Bertucci v. Watkins: No Briefing-Waiver of Perfected Derivative Appeal Absent Clear Failure to Present Derivative Arguments

A. Precedents Cited

1. Preserving appellate jurisdiction and resisting “overly technical” waiver

• Walker v. Blue Water Garden Apartments, 776 S.W.2d 578 (Tex. 1989) (quoting United Ass'n of Journeymen & Apprentices v. Borden, 328 S.W.2d 739 (Tex. 1959))
  Role in the opinion: Anchors the Court’s insistence that appellate jurisdiction (and the right to review) turns on a bona fide attempt to appeal rather than hyper-technical compliance. The Court analogized this “bona fide attempt” principle to the waiver analysis: where the record shows a clear intent to pursue derivative issues and the brief contains derivative arguments, forfeiture should not be imposed.
• State ex rel. Durden v. Shahan, 658 S.W.3d 300 (Tex. 2022) (per curiam)
  Role: Supports substance-over-form in identifying who is appealing and whether an appeal encompasses particular parties/capacities, emphasizing absence of unfair surprise where parties understand what is at issue.
• Lion Copolymer Holdings, LLC v. Lion Polymers, LLC, 6 14 S.W.3d 729 (Tex. 2020) (citing Holley v. Watts, 629 S.W.2d 694 (Tex. 1982))
  Role: Provides the methodological point that courts assess waiver by examining headings and argument content to discern intent, reinforcing that the brief’s fiduciary-duty discussion directed at entity duties functioned as derivative briefing.
• Dudley Constr., Ltd. v. Act Pipe & Supply, Inc., 545 S.W.3d 532 (Tex. 2018)
  Role: Articulates a broader anti-formalism theme: procedural rules should not be weaponized to avoid merits determinations when justice permits.
• First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214 (Tex. 2017); Weeks Marine, Inc. v. Garza, 371 S.W.3d 157 (Tex. 2012) (quoting Perry v. Cohen, 272 S.W.3d 585 (Tex. 2008)); Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279 (Tex. 1994)
  Role: These authorities collectively stress that appellate courts should reach the merits when reasonably possible and should not construe briefing rules to defeat the right to appeal unless absolutely necessary.
• Horton v. Stovall, 591 S.W.3d 567 (Tex. 2019)
  Role: Reinforces that “remediable” briefing defects should not be fatal without an opportunity to cure, supporting reliance on Texas Rule of Appellate Procedure 38.9 rather than waiver.
• Briscoe v. Goodmark Corp., 102 S.W.3d 714 (Tex. 2003) (citing Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001); Verburgt v. Dorner, 959 S.W.2d 615 (Tex. 1997))
  Role: Caps the Court’s point: Texas disfavors an “overly technical” approach that strips appellate rights, especially where the appellant clearly invoked review and presented at least a cognizable argument.
• ERI Consulting Eng'rs, Inc. v. Swinnea, 318 S.W.3d 867 (Tex. 2010); Ross v. St. Luke's Episcopal Hosp., 462 S.W.3d 496 (Tex. 2015); RSL Funding, LLC v. Newsome, 5 69 S.W.3d 116 (Tex. 2018)
  Role: These cases supply the counterweight: adequate briefing is required and inadequate analysis may forfeit issues. The Court distinguished them by finding that Bertucci’s brief actually argued derivative fiduciary duties and standing.
• Roccaforte v. Jefferson County, 341 S.W.3d 919 (Tex. 2011) (Willett, J., concurring in part) (citing United States v. Olano, 507 U.S. 725 (1993))
  Role: Used to clarify terminology—waiver vs. forfeiture—while reserving whether the distinction matters in Texas appellate briefing doctrine.

