Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Zook v. JPMorgan Chase Bank National Association

Court of Appeals of Ohio, Tenth District

March 9, 2017

Jeffrey Zook et al., Plaintiffs-Appellees,
v.
JPMorgan Chase Bank National Association, Defendant-Appellee. OhioHealth Foundation, Inc. et al., [Involuntary] Plaintiffs-Appellants, Jeffrey Zook et al., Plaintiffs-Appellants, OhioHealth Foundation, Inc. et al., [Involuntary] Plaintiffs-Appellees,
v.
JPMorgan Chase Bank National Association, Defendant-Appellee.

         APPEALS from the Franklin County Court of Common Pleas C.P.C. No. 13CV-6033

          On brief: Robert Gray Palmer Co., LPA, and Robert G. Palmer; Paul A. Bodycombe, for Jeffrey Zook, Karla Hindman, Kimberly Heath-Goodman, Cynthia Wolfe, Sean Zook, and Jason Zook. Argued: Robert G. Palmer.

          On brief: Dreyfuss Williams & Associates Co., L.PA., John F. Garswood, Nicholas J. Kopcho, and Michael T. Williams, for OhioHealth Foundation, Inc. and Columbus Museum of Art.

          On brief: Carpenter Lipps & Leland LLP, Jeffrey A. Lipps, and Angela Paul Whitfield, for JPMorgan Chase Bank, NA. Argued: Jeffrey A. Lipps.

          DECISION

          BROWN, J.

         {¶ 1} This is an action by beneficiaries of a trust bringing claims against the institutional trustee for negligence and breach of fiduciary duty. Plaintiffs-appellants Jeffrey Zook, Karla Hindman, Kimberly Heath-Goodman, Cynthia Wolfe, Sean Zook, and Jason Zook (the "Zook plaintiffs") appeal from a judgment of the Franklin County Court of Common Pleas granting summary judgment in favor of defendant-appellee, JPMorgan Chase Bank, NA. ("Chase"). Involuntary plaintiffs-appellants, OhioHealth Foundation, Inc. and Columbus Museum of Art ("involuntary plaintiffs") together filed a separate notice of appeal from the same judgment. This court has consolidated the two appeals for argument and determination.

         {¶ 2} On October 10, 1990, John D. Zook ("John Zook Sr.") executed a last will and testament and created the John D. Zook Trust. John Zook Sr. named his wife, Sharon Zook, as income beneficiary of the trust, and selected Chase's corporate predecessor, Bank One, as successor trustee of the trust upon his death. The remainder beneficiaries of the trust at inception were the five adult children of John Zook Sr. by a previous marriage, John Zook Jr., Jeffrey, Karla, Kimberly, and Cynthia, as well as predecessor entities for the two charities that have become involuntary plaintiffs in the case. Under Article VII of the trust instrument, the trust would terminate upon the death of Sharon and distribute all remaining assets to the remainder beneficiaries.

         {¶ 3} On November 26, 1995, John Zook Sr. died and Chase became successor trustee of the trust. At that time, the greater part of trust assets were comprised of a controlling interest in Zook Advertising, Inc. ("Zook Advertising") a business founded and operated by John Zook Sr.

         {¶ 4} Article X of the trust instrument states in part:

Being aware of the fact that the duties the Trustee has been requested to assume with respect to the business interests may considerably enlarge and increase the Trustee's usual responsibilities, duties, and work as Trustee, it is agreed that the Trustee shall be entitled to such additional reasonable compensation as is commensurate with the time, effort, and responsibility involved in the Trustee's performance of services rendered to the business may be paid by the Trustee from the business or from other assets, or from both, as the Trustee in the Trustee's discretion may determine to be advisable.
Upon the death of the Grantor, the Grantor's spouse, SHARON G. ZOOK, shall have the right to either operate and manage any business and/or real estate (whether corporate, partnership, or proprietary in form) in which the Grantor had an interest at the time of Grantor's death which becomes a part of this trust, or designate any third party acceptable to the Trustee to operate and manage any such business, but subject to a management contract that either SHARON G. ZOOK or her designee must enter into with the Trustee.

         {¶ 5} After John Zook Sr. died, Sharon immediately took over operation and control of Zook Advertising although she and Chase never entered into the management agreement required by Article X. When John Zook Sr.'s majority ownership interest, comprising 148 shares out of 150 issued and transferred to the trust in January 1997, Zook Advertising had an appraised value of $1, 036, 000.00 on the trust accounts and probate inventory. The balance of other trust assets at that time amounted to $258, 904.69.

