Matter of Green Charitable Trust

Leslie and Edith Green established a charitable trust in favor of St. Peter’s Home for Boys, the Cathedral Church of St. Paul, and the Cathedral of the Episcopal Church, Diocese of Michigan (the beneficiaries) (plaintiffs). The Greens named themselves, as well as Comerica Bank and Miles Jaffe (defendants), as trustees. The trust was funded by a partial interest in the Greens’ farm. In 1973, Mr. Green died, and his will created a marital trust for Mrs. Green with his interest in the farm. Comerica was the sole trustee of the marital trust. At this time, Leo Majzels was hired to appraise the farm. In 1983, Mrs. Green died and left the residue of her estate, including her interest in the farm, to the charitable trust. Comerica served as executor of Mrs. Green’s estate. At this point, the ownership of the farm was split between the charitable trust, the marital trust, and Mrs. Green’s estate. Comerica hired Majzels as a consultant to advise on an appropriate asking price for the farm. Majzels told Comerica and Jaffe that a reasonable sale price for the farm’s homestead would be between $3 and $3.5 million. Jaffe testified that Jaffe and Comerica did not want a formal appraisal early in the sale process because it would cap any potential asking price. Comerica sold the homestead portion of the property to Maurice Cohen for $3.25 million. Jaffe, an attorney, represented Cohen in the sale and had represented Cohen on other matters previously. Jaffe disclosed to the beneficiaries his representation of Cohen on the sale but did not disclose his history of representing Cohen in other matters. Acknowledging a potential conflict, Jaffe had stated that he would not serve as trustee with respect to any offer by Cohen, but Jaffe did not formally resign as trustee of the Greens’ charitable trust. The beneficiaries sued Comerica and Jaffe, alleging that they violated their fiduciary duties as trustees. The probate court found in the beneficiaries’ favor. Comerica and Jaffe appealed.