Minor Briefing Defects Do Not Forfeit Derivative Appeals; Rule 38.9(b) Is the Proper Remedy

Supreme Court of Texas — CHRISTOPHER F. BERTUCCI, AS OF THE ESTATE OF ANTHONY R. BERTUCCI, AND DERIVATIVELY ON BEHALF OF AMERICAN AFFORDABLE HOMES & PROPERTIES, INC.; AMERICAN AFFORDABLE HOMES, LP; TOWN VISTA DEVELOPMENT, LLC; TOWN VISTA TERRACE, INC.; AND MIDCROWNE SENIOR SLP, LLC v. EUGENE L. WATKINS, JR.
Opinion by Justice Boyd (Opinion delivered March 14, 2025)

I. Introduction

This case arises from a long-running business dispute between Anthony Bertucci and Eugene Watkins, who partnered in developing low-income housing projects through multiple project-specific entities (the “B-W entities”). Bertucci generally supplied capital (60% interests) and Watkins supplied industry expertise and day-to-day management (40% interests). Watkins also controlled and used a bank account belonging to an unrelated partnership he owned with his wife—Texas Community Builders, LP (TCBLP)—to receive and pay project funds, commingling B-W entity funds with other monies.

After Bertucci’s health declined, his son Christopher (acting under a power of attorney and later as executor) questioned Watkins’s handling of funds, demanded an accounting, and removed Watkins from management roles. Escrow agents later filed an interpleader. Christopher asserted claims both individually (for Bertucci) and derivatively (for the B-W entities), including breach of fiduciary duty, theft, accounting-related claims, and equitable remedies. After Bertucci died, the probate court granted summary judgment for Watkins on all claims.

The court of appeals reversed in part, but held the derivative side of the appeal was waived for inadequate briefing. The Supreme Court of Texas granted review on multiple issues, prominently: (1) whether appellate briefing waived derivative claims; (2) whether Watkins owed fiduciary duties to Bertucci individually; (3) whether limitations was conclusively established; and (4) two evidentiary disputes (a Rule 172 auditor report and the Dead Man’s Rule).

II. Summary of the Opinion

  • No briefing waiver of derivative appeal: The court of appeals erred by refusing to consider derivative claims on the theory that they were inadequately briefed. Any deficiencies were, at most, technical/remediable; Rule 38.9(b) provides a mechanism to request additional briefing.
  • No individual fiduciary-duty claim survives summary judgment: The court of appeals erred in reviving Bertucci’s individual breach-of-fiduciary-duty claim. The theory relied on by the court of appeals was not presented to the trial court (and surfaced late), and the record did not establish a legally viable basis for an individual fiduciary duty under the circumstances.
  • Limitations not conclusively established: Fact issues preclude summary judgment on limitations because the fiduciary context and evidence of concealment/assurances could delay accrual or discovery.
  • Evidentiary rulings largely affirmed: The court of appeals did not err in declining to decide the Rule 172 auditor-report challenge (given remand and Watkins’s concessions), and it correctly applied the Dead Man’s Rule to bar Watkins’s testimony about Bertucci’s supposed oral approvals.

Disposition: The Supreme Court reinstated summary judgment against the individual fiduciary-duty claim, and remanded to the court of appeals to consider derivative-claim arguments on the merits, with guidance on limitations and evidentiary issues.

III. Analysis

A. Precedents Cited

1. Appellate briefing waiver and “merits-first” review

The Court situated its holding in a familiar Texas appellate theme: jurisdiction and merits should not be defeated by over-technical procedural parsing.

  • Walker v. Blue Water Garden Apartments and United Ass'n of Journeymen & Apprentices v. Borden: cited for the “bona fide attempt” principle—jurisdiction turns on a good-faith effort to invoke appellate jurisdiction, not on technical form. The Court used this to reinforce that the appeal was properly perfected for both individual and derivative capacities.
  • State ex rel. Durden v. Shahan: employed to emphasize that notices of appeal (and the parties’ understanding) can reflect an intent to appeal for multiple capacities/parties, limiting “unfair surprise” arguments and supporting a substance-over-form approach.
  • ERI Consulting Eng'rs, Inc. v. Swinnea, Ross v. St. Luke's Episcopal Hosp., and RSL Funding, LLC v. Newsome: acknowledged for the baseline rule that inadequate briefing can result in waiver/forfeiture—establishing that the Court was not diluting briefing obligations, but policing excessive use of waiver where briefing, fairly read, advances the issues.
  • Lion Copolymer Holdings, LLC v. Lion Polymers, LLC (with Holley v. Watts): central to the Court’s method: waiver is assessed not only from headings but from the argument as a whole, to discern party intent.
  • Dudley Constr., Ltd. v. Act Pipe & Supply, Inc., Weeks Marine, Inc. v. Garza (quoting Perry v. Cohen), First United Pentecostal Church of Beaumont v. Parker, and Fredonia State Bank v. Gen. Am. Life Ins. Co.: collectively reinforce the preference for resolving on the merits when “reasonably possible,” and resisting “form-over-substance” briefing traps.
  • Horton v. Stovall: supports the Court’s key remedial point—when briefing defects are “remediable,” the proper course is to allow a chance to cure, aligning with Rule 38.9(b).
  • Briscoe v. Goodmark Corp. (citing Lehmann v. Har-Con Corp. and Verburgt v. Dorner): anchors the Court’s conclusion that losing the right to appeal due to an “overly technical” approach is disfavored.
  • Roccaforte v. Jefferson County and United States v. Olano: noted to distinguish “waiver” from “forfeiture,” reflecting the Court’s caution about terminology while keeping focus on practical appellate consequences.

