For its role in administering an estate, JPMorgan was sued for damages by the widow and two stepchildren. A jury awarded the plaintiffs $4 billion in punitive damages.
Max Hopper is not a well-known figure. However, he became a wealthy man during his time as an executive at American Airlines.
He was best known for creating an innovative reservation system.
At the time of his death, his estate was valued at $19 million.
Unfortunately, he did not have an estate plan.
The bank JPMorgan was chosen to administer his complex estate. However, Hopper’s widow and her stepchildren grew angry at the way the bank was handling the estate and accused it of delaying distributions for its own benefit.
They sued in a Dallas court.
A jury recently came down with a verdict.
JPMorgan was ordered to pay the plaintiffs $5 million in actual damages and $4 billion in punitive damages, as Bloomberg reports in “JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family.”
It is very likely courts will greatly reduce this punitive damage award, since the Supreme Court has previously ruled that punitive damages must be proportional to actual damages.
Nevertheless, this case highlights an important point.
Estate administrators can be held liable, if they do not faithfully carry out their duties.
The jury in this case believed that the bank was guilty of fraud, breach of fiduciary duty and breaking a fee agreement.
JPMorgan is a sophisticated entity that should have known better.
Estate administrators with less experience would be wise to seek the assistance of an attorney to help them make sure they do not run afoul of the law.
Reference: Bloomberg (Sep. 26, 2017) “JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family.”
