JP Morgan says family awarded $8 billion deserves nothing

In a recent American case, a jury awarded $8 billion to the family of Max Hopper, who died without a will. Mr. Hopper's estate was about $19 million. JPMorgan Chase & Co (our Canadian equivalent would be a trust company) was hired to administer the estate.

The family took the administrator to court because it wasn't happy with how things were going. It was the usual kind of thing we see in court constantly: the family said that the administrator was taking too long and favouring one beneficiary over another. The issues are the same no matter the size of the estate.

In this case, the monetary award for the family was huge because it had two major components. One part of the award was to recover the losses the family said it suffered due to the administrator's handling of the estate. The other part of the award was made up of punitive damages, which means the jury was punishing the administrator for its behaviour.

As you can imagine, JPMorgan Chase & Co is appealing the verdict and the award. This matter will probably be in court for many years to come. Legal fees are reported already over $3 million. To read more about this case, click here to see a story from www.bloomberg.com.

Why a person with an estate of $19 million and a blended family did not make a will is simply incomprehensible. I can only assume that Mr. Hopper thought he had more time, as I hear often enough from people who are reluctant to make wills. In this case, though, I'm not sure that the fallout from the failure to make a will is really the take-away. Whether JPMorgan & Chase was appointed by will or by the court would not seem to be relevant. What is interesting is the enthusiasm of the jury to punish an estate administrator for mis-handling the estate.

Perhaps this is the trend we will be seeing. Here in Canada we've never had an award in an estate anything like $8 billion and we probably never will, but we do see more and more litigation against executors who are perceived to be mis-handling estates. As a general rule, executors who are honest and diligent don't have much to worry about in terms of being sued, but those who are being careless, negligent, or downright dishonest should realize that people in general seem to be fed up.