Probate court trials usually involve fights between heirs over minor amounts of money and property. But three Dallas lawyers used a probate case to take on the largest bank in the U.S.—and won a stunning $4 billion punitive damage award against JPMorgan Chase for mishandling an estate.
The case involved the estate of Max Hopper, a prominent information technology executive who pioneered American Airlines’ SABRE reservation system. Hopper died from a stroke in 2010 and had accrued assets worth more than $19 million during 28 years of marriage to his second wife, Jo Hopper, but died without a will.
JPMorgan Chase was appointed as administrator over Hopper’s estate and was responsible for collecting assets, paying debts and releasing assets to Jo Hopper and her stepchildren, Dr. Stephen Hopper and Laura Wassmer.
Jo Hopper later sued JPMorgan Chase for breach of fiduciary duty, breach of contract and fraud and was later joined by the stepchildren in her lawsuit. The heirs claimed that the bank had mishandled the estate, had missed financial deadlines and took too long to divide up the estate, fostering animosity between Jo Hopper and her stepchildren.
They alleged that the bank took years to release basic interests in art, home furnishings, jewelry and Mr. Hopper’s collection of 6,700 golf putters and 900 bottles of wine.
On Sept. 26, after a monthlong trial, a jury in Dallas County Probate Court No. 1 found JPMorgan Chase had breached its contract and fiduciary duty to the heirs and committed fraud. The award totaled over $4 billion in punitive damages, $4.7 million in actual damages and $5 million in attorney fees.
Alan Loewinsohn, a partner in Dallas’ Loewinsohn Flegle Deary Simon who represents Jo Hopper, said his client spent $6 million in attorney fees fighting JPMorgan Chase. He said he decided to ask for $2 billion in punitive damages for his client because it represented 1 percent of the more than $200 billion in assets held by the huge bank.
“They have a net worth of $200 billion dollars and I thought that 1 percent might get their attention,” Loewinsohn said.
“This was an interesting case because I’ve got a client who spent $6 million dollars fighting the nation’s largest bank. And when she filed the lawsuit, she said she felt blessed because she had the resources to fight where other widows would not,” Loewinsohn said. “So for her, for the jury to find that bank’s conduct as outrageous as she did is vindication for her.”
James Bell, a Dallas solo practitioner, and Anthony “Lenny” Vitullo of Dallas Fee, Smith, Sharp & Vitullo both represented Max Hopper’s children in the case. They argued that the bank depleted the estate’s funds by spending millions in attorney fees to pay Hunton & Williams to litigate the bank’s declaratory judgment action in the case.
At trial, JPMorgan Chase argued it did its best to handle the complicated estate and that it was perfectly legal under the Texas Probate Code to use the estate’s money to pay private attorneys to litigate the declaratory judgment action.
But that argument did not sit well with the jury. Each of Max Hopper’s children were also awarded $1 billion in punitive damages against the bank.
“We asked the jury for what was right and to make a verdict so loud that the folks on Wall Street would hear it. You can’t do business like that in Texas,” Bell said. “They sued my clients with their own money and depleted the estate. I think that’s what pissed off the jury.”
Vitullo argued that JPMorgan Chase could have solved its legal problems by resigning as the administrator of Hopper’s estate when questions about its conduct arose.
“They chose not to step down as an administrator and they stayed there at the expense of my client to defend their breach of fiduciary duty lawsuit,” Vitullo said. “That’s what got [the jury] riled up.”
John Eichman, a partner in the Dallas office of Hunton & Williams who represented JPMorgan Chase at trial, declined to comment.
In a statement, JPMorgan Chase said it is confident the jury verdict will not stand.
“Clearly the award far exceeds any possible interpretation of Texas tort reform statutes,” according the JPMorgan Chase’s statement, which notes that a judgment has not yet been entered by the trial court in the case. “JPMC acted in a professional manner and in good faith in administering this estate.”
While it’s exhilarating to win a multibillion-dollar verdict from a jury, the plaintiffs’ ultimate recovery in the case is likely to only be in the millions. Texas state law caps punitive damage awards to $200,000 or twice the amount of economic damages—whichever amount is greater.
However, Vitullo plans to argue that the cap does not apply to the case under state law.
“The cap doesn’t apply. This is a bank that misappropriated funds and I got a conversion finding,” Vitullo said. “I’m going after them to bust the cap.”