Wednesday, July 1, 2015

Wells Fargo Takes One on the Chin

A St. Louis County jury recently awarded over $70 million to the beneficiary of two trusts against Wells Fargo (WF).

WF and its predecessors had served as the corporate trustee of one trust, and the custodian of the other. This firm previously prosecuted an arbitration against a WF predecessor on behalf of a trustee. The client prevailed, but not for $77 million! (Her damages were much lower!)

A review of the case facts set forth in Missouri Lawyer's Weekly's May 18th publication suggests that the case was anything but a slam dunk for the plaintiff. So—kudos to Jim, Megan, and Paul!

My law partner, Dan Conlisk, has over 25 years of fiduciary litigation experience to compliment my financial services industry practice. He too was amazed at the result.

The primary protagonist in the underlying drama was the plaintiff's own son, Doug Morris. WF's defense, in part, was that Mr. Morris, rather than WF ran the trusts. Further, WF argued that the elderly woman at plaintiff's table “said yes to everything her attorneys now complain about.” Notably, Mr. Morris wasn't suppose to be running the two trusts and there were 11 women on the jury.

At the end of the trial, the plaintiff prevailed almost entirely on her breach of fiduciary duty and Uniform Fiduciaries Law claims. The jury assessed 98% of the blame to WF. Food for thought if you are a trust beneficiary or “mere custodian.”  

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