St. Clair County Circuit Judge Lloyd Cueto will not force a deceased millionaire's offspring to arbitrate their claims against an investment firm that allegedly let a second wife to withdraw nearly $2 million from a trust account.
Cueto on March 5 denied a combined motion by defendants Merrill Lynch and James Maher to either force Bradley Schmitz and the other plaintiffs to arbitration or to dismiss their case.
Bradley Schmitz and six of his relatives are suing Merrill Lynch and Maher for breaching their fiduciary duties to a trust set up by Marvin Huth – now deceased – and for negligence.
The original complaint also added breach of contract but those claims were dropped in the plaintiffs' first amended complaint.
In their complaint, the plaintiffs allege that Marvin Huth and his wife, Shirley Huth, set up a trust account with over $2 million in the late 1990s.
Shirley Huth died in 1999.
The trust was allegedly set up to have Marvin and Shirley Huth as trustees. On the death of one or the other, a new trustee would have to be appointed.
Marvin or Shirley Huth would also be required to notify the other trustees of any amendments to the trust in writing.
After Shirley Huth's death, Marvin Huth married Patricia Bartsokas-Huth.
Between February and August 2003, amendments were allegedly made to the trust. The other trustees allege that they were not made aware of the amendments in writing and that they could not take effect because they referenced the trust by a different name.
Marvin Huth then died in April 2004.
The plaintiffs allege that Patricia Huth then transferred over $1.8 million out of the trust. The plaintiffs became aware of the transfers in February 2009.
They allege that Merrill Lynch and Maher – who oversaw the trust at the company – deliberately turned over the trust to Patricia Huth without authorization because they did not want the plaintiffs to move the trust to another company.
The suit seeks damages in excess of $1.85 million and costs.
The defendants cited Client Relationship Agreements (CRA) from 2001 and 2004 that contain mandatory arbitration clauses as to why the case should go through the process.
The defendants also alleged that the plaintiffs had not sufficiently pled their case.
The plaintiffs countered in their opposition to the move that the CRA documents are not valid because they were not signed by the plaintiffs. They also argue that the 2004 CRA is not valid because Patricia Huth was not a trustee of the Marvin Huth Trust and could not enter into legally binding agreements on its behalf.
They claim that Patricia Huth "is an imposter," according to that motion.
Cueto took over the case after the defendants asked for a change of judge from Circuit Judge Robert LeChien.
Joseph Dulle and others represent the plaintiffs.
Merrill Lynch is represented by Robert Will and others.
Maher is represented by Grey Chatham.
The case is St. Clair County case number 09-L-167.