2. Fiduciary duties: entity-level duties versus partner-to-partner duties

  • M.R. Champion, Inc. v. Mizell: used to describe partners’ duties under Texas partnership law as fiduciary in nature.
  • Strebel v. Wimberly: the court of appeals relied on this “control test” concept (limited partner acting like a general partner) to suggest possible fiduciary duties among limited partners. The Supreme Court did not broadly endorse or reject Strebel, but held it did not salvage the individual claim here.
  • Ritchie v. Rupe: confirms the corporate law baseline that officers/directors owe duties to the corporation, not necessarily to each other personally.
  • Suntech Processing Sys., L.L.C. v. Sun Commc'ns, Inc. and Gadin v. Societe Captrade: cited for the proposition that Texas law generally has not recognized per se fiduciary duties among LLC members merely due to co-membership.
  • Johnson v. Brewer & Pritchard, P.C. (with Sci. Spectrum, Inc. v. Martinez and McConnell v. Southside Indep. Sch. Dist.): supports the procedural principle that summary judgment cannot be reversed on a ground not presented to the trial court.
  • City of Houston v. Clear Creek Basin Auth.: reinforces the nonmovant’s obligation to expressly present issues in the summary judgment response and constrains appellate courts from relying on unpresented theories.
  • Meyer v. Cathey and Associated Indem. Corp. v. CAT Contracting, Inc.: referenced to define “informal fiduciary duty” and the requirement that special trust exist prior to, and apart from, the transaction; Bertucci disclaimed reliance on this theory.
  • Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen (citing Grissom v. Watson): invoked to reject the attempt to transform Watkins’s control of funds into a principal–agent relationship; agency requires the agent be subject to the principal’s control.
  • Huffington v. Upchurch, Smith v. Bolin, and Ingram v. Deere: provide background on “managing partner” rhetoric and warn that labels in communications do not necessarily create legal status or duties.

3. Limitations in a fiduciary setting

  • Berry v. Berry and Marcus & Millichap Real Est. Inv. Servs. of Nev. v. Triex Tex. Holdings, LLC: caution that even where fiduciary duties exist, a claimant is not wholly absolved from reasonable diligence; but this is fact-sensitive.
  • Kinzbach Tool Co. v. Corbett- Wallace Corp. and S.V. v. R.V.: underpin the countervailing principle that fiduciaries owe duties of full disclosure and that fiduciary status can lessen the obligee’s duty of inquiry—supporting fact issues here.

4. Evidence: Rule 172 auditor report and the Dead Man’s Rule

  • Lewis v. Foster: supplies the rationale for the Dead Man’s Rule—preventing unfair advantage when the decedent cannot contradict testimony about oral statements.
  • Fraga v. Drake: used to define corroboration: it must “tend to confirm and strengthen” testimony and show probability of truth, not merely be consistent with it.
  • City of Keller v. Wilson: applied to reject an inference of corroboration where circumstances are equally consistent with competing explanations (approval versus lack of knowledge).
  • In re Bertucci: referenced in the procedural backstory about earlier mandamus regarding the auditor-report dispute.

B. Legal Reasoning

1. Why the derivative appeal was not waived

The Supreme Court drew a sharp line between (a) a brief that fails to present an issue at all and (b) a brief that imperfectly presents it. Here, the Court found the derivative issues were present in substance:

  • The notice of appeal, docketing statement, and court of appeals’ own notices/styling treated the B-W entities as appellants.
  • The opening brief argued standing to pursue derivative claims and asserted fiduciary duties owed to the B-W entities, with multi-page merits argument and authority.
  • Any omissions on the cover/identity-of-parties sections were “minor and technical,” not a merits-dispositive abandonment.
  • Importantly, Watkins was not unfairly surprised—he addressed derivative issues fully in his response brief.

The opinion’s practical thrust is remedial: if a court of appeals believes briefing is unclear or incomplete, Texas Rule of Appellate Procedure 38.9(b) provides a tailored solution—order additional briefing—rather than extinguishing the appeal.

