MARILYN NEWSOME, INDIVIDUALLY AND AS CONSERVATOR/CONSERVATRIX OF VICTORIA NEWSOME
PEOPLES BANCSHARES d/b/a PEOPLES BANK AND CHRIS DUNN
OF JUDGMENT: 03/01/2017
SIMPSON COUNTY CHANCERY COURT HON. JAMES D. BELL TRIAL JUDGE
COURT ATTORNEYS: W. TERRELL STUBBS WILLIAM C. BRABEC
ATTORNEY FOR APPELLANT: W. TERRELL STUBBS
ATTORNEYS FOR APPELLEES: LINDSEY O. WATSON WILLIAM C. BRABEC
TIMOTHY J. ANZENBERGER
KITCHENS, P.J., KING AND CHAMBERLIN, JJ.
The instant case addresses whether the claims of the
Appellant, Marilyn Newsome, survive summary judgment against
Appellees, People's Bank and Chris Dunn. The claims
address the issuance of cashier's checks by People's
Bank and Chris Dunn without the signature or approval of the
conservatorship account holder, Marilyn Newsome. For the
reasons expounded upon below on the direct appeal, the Court
affirms the judgment of the trial court in part and reverses
and remands in part. On the cross appeal, under different
reasoning, the Court affirms the judgment of the trial court.
On February 9, 2015, Marilyn Newsome filed suit against
Chancellor David Shoemake, former Chancellor Joe Dale Walker,
Keely McNulty, People's Bank (the Bank), and Chris Dunn
(Dunn). The instant appeal focuses only on the liability of
the Bank and Dunn, if any. Therefore, the alleged liability
and/or wrongdoing of the additional parties is not at issue
and is neither addressed in the facts provided below nor in
In 2010, Charles Merkel of Merkel & Cocke hired Keely
McNulty (McNulty), an attorney, to set up the conservatorship
for his client, Victoria Newsome. Victoria Newsome had
settled a medical malpractice case, but she was unable to
manage her affairs. The trial court appointed Marilyn Newsome
(Newsome), Victoria Newsome's mother, as the conservator
for Victoria Newsome. The trial court then denied the request
to purchase a home for Victoria Newsome, and instead, the
trial court ordered that a house be built for her. In the
interim, the trial court ordered a mobile home to be
With the help of Dunn, a Bank employee, Newsome opened a
checking account for the conservatorship with the Bank. When
Newsome opened the conservatorship account, she signed a
Deposit Agreement. According to the Deposit Agreement,
Newsome was the sole authorized signor on the account.
Newsome testified that she did not have any discussions with
the Bank about who would be authorized to sign on the
account. The Deposit Agreement also provided that Newsome had
thirty days to review her statements for errors or
With the conservatorship account opened, McNulty began
coordinating the process of building the house, which
included hiring a contractor, paying subcontractors, and
generally, supervising the building of the residence. In
order to pay the subcontractors and herself, McNulty drafted
court orders that provided for the release of funds
from the conservatorship account. After the trial court
signed the orders, McNulty then sent or delivered the court
orders to the Bank for release of the funds. The court orders
did not provide any guidance on how disbursements should
occur. Specifically, the court orders did not provide for the
issuance of cashier's checks to disburse the money. In
her affidavit, McNulty testified that she instructed the Bank
to issue cashier's checks for the money.
To issue the cashier's checks, the Bank withdrew money
from Newsome's conservatorship account, placed it in the
Bank's account and with a bank employee's signature,
issued official Bank checks to McNulty and various
subcontractors. Usually, the checks were signed by Dunn.
Newsome's signature did not appear on any of the
cashier's checks. The withdrawals were shown on
Newsome's statements as "Miscellaneous Debit."
No further information was provided on the statements, and if
more than one cashier's check was issued at one time, the
"Miscellaneous Debit" on the statement would lump
the entire sum of a number of checks together.
The process continued from March 2011 to October 2011, as the
residence was built. Through the process, over $400, 000 was
transferred out of the conservatorship account.
Dunn testified that while the residence was being built and
the cashier's checks were being issued, Newsome
frequently visited the Bank, and sometimes she would bring
Victoria Newsome to visit as well. Dunn claims that Newsome
never mentioned that she was not receiving her monthly
statement and that she never communicated that McNulty
"did not have the right to direct payment orders."
On the other hand, although she cannot remember the date,
Newsome claims that she asked Dunn about why she was not
receiving her monthly statement and about the account. She
states that Dunn only told her to consult McNulty and the
On February 9, 2015, Newsome filed suit against the Bank and
Dunn alleging common-law claims: conspiracy, fraud, breach of
contract, negligence, breach of the duty of good faith and
fair dealing, negligence per se, gross negligence, and
intentional infliction of emotional distress. Further,
falling under the Uniform Commercial Code (UCC), Newsome
alleged that the Bank and Dunn were liable for failing to
require Marilyn's signature on any of the checks
negotiated on the conservatorship account.
