JPMorgan has been ordered to pay plaintiffs $5 million in actual damages and $4 billion in punitive damages for a suit involving the handling of a complex estate that didn’t have an estate plan, according to Bloomberg in "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."
The case began when Max Hopper, an American Airlines executive credited with creating an innovative reservation system, passed away and left an estate valued at $19 million.
Unfortunately, he did not have an estate plan.
JPMorgan was chosen to administer his complex estate. However, Hopper's widow and her stepchildren, angry at the way the bank was handling the estate, accused it of delaying distributions for its own benefit and sued.
A jury recently came down with the verdict that included $4 billion in punitive damages.
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.
Reference: Bloomberg (Sep. 26, 2017) "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."