Daniel R. Orvets v. National City Bank Northeast, et al.
Summit County Court of Common Pleas
Palmer proves bank trustee breached its fiduciary duty to trust beneficiaries who were to receive half of real estate holdings.
Mayo and Orvets was a real estate company and developer of commercial properties in Mahoning County, Ohio. When Orvets died suddenly leaving three sons, National City Bank became the trustee of the Orvets trust, which then controlled his various properties and businesses. His surviving partner, Mayo, in fact assumed control of the businesses contrary to the duties of the trustee. Orvets’ sons claimed that the trustee had violated its fiduciary duties by permitting Mayo to self-deal properties, to take inappropriate commissions on the sale of trust properties, and for other items over a lengthy period of time in the 1980s and 1990s. Orvets claimed that the trustee knowingly agreed to forego Leonard Orvets’ estate plan under which the beneficiaries would reap the profits of the residual and commercial development plan that Leonard had conceived. The trustee consciously allowed Mayo to change the agreement to Mayo’s benefit, and failed to monitor the trust beneficiaries’ interests as Mayo proceeded to cherry pick the most valuable properties for himself. Despite warning from a member of its trust department, the trustee lost the beneficiaries millions of dollars. This case was settled through mediation for a confidential amount subsequent to a lengthy litigation process involving an appeal.