Union Planters Bank v. Rogers
| Docket Number: | 2003-CA-02221-SCT Linked Case(s): 2003-CA-02221-SCT |
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| Oral Argument: | 03-15-2005 | |
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| Supreme Court: | Opinion Link Opinion Date: 04-28-2005 Opinion Author: Waller, P.J. Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Contract - Arbitration - Waiver of right to file lawsuit - Delay in detecting forgeries - Section 75-4-406 - Duty of bank - Reasonable period of time - Directed verdict - Ordinary care Judge(s) Concurring: Smith, C.J., Cobb, P.J., Carlson, Dickinson and Randolph, JJ. Non Participating Judge(s): Diaz, J. Dissenting Author : Easley, J. Concur in Part, Dissent in Part 1: Graves, J., Concurs in Part and Dissents in Part Without Separate Written Opinion Procedural History: Jury Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 08-04-2003 Appealed from: WASHINGTON COUNTY CIRCUIT COURT Judge: W. Ashley Hines Disposition: After a trial, the jury awarded Helen $29,595 in damages, and the circuit court entered judgment accordingly. Case Number: CI-2002-101 |
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| Party Name: | Attorney Name: | |||
| Appellant: | Union Planters Bank, National Association |
CHARLES J. SWAYZE, JR. |
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| Appellee: | Neal Doniphan Rogers, Jr., Executor of the Estate of Helen Rogers, Deceased, a/k/a Helen K. Rogers | NATHAN P. ADAMS, JR. |
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| Topic: | Contract - Arbitration - Waiver of right to file lawsuit - Delay in detecting forgeries - Section 75-4-406 - Duty of bank - Reasonable period of time - Directed verdict - Ordinary care |
| Summary of the Facts: | Neal and Helen Rogers maintained four checking accounts with the Union Planters Bank. Each of these four accounts had originally been opened at banks which later merged with Union Planters. After Neal became bedridden, Helen hired Jackie Reese to help her take care of Neal and to do chores and errands. Reese began writing checks on the four accounts and forged Helen’s name on the signature line. Some of the checks were made out to “cash,” some to “Helen K. Rogers,” and some to “Jackie Reese.” After Neal died, the Rogerses’ son, Neal, Jr., began helping Helen with financial matters. Together they discovered that many bank statements were missing and that there was not as much money in the accounts as they had thought. They contacted Union Planters and asked for copies of the missing bank statements. Helen was advised by Union Planters to contact the police due to forgeries made on her accounts. Helen filed suit against Union Planters, alleging conversion (unlawful payment of forged checks) and negligence. The jury awarded Helen $29,595 in damages. Union Planters appeals. |
| Summary of Opinion Analysis: | Issue 1: Arbitration After its acquisition of other banks, Union Planters sent a mailing to its customers which included an arbitration clause. The judge ruled that the arbitration clause was not enforceable because, even though Rogers had signed signature cards with the individual banks prior to merger, she had never signed a signature card for Union Planters containing an arbitration clause. Union Planters argues that whether Rogers signed a Union Planters signature card is immaterial because many of the mail-outs had the following language: “Your continued use of the Account evidences your agreement to any amendment.” Waiving the right to file a lawsuit in a court of competent jurisdiction presupposes full knowledge of a right existing, and an intentional surrender or relinquishment of that right. Here, there is no evidence that either of the Rogerses voluntarily and knowingly waived their right to access to the courts. The Rogerses signed signature cards for the four banks prior to their merger with Union Planters, and these signature cards did not contain arbitration provisions. In addition, the general provisions of the mail-outs and the specific provisions of the arbitration clause are in conflict (i.e., the general provisions require “use” of the account only, whereas the specific provisions of the arbitration clause require “use” of the account and the execution of a signature card), causing ambiguity. Ambiguities in a contract are to be construed against the party who drafted the contract. Issue 2: Delay in detecting forgeries Section 75-4-406(a) & (c) provide that a bank customer has a duty to discover and report “unauthorized signatures”; i.e., forgeries. The customer’s duty to exercise this care is triggered when the bank satisfies its burden to provide sufficient information to the customer. Section 75-4-406(a) clearly states a bank discharges its duty in providing the necessary information to a customer when it sends to a customer a statement of account showing payment of items. If the bank provides sufficient information, the customer bears the loss when he fails to detect and notify the bank about unauthorized transactions. The evidence in this case shows that all bank statements and cancelled checks were sent, via United States Mail, postage prepaid, to all customers at their “designated address” each month. Rogers introduced no evidence to the contrary, and the bank therefore fulfilled its duty of making the statements available to Rogers. Rogers failed to act reasonably when she failed to take any action to replace the missing statements. Under section 75-4-406(d), a customer must report a series of forgeries within a reasonable period of time, not exceeding 30 days. The 30-day period is an outside limit only. Thirty days is presumed to be reasonable and the bank bears the burden of proving otherwise. Rogers testified that she and her son began looking for the statements in late May or early June of 2001, after her husband had died and that they notified Union Planters in June of 2001 to replace the statements. At this time, no mention of possible forgery was made. Neal, Jr., testified that neither he nor his mother knew that Reese had been forging checks until September of 2001. Rogers is therefore precluded from making claims against Union Planters. Issue 3: Directed verdict Section 75-4-406(e) provides that the preclusion to bring claims against a bank may not apply if a customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to the loss. Under the statute, the only way Rogers could escape preclusion of her claims was to prove that Union Planters failed to exercise ordinary care in the payment of the forged checks. Rogers presented absolutely no evidence concerning Union Planters’ alleged failure to exercise ordinary care, much less present expert testimony on what ordinary care in the banking business would be. Therefore, Union Planters’ motions for directed verdict and/or JNOV should have been granted. |
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