Date: Mar 12, 2025

Texas Appellate Briefing Waiver: Courts Must Avoid Overly Technical Forfeitures and Reach Derivative-Claim Merits When Briefing Fairly Presents the Issues

1) Introduction

Case: 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.
Court: Supreme Court of Texas (Opinion by Justice Boyd)
Opinion Delivered: March 14, 2025

This dispute arose from a long-running business relationship between Anthony Bertucci (primarily the capital provider) and Eugene Watkins (primarily the manager/operator) in a series of low-income housing projects. Instead of a single umbrella company, the partners created separate project-specific entities (“B-W entities”)—typically limited partnerships and related corporate/LLC general partners and development/monitoring entities.

A core factual contention was that Watkins managed project funds through a bank account owned by an unrelated partnership (Texas Community Builders, LP) that Watkins and his wife controlled, commingling project, unrelated business, and personal funds. After concerns arose (voiced by Anthony’s son Christopher, acting under power of attorney), litigation began as an interpleader over sale proceeds. Watkins sought distribution to the entities/partners; Bertucci asserted individual and derivative claims (including fiduciary-duty theories, accounting, and theft-related claims). Anthony died during the case; Christopher became executor.

The probate court granted summary judgment for Watkins on all claims. The court of appeals affirmed dismissal of the derivative claims for alleged briefing waiver, but reversed on certain individual fiduciary-duty and limitations issues. The Texas Supreme Court granted review on multiple issues, producing an opinion that meaningfully clarifies (1) appellate “briefing waiver” standards—especially in derivative-claim settings—and (2) the boundary between entity-level fiduciary duties and individual-level fiduciary duties among co-owners, while also addressing limitations fact issues and evidentiary rulings (a Rule 172 auditor report and the Dead Man’s Rule).

2) Summary of the Opinion

No appellate briefing waiver of derivative claims: The court of appeals erred by concluding Bertucci forfeited appeal of derivative claims for inadequate briefing. The Supreme Court emphasized substance over form and the availability of supplemental briefing under TEX. R. APP. P. 38.9(b).
Individual fiduciary-duty claim fails as a matter of law (here): The court of appeals erred by reviving an individual breach-of-fiduciary-duty theory not properly presented to the trial court (TEX. R. CIV. P. 166a(c)) and unsupported by preserved argument/evidence. Summary judgment against the estate on individual fiduciary-duty claims was reinstated.
Limitations remains fact-bound: The court of appeals correctly held fact issues precluded summary judgment for Watkins on limitations, given evidence of fiduciary relationships, control of records, alleged assurances, and refusal to provide information.
Evidentiary rulings affirmed: The court of appeals did not err by declining to decide the Rule 172 report issue (given posture and concessions) and correctly applied the Dead Man’s Rule to exclude uncorroborated testimony of the decedent’s oral approvals.
Disposition: The Supreme Court remanded to the court of appeals to address derivative-claim merits; reinstated summary judgment on individual fiduciary-duty claims; and provided guidance on limitations and evidence for further proceedings.

3) Analysis

3.1 Precedents Cited (and How They Shaped the Decision)

A. Appellate jurisdiction and “waiver/forfeiture” from briefing defects

Walker v. Blue Water Garden Apartments and United Ass'n of Journeymen & Apprentices v. Borden: Used to emphasize that appellate jurisdiction turns on a bona fide attempt to invoke appellate jurisdiction, not technical perfection. This undergirded the Court’s view that the appeal was properly perfected for both individual and derivative capacities.
State ex rel. Durden v. Shahan: Reinforced a pragmatic approach: if the notice and context make clear what is being appealed and there is no unfair surprise, courts should not dismiss by technicalities. The Court analogized that the parties and court understood derivative issues were in play.
ERI Consulting Eng'rs, Inc. v. Swinnea, Ross v. St. Luke's Episcopal Hosp., RSL Funding, LLC v. Newsome: These cases supply the baseline: appellate rules require adequate briefing, and lack of citation/analysis can forfeit issues. The Court did not retreat from that doctrine; it held instead that Bertucci’s brief, in substance, contained derivative arguments sufficient to avoid forfeiture.
Roccaforte v. Jefferson County and United States v. Olano: Cited to distinguish “waiver” (intentional relinquishment) from “forfeiture” (failure to timely assert). The Court noted the terminology but did not decide its broader procedural consequences—signaling doctrinal care while keeping focus on the case.
Lion Copolymer Holdings, LLC v. Lion Polymers, LLC and Holley v. Watts: Provided the methodological rule: courts evaluate not just issue headings, but the argument beneath them to discern intent and preservation. This was central to rejecting the court of appeals’ reading that derivative claims were not “plainly” asserted.
Dudley Constr., Ltd. v. Act Pipe & Supply, Inc., First United Pentecostal Church of Beaumont v. Parker, Weeks Marine, Inc. v. Garza, Perry v. Cohen, Fredonia State Bank v. Gen. Am. Life Ins. Co.: These authorities collectively articulate Texas’s repeated preference to decide cases on the merits and not “defeat the right to appeal” by hyper-technical procedural constructions.
Horton v. Stovall: Key remedial principle: briefing defects that are remediable should not be fatal without a reasonable opportunity to cure. This supported the Court’s emphasis that, if more detail were needed, the proper tool is supplemental briefing under TEX. R. APP. P. 38.9(b).
Briscoe v. Goodmark Corp., Lehmann v. Har-Con Corp., Verburgt v. Dorner: These cases support the anti-technicality theme: Texas appellate law favors substance over form when the litigant has made a genuine effort to preserve appellate rights.

