Before Pittman, P.j., Banks And Waller, JJ.
The opinion of the court was delivered by: Banks, Justice
DATE OF JUDGMENT: 01/30/96
TRIAL JUDGE: HON. HYDE RUST JENKINS, II
COURT FROM WHICH APPEALED: ADAMS COUNTY CHANCERY COURT
NATURE OF THE CASE: CIVIL - TORTS (OTHER THAN PERSONAL INJURY AND PROPERTY DAMAGE)
DISPOSITION REVERSED AND REMANDED - 7/2/98
MOTION FOR REHEARING FILED:
¶1. This matter involves the propriety of a bank setting off loans to the deceased against funds held in joint certificates of deposit ("CDs"). Summary judgment was entered in favor of the bank. We find that none of the legal bases on which the bank depends gave it the right to set off the subject CDs against the disputed notes, and that the plaintiff was entitled as a matter of law to the remaining value of the CDs after they were set off against the two notes for which they had been specifically pledged. The plaintiff was likewise entitled to summary judgment on her conversion claim. The issue of accord and satisfaction is remanded for further proceedings, as the defendant bank did not show proof sufficient for summary judgment that there was clear and convincing evidence that there was an accord and satisfaction in this case.
¶2. Jerry Wallace had been a business customer of Appellee United Mississippi Bank (UMB) for a number of years prior to his death on March 20, 1989. During this time UMB extended lines of credit to Jerry Wallace, and also to his businesses, Wallace Auto Sales and Wallace Mobile Homes. These loans were evidenced by various notes signed by Mr. Wallace, and each was executed on a form which contained a provision allowing the bank to set off "any amount I owe you under this note against any right I have to receive money from you."
¶3. At the time of his death, Jerry Wallace and his wife, Texie Rae Wallace, were listed as owners on two CDs purchased from UMB. The CDs were originally issued in joint names, with full rights of survivorship. These non-negotiable CDs were numbered 16523 and 16524 and had a combined value, excluding interest, of $69,229.88. Clarence Young, Executive Vice President of UMB from 1986 until 1991, stated in his affidavit that the CDs themselves contained a specific clause which provided that "[e]ach of you who has the right to withdraw from this account agrees that we may set-off any debt you owe us now or later against the amount of money you could withdraw from this account." Young stated that the CDs also contained a provision regarding pledges of the certificates, specifying that such pledges must be satisfied before the rights of any joint account survivor become effective. This provision was apparently signed only by the decedent, Jerry Wallace.
¶4. On February 21, 1989, Jerry Wallace had pledged the CDs for two loans extended to him by UMB on that day, evidenced by loan numbers 6816482 and 6843940. These two loans totaled $30,250.00. The CDs were not specifically pledged for any other loans which Jerry Wallace took from UMB. On the same day that he took out loan numbers 6816482 and 6843940, Mr. Wallace executed assignments of the two certificates to UMB. Each of these assignments transferred "all right, title and interest of the undersigned" in each of the accounts "for the purpose of securing payment of each and every debt, liability or obligation of every type or description which any of the undersigned may now or at any time hereafter owe to the Depository Institution, whether such debt, liability or obligation now exists or is hereafter created or incurred." Each of the assignments was signed individually by Jerry Wallace.
¶5. Pursuant to another provision in the notes, all the loans to Jerry Wallace and his various businesses became in default on the date of his death. At this time, his debt with UMB totaled $264,309.75. The chancery court, however, had specifically authorized the two co-administratrices of Mr. Wallace's estate to continue the operation of the decedent's businesses. *fn1 Thus, UMB continued to re-work the loans in the months after Mr. Wallace's death in an effort to reduce the indebtedness of his estate. On June 22, 1989, UMB probated its claim for $102,609.30, which was allowed and registered by the chancery court.
¶6. In August of 1989, when the CDs matured, Texie Rae Wallace went to the bank and requested that she be paid the face amount, or be allowed to "roll over" the CDs as her husband had done in the past. Alternatively, she requested that the bank set off against the CDs only for the two loans for which they had specifically been pledged, and pay her the balance. The bank refused all of these requests.
¶7. On June 13, 1990, the Executive Vice President of UMB, Clarence Young, wrote to the co-administratrices advising them that the bank had been in a "waiting position" since the probate of its claim, and that since the indebtedness occupied a "seriously past-due status" the bank was going to "exercise its legal prerogatives under the terms of the instruments." As part of its planned action, the bank indicated that "[n]otes of Jerry Wallace/Texie Rae Wallace and Wallace Mobile Homes, principal plus accrued interest, will be set off against CD # 16523 and CD # 16524," and the residue paid into the chancery court for disposition.
¶8. W. Stewart Robison, counsel for Texie Rae Wallace, wrote to UMB on June 14, 1990, and emphasized that the CDs in question were jointly owned by Jerry Wallace and Texie Rae Wallace, and "that under Mississippi law the certificates became the sole property of Texie Rae Wallace, upon the death of Mr. Wallace, subject only to outstanding security interests." Mr. Robison also insisted that "[i]f the Bank persists in its announced plan of set off, any residue of certificates of deposit numbered 16523 and 16524 should be immediately paid to Texie Rae Wallace" rather than into the chancery court. Walter Brown, counsel for Debra Wallace-Blackwell, agreed that the residue could be paid directly to Texie Rae Wallace, although Mr. Robison was to hold the check pending a meeting on July 11, 1990, at which the parties could "hopefully iron out all of the remaining questions regarding this estate." Mr. Robison emphasized that whether or not all matters were settled to the mutual satisfaction of their clients, he would deliver the check to Texie Rae Wallace.
