Summary
This District of Alaska order addresses plaintiffs' motion for review and vacation of prior summary judgment and reconsideration orders following the resignation of the original judge due to misconduct allegations. The court denies relief under Federal Rule of Civil Procedure 60(b)(6) due to the lack of a final judgment but exercises its inherent authority to reconsider interlocutory orders. After reviewing the record, the court finds manifest factual and legal errors in the prior rulings regarding Alaska’s trust certification statute and grants a de novo review of the summary judgment granted in favor of Merrill Lynch, while leaving the partial summary judgment for co-defendant Guadalupe Wright undisturbed.
Topics
Practice areas
Questions Presented
- Whether Rule 60(b)(6) authorized relief from the prior summary-judgment and reconsideration orders when no final judgment had been entered.
- Whether the court could reconsider the interlocutory orders under Rule 54(b) or its inherent authority.
- Whether the prior orders manifestly erred by treating actual knowledge of Snead's incapacity or undue influence as necessary to defeat Merrill Lynch's reliance on trustee certifications under Alaska Statute § 13.36.079(f).
- Whether the evidence created genuine disputes of material fact concerning Merrill Lynch's fiduciary duty, negligence, good faith and fair dealing, and punitive damages claims.
- Whether summary judgment remained appropriate on plaintiffs' claims for negligent hiring, training, and supervision; violation of Alaska's Unfair Trade Practices Act; vicarious liability; and fraud.
Holdings
- Rule 60(b)(6) does not apply because the prior partial-summary-judgment and reconsideration orders were not final judgments or appealable final orders.
- The court may reconsider, rescind, or modify its own interlocutory orders under Rule 54(b) and its inherent procedural authority when necessary to correct clear error or prevent manifest injustice.
- Alaska Statute § 13.36.079(f) does not immunize Merrill Lynch from liability merely because it relied on trustee certifications; the statute requires reasonable reliance, and evidence of incapacity, undue influence, suspicious circumstances, and unauthorized access created a triable issue concerning the reasonableness of that reliance.
- Summary judgment was denied on plaintiffs' claims for breach of fiduciary duty concerning the Revocable Trust, negligence concerning the Transamerica annuity, breach of the covenant of good faith and fair dealing, and punitive damages.
- Summary judgment remained appropriate for claims concerning the Irrevocable Trust, negligent hiring, training and supervision, Alaska's Unfair Trade Practices Act, vicarious liability, and fraud.
Key quotations
“In sum, the 206 Order and the 208 Order manifestly erred by requiring Plaintiffs to produce evidence that Merrill Lynch had actual knowledge that Mr. Snead either lacked the capacity or was unduly influenced by Ms. Wright to effectuate the Wire Transfer and Change of Beneficiary in order to survive summary judgment.” (Discussion § II)
“And it was manifest error to conclude that AS § 13.36.079(f) provided Merrill Lynch with “immunity” from suit by virtue of Mr. Snead’s Trustee Certifications.” (Discussion § II)
“As to Merrill Lynch, the orders at Docket 206 and Docket 208 are VACATED.” (Conclusion)
Factual background
Plaintiffs challenged a $358,000 wire transfer from the Revocable Trust's Merrill Lynch account to a joint account maintained by John Snead and Guadalupe Wright, as well as a change naming Wright the sole beneficiary of a Transamerica annuity. At the time of the wire-transfer request, Snead was hospitalized, receiving lidocaine, and described as extremely lightheaded and nearly syncopal. Evidence also indicated that Wright accessed Snead's financial information, communicated with Merrill Lynch using her own email address and phone, assisted with the transactions, and benefited from both the wire transfer and the beneficiary change. Merrill Lynch processed the transactions in reliance on trustee certifications signed by Snead.
Procedural history
The consolidated actions arose from disputed transactions involving two Merrill Lynch accounts held by the John H. Snead Revocable Trust: a $358,000 wire transfer and a change of beneficiary for a Transamerica annuity. Former Judge Joshua M. Kindred granted Merrill Lynch summary judgment in full and partially granted Wright summary judgment in a May 28, 2024 order, then denied plaintiffs' motion for reconsideration on July 3, 2024. After Judge Kindred resigned, plaintiffs sought review and vacation of those orders. The court held that Rule 60(b)(6) did not apply because the orders were interlocutory, but reviewed them under Rule 54(b) and the court's inherent authority, vacating the orders as to Merrill Lynch while leaving the rulings concerning Wright undisturbed.