Tuesday, November 12, 2013

Wood v. U.S. Bank, N.A. case brief

Wood v. U.S. Bank, N.A. case brief summary
828 N.E.2d 1072 (2005)

Appellant trust beneficiary sought review of a judgment from the Hamilton County Court of Common Pleas (Ohio), which denied her motions for a directed verdict, judgment notwithstanding the verdict (JNOV), and a new trial, and rejected instructions based on the Uniform Prudent Investor Act, Ohio Rev. Code Ann. § 1339.52 et seq., in an action against appellee bank, acting as a trustee.


The trust held stock of the corporate trustee. The trust authorized the trustee to retain its own stock, but it was silent as to the trustee's obligation to diversify. Although the trust beneficiaries did not object to a plan to sell off some stock in order to pay the estate expenses, they later requested that the trustee diversify the holdings, which it did not do. Thereafter, the trustee's corporate stock price plunged, and the distributions to the beneficiaries were made from the decreased assets. The beneficiary filed suit, alleging that the trustee had a mandatory duty under Ohio Rev. Code Ann. § 1339.54 to diversify. The trial court adopted the trustee's abuse of discretion and estoppel instructions, and judgment was entered for the trustee.


  • On appeal, the court held that the abuse of discretion standard was improperly provided to the jury, as an instruction pursuant to § 1339.54(B) was warranted. 
  • The power to retain the trustee's own stock was for the purpose of circumventing the rule of undivided loyalty only, and diversification was required absence special circumstances. 
  • There was at least enough evidence of special circumstances to avoid a directed verdict.

The court reversed the judgment of the trial court and remanded the matter for further proceedings.

Suggested Study Aids For Wills, Trusts & Estate Law

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