¶9. UMB set off against the CDs for the outstanding indebtedness owed by Jerry Wallace on note numbers 6816482 and 6843940-for which Mr. Wallace had specifically pledged the CDs-and for five other notes of Wallace Mobile Homes totaling $28,829.58. All five of these other notes were signed prior to the execution of the assignments of the CDs by Mr. Wallace, and were otherwise secured by new and used mobile homes. *fn2 The total value of the CDs at the time of set-off was $72,172.15, against which a total of $63,032.77 in debt was set off. On June 19, 1990, the balance of $9,139.38 was sent to Mr. Robison on behalf of Texie Rae Wallace.
¶10. On motion by Texie Rae Wallace, the chancellor ordered the matter of UMB's set-off of the decedent's debts to be assigned a new cause to proceed independent of the estate of Jerry Wallace. Appellant Texie Rae Wallace filed an Amended Complaint on March 4, 1994, requesting an accounting and damages for UMB's negligence and conversion of her assets. UMB filed its Defense and Answer to Amended Complaint on April 5, 1994, averring that the plaintiff had no cause of action and requesting dismissal of the Amended Complaint.
¶11. On September 2, 1994, Appellee UMB filed its Motion for Summary Judgment. Attached to the bank's motion are the affidavits of Debra Wallace-Blackwell and Clarence Young. The bank contends that it is due judgment as a matter of law by virtue of the set-off provisions in the notes, the CDs, and the assignments executed by Mr. Wallace. UMB further contends that the "agreement" between attorneys Robison and Brown constituted accord and satisfaction of the claims of Texie Rae Wallace, and that she was thereby "estopped by the Agreement signed by her attorney and negotiation of the settlement check issued by United Mississippi Bank."
¶12. On December 27, 1994, Texie Rae Wallace filed her Plaintiff's Cross Motion for Summary Judgment. In her motion, she argues that since the CDs in question were not negotiable, they were not covered by the provisions of Article 3 of the Uniform Commercial Code, but rather by Miss. Code Ann. § 81-5-63. Texie Rae Wallace contends that pursuant to this statute, the subject CDs passed directly to her as joint tenant upon the death of her husband, subject only to the security interests of the bank in such CDs. She alleges that the estate of Jerry Wallace never possessed a pecuniary interest in the CDs. Accordingly, she sought a declaration that UMB did not act in a commercially reasonable manner in setting off her deceased husband's loans and converting her interest in the CDs. She requested a money judgment in her favor in the amount of $50,000.00, plus attorney's fees and all costs of court.
¶13. The chancery court heard both motions for summary judgment on February 24, 1995. On January 30, 1995, the court issued an granting summary judgment in favor of Defendant UMB. In addition, the court found that the plaintiff had accepted and negotiated a settlement offer from UMB by accepting its check for $9,139.38 without an express reservation of rights, constituting an accord and satisfaction of her claim. Texie Rae Wallace appeals from this judgment.
¶14. This Court employs a de novo standard in reviewing a grant of summary judgment. Allen v. Mac Tools, Inc., 671 So. 2d 636, 640 (Miss. 1996); National Farmers Union Property & Cas. Co. v. First Columbus Nat'l Bank, 669 So. 2d 767, 769 (Miss. 1996); Owen v. Pringle, 621 So. 2d 668, 670 (Miss. 1993). "A trial court may grant summary judgment if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law." Roussel v. Robbins, 688 So. 2d 714, 725 (Miss. 1996); Morgan v. City of Ruleville, 627 So. 2d 275, 277 (Miss. 1993). See also Miss. R. Civ. P. 56. However, notwithstanding our respect for and deference to the trial Judge, on matters of law "it is our job to get it right." Cooper v. Crabb, 587 So. 2d 236, 239 (Miss. 1991) (quoting UHS-Qualicare, Inc. v. Gulf Coast Community Hosp., Inc., 525 So. 2d 746, 754 (Miss. 1987)).
¶15. Appellant Texie Rae Wallace contends that UMB had no right to set off against the CDs which she jointly owned with the decedent any debts for which they were not expressly pledged. Thus, she specifically contests the bank's set-off of the four loans numbered 6831523, 6873913, 6877617 and 6888036, totaling $28,829.50. The appellant contends that pursuant to Miss. Code Ann. § 81-5-63, the CDs became vested in her upon the death of her husband. *fn3 The appellant cites Stamper v. Edwards, 607 So. 2d 1141 (Miss. 1992). In Stamper, this Court held that a certificate of deposit issued by a bank to the decedent, Susie Mae Stamper, and made "Payable on Death to Bob Williams," id. at 1151, constituted no part of the estate of Susie Mae Stamper but rather, by reason of § 81-5- 63, "became vested in Bob Williams at the death of Susie Mae Stamper." Id. at 1152. Stamper thus stands for the proposition that under Mississippi law a CD with survivorship provisions represents "an enforceable will substitute." Id. See also Cooper ...