B. Fiduciary duty: entity-level duties vs individual duties among co-owners

M.R. Champion, Inc. v. Mizell: Cited for the proposition that general partners owe duties “in the nature of a fiduciary duty” (now codified in the Business Organizations Code). This framed the contrast between general partner duties and the general rule that limited partners do not owe each other such duties.
Strebel v. Wimberly: The court of appeals relied on this “control test” for potentially imposing fiduciary duties on a limited partner who acts like a general partner. The Supreme Court explicitly avoided resolving Strebel’s broader correctness, but rejected its application here—procedurally (not preserved below) and substantively (the alleged conduct remained within the assigned limited-partner role).
Ritchie v. Rupe: Supported the proposition that corporate officers/directors generally owe duties to the corporation, not to each other individually—undercutting the estate’s attempt to recast entity duties as personal duties owed to a co-owner.
Suntech Processing Sys., L.L.C. v. Sun Commc'ns, Inc. and Gadin v. Societe Captrade: Reinforced that Texas law does not generally impose formal fiduciary duties among LLC members merely by virtue of co-membership, paralleling the corporate rule in Ritchie.
Meyer v. Cathey and Associated Indem. Corp. v. CAT Contracting, Inc.: These cases define and limit “informal fiduciary duty” (confidential relationships), requiring the relationship to exist prior to and apart from the transaction. The Court noted the estate disclaimed reliance on this theory in the Supreme Court, narrowing the fiduciary analysis.
Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen and Grissom v. Watson: Provided the agency definition—an agent acts on the principal’s behalf and subject to the principal’s control. The Court used these to reject the estate’s attempt to reframe Watkins’s fund-handling as a principal-agent fiduciary relationship while simultaneously arguing Watkins had usurped exclusive control.
Huffington v. Upchurch and Smith v. Bolin, and Ingram v. Deere: The first two supply older “managing partner” fiduciary language; Ingram cautions against treating casual “partner” labels as legally dispositive. Together, they supported the Court’s skepticism that Watkins’s third-party self-description as “managing” created a distinct legal fiduciary role to Bertucci personally.
Drexel Highlander L.P. v. Edelman: Cited as an example where a “control person” in a limited partnership breached duties by commingling and personal use—supporting the concept of entity-level fiduciary breach. Importantly, it did not compel recognition of an individual fiduciary duty between limited partners.

C. Summary judgment preservation limits on appellate courts

Johnson v. Brewer & Pritchard, P.C., Sci. Spectrum, Inc. v. Martinez, McConnell v. Southside Indep. Sch. Dist., City of Houston v. Clear Creek Basin Auth.: These cases enforce the rule (also codified in TEX. R. CIV. P. 166a(c)) that summary judgments stand or fall on the grounds expressly presented to the trial court; appellate courts may not reverse on unpresented theories. This was decisive against the estate’s late-raised “control test”/general-partner-like fiduciary theory.

D. Limitations, discovery, and fiduciary context

Berry v. Berry and Marcus & Millichap Real Est. Inv. Servs. of Nev. v. Triex Tex. Holdings, LLC: These cases guard against overreading fiduciary relationships to eliminate diligence obligations; a fiduciary beneficiary is not “altogether absolved” from reasonable diligence. Watkins invoked these to argue limitations should run earlier.
Kinzbach Tool Co. v. Corbett-Wallace Corp. and S.V. v. R.V.: The Court used these to show the counterweight: fiduciaries have an affirmative disclosure duty, and a fiduciary relationship can lessen the duty of inquiry, supporting a fact question on when the estate should have discovered the alleged misappropriation.

