Attorney Liable for Aiding Fiduciary Breach

A Texas appellate court finds that an attorney breached his fiduciary duty to a trust beneficiary when he knowingly aided and abetted the trustees in breaching their fiduciary duty. Parenti v. Moberg (Tex.App. [4th Dist.] 5-30-2007) No. 04-06-00497-CV.

 

Kinsey Moberg was sexually assaulted as a young child. Her mother, Michele Adams-Thompson, and stepfather, Larry Adams-Thompson, subsequently received a settlement of a lawsuit filed on Kinsey’s behalf. Attorney Peter Parenti drafted a living trust for Kinsey that made the Thompsons trustees and provided that Kinsey would become co-trustee when she turned 18. The trust also provided that if Kinsey did not accept and sign the document within one month of turning 18, the trust assets would go to the Thompsons, unless certain circumstances pertained.

Twenty seven days after Kinsey turned 18, her stepfather, represented by Mr. Parenti, filed a lawsuit seeking declaratory judgment that the trust was valid and that the terms of trust should be followed. Kinsey filed a counterclaim against the Thompsons for breach of fiduciary duty and to declare the trust unenforceable.

The probate court terminated the trust and ordered all assets distributed to Kinsey. Kinsey then sued Mr. Parenti for breach of fiduciary duty and for aiding and abetting the Thompsons. A jury trial found for Moberg, awarding her mental anguish damages and an exemplary award.

The Texas Appeals Court affirms, finding that Kinsey is entitled to the award because of Mr. Parenti’s conduct in representing Mr. Thompson in a declaratory judgment action against Kinsey, and that the award does not violate Mr. Parenti’s due process rights.