Motion for Summary Judgment
Then in the spring of 2003, a court order ended Capital's ability to conduct business and appointed the Security Investor Protection Program as Trustee. During the ensuing bankruptcy proceedings, it was discovered that a number of Davis' investments were nonexistent, and it was at this point the plaintiffs discovered "the full extent of the losses to the value of their pension plans." According to the court’s summary Tullis alleges as of February 28, 2003, UMB Bank represented the value of his retirement assets to be $724,561.29, while the actual value was just $142,269.41. Moreover, Mack contends that on July 1, 2001, the defendant represented the value of his retirement assets to be $1,613,407.87, but when Mack attempted to withdraw those monies he discovered that they were only worth $420,793.57 - a difference of $1,192,614.30.
Suits Filed
The plaintiffs initially filed suit against Davis, Capital, UMB Bank, and "others" in the Lucas County Court of Common Pleas, cases that the court notes were stayed pending the outcome of the bankruptcy proceedings. The plaintiffs then requested the Toledo Pension Plan, which administered the 401(k) program, bring suit against the defendant for the bank’s alleged breach of fiduciary duties as an ERISA trustee. However, the plan declined to do so, according to the court, citing a Master Trust Agreement (“MTA”) that includes an indemnification clause holding the bank harmless from claims. Consequently, the plaintiffs filed this action in the Northern District of Ohio on January 24, 2006.
In considering the motion for summary judgment, the court noted that the defendant UMB Bank argued that no liability exists as a fiduciary for losses resulting from plaintiffs’ exercise of control over their own assets. Additionally, the defendant asserted that, even if it were liable for such activities, the applicable statute of limitations limits recovery to losses incurred within the last six years. Plaintiffs, on the other hand, claimed that those affirmative defenses were procedurally barred, and that even if they were permitted, UMB retained responsibility as a “directed trustee.”