         {¶ 6} The business thereafter went into a rapid decline under Sharon's management. The shares of Zook Advertising remained an asset of the trust until 2003, at which time Chase considered that the business was not only worthless but presented a significant risk of liability that could compromise the other assets still held by the trust. Chase then sold the trust's 148 shares to Sharon for the nominal figure of $5 per share, or $740.00 total. Shortly thereafter, Zook Advertising ceased business entirely.

         {¶ 7} In 2010, Sharon died. Her death triggered termination and distribution of the trust under Article VII of the trust instrument. Due to the intervening death of John Zook Jr. in 2003, two grandchildren of John Zook Sr., Jason and Sean Zook, had become remainder beneficiaries by this time under Article VII(1)(a), alongside the four surviving children and the charities.

         {¶ 8} David Curry, a Chase employee, sent a letter to each remainder beneficiary, advising that Chase would provide a "Receipt, Release and Refunding Agreement" for signature by each beneficiary so that Chase could close the trust and distribute the corpus. In his letter to the beneficiaries, Curry summed up the terms of the release agreement: "These agreements basically state that you acknowledge receipt of the assets, agree to release the Bank for the administration of the trust and also to refund any funds distributed out should additional taxes, bills or expenses be owed after we have released the funds."

         {¶ 9} Each of the Zook plaintiffs and involuntary plaintiffs eventually signed such a release, which states in pertinent part as follows:

NOW, THEREFORE, in order to induce the Trustee to terminate the Trusts without seeking formal court approval of its accounting, and to distribute all of the Trusts' assets to Jeffrey A. Zook, Karla L. Zook, Kimberly A. Heath, Cynthia A. Wolfe, Jason Zook, Sean Zook, OhioHealth Foundation, and Columbus Museum of Art, and in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned, Jeffrey A. Zook, Karla L. Zook, Kimberly A. Heath, Cynthia A. Wolfe, Jason Zook, Sean Zook, OhioHealth Foundation, and Columbus Museum of Art remainder beneficiaries of the Trust (hereafter called the "Beneficiaries"), for themselves and their descendants, spouse, heirs, successors, assigns and legal representatives, agree and covenant as follows:
That the accounting of receipts, disbursements and transactions of JPMorgan Chase Bank, National Association as Trustee from the inception of the Trusts to the date hereof are correct and approved, and all of the acts, doings, administration, and omissions of JPMorgan Chase Bank, National Association with respect to the Trusts are hereby ratified, affirmed and approved;
That JPMorgan Chase Bank, National Association, as soon as is practicable, shall deliver the assets of the Trusts, including principal and any accrued or unpaid income to the Beneficiaries in the percentages specified as follows: Jeffrey A. Zook 8%, Karla L. Zook 8%, Kimberly A. Heath 8%, Cynthia A. Wolfe 8%; Jason Zook 4%, Sean Zook 4%, OhioHealth Foundation 50%, and Columbus Museum of Art 10%;
That effective immediately, JPMorgan Chase Bank, National Association is released and discharged for having acted as Trustee of the Trusts and the Trusts are considered terminated;
That Jeffrey A. Zook, Karla L. Zook, Kimberly A. Heath, Cynthia A. Wolfe, Jason Zook, Sean Zook, OhioHealth Foundation, and Columbus Museum of Art, remainder beneficiaries of the Trust, hereby agree to release, indemnify, defend and hold harmless JPMorgan Chase Bank, National Association, both as a Trustee of the Trusts and in its individual capacity, its affiliates and their respective officers, directors, employees, stockholders, successors, predecessors, assigns and representatives, against any and all action, inaction, grounds for complaint, and any causes of action, in law or in equity, suits, debts, liens, contracts, promises, taxes, interest, penalties, liabilities, losses, claims, expenses (including legal and other professional fees), costs or other demands which it may incur or which may be charged against it by reason of its acting as Trustee of the Trusts * * *.

(Emphasis sic.)

         {¶ 10} Chase began distributing the remaining trust assets to beneficiaries in June 2011. On May 31, 2013, the Zook plaintiffs filed a complaint against Chase stating claims for breach of fiduciary duty and negligence, and adding a demand for an accounting and audit. These claims rested on the loss to trust corpus that resulted from the decline in value of Zook Advertising shares during Chase's oversight of the trust. The Columbus Museum of Art and the OhioHealth Foundation, Inc. were named as involuntary plaintiffs based on their status as remainder beneficiaries.

         {¶ 11} On August 30, 2013, Chase filed a motion for judgment on the pleadings. On September 4, 2013, Chase filed an answer, counterclaim, and third-party complaint. The counterclaim alleged claims for breach and declaratory judgment against the Zook plaintiffs. The third-party complaint sought indemnification from the estate of Sharon Zook. On September 23, 2013, the involuntary plaintiffs filed an answer to the Zook plaintiffs' ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.