A 95-year-old Florida woman who won an arbitration fight against her banker grandsons is now battling them in court—seeking to collect the award, and also to preserve her ability to speak freely about her experience.
Beverley Schottenstein prevailed earlier this year in a financial industry arbitration after accusing JPMorgan Chase & Co., and two of her grandsons who handled her account there, of improper trading in her $80 million portfolio, in a case that highlighted the complications and conflicts that can arise when bankers manage money for family members.
The panel found JPMorgan’s securities unit and the two advisers liable for abusing their fiduciary duty and making fraudulent misrepresentations. It also found the bank and one of the grandsons, Evan Schottenstein, liable for elder abuse, ordering about $19 million in damages.
The day the February ruling became public, Beverley Schottenstein filed a lawsuit in federal court in Miami seeking to collect. JPMorgan paid its $9 million portion. The grandsons, Evan and Avi Schottenstein, sought to have the arbitration ruling against them vacated. Within weeks, Beverley and the grandsons began seeking a resolution, and by mid-March, the parties notified the court that they had reached an oral agreement on an amount, and that a written settlement was likely forthcoming in a week.
But the deal was derailed. A lawyer for the grandsons sent Beverley’s lawyers proposed settlement terms, which included no admissions of wrongdoing and a confidentiality order that bound Beverley and anyone associated with her from speaking about the resolution and facts behind the arbitration, according to court records. The proposed settlement didn’t bar the grandsons from speaking about the case. Beverley never agreed to those provisions, her lawyer said in court filings. No papers were signed and no money ever exchanged hands.
“I said forget it. I would never sign anything like that,” Beverley said in an interview. “The heck with them, let the boys go to work, or go to jail. One or the other, I don’t care anymore.”
A lawyer for Evan and Avi didn’t respond to messages seeking comment. A JPMorgan spokeswoman declined to comment.
A few months later, in a June 29 filing, Evan and Avi asked the judge to enforce the deal—the $4 million payment they said the sides had agreed upon, as well as the gag order. They also alleged that Beverley was already in breach of the confidentiality provision because one of her granddaughters had blogged about the $4 million offer. They cited Florida law that allows for settlements to be considered lawful even without the signatures of the parties.
“The issue comes up enough that most attorneys know how to avoid it or to use it to their advantage,” said Clay Roesch, a business litigator in Orlando who isn’t involved in the Schottenstein case.
Roesch said the judge may consider the email communications between the lawyers negotiating the resolution to determine whether there were agreements on key elements of the deal. Certain provisions, such as confidentiality, could have been agreed upon without Beverley’s specific consent if her lawyer had the authority to negotiate terms on her behalf, said Roesch, a partner at Shuffield, Lowman & Wilson. Beverley’s lawyer told the court he didn’t make such an agreement.