August 9, 2023 820 PM
MARFA — A district court judge has ordered the removal of Jim White as trustee of the Jane White Trust effective immediately, finding that he committed “intentional breaches of fiduciary duty.” The ruling, signed last week by Judge Rex Emerson and filed with the 394th Judicial District Court on Tuesday, further orders the division of the family trust among the four White siblings, and modifies the original trust to allow for the sale of the historic Brite Ranch land.
The final judgment marks the conclusion, at least within the trial court, of a protracted legal battle between the descendants of the storied Brite clan, early cattle ranchers whose presence in Presidio County dates back to 1885. The family played an instrumental role not only in the development of the region’s cattle industry, but also in the development of Marfa’s infrastructure and culture. At the center of that legacy lies the historic Brite Ranch, 61,548 acres that remain home to a herd of Highland Hereford cattle, the breed that defined the family’s early contributions to ranching.
That legacy now falls to the great-grandchildren of settler L.C. Brite — Jim, Mac, Beau and Hester White. The four siblings are beneficiaries of the Jane White Trust, the family trust created by — and named for — their mother. When Jane passed away in 2010, Jim became the trust’s sole trustee.
In 2018, Mac and Beau sued Jim for breach of fiduciary duty, alleging that he had acted in ways that benefited him and his family but not the other beneficiaries of the trust. They argued that Jim had failed to generate income for the trust beneficiaries — the intended purpose of their mother’s trust — by choosing to continue the cattle business and spending money on ranch improvements and equipment. They also accused him of “self-dealing” by employing himself as ranch manager and putting his wife and son on the payroll (actions that Jim’s attorney, Ted Lyon, countered are perfectly normal among ranching families).
In addition to monetary damages, the siblings sought a judicial overhaul of the trust itself — the removal of their brother as trustee, and the modification of the trust to allow for the sale of the ranchland. While the Jane White Trust, based upon the last will and testament of Jane’s grandmother Eddie, forbade the sale of the Brite Ranch, the plaintiffs had argued that their ancestor could not have foreseen the “impossible” nature of generating income with the ranch.
The matter of inheritance, or who stands to benefit from the estate, was raised within the suit and at trial by both parties. Jim and Hester — who is not a party to the suit, except nominally — each have children who would benefit from the ranch. Mac and Beau have both adopted the same adult man as a son, who their attorneys say is legally a descendent.
In June, after a multi-part trial, a Presidio County jury issued a verdict largely favoring Beau and Mac, finding that Jim had intentionally breached his fiduciary duty. Jim’s legal team sought to have the verdict tossed, arguing it was riddled with inconsistencies and that Mac and Beau were seeking to destroy the legacy that Jim was attempting to preserve. The court’s final judgment, however, largely reaffirms the jury verdict.
The judgment orders that Jim pay $1 million to the Jane White Trust for loss of value to the estate, and $1.5 million apiece to both Mac and Beau in exemplary damages, plus roughly half a million apiece in fees. Jim will also pay $185,000 to the Brite Divinity School, a trust beneficiary and nominal party to the suit.
In addition to removing Jim as trustee, the court has ruled to divide the Jane White Trust into four separate trusts — one for each of the four siblings, each consisting of “equal undivided interests in all assets currently comprising the trust estate of the Jane White Trust.” Each sibling will be the sole trustee of his or her trust.
Finally, the court found that “good cause exists” to modify the Jane White Trust in order to allow for the sale of any assets within the trust, including interest in the Brite Ranch — per the ruling, as the trust existed to generate income for trust beneficiaries, modifying the trust would further its intended purpose. With the trust divided into four equal parts, each trustee will have the authority to sell their assets as they see fit.
“We thank the jurors and the court for their hard work on this very important case for our clients,” wrote attorneys for Mac and Beau — Steve Skarnulis, Frank Ikard and Deborah McClure — in a statement.
Jim’s attorney, Ted Lyon, pledged to appeal the judgment, which he said was flawed — the jury, while finding that the estate had depreciated in value, also found that the trust did not suffer any financial loss.
“There’s zero evidence to show that Jim White ever financially did anything wrong, and the evidence found by the jury was that the estate had not suffered any damages. So we think that their judgment is fatally wrong, and we’re extremely disappointed in it,” said Lyon. “We’re going to get it reversed in the court of appeals. That’s our intention.”
Lyon characterized the stakes of the case as reaching far beyond the White family or Presidio County — if the court of appeals rules that his client mismanaged the trust by hiring his own family to work the ranch, he argued, that could have implications for other ranching families.
“Everywhere in Texas, this is going to have an impact on people that have ranches that are in their family,” said Lyon. “It’s a frightening aspect of this case. That’s what the legacy of this case is, as it exists right now.”
