … signaled a trespass on one of the most prominent and well-secured ranches in Texas,” wrote historian Monica Muñoz Martinez in her book The Injustice Never Leaves You: Anti-Mexican Violence in Texas.
The original Brite Trust was created by Eddie through her last will and testament, naming her descendants — daughter Hester and grand-daughters Nancy and Jane — as beneficiaries, along with Brite Divinity School and First Christian Church of Marfa. Its primary asset was the Brite Ranch, but it also included a breeding herd of Hereford cattle, a commercial building and lots in Marfa, the Brite home and the pasture to its west, and more.
In 1946, Jane married James E. White Jr., a member of another prominent local ranching family. Jane would give birth to Jim, Mac, Beau and Hester.
When their mother Hester died in 1995, Nancy and Jane decided to partition the Brite Trust into two new trusts, one benefiting Nancy’s descendants (the Lynches) and the other benefiting Jane’s (the Whites). JPMorgan Chase entered into a plan to revise the Brite Trust, to allow its partition, in 2005, and a final, modified judgment on the matter was rendered in 2008 — the final judgment allowed the Brite Trust to be split into the Lynch Trust and the White Trust, and for the trustee to sell properties other than the ranch land and to reduce the breeding herd. JPMorgan also made Jim manager of the ranch, allotting him a salary of $5,000 a month.
Jane White had also created children’s trusts for each of her four children, which consisted of equally-split undivided interests in some of the White land in Presidio County — per the suit, the 2005 restructuring entailed Jim facilitating an exchange between land owned under the children’s trusts and land owned by the White Trust.
When Jane died in 2010, Jim became sole trustee of the White Trust. Court records paint a picture of familial strife over the handling of the trust and its assets even before Jim took over — Mac and Beau allege that Jim used his power of attorney during the partition process to benefit himself and his descendants.
That breakdown sets the stage for later disputes over the land — as Mac and Beau see it, they are not benefiting from the White Trust as they should, while Jim is reaping the benefits of his role as trustee of the White Trust.
Then there is the matter of Jim’s continued maintenance of the cattle business, which Mac and Beau argue has contributed to his failure to generate income for the trust.
The Whites are not the only prominent ranching family to have become embroiled in conflict over their inherited land. Sam Middleton, third-generation owner of Chas. S. Middleton and Son, a farm and ranch brokerage and appraisal business based in Lubbock, has been involved with a number of high profile ranch sales over the years, including the sale of the Waggoner Ranch, a historic 500,000-acre plus property in North Texas that sold for $725 million in 2016 following a years-long legal battle amongst heirs — the largest ranch sale in the history of the nation.
Middleton said these days the value of historic ranches like the Brite Ranch largely lies in the property itself, rather than income that can be generated off of the land. Rather than traditional cattle ranching, many large ranches today make money off of hunting leases, renewable energy, the sale of resources, and more. (The Brite Ranch does offer hunting opportunities).
“You have an asset worth millions and millions of dollars and ranches do not return a large amount of money based on the value of the property,” said Middleton.
He points to data collected by the Texas Real Estate Research Center which shows the appreciation of ranches has been “astronomical” since the 1800s, where land was sometimes purchased from the state for as low as $1 an acre.
“It’s been about 60 years now that we have been documenting the appreciation in ranches in Texas on an average — even with recessions that we’ve gone through, declines in market, droughts, ranches in Texas have appreciated approximately 6% per year overall, and sometimes even 20% a year or more,” said Middleton.
Working closely with ranching families on the sale of their properties, Middleton said oftentimes second, third and fourth generations of early ranchers do not have the sentimental attachment to the land their ancestors had, and rifts tend to result amongst heirs from differing philosophies.
“I think it’s just the pride of ownership of some of those who are closely tied to the ranch,” said Middleton. “There’s a real pride of ownership that they want to keep it intact, and then you’ve got others that don’t have that feeling. That’s what causes these issues between family members.”
Mac and Beau’s allegations against Jim go so far as to accuse him of “self-dealing” by continuing to employ himself as ranch manager, hiring his sons to work on the ranch and bringing in his wife to do bookkeeping. The lawsuit against him characterizes these payments as “excessive.”
Jim’s lawyer counters that there is nothing illegitimate or nefarious about the employment of family members to work on the family ranch.
“Families work on the ranch,” said Lyon of Texas ranching families. ”There’s nothing wrong with that.”
But the general thrust of Mac and Beau’s grievance is that through these employment decisions and more — choosing to continue the cattle business, spending money on improvements to the ranch and on ranching equipment — led to a failure to generate income for the trust beneficiaries.
Most recently, a decision made by Jim spawned an entirely new lawsuit, which is being stalled as the 2018 litigation awaits resolution. In October of 2021, Jim sold the trust’s undivided interest in 260.1 acres near Marfa, called the “Bull Trap Property,” to Midland-based Dog Canyon Investments, LLC (its principal, Scott King, is a senior engineer at oil and gas company SM Energies). In April of last year, Dog Canyon sued Jim, Mac and Beau for partition of the property, demanding both surface and mineral rights attached to the land.
In the original suit between the siblings, Mac and Beau point to the Bull Trap sale as evidence of Jim’s breach of duty.
For now, the White family awaits a judge’s ruling on the familial dispute. The jury was tasked with rendering 12 findings, almost all of which favor Mac and Beau. The jury found that Jim White did not comply with his fiduciary duty to trust beneficiaries, that he engaged in this conduct “in bad faith, intentionally, or with reckless indifference” or that he derived profit as a result. It found that Jim should pay $1 million to the Jane White Trust for “any loss or depreciation in value” of the estate, but did not award damages for profit made by Jim for his benefit or profit that would have gone to the trust. The jury also found that Jim did “materially violate or attempt to materially violate” the terms of the trust — but also found that violation did not result in financial loss to the trust.
In Jim’s favor, the jury found that he had complied with his fiduciary duty with regards to the children’s trust during the 2008 division.
Finally, the jury found that Jim had committed an “intentional or fraudulent” breach of his fiduciary duty to Beau and Mac, and awarded the brothers damages and attorneys fees as a result.
Lyon said that he felt the verdict was flawed — for one, he argued, it contained inconsistencies in claiming the trust had not suffered monetary losses while also finding that the trust had been damaged.
“I don’t think the verdict will stand,” said Lyon. “We’re going to appeal it and we’ll go from there.”
Correction: A previous version of this article stated that Mac and Beau White do not have descendants who would benefit from the family trust. The article has been corrected to include the information that the brothers have an adopted adult son.