JPMorgan says family awarded US$8 billion deserves nothing

JPMorgan is currently embroiled in a lawsuit with the family of former American Airlines executive Max Hopper.
JPMorgan is currently embroiled in a lawsuit with the family of former American Airlines executive Max Hopper. PHOTO: REUTERS

DALLAS (Bloomberg) - JPMorgan Chase & Co urged a judge to throw out a stunning US$8 billion (S$10.9 billion) jury verdict over a mismanaged inheritance, saying the family deserves nothing.

"The law and evidence do not support any claim against JPMorgan, much less the unprecedented multi-billion-dollar punitive damage award, which the heirs have already admitted is unconstitutionally excessive," the bank said in a filing in Dallas probate court.

Two children of Max Hopper, a former American Airlines executive who died in 2010, have already asked that the damages for them and their father's estate be reduced to about US$74 million, while his widow has yet to weigh in with any adjustment to the ninth-largest verdict in US history.

JPMorgan said the jury "accepted to the penny, the extraordinary invitation" of the family's legal team to award the US$8 billion without doing any "independent analysis", according to last week's filing.

The bank previously said it was "highly confident" the verdict wouldn't stand under Texas law.

Hopper, who pioneered a reservation system for the airline, died unexpectedly with assets of more than US$19 million but without a will, according to court records.

JPMorgan was hired to administer the estate and the bank should have divided the assets and released them to Jo Hopper and her stepchildren, according to the lawsuit. Instead, her lawyers said, in a statement: "The bank took years to release basic interests in art, home furnishings, jewelry, and notably, Mr Hopper's collection of 6,700 golf putters and 900 bottles of wine. Some of the interests in the assets were not released for more than five years."

The plaintiffs alleged that bank representatives failed to meet financial deadlines for assets under their control, stock options were allowed to expire, and Mrs Hopper's wishes to sell stock were ignored.

The step children, Stephen Hopper and Laura Wassmer, also claimed that the bank cut them out of decisions and kept them uninformed in order to curry favour with their stepmother.

Jo Hopper initially sued the bank, alleging breach of fiduciary duty. JPMorgan paid legal fees to defend this out of the estate account, depleting it by more than US$3 million, the plaintiffs' said in court filings.

In September, a probate court jury awarded punitive damage awards of US$2 billion each to Jo Hopper, the Hopper estate, Stephen Hopper and Laura Wassmer. Punitive damages are meant to punish a defendant and are separate from compensation for plaintiffs' actual losses.

JPMorgan denied any wrongdoing, saying it acted in good faith on the Hopper estate.

"The crux of the lawsuit is whether sparring survivors of a decedent may blame an independent administrator for seeking judicial guidance on a distribution issue about which the survivors disagree," the bank said in last Thursday's filing.

The US$8 billion award is the largest jury verdict of 2017 so far, according to data compiled by Bloomberg.