2. Why the individual fiduciary-duty claim failed

The Court reinstated summary judgment against the individual fiduciary-duty theory for two reinforcing reasons:

  • Preservation/summary-judgment limits: The “control test” rationale the court of appeals used (drawing on Strebel) was not properly presented to the trial court as a ground to defeat summary judgment, and appeared only late (notably in a reply brief in the court of appeals), running into the constraint that appellate courts cannot reverse on unpresented grounds.
  • Substantive mismatch: Bertucci largely treated any distinction between duties owed to the entities and duties owed to him personally as “of no consequence” (because he also had derivative claims). In this Court, he pivoted to an “agency/control over funds” theory, which the Court rejected as incompatible with agency principles (an agent must be subject to the principal’s control).

Notably, the Court did not definitively decide whether a limited partner can ever assume partner-to-partner fiduciary duties by acting as a general partner. Instead, it held that the theory did not carry this record and, critically, the individual/derivative overlap meant the individual fiduciary-duty dismissal was not shown to cause distinct harm.

3. Why limitations could not be resolved on summary judgment

Even while reaffirming that fiduciary status does not eliminate the need for reasonable diligence, the Court held competing evidence created a fact issue: Watkins’s exclusive signature authority, assurances, refusal to provide records, and alleged personal use of invested funds could support delayed discovery. The fiduciary duty of disclosure (and reduced duty of inquiry) made this unsuitable for conclusive limitations resolution.

4. Why the evidentiary holdings stood

  • Rule 172 auditor report: Although the Court expressed skepticism that an unverified report later acknowledged to be erroneous could be “conclusive,” it declined to decide the issue because the court of appeals’ remand rendered the dispute nonessential at that stage, and Watkins conceded the report would not be dispositively conclusive at a future trial (leaving room for challenge on remand).
  • Dead Man’s Rule (Tex. R. Evid. 601(b)): Watkins’s testimony that Bertucci “approved” oral statements was barred absent corroboration. The Court rejected “inaction” as corroboration because it was equally consistent with lack of knowledge. It also rejected the claim that Christopher “called” Watkins to testify merely by citing documents, and in any event those materials went to knowledge/accounting, not to oral approval.

C. Impact

1. Appellate practice: narrowing briefing-waiver outcomes

The most immediate doctrinal impact is appellate: courts should be reluctant to treat derivative (or multi-capacity) appeals as forfeited due to formatting/identification omissions when the substance of the arguments is present. The opinion reinforces that:

  • Waiver/forfeiture is reserved for truly absent argument, not for imperfect presentation.
  • Rule 38.9(b) supplemental briefing is the preferred tool for curable deficiencies.
  • “No unfair surprise” matters: if the appellee understood and briefed the issue, waiver is harder to justify.

2. Business-entity litigation: clarifying the individual vs. derivative divide

The opinion also signals that plaintiffs must carefully articulate whether claimed fiduciary duties are owed to the entity (supporting derivative claims) or owed directly to an owner/partner (supporting individual claims). Where duties are entity-level (e.g., officers/directors to corporations), courts may resist expanding them into personal duties absent a clear and preserved theory.

3. Evidence and limitations in fiduciary disputes

The Dead Man’s Rule analysis provides a practical evidentiary warning: defendants in decedent cases cannot rely on uncorroborated testimony about the decedent’s oral approvals, and “he never objected” is not corroboration if knowledge is disputed. On limitations, the opinion reinforces that fiduciary concealment/assurances can create jury issues even when the claimant had some access or status within the entity structure.

IV. Complex Concepts Simplified

  • Derivative claim: A claim brought by an owner (shareholder/partner/member) on behalf of the business entity for harm done to the entity. Any recovery generally belongs to the entity, not directly to the owner.
  • Individual claim: A claim for harm done directly to the person (e.g., a distinct injury not shared by the entity).
  • Briefing “waiver/forfeiture”: If an appellant does not adequately argue an issue on appeal, the court may decline to consider it. This opinion stresses that curable defects should be addressed with supplemental briefing rather than dismissal.
  • Rule 38.9(b): A rule allowing appellate courts to require additional briefing when the case is not properly presented—used here as the preferred remedy.
  • Dead Man’s Rule (Tex. R. Evid. 601(b)): In suits involving a decedent’s estate, the opposing party generally cannot testify about the decedent’s oral statements unless corroborated—because the decedent cannot rebut the testimony.
  • Corroboration: Evidence that meaningfully strengthens the probability the testimony is true, not evidence that is equally consistent with competing explanations.

V. Conclusion

The Supreme Court of Texas’s decision does two major things. First, it meaningfully constrains appellate courts’ use of “briefing waiver” to dispose of derivative (and multi-capacity) appeals where the record and arguments demonstrate an intent to present the issues; Rule 38.9(b) is the appropriate corrective mechanism for remediable defects. Second, it tightens discipline around fiduciary-duty pleading and preservation—reinstating summary judgment against an individual fiduciary-duty claim where the plaintiff did not properly present a viable individualized duty theory in the trial court and where the dispute is more naturally analyzed through derivative duties owed to the entities.

On remand, the decisive battlefield becomes the derivative claims (and related limitations/evidence issues), with the Court’s guidance ensuring the dispute is decided on the merits rather than lost to technical briefing objections or uncorroborated testimony about the decedent’s supposed oral approvals.