Marion v. Bryn Mawr Trust Co.

After the Securities and Exchange Commission commenced an action against Robert Bentley for an alleged Ponzi scheme, the Federal District Court for the Eastern District of PA appointed Marion receiver. In Marion v. Bryn Mawr Trust Co., the receiver alleged breach of the Uniform Fiduciaries Act (“UFA”), 7 P.S. § 6351, et. seq., aiding and abetting fraud, and negligence. The case concerned Bentley’s use of his Bryn Mawr Trust bank accounts to deposit and transfer investor funds in furtherance of his fraudulent scheme. The trial court granted Bryn Mawr’s motion for summary judgment on aiding and abetting fraud. A jury returned a defense verdict on the UFA and negligence claims. The Superior Court reversed and ordered a new trial. The Court held summary judgment was not appropriate because Pennsylvania recognizes a cause of action for aiding and abetting fraud, and here the receiver alleged BMT aided and abetted Bentley’s fraud. Summary judgment was also not appropriate because the record showed a genuine issue of material fact: whether BMT exercised intentional ignorance toward Bentley’s unlawful activity. Lastly, the trial court erred when it admitted evidence about the receiver’s attorneys fees from this case and several others. That evidence not relevant to the merits of any of the causes of action that went to the jury. Moreover, BMT invited the jury to consider the evidence to prejudice the jury against the receiver. Therefore, the trial court’s error was not harmless, and the court’s denial of the receiver’s motion for a new trial based upon this error was an abuse of discretion.

Marion