The parties filed competing motions for summary judgment. The
Bank and Dunn argued that Newsome's claims were barred by
the statute of repose in Mississippi Code Section 75-4A-505
and that the Bank and Dunn were not at fault because McNulty
had the authority to act on Newsome's behalf. Newsome
argued that she was entitled to summary judgement as to
liability and actual damages. The trial court denied
Newsome's motion for summary judgment on liability and
actual damages, and it denied the Bank and Dunn's motion
for summary judgment on the statute of repose issue. However,
the trial court granted the Bank and Dunn's motion for
summary judgment as to McNulty's authority, dismissing
the Bank and Dunn. Newsome appealed the dismissal of the Bank
and Dunn, and the Bank and Dunn cross-appealed the statute of
The Court distinguishes between the direct appeal and the
cross-appeal. Further, for clarity, the Court addresses the
the claims are barred by the one-year statute of
Whether People's Bank and Chris Dunn are entitled to
summary judgment due to Keely McNulty's actual, implied,
and/or apparent authority.
Whether the duty to review statements contained in the
Deposit Agreement warrants summary judgment.
Whether the Uniform Commercial Code displaces Marilyn
Newsome's common-law claims.
Whether People's Bank risked contempt of court if it
refused to comply with the trial court's orders.
Whether Chris Dunn is entitled to summary judgment as to
claims against him in his individual capacity.
The Court reviews a motion for summary judgment de novo.
Kinney v. S. Miss. Planning & Dev. Dist.,
Inc., 202 So.3d 187, 192 (Miss. 2016). "The
evidence is viewed in the light most favorable to the party
opposing the motion. The moving party has the burden of
demonstrating no genuine issue of material fact exists."
Id. "Summary judgment is proper 'if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter
of law.'" Id. (quoting Hosemann v.
Harris, 163 So.3d 263, 267 (Miss. 2015)).
the claims are barred by the one-year statute of
The Bank and Dunn argue that the statute of repose, codified
in Chapter 4A of the UCC, applies and bars Newsome's
claims. See Miss. Code Ann. § 75-4A-505 (Rev.
2016). Further, the Bank and Dunn maintain that
Newsome is barred from arguing that the cashier's checks
were not fund transfers because she failed to make that
argument below. On the other hand, Newsome claims that
Article 4A only applies to wire transfers, and here, the Bank
and Dunn improperly commingled conservatorship funds with the
Bank's funds. Although not binding under the de novo
standard of review, the trial court denied summary judgment
on the instant issue, finding a question of
Before delving into the merits of the statute-of-repose
claim, the Court considers the Bank and Dunn's argument
that the issue is barred. As argued by the Bank and Dunn, the
Court need not consider an issue raised for the first time on
appeal. Flagstar Bank, FSB v. Danos, 46 So.3d 298,
311 (Miss. 2010). However, here, Newsome clearly argued
before the trial court that the statute of repose does not
apply. Specifically, during the hearing on the competing
motions for summary judgment, Newsome argued that because the
Bank itself signed the cashier's checks, the statute of
repose does not apply. Thus, the issue was considered and is
not barred. Accordingly, the Court proceeds to the merits of
The statute of repose appears in Chapter 4A of the UCC.
See Miss. Code Ann. § 75-4A-505 (Rev. 2016).
"The Court's role 'is not to decide what a
statute should provide, but to determine what it does
provide.'" Rankin Cty. Bd. of Supervisors v.
Lakeland Income Props., LLC, 241 So.3d 1279,
1283 (Miss. 2018) (quoting Lawson v. Honeywell Int'l,
Inc., 75 So.3d 1024, 1027 (Miss. 2011))." The Court
considers the words and phrases in the statutes
"according to their common and ordinary acceptation and
meaning; but technical words and phrases according to their
technical meaning." Miss. Code Ann. § 1-3-65 (Rev.
Chapter 4A applies to "funds transfers defined in
Section 75-4A-104." Miss. Code Ann. § 75-4A-102
(Rev. 2016). Section 75-4A-104 defines funds transfers as:
[T]he series of transactions, beginning with the
originator's payment order, made for the purpose of
making payment to the beneficiary of the order. The term
includes any payment order issued by the originator's
bank or an intermediary bank intended to carry out the
originator's payment order. A funds transfer is completed
by acceptance by the beneficiary's bank of ...