Mitchell v. Mitchell

• Citation: 756 A.2d 179
• Decision Date: 28 June 2000
• Docket Number: No. 98-479-Appeal.,98-479-Appeal.
• Parties: Mary P. MITCHELL et al. v. Charles MITCHELL.
• Court: United States State Supreme Court of Rhode Island

756 A.2d 179

Mary P. MITCHELL et al. v. Charles MITCHELL.

No. 98-479-Appeal.

Supreme Court of Rhode Island.

June 28, 2000.

Present LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

Anthony F. Cottone, Mark H. Grimm, Providence, for plaintiff.

Thomas L. Mirza, David N. Bazar, East Providence, for defendant.

OPINION

FLANDERS, Justice.

We face here the propriety of a Superior Court motion justice deciding on summary judgment various questions related to asserted gift-giving and debt-forgiveness among family members. The plaintiffs, Mary P. Mitchell (Mary) and George Mitchell (George), claimed that the defendant Charles Mitchell (Charles) — who is Mary's son and George's brother — had failed to pay certain debts that he owed them. In response, Charles contended that his mother and brother either had forgiven these debts or had given him the money as a gift and that, consequently, they should not be allowed to sue him for nonpayment.

The alleged gifts and debt forgiveness pertained to two different matters: (1) Mary's adding Charles's name to two $40,000 certificate-of-deposit (CD) accounts that she opened and maintained at a local bank and then, together with Charles, pledging these joint accounts to secure Charles's bank loan; and (2) Mary's and George's alleged forgiveness of Charles's $25,000 debt owed to the family trust. After reviewing the facts relating to these disputes and the applicable standard of review, we shalldiscuss our rationale for sustaining Charles's appeal, vacating the summary judgment, and remanding this case to the Superior Court for trial.

Facts and Travel

The late Lewis J. Mitchell (Lewis) was the father of Charles and George and the husband of Mary. When Lewis died in 1983, he left a will that established the Lewis J. Mitchell Family Trust (trust).¹ The will named Mary, George, and Charles as cotrustees and cobeneficiaries.

Following Lewis's death, disputes arose between Charles and his mother and brother concerning whether Charles owed any money to Mary and/or to the trust. The first dispute began after Mary added Charles's name in May 1985 to a $40,000 CD account that she alone had funded and maintained at a local bank, and after she opened another joint $40,000 CD account in both of their names at the same bank. Both of these accounts had rights of survivorship for both Mary and Charles. (Mary, however, continued to receive the interest income from these accounts.) In October 1985, in consideration of a bank's lending $72,000 to Charles, both Charles and Mary signed assignment forms that pledged the joint accounts as collateral for this loan. After Charles defaulted on the loan, the bank seized the accounts and used them to liquidate the unpaid loan balance. Mary asked Charles to reimburse her, but he refused, arguing that Mary had given him the money in these accounts as a gift. The second dispute concerned Mary's and George's alleged forgiveness of a $25,000 debt due fromCharles to the trust, as evidenced by a promissory note that Charles signed after Mary had transferred to Charles certain real estate in Maine.

Both disputes ended up in court when Mary and George sued Charles to recover the money they claimed Charles owed to them. After Mary and George moved for a partial summary judgment with respect to the claims addressing these disputes, a Superior Court motion justice concluded that no genuine issues of material fact existed with respect to Charles's defenses: namely, that Mary's and George's alleged gift-giving and debt-forgiveness in connection with the joint accounts and the $25,000 debt, respectively, barred them from suing him on these matters. As a result, the motion justice rejected Charles's defenses and entered a partial summary judgment in plaintiffs' favor.² Charles has appealed from this judgment.

