A Law Firm and Bank are Found to Have Breached Their Fiduciary Duties to an Elderly Widow
Peter Lattman of the Wall Street Journal Law Blog here recently gave a run down of the Top Ten Jury Verdicts awarded to Individual Plaintiffs in 2005 from a Lawyers Weekly USA list and one case in particular caught my attention, Callioux v. Baker Botts. In February, a Texas jury awarded an elderly wealthy woman who is suffering from Alzeherimer’s Disease $65.5 million after she sued both Baker Botts and Wells Fargo Bank claiming they conspired to persuade her to move her inheritance from her recently deceased husband into a foundation without advising her of any other alternatives.
The jury found that Baker Botts breached its fiduciary duty to the widow by failing to disclose “all important information” while doing the estate planning work, and that Wells Fargo also breached its fiduciary duty. There are a couple interesting twists worth pointing out in this case. First, according to an article about the case in Lawyers Weekly USA, there were conflict issues between the firm and the bank. Wells Fargo – which served as executor of the husband’s estate – was also a client of Baker Botts. In the Lawyers Weekly article, one of the widow’s attorneys is quoted saying, “ Baker Botts gave advice that took $65 million from one client and directed it to another client.” The second twist is how the judge handled the multi-million dollar verdict. After adding additional damages raising the verdict to $71 million, the court ordered the defendant’s to pay the money into a new court-created trust, allowing the widow to use the interest from the trust and giving her the ability to withdraw up to 5 percent of the principal yearly. The defendants are appealing the decision and I plan on tracking any new developments if they occur.