In re Duckett v. Duckett


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Docket Number: 2006-CA-01738-SCT
Linked Case(s): 2006-CA-01738-SCT
Supreme Court: Opinion Link
Opinion Date: 06-12-2008
Opinion Author: DIAZ, P.J.
Holding: REVERSED AND RENDERED IN PART; REVERSED AND REMANDED IN PART
Additional Case Information: Topic: Conversion of guardianship funds - Statute of limitations - Section 15-1-49 - Section 15-1-27 - Section 93-13-17 - Section 15-1-43 - Damages - Punitive damages - Attorney’s fees - Prejudgment interest - Section 75-17-7 - Stipulations - Plain error - M.R.A.P. 28(a)(3)
Judge(s) Concurring: SMITH, C.J., CARLSON, GRAVES, DICKINSON AND RANDOLPH, JJ.
Non Participating Judge(s): WALLER, P.J., AND LAMAR, J.
Dissenting Author : EASLEY, J., without separate written opinion.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - OTHER
Trial Court: Date of Trial Judgment: 08-17-2006
Appealed from: TISHOMINGO COUNTY CHANCERY COURT
Judge: Talmadge Littlejohn
Disposition: The Chancery Court of Tishomingo County granted summary judgment in favor of Albert Jermaine Duckett (Albert) and Walter Williams, Jr. (Junior) on their claims against BancorpSouth for allowing their father and former guardian, Walter Williams, Sr. (Walter), to convert the guardianship funds that had been deposited in a BancorpSouth savings account. After conducting a hearing to determine the damages owed by BancorpSouth, the chancery court awarded Albert and Junior $1,770,480.40 in actual damages, punitive damages, attorney’s fees and prejudgment interest.
Case Number: 12,551
  Party Name: Attorney Name:   Brief(s) Available:
Appellant: IN RE THE GUARDIANSHIP OF ALBERT JERMAINE DUCKETT AND WALTER WILLIAMS, JR.; WALTER WILLIAMS, SR., GUARDIAN: BANCORPSOUTH BANK f/k/a BANK OF MISSISSIPPI




