The Eighth Circuit Court of Appeals Orders Retrial
On Thursday, August 17, 2017, the U.S. Court of Appeals for the Eighth Circuit reversed in part the largest plaintiffs’ win in Missouri in 2015, and remanded the case to the district court for further proceedings.
The case, Jo Ann Howard and Associates, et al. v. National City Bank, et al., was originally tried to a jury as a tort case, and resulted in a verdict of $491 million. The plaintiffs sued PNC, the successor-in-interest to Allegiant Bank, for breach of fiduciary duty and negligence. At trial, the plaintiffs argued that Allegiant, the trustee of certain Missouri trusts, should have stopped a nationwide fraud scheme committed by National Prearranged Services, Inc., a seller of prearranged funeral services.
The Eighth Circuit, agreeing with PNC, held that the plaintiffs’ claims arose under trust law rather than tort law, and the plaintiffs were “thus entitled only to the damages afforded under trust law,” namely for damages to the Missouri trusts during Allegiant’s trusteeship. The appellate court further agreed with PNC that the plaintiffs’ trust-law claim sounded in equity and should have been tried to the court, rather than to a jury. The court also found that the district court did not err in striking certain defenses or in dismissing the plaintiffs’ claims for aiding and abetting. The Eighth Circuit remanded the case, noting that the district court could proceed based on the existing trial record and additional evidence at its discretion.