Opinion ID: 2041034
Heading Depth: 1
Heading Rank: 5

Heading: Removal of Bank One as Trustee

Text: The Beneficiaries also sought removal of Bank One as Trustee, at least in part on account of the alleged misrepresentation of the mandate from the National Bank Examiners Audit staff to diversify the Trust holdings. Neither the order of the trial court nor the majority opinion of the Court of Appeals specifically address this issue. The Beneficiaries urge that, if proven, the alleged misrepresentation gives rise to the inference that Bank One breached its fiduciary duty to them. In his dissenting opinion below, Judge Sullivan correctly noted that the issue of Bank One's removal as Trustee had not been resolved when he wrote, [a] trier of fact may have been permitted to determine from the evidence that in making misrepresentations to the Beneficiaries as to federal examiners' orders to diversify, the Bank had so jeopardized its trust relationship as to require removal. 570 N.E.2d at 69. We agree. As Chief Justice Cardozo wrote years ago: Many forms of conduct permissible in a workaday world for those acting at arm's length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the `disintegrating erosion' of particular exceptions... . Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. Meinhard v. Salmon (1929), 249 N.Y. 458, 464, 164 N.E. 545, 546; see also Massey v. St. Joseph Bank and Trust Co. (1980), Ind. App., 411 N.E.2d 751, 754. Bank One was not entitled to summary judgment on this claim.