Carol Nickel v. Bank of America

N.D. Cal94-2716 CAL

The Mills Law Firm initiated this Federal class action on behalf of 6500 trust beneficiaries involving overcharged trust accounts in 1994 and served as sole class counsel until late 1999 when two former employees joined the case. In addition to $43 million paid earlier to settle class claims, a $36.5 million partial settlement of punitive damages and other claims was achieved in 2001.

After a successful appeal before the 9th Circuit Court of Appeals in 2002, the Bank of America agreed to pay an additional $33 million in compensatory damages in a settlement approved in 2004. The $69.5 million in settlements on top of the $42 million already paid to resolve class claims brought the total class recovery to $111.5 million. This result is one of the highest, if not the highest recovery in proportion to the $24 million in principal loses (465 percent) ever achieved in a class action of this nature.

During its 10-year history this case generated a number of important legal precedents favorable to the victims of financial fraud, including a District Court ruling that trust beneficiaries have the right to pursue claims of punitive damages against a faithless trustee who wrongfully takes funds, even where the trustee has voluntarily repaid the funds, and a landmark Ninth Circuit Court of Appeals ruling that expands the remedies available to victims of financial fraud (Nickel v. Bank of America NT &SA, 290 Fed. 3rd 1134). Here, the court ruled that where a Bank trustee commingles trust funds with its own, the victim is entitled to a pro-rata share of all profits made by the Bank while the funds were commingled.