E. Evidence: court-appointed auditor reports and the Dead Man’s Rule

In re Bertucci: Provided procedural history (prior mandamus) about the Rule 172 report dispute, showing the report’s controversy and why the issue could be revisited through normal appellate process rather than extraordinary relief.
Lewis v. Foster: Articulated the purpose of the Dead Man’s Rule: preventing unfair advantage when one party cannot contradict testimony due to death. This policy anchored exclusion of uncorroborated “oral approval” testimony.
Fraga v. Drake: Defined what “corroborating evidence” must do: tend to confirm and strengthen the testimony and show probability of truth. The Court relied on this to reject “inaction” as corroboration where inaction was equally consistent with lack of knowledge.
City of Keller v. Wilson: Used for the equal-inference principle: if evidence is equally consistent with two competing facts, neither may be inferred. This was critical to rejecting the “inaction = approval” corroboration argument.

3.2 Legal Reasoning

A. The new operational rule on briefing “waiver” in derivative-claim appeals

The opinion’s most practically important holding is procedural: when a party has clearly perfected an appeal in both individual and derivative capacities, an appellate court should not affirm dismissal of derivative claims on a narrow reading of briefing formalities (such as cover-page omissions or an “Identity of Parties” list) if the body of the brief substantively advances arguments on behalf of the entities.

The Court reasoned that:

The record showed a clear, bona fide intent to appeal derivative rulings (notice of appeal, docketing statement, court notices, and case style all recognized derivative parties).
The opening brief did, in substance, argue entity fiduciary duties and breaches and referenced governing documents—enough to avoid forfeiture.
If a court of appeals believes presentation is insufficient to assist decision-making, TEX. R. APP. P. 38.9(b) provides the proper remedy: require additional briefing rather than effectively disposing of potentially meritorious claims by forfeiture.
The absence of unfair surprise mattered: Watkins responded on the merits to derivative theories, confirming that the dispute was understood.

B. Individual fiduciary duty: procedural preservation and substantive fit

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

Preservation (summary judgment practice): The theory adopted by the court of appeals—that Watkins might owe an individual fiduciary duty because he exercised operational control like a general partner (invoking Strebel)—was not expressly presented to the trial court as required by TEX. R. CIV. P. 166a(c). An appellate court cannot reverse on new grounds.
Substance (as argued in this Court): The estate pivoted to an agency/control-of-funds framing, but the Court held that merely entrusting funds to a business partner—especially within the partner’s assigned role—does not itself create an agency relationship or an individual fiduciary duty. The Court also identified an internal inconsistency: claiming Watkins had usurped control to the exclusion of Bertucci while also claiming Watkins was acting “subject to” Bertucci’s control as an agent.

Notably, the Court’s holding is narrow and tied to the estate’s own litigation choices: the estate repeatedly told the trial court it “need not prove” an individual fiduciary duty because it sued derivatively. The Court also emphasized it was not announcing a universal rule for all cases combining individual and derivative claims; it accepted the estate’s position that the harm and remedies overlapped here and therefore dismissal of the individual fiduciary claim caused no cognizable harm if derivative claims proceed.

C. Limitations: fiduciary context creates a fact question despite diligence principles

Watkins sought summary judgment on limitations, arguing that Bertucci’s status as investor and entity insider and his alleged access to records meant he knew or should have known of the complained-of conduct long before suit. The Court agreed with the court of appeals that competing evidence created a fact issue—especially (i) Watkins’s exclusive signature authority on the commingled account, (ii) alleged assurances and representations, (iii) refusal to provide information when requested, and (iv) evidence suggesting personal use of funds.

The Court reconciled the tension between two lines of authority:

Diligence still matters (as in Berry v. Berry and Marcus & Millichap Real Est. Inv. Servs. of Nev. v. Triex Tex. Holdings, LLC), and fiduciary status does not automatically delay accrual.
But fiduciary duties also affect inquiry (as in Kinzbach Tool Co. v. Corbett-Wallace Corp. and S.V. v. R.V.), and concealment/assurances and control over information can reasonably delay discovery, precluding summary judgment.

D. Evidence: Rule 172 report posture and Dead Man’s Rule enforcement

On the Rule 172 report, the Court declined to decide admissibility/conclusiveness in the abstract, largely because the case posture (remand) and Watkins’s concessions made the question non-dispositive at this stage. Practically, the Court treated the issue as open for meaningful challenge on remand, reducing the estate’s “law of the case” concern.