2. Fiduciary duties in entities and the limits of new theories on appeal

• M.R. Champion, Inc. v. Mizell, 904 S.W.2d 617 (Tex. 1995)
  Role: Recognizes partners owe duties “in the nature of a fiduciary duty,” framing baseline partnership fiduciary concepts (while noting this case involved limited partnership structures and entity-level duties).
• Strebel v. Wimberly, 371 S.W.3d 267 (Tex. App.—Houston [1st Dist.] 2012, pet. denied)
  Role: The court of appeals used this “control test” to suggest a limited partner who effectively functions like a general partner may owe fiduciary duties to other limited partners. The Supreme Court did not decide whether Strebel is generally correct; it held the theory was not preserved in the trial court and, on the presented facts, did not support an individual-duty claim.
• Ritchie v. Rupe, 443 S.W.3d 856 (Tex. 2014)
  Role: Supports the proposition that corporate officers/directors owe fiduciary duties to the corporation, not automatically to co-owners—undermining an assumed direct-duty theory between Bertucci and Watkins.
• Suntech Processing Sys., L.L.C. v. Sun Commc'ns, Inc., No. 05-99-00213-CV, 2000 WL 1780236 (Tex. App.—Dallas Dec. 5, 2000, pet. denied); Gadin v. Societe Captrade, No. CIV.A. 08-CV-3773, 2009 WL 1704049 (S.D. Tex. June 17, 2009)
  Role: Cited for the limited proposition that Texas courts have not generally recognized formal fiduciary duties among LLC members solely by virtue of membership.
• Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193 (Tex. 2002); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910 (Tex. 1997); McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 1993); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex. 1979)
  Role: These cases enforce Texas Rule of Civil Procedure 166a(c)’s preservation principle: appellate courts may not reverse summary judgment on grounds not expressly presented to the trial court. This was central to rejecting the late-raised “control test” fiduciary-duty theory.
• Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671 (Tex. 2017) (citing Grissom v. Watson, 704 S.W.2d 325 (Tex. 1986))
  Role: Used to refute the attempt to recast Watkins as an agent of Bertucci: agency requires the agent to be subject to the principal’s control, which conflicts with the narrative that Watkins had exclusive/usurped control.
• Ingram v. Deere, 288 S.W.3d 886 (Tex. 2009)
  Role: Supports the Court’s skepticism that a self-description like “managing partner” to third parties establishes legal status or fiduciary obligations.
• Huffington v. Upchurch, 532 S.W.2d 576 (Tex. 1976); Smith v. Bolin, 271 S.W.2d 93 (Tex. 1954)
  Role: Cited historically for “managing partner” loyalty language, then contrasted with modern statutory framing under the partnership code.
• Meyer v. Cathey, 167 S.W.3d 327 (Tex. 2005) (quoting Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276 (Tex. 1998))
  Role: Addresses informal fiduciary duties; the Court noted Bertucci expressly disclaimed reliance on an informal fiduciary-duty theory in this Court.

3. Limitations, discovery, fiduciary concealment, and diminished duty of inquiry

• Berry v. Berry, 646 S.W.3d 516 (Tex. 2022)
  Role: Confirms that even where a fiduciary duty exists, the beneficiary is not “altogether absolved” of reasonable diligence—supporting Watkins’s legal framework, though not his summary-judgment conclusion.
• Marcus & Millichap Real Est. Inv. Servs. of Nev. v. Triex Tex. Holdings, LLC, 659 S.W.3d 456 (Tex. 2023)
  Role: Reinforces diligence is still required in fiduciary settings; the Court used it to show the correct standard but found fact disputes prevented judgment as a matter of law.
• Kinzbach Tool Co. v. Corbett- Wallace Corp., 160 S.W.2d 509 (Tex. 1942)
  Role: Establishes the fiduciary’s affirmative duty of full disclosure—supporting why concealment/reassurance evidence can delay accrual or create fact issues.
• S.V. v. R.V., 933 S.W.2d 1 (Tex. 1996)
  Role: Supports the proposition that a claimant’s duty of inquiry is lessened by the defendant’s fiduciary duty, strengthening the conclusion that limitations could not be resolved conclusively here.

4. Evidence: Dead Man’s Rule and corroboration

• Lewis v. Foster, 621 S.W.2d 400 (Tex. 1981)
  Role: Supplies the policy rationale for Texas Rule of Evidence 601(b): preventing unfair advantage from one-sided testimony about a decedent’s oral statements.
• Fraga v. Drake, 276 S.W.3d 55 (Tex. App.— El Paso 2008, no pet.)
  Role: Provides a working definition of “corroboration” under the Dead Man’s Rule: evidence must tend to confirm and strengthen the testimony and show its probability of truth.
• City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005)
  Role: Used to reject an “inaction equals approval” inference where circumstances are equally consistent with lack of knowledge; in such cases, neither inference may be drawn to corroborate barred testimony.

5. Court-appointed auditor reports and appellate minimalism

• In re Bertucci, 590 S.W.3d 113 (Tex. App.—Austin 2019, orig. proceeding)
  Role: Procedural background on the auditor-report dispute; the Supreme Court ultimately declined to decide admissibility/conclusiveness at this stage.

B. Legal Reasoning

1. Derivative appeal: preservation through substance and Rule 38.9 cure mechanisms

The Court drew a sharp line between (a) inadequate briefing that truly fails to present an argument and (b) imperfect briefing that still articulates the legal contention. Here, Bertucci’s brief explicitly discussed derivative standing and devoted extensive argument to fiduciary duties owed to the entities and breaches of those duties. That was enough to defeat a holding of “waiver,” particularly where:

• the notice of appeal and docketing statement unmistakably invoked derivative capacity and identified the entities;
• the court of appeals’ own case style and notices reflected derivative parties; and
• Watkins was not confused—he responded substantively to derivative issues.

The opinion’s structural move is important: it treats waiver doctrine as a tool to ensure functional appellate review, not a trapdoor. The Court emphasized Texas Rule of Appellate Procedure 38.9(b) (additional briefing) as the proper response when briefing is unclear but curable, rather than outright forfeiture of an entire category of claims.

