A St. Louis County jury has awarded an Olivette woman $77 million in a lawsuit that accused Wells Fargo of mismanaging family trusts.
The award, announced late Monday, is believed to be the largest plaintiff verdict in St. Louis County history.
Barbara Burton Morriss, 78, sued the San Francisco-based bank in March 2012 in St. Louis County Circuit Court, alleging that the bank breached its fiduciary duty by failing to fully disclose financial transactions in two family trusts that were drained of millions of dollars.
She only learned of the losses in late 2011, when her credit card was declined at Neiman Marcus, according to court documents.
Morriss’ son, venture capitalist B. Douglas Morriss, was sentenced to five years in federal prison for tax evasion in 2013. Through his Clayton-based Acartha Group and other companies, B. Douglas Morriss and partners raised tens of millions of dollars in private equity and venture capital funds until the companies he led filed for bankruptcy in January 2012, listing more than $35 million in debts.
Barbara Burton Morriss was a beneficiary and co-trustee on both of the family trusts with her son. In her lawsuit, she alleged funds of the trusts were wrongfully pledged as collateral in risky business ventures, and she only learned this after the U.S. Securities and Exchange Commission accused her son of defrauding investors in civil charges in January 2012.
“Wells Fargo and Doug Morriss were closely aligned in a scheme to defraud the trusts,” she alleged in court documents, adding that Wells Fargo received more than $12 million in interest, loan fees, trust fees and custody fees tied to its participation in the trusts. Both her son and Wells Fargo “concealed their conduct from Barbara Morriss year after year until almost all of the trust assets were gone,” the court filing continues.
A member of a prominent local family, Barbara Burton Morriss was married to Reuben Morriss III, a former chairman of Boatmen’s Trust Co. who died in 2006.
Former U.S. Sen. John Danforth, an attorney and family friend of the Morrisses, testified at trial that he urged Barbara Burton Morriss to pursue the case against Wells Fargo.
Wells Fargo argued it should not be held liable for any losses of the Morriss trust, the plaintiff’s personal trust, because it and predecessor banks Offitbank and Wachovia were never trustees, but merely custodians for the portion of trust assets held at the bank. Offitbank merged with Wachovia in 1999 and Wells Fargo bought Wachovia in 2008.
“Plaintiff complains that her son and co-trustee, B. Douglas Morriss, converted various stocks held by the Morriss Trust to cash, that trust assets were pledged for a line of credit in her son’s name, and that the line of credit was used to make ‘risky investments’ in private equity companies,” Wells Fargo wrote in a motion for summary judgment. “But there is no evidence that any of these activities were improper in any way. … The Morriss Trust, as a revocable trust, is essentially just Plaintiff’s own money, and she is entitled to use it however she pleases.”
The jury’s award represents $45 million in actual damages and about $32 million in punitive damages related to the Morriss Trust. A hearing on damages related to a second trust, called the Burton Trust, is expected to be held in the coming weeks. In the second trust dispute, Barbara Burton Morriss is seeking to recoup more than $20 million.
Monday’s $77 million award appears to be the largest in St. Louis County history. In 2011, a St. Louis County jury awarded $48.4 million to biofuels ethanol company Abengoa Bioenergy, which sued Chicago Title Insurance Co. for negligence. That verdict, at the time, was described by lawyers in the case as the county’s largest.
“We think that the jury ruled for Mrs. Morriss because the evidence demonstrated the bank failed to live up to the most basic obligation to take care and safe-keep the assets of the trust that were placed with the bank,” said her attorney Jim Bennett, a partner with Clayton law firm Dowd Bennett.
Through her attorney, Barbara Burton Morriss declined to be interviewed, but said in an emailed statement: “I am very happy that we have a system that allows people to bring their claims to the courts to be heard by a jury and appreciate very much that these 12 people gave up their time from their jobs and families to come and listen to the evidence so closely.”
Thompson Coburn attorney David Wells, who represented Wells Fargo in the case, declined to say whether Wells Fargo will appeal the verdict.
“We are disappointed with the verdict and will be considering all of our legal options as we move forward,” Wells Fargo spokesman Vince Scanlon said in an emailed statement.
Robert Patrick of the Post-Dispatch contributed to this report.
Attribution:
Jury sides against Wells Fargo, awards St. Louis County woman $77 million
Lisa Brown
May 12, 2015
St. Louis Post-Dispatch
http://www.stltoday.com/business/local/jury-sides-against-wells-fargo-awards-st-louis-county-woman/article_e9375416-cc06-5cd7-a99c-e97a5a64153d.html
The award, announced late Monday, is believed to be the largest plaintiff verdict in St. Louis County history.
