The Texas legislature created business courts to handle litigation cases involving business matters. The jurisdiction and scope of cases the courts can hear has not been fully fleshed out yet.
Since many probate estates and trusts include family-controlled partnerships and LLCs, this begs the question as to whether these disputes should be litigated in probate court, as they normally have, or in the new business courts.
The court recently considered this in the Barrett v. Barrett, 2025 Tex. Bus. 37, 2025 WL 2715321 (Tex. Bus. Ct. 4th Div. Sept. 23, 2025) case. The case involves a trust beneficiary who sued family member trustees for allegedly making self-serving investments of trust assets into family-controlled business entities. The question was whether the defendants could remove the case from the probate court given that the dispute involved legal entities and business governance claims.
Facts & Procedural History
This case involves, Charlotte, a beneficiary of a trust who was also the trustee who filed suit against the former trustees.
Charlotte’s family had established this and other trust thirty-five years earlier. The second trust had been terminated in 2021. Three family members had served as trustees of these trusts over the years: Marcus (Charlotte’s father), Mary (her mother), and William (her brother). The trusts owned interests in eleven business entities.
Charlotte filed suit in Bexar County Probate Court No. 1 in 2025. She named as defendants her three family member who were trustees, along with her nephew individually and the eleven family business entities. Charlotte alleged that the trustee defendants breached their fiduciary duties owed to her by making self-serving investments of trust assets into these family-run business entities.
Charlotte’s petition requested several forms of relief. She sought modification of the trust. She requested monetary damages to recover losses to the trust estates, including depreciation in value, profits the trustees made through their breaches, and lost profits that would have accrued absent the breaches. She asked for judicial dissolution of one entity. She sought attorney’s fees. Finally, she requested declarations that the trustees could not use trust funds to pay their own expenses, attorney’s fees, or costs, and that Texas Property Code section 114.064 controlled how defendants could recover their fees and expenses.
The nephew who was sued indivudally sought to remove the case to the Texas Business Court in late 2025. In his notice of removal, he argued the business court had jurisdiction under multiple subsections of Texas Government Code section 25A.004. He contended Charlotte’s case directly regarded governance and internal affairs of corporate defendants. He noted that Charlotte brought her suit in several capacities, including derivatively on behalf of corporate defendants, with many claims being derivative in nature. He argued that Charlotte’s allegations included breaches of fiduciary duties owed to the partnerships and their owners. He pointed out that the suit sought judicial dissolution of a corporate defendant under the Business Organizations Code and included requests for declaratory relief.
Charlotte timely objected to removal. She argued that section 25A.006(d) of the Government Code authorized removal only from district court or county court at law—not from statutory probate court. She contended the business court lacked jurisdiction because all her claims arose from trust administration. The business court does not have jurisdiction over claims arising from the Texas Estates Code or Chapter 53 and Title 9 of the Property Code. She also argued that the nephew improperly relied solely on disputes concerning corporate defendants to establish the amount in controversy requirement.
Charlotte amended her petition after filing her objection. The amended petition requested that the court void certain trustee actions that converted trust property to limited partnership interests in the corporate defendants under Section 114.008(a)(9) of the Property Code. She asked the court to compel the trustees to restore the converted property and remedy their breaches by paying money to her under section 114.008(3) of the Property Code.
Understanding the Business Court’s Limited Jurisdiction
Texas created its business court system in 2023 to provide specialized adjudication of complex commercial disputes. The legislature created eight divisions, with one court in each major metropolitan area in each division. These courts began operations in 2024.
The idea is that these courts could offer offer expertise in business litigation that might otherwise burden general district courts. Given their limited focus, these courts have limited jurisdiction.
The business court does not have general jurisdiction as the district courts do. Its authority derives entirely from statute. Texas Government Code section 25A.004 defines what cases the business court can hear. The statute grants the business court civil jurisdiction concurrent with district courts over certain types of actions that meet specific monetary thresholds. These include disputes over corporate governance and internal affairs, partnership and LLC matters, derivative actions, breaches of fiduciary duty related to business entities, and requests for judicial dissolution of business organizations.