2. Individual fiduciary duty: (i) no reversal on unpresented grounds and (ii) mismatch between pleaded theory and sought duty

The Court reinstated summary judgment against Bertucci’s individual fiduciary-duty claim on two intertwined grounds:

1. Preservation: The “control test”/acting-like-a-general-partner theory (cited to Strebel v. Wimberly) was not expressly presented to the trial court. Under Texas Rule of Civil Procedure 166a(c), an appellate court cannot reverse summary judgment on a ground not raised below.
2. Substantive fit and concession: Bertucci repeatedly argued he “need not prove” a direct fiduciary duty because he was suing derivatively, and he framed the harm as identical under both theories. The Court treated the individual-duty theory as both underdeveloped and ultimately unnecessary, especially since the revived derivative appeal provides the vehicle to litigate the entity-level fiduciary duties and remedies.

Notably, the Court declined to broadly resolve whether Texas should recognize a limited-partner-to-limited-partner fiduciary duty based on control (the question implicated by Strebel v. Wimberly). Instead, it resolved the case through procedural preservation and the theory’s poor alignment with the record and litigating positions.

3. Limitations: fiduciary concealment evidence can create fact issues even where diligence remains required

Watkins framed limitations as conclusively established because Bertucci was sophisticated, an owner/officer/partner, and had access to accounting records. The Court accepted the governing standard (fiduciary status does not eliminate diligence) but held that competing evidence created a jury question, including:

• Watkins’s exclusive signature authority over the commingled account;
• alleged assurances that distributions were authorized;
• refusal to produce records when questioned; and
• inconsistent explanations concerning entitlement and amounts.

In effect, the Court reaffirmed that limitations in fiduciary/financial-control disputes is often fact-intensive: the fiduciary’s duty of disclosure and the beneficiary’s duty of inquiry operate together, and summary judgment is inappropriate if evidence reasonably supports delayed discovery.

4. Evidence: corroboration under the Dead Man’s Rule requires more than “inaction”

The Court affirmed exclusion of Watkins’s testimony that Bertucci orally approved transactions. It rejected two attempted pathways around Texas Rule of Evidence 601(b):

• “Tacit approval” via inaction: Without proof that Bertucci knew of the disputed transactions, inaction is equally consistent with ignorance. Under City of Keller v. Wilson, an inference cannot be drawn when evidence is equally consistent with competing facts; therefore, inaction does not corroborate oral approval.
• “Called by opponent”: The executor’s reliance on documents in summary-judgment practice did not constitute “call[ing]” Watkins to testify about oral statements, nor did those documents corroborate “approval” as opposed to mere awareness.

5. Court-appointed accountant report: prudential avoidance coupled with remand flexibility

Although the record suggested serious deficiencies (including the accountant’s lack of verification and later admission of errors), the Court declined to decide admissibility/conclusiveness at this stage because (i) the appellate disposition turned on other grounds and (ii) Watkins conceded the report was not presently conclusive and admissibility questions for a future trial were premature. The practical effect is to keep the report contestable on remand rather than freezing it as unassailable “law of the case.”

C. Impact

1. Appellate practice: narrower briefing-waiver and stronger preference for merits resolution

The most broadly applicable aspect of the decision is its message to intermediate courts: where a party plainly perfected an appeal and the brief contains intelligible argument on the contested claims, courts should be reluctant to hold issues waived—especially when supplemental briefing under Texas Rule of Appellate Procedure 38.9(b) can cure clarity problems. This strengthens predictability for multi-capacity appeals (individual and derivative) and reduces the risk that formatting or organizational flaws (cover page/identity-of-parties omissions) will nullify appellate review.

2. Summary-judgment appeals: renewed emphasis on Rule 166a(c) issue-preservation boundaries

The decision reinforces a strict boundary: appellate courts cannot reverse summary judgments based on theories not expressly presented to the trial court. Parties should assume that new doctrinal pivots (like a limited-partner “control test” fiduciary theory) raised for the first time in reply briefing will not survive review.

3. Fiduciary/limitations disputes: fact issues will persist where control, concealment, and access to records are contested

By affirming a fact issue on limitations, the Court signaled that “access” to information is not equivalent to “discovery,” particularly where a fiduciary controls accounts, provides reassurances, and denies disclosure. Litigants should expect limitations defenses in fiduciary settings to turn on granular evidence of knowledge, disclosure, and opportunity for inquiry.

4. Evidence in estate-adjacent business disputes: Dead Man’s Rule remains potent

The Court’s corroboration analysis narrows attempts to use circumstantial “silence” or “inaction” to validate testimony about a decedent’s oral approvals. Practically, parties should build corroboration through independent documents, third-party testimony, or objective transactional evidence that tends to confirm the specific oral statement at issue—not just general course-of-dealing claims.