Standard of Review

Rule 56(c) of the Superior Court Rules of Civil Procedure provides, in relevant part, that summary judgment "shall be rendered forthwith 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." In determining whether any genuine issue of material fact precludes summary judgment, the motion justice, like this Court on review, must review the pleadings and other relevant documents in the light most favorable to the nonmoving party. See Nichols v. R.R. Beaufort & Associates, Inc., 727 A.2d 174, 176 (R.I.1999)

. If no genuine issue of material fact exists, the motion justice should then determine if the moving party is entitled to judgment as a matter of law. See Superior Boiler Works, Inc. v. R. J. Sanders, Inc., 711 A.2d 628, 632 (R.I.1998). The nonmoving party, however, cannot rest upon mere allegations or denials in pleadings, conclusory statements, or legal opinions. See Doe v. Gelineau, 732 A.2d 43, 48 (R.I.1999). Also, the court should not pass upon the weight or the credibility of the evidence in its summary-judgment determination. See Superior Boiler Works, Inc.,

711 A.2d at 631.

Analysis

I The Alleged Gift of the Funds in the Collateralized CD Accounts

By February 1995 Citizens Bank (the bank) had acquired the $72,000 loan to Charles, as well as the collateralized joint accounts. The bank soon demanded payment on the loan because, by this date, Charles was more than ninety days delinquent on his loan payments. After Charles failed to respond to the bank's requests for payment, it seized the joint accounts and used the money in them to satisfy the unpaid principal, interest, and penalties due on the loan. The bank then issued a check to Mary and Charles jointly for the small remaining balance in the joint accounts after discharging the unpaid loan balance. Charles swore in an affidavit that he was unaware that the bank had decided to default him on the loan because the bank had sent notice of default only to his previous address, where Mary and George, but not Charles, then were living. Furthermore, even though Charles conceded that he alone was responsible to repay the loan, he argued that he should not have to reimburse Mary for the money that the bank seized from their joint accounts because Mary had given him the money in these accounts as a gift when she added his name to them, converted them to joint accounts with mutual survivorship rights, and then pledged the accounts as collateral for Charles's bank loan. Unable toobtain reimbursement from Charles, Mary eventually sued him in Superior Court, asserting that she had added Charles's name to her CD accounts merely for "convenience" and that she never intended to give Charles the money as a gift. Thus, she sought a judgment against Charles to recover from him the amount of money she lost when the bank seized the joint accounts to pay off Charles's delinquent loan.

Charles contends that summary judgment was improper because a genuine issue of material fact existed concerning whether Mary had completed an inter vivos gift to him of the money in the accounts by converting her CD accounts into joint accounts with him — each person having the right of survivorship — and by pledging the accounts to secure his bank loan. Charles suggests that Mary effectively gave up her sole ownership, dominion, and control over the accounts when she converted them to joint accounts, and thereby completed a valid inter vivos gift of the money therein. He insists that, as a result of this joint-account conversion, he acquired an immediate possessory right to the money in the accounts. Mary counters that the money she used to fund the accounts always belonged only to her. She suggests that she added Charles's name to her accounts merely for convenience, and that neither her conversion of the CD accounts to joint accounts with Charles nor her pledge of the accounts as collateral for Charles's bank loan equated to a completed gift of that money to Charles.

Recently, we discussed a surviving party's right to the funds in a joint account after the other party has died. In Robinson v. Delfino, 710 A.2d 154 (R.I.1998), we noted that the establishment of a joint bank account with survivorship rights "is conclusive evidence of the intention to transfer to the survivor an immediate in praesenti joint beneficial possessory ownership right in the balance of the account remaining after the death of the depositor, absent evidence of fraud, undue influence, duress, or lack of mental capacity." Id. at 161 (emphases added). While both parties are still alive, however, the existence of a joint bank account only gives rise to a rebuttable presumption of an intent to make a giftof a joint interest therein, albeit the establishment of a joint account is one that "create[s] immediate possessory as well as survivorship rights" in both joint-account parties. Id. at 160. (Emphasis added.) Thus, in Bielecki v. Boissel, 715 A.2d 571 (R.I.1998), we held that the mere addition of a second name to a bank account, thereby transforming it into a joint bank account with a right of survivorship, does not always evidence an intent on the part of the original owner to create any present joint ownership rights in the account because "[n]othing said in Robinson even suggests that joint bank accounts established for purposes of convenience only are no longer permitted. Neither does Robinson proclaim that any right of present ownership in the account funds is transferred in a joint bank account to a person whose name is placed thereon for purposes of convenience only." Id. at 574.

Rather, in the context of joint bank accounts with a right of survivorship, we adopted in Robinson the Ohio Supreme Court's rule in Wright v. Bloom, 635 N.E.2d 31 (Ohio 1994), that:

"[i]t would seem that when a depositor opens a joint and survivorship account and executes signature cards which recite that the account is to be paid to either during the...