from the United States District Court for the Northern
District of Texas
SMITH and HAYNES, Circuit Judges, and JUNELL, District Judge.
E. SMITH, Circuit Judge:
Fargo Bank, N.A. ("Wells Fargo"), and JPMorgan
Chase Bank, N.A. ("JPMorgan"), served as trustees
of trusts of which Richard Jones, Jr., was a beneficiary.
Jones sued both banks for breach of fiduciary duty. The
district court dismissed all but one of Jones's claims,
as to which a jury, finding a breach, awarded actual and
exemplary damages. Wells Fargo seeks to set aside the
verdict. On cross-appeal, Jones hopes to revive some of the
claims that were dismissed. We find in favor of the banks on
is the grandson of Sweetie Boyle, who died in 1996. Until
2010, Jones had beneficial interests in four trusts that were
funded with assets from Boyle's estate. JPMorgan and its
predecessors in interest served as trustee of three of the
trusts from their creation until 2001, when Wells Fargo
became the trustee after acquiring JPMorgan's trust
department. Wells Fargo remained the trustee until the trusts
were terminated on December 31, 2010. A fourth trust was
created in 2003, with Wells Fargo serving as trustee until
the trust's termination on December 31, 2010.
litigation surrounding these trusts dates back to 1999, when
JPMorgan filed two actions in state court. In the first, it
sought a final accounting of Boyle's estate and a
discharge from any further duties to the beneficiaries,
including Jones. In the second, it sought to resign as
trustee of the Boyle trusts. Jones filed counterclaims in
both cases, alleging that JPMorgan had mismanaged the trusts
in various ways. Both matters were ultimately dismissed.
another case, brought in a different state court, concerned
the Richard Donald Jones, Jr. 1994 Family Trust (the
"House Trust"). In 1995, Jones asked the
then-trustee, JPMorgan, to purchase a specific house in
Bas-trop County, Texas, and hold it in the House Trust for
his benefit. The trustee purchased the house, and for a time
Jones lived there. According to Jones, however, the house had
so many flaws-including broken appliances, electrical issues,
and water leaks that eventually caused a mold problem-that it
was uninhabitable, and he had to move out. In 1999, JPMorgan
sued the inspector it had hired to perform a pre-purchase
house inspection (hereinafter the "House
mid-2000s, it was clear that the House Trust did not have
enough cash to pay for all of the necessary repairs. Wells
Fargo concluded that Jones would be better off if the House
Trust were dissolved. In 2007, Wells Fargo sued in state
court to terminate the House Trust (hereinafter the
"Termination Suit"). The state court ruled against
Wells Fargo, keeping the trust alive.
point, Wells Fargo also concluded that it would lose the
House Suit if it took the case to trial. Settlement
negotiations fell apart. Wells Fargo tried to assign the
claim to Jones, who refused to accept the assignment. In
2009, Wells Fargo nonsuited the House Suit.
present case is four years old. In March 2013, Jones sued
JPMorgan and Wells Fargo in state court on a number of
claims. Wells Fargo and JPMorgan removed to federal court and
moved for summary judgment. The district court dismissed all
of the claims except for the claim that, by nonsuiting the
House Suit instead of proceeding to trial, Wells Fargo had
breached its fiduciary duty to Jones, had breached the trust
contract, and had violated the Texas Property Code.
nonsuit claim went to trial. During his closing argument,
Jones's lawyer introduced a new theory: that Wells Fargo
had breached its fiduciary duty to Jones not by nonsuiting
the case in April 2009, but by not nonsuiting it earlier,
when it became clear that Wells Fargo would not prevail.
Although Jones had not pleaded that theory, Wells Fargo did
not object during trial.Wells Fargo instead raised its objection
repeatedly in its post-trial briefing, including in its
renewed motion for judgment JML, and its responses to
Jones's motions to enter judgment and for leave to amend
the complaint. The district court, however, ruled that,
because Wells Fargo was on notice of this potential theory of
liability, it had waived any objection to the adequacy of the
pleadings by not objecting in its first motion for JML.
jury seems to have relied on this new theory. It concluded
that Wells Fargo had breached its fiduciary duty by
nonsuiting and that the harm to Jones was the result of
"gross negligence or malice." At the same time, the
jury pegged Jones's likely recovery from the lawsuit, had
it not been nonsuited, at "$0.00." The jury awarded
Jones $171, 780.57 in exemplary damages, $33, 658.66 in
attorneys' fees, and $4, 440.94 in disgorged trustee
fees. The court denied Wells Fargo's renewed motion for
JML and granted Jones's motion for entry of final
Fargo appeals. It claims that (1) the evidence was not
sufficient to support a finding of breach of fiduciary duty,
(2) the evidence was not sufficient to support a finding of
actual damages, (3) the evidence was not sufficient to
support a finding of exemplary damages, (4) the court
erroneously shifted the burden of proof, (5) Wells Fargo did
not waive its objection to Jones's introduction of his
frivolous-litigation theory, (6) Jones should have presented
expert testimony, and (7) Jones's claim is time-barred.
cross-appeals. He asserts that the district court improperly
dismissed several claims against Wells Fargo as well as his
claim that JPMorgan failed to convey mineral interests.
Fargo asks this court to set aside a jury verdict.
"Although we review denial of a motion for [JML] de
novo, we note that 'our standard of review with respect
to a jury verdict is especially
deferential.'" "[W]hen evaluating the sufficiency
of the evidence, we view all evidence and draw all reasonable
inferences in the light most favorable to the
verdict." Nevertheless, we will not sustain a jury
verdict based on a "mere scintilla" of
Texas, "[t]he elements of a claim for breach of
fiduciary duty are (1) a fiduciary relationship between the
plaintiff and the defendant, (2) a breach by the defendant of
his fiduciary duty to the plaintiff, and (3) an injury to the
plaintiff or a benefit to the defendant as a result of the
breach." Both sides agree that a fiduciary
relationship existed. Jones claims that Wells Fargo breached
its fiduciary duty when it nonsuited the case instead of
taking it to trial. In doing so, Jones says, Wells Fargo
deprived him of a potential recovery and rendered any trust
resources spent on attorneys' fees to have been wasted.
Alternatively, Jones claims that Wells Fargo breached its
duty by wasting trust resources litigating a meritless suit.
respect to the claim actually tried-that nonsuiting the suit
was a breach of fiduciary duty-Jones failed to persuade the
jury of that theory, as evidenced by its conclusion that the
lawsuit had a value of zero at the time of nonsuit.
Tellingly, Jones refused to accept an assignment of the House
Suit claim. Thus, the only theory on which the jury ...