Texas Business Court Decision – Monday, February 2, 2026
No. 25-BC01B-0030 Preston Hollow Capital, LLC, et al. v. Truist Bank, etc. (First Div., Judge Whitehill)
Designation of Responsible Third Parties – Tex. Civ. Prac. & Rem. Code Sec. 33.004(f). Truist’s predecessor-in-interest BB&T was the initial trustee for Senior Care Living VI’s construction project. As part of their business arrangements, Senior Care executed trust control agreements whereby Truist held the bank accounts into which Senior Care was to deposit its gross receipts and revenue; Preston Hollow controlled the bond funds during construction of the senior living center and later determined Senior Care had defaulted; it instructed Truist to send default notices to Senior Care and directed Truist not to act under the loan or bond documents unless expressly instructed to do so. Truist later accelerated the bonds and loan at Preston Hollow’s direction and withdrew as trustee when Preston Hollow sued Senior Care and its principal, a man named Bouldin; Preston Hollow later learned that Truist Senior Care had obtained approval from Truist to deviate from the trust documents and that it had failed to pay its receipts and revenue to Truist with Truist’s approval. Preston Hollow sued Truist alleging breaches of fiduciary duty, trust, and contract in its role as the bond documents’ trustee. For more details, see the court’s prior opinion in the matter issued December 19, 2025 (and reported in this blog on December 24).
In this motion, Truist sought to identify Senior Care and Bouldin as responsible third parties, contending Preston Hollow’s harms derived from Senior Care and Bouldin’s breaches – they failed to pay the general contractor, failed to pay property taxes, failed to deposit gross revenues, and improperly transferred funds to another of Bouldin’s projects; Truist contends that by failing to fulfill its duties as trustee, Truist allowed Senior Care and Bouldin to violate their duties under the bond documents, thereby causing irretrievable deterioration of the trust estate. Preston Hollow objects to the motion.
Held: (1) Sec. 33.011(6) defines responsible third party as one who is alleged to have caused or contributed in any way to the harm for which recovery of damages is sought; the dispute here is over what is the relevant harm; Preston Hollow asserts the only harm for which it seeks recovery is Truist’s failure to exercise its fiduciary and trustee duties, while Truist defines the harm as the irretrievable deterioration of the trust estate alleged by Preston Hollow – in other words, Preston Hollow contends the responsible third party must have participated in the sued-for breach, while Truist argues it is enough if the third party contributed to the alleged injury; (2) the court concludes harm as used in Sec. 33.011(6) has a meaning more akin to the legal concept of “injury” than the concept of “breach,” and a responsible third party need only contribute to any single harm among the multiple harms plead by the claimant; the motion is granted, conditioned on Truist satisfying the notice pleading standard in its new pleadings by alleging how Bouldin and Senior Care have separately contributed to Preston Hollow’s injury or injuries.
In reaching this conclusion, the court examines the 2003 amendments to Sec. 33.011(6) which expanded the class of persons who could be designated as responsible third parties, and which allowed the addition of persons who violated some legal standard (not necessarily the same legal standard as the named defendant) and who may have contributed in some way to one of the harms pleaded in the complaint; the court adopts Senior Care and Bouldin’s contention that at least one harm for which Preston Hollow sues is the irretrievable deterioration of the trust estate; further, Truist’s motion connects Senior Care and Bouldin’s alleged acts to Preston Hollow’s tort claims against Truist – Truist’s failure to monitor the proposed responsible third parties and its acts of giving advice on asset protection strategies and directions on payment necessarily involved actions by Senior Care and Bouldin.