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Engle v. Regions Bank

United States District Court, S.D. Mississippi, Northern Division

January 5, 2015

PAUL E. ENGLE, IV; SAMUEL M., Plaintiffs,
v.
REGIONS BANK; CYNTHIA B. ENGLE;, UNKNOWN LEGAL ENTITIES A, B, AND C; UNKNOWN JOHN DOE DEFENDANTS A, B, AND C Defendants. ENGLE

ORDER

CARLTON W. REEVES, District Judge.

Before the Court is Regions Bank's motion to dismiss. Docket No. 7. Having reviewed the allegations, arguments, and applicable law, the motion will be converted to one for summary judgment, and denied.

I. Factual and Procedural History

Paul E. Engle, III passed away in 1996. In accordance with his will, one-third of his estate went to his wife, Cynthia B. Engle, while the remaining two-thirds funded a trust he had established for the benefit of their two minor children, Paul E. Engle, IV and Samuel M. Engle (the "Children's Trust"). Life insurance proceeds also went into the Children's Trust. All said, the Children's Trust was initially funded with about $600, 000.

Cynthia Engle was not the trustee, nor was she the executrix or alternate executrix of Engle's estate.[1] According to the plaintiffs, those facts suggest that Engle did not trust his wife to manage money meant for their children. The trustee was Deposit Guaranty National Bank, which later became Regions Bank.

In this suit, plaintiffs Paul E. Engle, IV and Samuel M. Engle allege that Regions wrongfully allowed their mother to receive and spend funds intended for them. They specifically claim that Regions provided their mother with a monthly income "which bore no relation" to their needs, did not assess their needs, failed to follow the Children's Trust guidelines, failed to contact Paul E. Engle, IV when he turned 21, and blindly accepted their mother's word to their detriment. As a result of these errors, they say, the Children's Trust was spent down to $0 and closed in September 2009.

The plaintiffs filed suit in the Chancery Court of Hinds County, Mississippi on August 12, 2013. Their causes of action included breach of fiduciary duty, gross negligence, and breach of contract, among others. Regions removed the case to this Court on December 31, 2013, alleging diversity jurisdiction due to the improper joinder of Cynthia Engle, who has never been served.

Regions now presents two arguments for dismissal. First, it contends that the plaintiffs filed suit after the three-year statute of limitations expired, even after applying the minor's savings clause. Second, Regions argues that the statute of limitations was not tolled by the doctrine of fraudulent concealment. In this latter theory, Regions claims in part that it cannot be liable to the plaintiffs for breaching its fiduciary duty to them because it was entitled to send "distributions, accountings, and notices" to their mother, whose receipt, knowledge, and decisions were binding on her children. Docket No. 8, at 7.

In response, the plaintiffs say they did not know the Children's Trust existed until their paternal grandmother told them about it in July 2012, and then did not know that it had been improperly administered until September 21, 2012. Alternatively, they contend that Samuel Engle's claim was timely filed. Finally, they argue that fraudulent concealment applies because in mid-2012, the Regions employee responsible for administering the Children's Trust allegedly told them he had never heard of it. They have attached two affidavits and correspondence with Regions to their response.

Perhaps unaware of the plaintiffs' ignorance of the Children's Trust, Regions' reply sidesteps its first argument and presses part of its second: that the plaintiffs are barred from suit because their mother's decision to draw down the Children's Trust is imputed to them.

II. Legal Standard

Because the Court will consider material outside the pleadings, "the motion must be treated as one for summary judgment under Rule 56." Fed.R.Civ.P. 12(d); see Stokes v. Dolgencorp, Inc., 367 F.Appx. 545, 547 (5th Cir. 2010) (unpublished).

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A party seeking to avoid summary judgment must identify admissible evidence in the record showing a fact dispute. Id. at 56(c)(1); see Tran Enterprises, LLC v. DHL Exp. (USA), Inc., 627 F.3d 1004, 1010 (5th Cir. 2010) ("With respect to an issue on which the nonmovant would bear the burden of proof at trial, if the movant for summary judgment correctly points to the absence of evidence supporting the nonmovant with respect to such an issue, the nonmovant, in order to avoid an adverse summary judgment on that issue, must produce sufficient summary judgment evidence to sustain a finding in its favor on the issue.").

The Court views the evidence and draws reasonable inferences in the light most favorable to the nonmovant. Maddox v. Townsend and Sons, Inc., 639 F.3d 214, 216 (5th Cir. 2011). But the Court will not, "in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts." McCallum Highlands, Ltd. v. Wash. Capital Dus, ...


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