Barbara Burton Morriss, 78, sued the San Francisco-based bank in March 2012 in St. Louis County Circuit Court, alleging that the bank breached its fiduciary duty by failing to fully disclose financial transactions in two family trusts that were drained of millions of dollars.
She only learned of the losses in late 2011, when her credit card was declined at Neiman Marcus, according to court documents.
Morriss’ son, venture capitalist B. Douglas Morriss, was sentenced to five years in federal prison for tax evasion in 2013. Through his Clayton-based Acartha Group and other companies, B. Douglas Morriss and partners raised tens of millions of dollars in private equity and venture capital funds until the companies he led filed for bankruptcy in January 2012, listing more than $35 million in debts.
Barbara Burton Morriss was a beneficiary and co-trustee on both of the family trusts with her son. In her lawsuit, she alleged funds of the trusts were wrongfully pledged as collateral in risky business ventures, and she only learned this after the U.S. Securities and Exchange Commission accused her son of defrauding investors in civil charges in January 2012.
“Wells Fargo and Doug Morriss were closely aligned in a scheme to defraud the trusts,” she alleged in court documents, adding that Wells Fargo received more than $12 million in interest, loan fees, trust fees and custody fees tied to its participation in the trusts. Both her son and Wells Fargo “concealed their conduct from Barbara Morriss year after year until almost all of the trust assets were gone,” the court filing continues.
A member of a prominent local family, Barbara Burton Morriss was married to Reuben Morriss III, a former chairman of Boatmen’s Trust Co. who died in 2006.
Former U.S. Sen. John Danforth, an attorney and family friend of the Morrisses, testified at trial that he urged Barbara Burton Morriss to pursue the case against Wells Fargo.
Wells Fargo argued it should not be held liable for any losses of the Morriss trust, the plaintiff’s personal trust, because it and predecessor banks Offitbank and Wachovia were never trustees, but merely custodians for the portion of trust assets held at the bank. Offitbank merged with Wachovia in 1999 and Wells Fargo bought Wachovia in 2008.
“Plaintiff complains that her son and co-trustee, B. Douglas Morriss, converted various stocks held by the Morriss Trust to cash, that trust assets were pledged for a line of credit in her son’s name, and that the line of credit was used to make ‘risky investments’ in private equity companies,” Wells Fargo wrote in a motion for summary judgment. “But there is no evidence that any of these activities were improper in any way. … The Morriss Trust, as a revocable trust, is essentially just Plaintiff’s own money, and she is entitled to use it however she pleases.”
The jury’s award represents $45 million in actual damages and about $32 million in punitive damages related to the Morriss Trust. A hearing on damages related to a second trust, called the Burton Trust, is expected to be held in the coming weeks. In the second trust dispute, Barbara Burton Morriss is seeking to recoup more than $20 million.
Monday’s $77 million award appears to be the largest in St. Louis County history. In 2011, a St. Louis County jury awarded $48.4 million to biofuels ethanol company Abengoa Bioenergy, which sued Chicago Title Insurance Co. for negligence. That verdict, at the time, was described by lawyers in the case as the county’s largest.
“We think that the jury ruled for Mrs. Morriss because the evidence demonstrated the bank failed to live up to the most basic obligation to take care and safe-keep the assets of the trust that were placed with the bank,” said her attorney Jim Bennett, a partner with Clayton law firm Dowd Bennett.
Through her attorney, Barbara Burton Morriss declined to be interviewed, but said in an emailed statement: “I am very happy that we have a system that allows people to bring their claims to the courts to be heard by a jury and appreciate very much that these 12 people gave up their time from their jobs and families to come and listen to the evidence so closely.”
Thompson Coburn attorney David Wells, who represented Wells Fargo in the case, declined to say whether Wells Fargo will appeal the verdict.
“We are disappointed with the verdict and will be considering all of our legal options as we move forward,” Wells Fargo spokesman Vince Scanlon said in an emailed statement.
Robert Patrick of the Post-Dispatch contributed to this report.
Attribution:
Jury sides against Wells Fargo, awards St. Louis County woman $77 million
Lisa Brown
May 12, 2015
St. Louis Post-Dispatch
http://www.stltoday.com/business/local/jury-sides-against-wells-fargo-awards-st-louis-county-woman/article_e9375416-cc06-5cd7-a99c-e97a5a64153d.html
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