 JAMES PATRICK CALDWELL, LES ALVIS



  
  • Appellant #1 Brief
  • Appellant #1 Reply Brief
    		•
    Appellee: ALBERT JERMAINE DUCKETT, WALTER WILLIAMS, JR., AND WALTER WILLIAMS, SR. JOHN R. WHITE, GREGORY D. KEENUM  
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    Topic: Conversion of guardianship funds - Statute of limitations - Section 15-1-49 - Section 15-1-27 - Section 93-13-17 - Section 15-1-43 - Damages - Punitive damages - Attorney’s fees - Prejudgment interest - Section 75-17-7 - Stipulations - Plain error - M.R.A.P. 28(a)(3)
    Summary of the Facts: Albert Duckett and Walter Williams, Jr. filed claims against BancorpSouth for allowing their father and former guardian, Walter Williams, Sr., to convert the guardianship funds that had been deposited in a BancorpSouth savings account. After conducting a hearing to determine the damages owed by BancorpSouth, the chancery court awarded Albert and Junior $1,770,480.40 in actual damages, punitive damages, attorney’s fees and prejudgment interest. BancorpSouth appeals.
    Summary of Opinion Analysis: Issue 1: Statute of limitations BancorpSouth argues that Albert’s claim is barred because it was not filed within the general, three-year statute of limitations, section 15-1-49. The chancery court held that the statute of limitations that applied to his claim against BancorpSouth was section 15-1-27, not section 15-1-49. Section 15-1-27 provides that all actions against a guardian and the sureties on his bond, or either of them, by the ward, shall be commenced within five years next after the ward shall have arrived at the age of twenty-one years, and not after. Section 93-13-17 makes a clear distinction between sureties and depositories; it treats them as two completely different entities that perform completely different functions. A surety issues the bond to the guardian and will be held liable on the bond if the guardian does not faithfully discharge all the duties required of him by law. Depositories, on the other hand, are banking corporations, building and loan associations or savings and loan associations, into which a guardian may deposit the assets of the ward’s estate. The plain meaning of the statute is not that a depository can be held liable for the deposited funds if it allows the guardian to misappropriate them. Accordingly, BancorpSouth is not (and should not have been treated as) a surety, and section 15-1-27 is therefore not the applicable statute of limitations. Albert argues, in the alternative, that section 15-1-43 is the applicable statute of limitations because his claim is based on BancorpSouth’s violation of the chancery court’s decree authorizing the settlement of the wrongful death claim and ordering that the guardianship funds not be disbursed without the approval of the court. Although a chancery court’s “decree” is the equivalent of a circuit court’s “judgment at law,” the decree issued by the chancery court authorizing Walter to settle the wrongful death claim was not a “decree” within the meaning of section 15-1-43. The chancery court’s decree did not give Albert any affirmative relief upon which he could execute or make him a judgment creditor. Therefore, section 15-1-43 is not the applicable statute of limitations. Albert’s claim against BancorpSouth accrued – and the limitations period began to run – when he turned twenty-one on August 23, 2000. The amended complaint joining Albert as a plaintiff was not filed until September 22, 2004, more than four years after he turned twenty-one. Thus, Albert’s claim is barred because it was not filed within the three-year limitations period. Issue 2: Damages BancorpSouth argues that the chancery court committed error by not crediting it for the guardianship funds that Walter spent on Albert and Junior. The uncontradicted evidence presented during the hearing on damages establishes that a total of $109,946.45 of Walter’s unauthorized disbursements benefitted Albert and Junior. Walter used $55,946.45 to purchase a car and a house for Albert and gave $7,000 directly to Albert to open a bank account. Walter also spent $47,000 to buy Junior a house. Since Albert’s claim is time-barred and the judgment rendered in his favor against BancorpSouth must be reversed, there is no need to consider whether the judgment, as it relates to him, should be reduced by the amount of unauthorized payments made for his benefit. As for the $47,000 used to purchase a house for Junior, BancorpSouth must be given credit on the judgment for this expenditure. Issue 3: Punitive damages BancorpSouth argues that the chancery court’s imposition of punitive damages was in error because the plaintiffs did not prove by clear and convincing evidence that it acted with gross negligence in allowing their father to withdraw all of the guardianship funds from the savings account without the authorization of the court, and punitive damages are not an appropriate remedy for the violation of a court order. Simple negligence is not of itself evidence sufficient to support punitive damages. The undisputed evidence presented at the hearing on damages establishes that BancorpSouth’s failure to successfully transfer the special instruction data relating to the guardianship savings account from the Iuka Guaranty computer system to its own computer system was the result of an honest mistake: the BancorpSouth conversion team either did not print out the special instruction data on this account or overlooked the sheet containing this data during the manual transfer of the data. Thus, BancorpSouth’s failure to transfer the special instruction data on the guardianship account at issue in this case was, at most, the result of simple negligence and cannot support an award of punitive damages. The chancery court also erred by finding that BancorpSouth’s post-conversion conduct warranted the imposition of punitive damages. The record does not contain substantial evidence that BancorpSouth acted with gross negligence after the conversion by allowing Walter to withdraw all of the guardianship funds from the savings account. The fact that BancorpSouth violated a court order is also not a ground upon which the award of punitive damages in this case can be justified. The appropriate remedy for the violation of a court order is a citation for contempt. Issue 4: Attorney’s fees If attorney's fees are not authorized by the contract or by statute, they are not to be awarded when an award of punitive damages is not proper. There is no contract between BancorpSouth and the plaintiffs which provides for the recovery of attorney’s fees; nor is there any statute upon which an award of attorney’s fees in this case could be based. Since the chancery court’s award of punitive damages was in error, its award of attorney’s fees was in error as well. Issue 5: Prejudgment interest Section 75-17-7 governs the awarding of prejudgment interest. Under Section 75-17-7, if the judgment of the lower court is not based on a contract or note, and the lower court decides to award prejudgment interest at a per annum rate set by it, it may only calculate that interest from a date determined by the court to be fair but in no event prior to the filing of the complaint. Therefore, the chancery court erred in calculating prejudgment interest from a date prior to the filing of the complaint. The evidence clearly establishes that BancorpSouth was not grossly negligent and did not engage in fraud or intentional misconduct. Therefore, BancorpSouth’s actions do not warrant an award of compounded prejudgment interest. Section 75-17-7 is silent on the specific issue of whether a trial court is authorized to calculate prejudgment interest as compound interest. The statute clearly grants trial courts the discretion to set the rate of prejudgment interest which suggests that the legislature also intended in enacting this statute to grant trial courts the discretion to calculate prejudgment interest on a simple or compound basis. Accordingly, the chancery court did not abuse its discretion by awarding prejudgment interest at the rate of eight percent per annum, compounded annually. Issue 6: Stipulations Pursuant to M.R.A.P. 28(a)(3), the Court may, at its option, notice a plain error not identified or distinctly specified. Plain-error review is appropriate when a party has failed to preserve an error for appellate review and a substantial right is affected. A monetary interest is a substantial right. The chancery court’s failure to abide by the parties’ stipulations of fact regarding the amount of money Albert and Junior would have received on their twenty-first birthdays from the guardianship account affects the amount of actual damages owed by BancorpSouth and therefore, plain-error review is warranted. By starting its calculation of actual damages with the amount of the original deposit, instead of the stipulated amounts Albert and Junior would have received upon turning twenty-one, the chancery court failed to abide by the parties’ stipulations of fact and therefore erred in awarding $207,833 in actual damages. The chancery court should have awarded Junior $74,038.66 in actual damages.


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