On the Dead Man’s Rule, the Court affirmed exclusion of Watkins’s testimony that the decedent expressly “approved” expenditures. Two key points drove the analysis:

“Inaction” (no objection for years) did not corroborate “approval,” because it was equally consistent with ignorance of the expenditures; under City of Keller v. Wilson no inference could be drawn.
The estate’s reliance on documents containing statements was not the same as “call[ing]” Watkins to testify about the decedent’s oral statements under TEX. R. EVID. 601(b)(3)(B), and in any event the documents showed (at most) knowledge, not approval.

3.3 Impact

Appellate practice (Texas): The decision strengthens an already-present Texas trend against “gotcha” briefing forfeitures by emphasizing that courts should (i) read briefs holistically, (ii) consider whether the opposing party was actually confused or surprised, and (iii) use TEX. R. APP. P. 38.9(b) to cure shortcomings rather than dispose of claims. This is especially consequential in complex multi-party, multi-capacity appeals (like derivative litigation), where captions and identity sections can be imperfect while substantive argument is present.
Derivative litigation strategy: Plaintiffs who plead both individual and derivative theories should expect close scrutiny of whether the alleged injury is truly personal or entity-level. This opinion shows the Court’s willingness to limit individual fiduciary-duty claims where the plaintiff has treated entity-level claims as the real vehicle and did not preserve a separate individual-duty theory.
Entity governance disputes: The opinion reinforces the general Texas rule that fiduciary duties commonly run to the entity (corporation/LLC/partnership) rather than horizontally among co-owners, absent a preserved, legally supported theory (informal fiduciary duty, agency, contract, or an actual general partner role).
Limitations in fiduciary contexts: The Court’s refusal to grant limitations summary judgment underscores that control of information, exclusive banking authority, and alleged assurances can keep limitations issues fact-bound even when the claimant is sophisticated or holds insider titles.
Probate/business overlap: The Dead Man’s Rule remains a potent evidentiary gate in disputes involving deceased principals—particularly where the surviving party’s narrative depends on uncorroborated oral “approvals.”

4) Complex Concepts Simplified

Derivative claim: A lawsuit brought by an owner (shareholder/member/partner) on behalf of the business entity for harms done to the entity. The remedy typically belongs to the entity, even if it ultimately benefits owners indirectly.
Briefing waiver / forfeiture: If an appellant does not adequately argue an issue (with record cites and legal analysis), an appellate court may treat the complaint as forfeited. This opinion emphasizes that courts should not impose forfeiture based on technicalities when the brief’s substance fairly presents the issue—and courts may order supplemental briefing if helpful.
Traditional vs. no-evidence summary judgment: A traditional motion argues there is no genuine issue of material fact and the movant wins as a matter of law. A no-evidence motion argues the opponent has no evidence of essential elements. Appellate review is constrained by what grounds were presented to the trial court (TEX. R. CIV. P. 166a(c)).
Formal vs. informal fiduciary duty: Formal fiduciary duties arise by law from certain relationships (e.g., trustee-beneficiary, attorney-client, general partners). Informal fiduciary duties arise from a preexisting relationship of trust and confidence outside the transaction at issue; Texas treats this as exceptional and fact-specific.
Dead Man’s Rule (TEX. R. EVID. 601(b)): In suits involving a decedent’s estate, a party generally cannot testify about the decedent’s oral statements unless corroborated or unless the opposing party calls that witness to testify about the statements. The goal is to prevent one-sided testimony that the deceased cannot contradict.
Rule 172 auditor report: A trial court may appoint an auditor to examine accounts and report. Procedural deadlines can apply to “exceptions,” but admissibility and conclusiveness can still be contested depending on compliance (including verification) and the posture of the case.

5) Conclusion

The Supreme Court of Texas used a business-partner dispute to sharpen important procedural and substantive boundaries. Procedurally, it rejected an overly technical appellate forfeiture of derivative claims where the appellant’s brief, read as a whole, advanced entity-based arguments and where any lack of clarity could have been addressed through supplemental briefing. Substantively, it curtailed an individual fiduciary-duty claim that was not properly preserved and that conflicted with the estate’s own framing that the alleged harm was essentially entity-level and remediable through derivative claims. The Court also reaffirmed that limitations defenses in fiduciary settings often turn on fact questions about disclosure, control, and discovery, and it applied the Dead Man’s Rule rigorously to prevent uncorroborated “oral approval” testimony from tilting the field against a decedent’s estate.