The jurisdictional grant comes with substantial limitations. Section 25A.004(g) lists categories of claims the business court cannot hear unless they fall within supplemental jurisdiction. These excluded categories include claims arising from certain sections of the Business and Commerce Code, the Estates Code, the Family Code, the Insurance Code, and Chapter 53 and Title 9 of the Property Code. Title 9 of the Property Code governs trusts through sections 111.001 through 117.012. Most probate matters are under the Estates Code.
Supplemental jurisdiction provides the only way for the business court to hear excluded claims. Section 25A.004(f) establishes that supplemental jurisdiction requires agreement of all parties to the claims and approval from a judge of the relevant division. Without universal party consent, the business court cannot exercise supplemental jurisdiction over claims arising from Title 9 of the Property Code.
How Removal to Business Court Works
Section 25A.006(d) of the Government Code addresses removal to business court. The statute states that a party to an action filed in district court or county court at law that falls within business court jurisdiction may remove the action to business court. The statute specifies only two originating courts from which removal is permitted: district court and county court at law.
Statutory probate courts were not included in this. Probate administration occurs primarily in statutory probate courts or county courts that focus on probates, so they possess specialized jurisdiction over estates and trusts. Section 115.001 of the Property Code grants probate courts original and exclusive jurisdiction over all proceedings by or against a trustee and all proceedings concerning trusts. This creates a jurisdictional framework where probate courts serve as the primary forum for trust disputes.
The removal statute’s failure to mention statutory probate courts as a source for removal suggests the legislature intended to preserve probate courts’ exclusive jurisdiction over trust matters. When parties file trust litigation in statutory probate court, the legislature appears to have determined those cases should remain there unless the business court can exercise supplemental jurisdiction with party consent.
The Claims All Originated From Trust Law
The business court examined Charlotte’s petition to determine whether her claims arose from Title 9 of the Property Code. The court found that every claim met this standard. The analysis focused on three factors: the capacity in which Charlotte brought suit, who Charlotte sued, and the substance of her allegations.
Charlotte brought suit in multiple capacities: individually, as beneficiary of the CRB Trust, and as current trustee of the CRB Trust. Each capacity connected directly to her relationship with trusts. She did not sue as a business owner, partner, or member of any entity. Her standing to bring claims derived entirely from trust law.
Charlotte sued three family members in their capacities as former or current trustees of three different trusts. She also sued her nephew individually. The corporate defendants—partnerships and LLCs—entered the litigation because trustees allegedly invested trust assets into those entities. Charlotte’s claims against the corporate defendants all traced back to actions the trustee defendants took with trust property.
The substance of Charlotte’s allegations centered on trustee conduct. She claimed trustees breached fiduciary duties owed to her as beneficiary by making self-serving investments. She sought to modify a trust. She requested remedies specifically authorized by Property Code sections 114.008(a)(9) and 114.008(3) for trustee breaches. Her amended petition cited Property Code section 114.008(a)(9) in requesting that the court void trustee actions converting trust property to partnership interests.
Throughout her petition, Charlotte repeatedly invoked Title 9 provisions. Property Code section 112.051 governs trust modification. Sections 113.001 through 113.082 outline trustee powers and duties. Sections 114.001 through 114.009 detail trustee liabilities, rights, and remedies available to beneficiaries. Section 115.001 grants probate courts jurisdiction over trust proceedings. Every legal theory Charlotte advanced originated from these trust statutes.
As such, the business court sustained Charlotte’s objection and remanded the case to Bexar County Probate Court No. 1.
The Takeaway
This case establishes that trust disputes generally have to remain in probate court even when business entities are involved. That there are corporate defendants does not transform a trust case into a business dispute to be handled in the new business courts. The legislature carved out trust matters from business court jurisdiction by excluding claims arising from Title 9 of the Property Code. This exclusion preserves probate courts’ role as the primary forum for trust and estate litigation. Parties cannot circumvent this jurisdictional allocation through removal absent universal agreement to invoke supplemental jurisdiction.
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