seal Memo from the Diocesan Chancellor
FAQs on “Fiduciary Duty”
 

As we approach the time of decision concerning our continued affiliation with The Episcopal Church (TEC), one of the issues raised by those who desire to maintain affiliation with TEC concerns the legal question of the existence of  “fiduciary” relationships.  The issue seems to have been raised as a veiled threat against those who would vote to disaffiliate with TEC. Accordingly, it would be helpful for anyone who is concerned about this issue to understand what a fiduciary is and how fiduciary relationships are created in order to evaluate the credibility of the threat.

 

What is a fiduciary?

The term “fiduciary” refers to a person owing a duty of integrity and fidelity, and it applies to a person who occupies a position of peculiar confidence towards another.  Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 514 (Tex. 1942).  Recently, the Texas Supreme Court has once again confirmed that “[i]t is well settled that ‘not every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship.’” Meyer v. Cathey, 167 S.W.2d 327, 330 (Tex. 2005). 

What relationships rise to the level of a fiduciary relationship?

Courts in Texas recognize that a fiduciary relationship exists in certain formal relationships as follows: (1) the attorney-client relationship; (2) trustee; (3) executor; (4) agent-principal; (5) partnerships. Texas courts also recognize that a fiduciary relationship can exist informally between members of a family or where a relationship of confidence and trust has developed between two people in which one party has become accustomed to being guided by the judgment or advice of the second party and there exists a long association in a business relationship, as well as personal friendship.

Do delegates, vestry members, and/or The Episcopal Diocese of Fort Worth have a fiduciary relationship with TEC?

The answer is “no” based on our attorneys’ understanding of the law and facts.  None of the delegates, vestry members, and certainly not The Episcopal Diocese of Fort Worth have an attorney-client relationship with TEC. The delegates, vestry members, and The Episcopal Diocese of Fort Worth are not trustees of a valid trust in favor of TEC. The delegates, vestry members, and The Episcopal Diocese of Fort Worth have not been appointed as executors of an estate wherein TEC is the beneficiary. Nor does a principal-agent relationship exist between TEC and The Episcopal Diocese of Fort Worth or any delegates or vestry members within The Episcopal Diocese of Fort Worth.  Nor does a partnership exist between TEC and The Episcopal Diocese of Fort Worth or any delegates or vestry members within The Episcopal Diocese of Fort Worth. Finally, no one could, with candor, say that TEC has become accustomed to being guided by the judgment or advice of the The Episcopal Diocese of Fort Worth (or any delegate or vestry member within The Episcopal Diocese of Fort Worth) as a result of a long association in a business relationship, as well as personal friendship.

In addition, the Canons and Constitution of this diocese have created and set out a property/fiduciary relationship between the diocese and each parish as to property ownership that would preclude another type of "fiduciary relationship" involving vestry members. Indeed, a conflict of interest would almost automatically arise.

Can you guarantee that I will not be sued by TEC?

No. While there is no factual or legal justification for making a claim that anyone is in a fiduciary relationship with TEC, that does not guarantee that TEC will refrain from filing a lawsuit and asserting such a claim. Frivolous lawsuits are a sad reality in our society. While it is our hope that TEC does not file frivolous lawsuits, we cannot guarantee that it will refrain from such a sad and abusive course of action. 

 

William T. McGee, Esq., Chancellor
August 15, 2008