Atlanta Sand & Supply Co. v. Citizens Bank, No. A05A1845.

• Court: Georgia Court of Appeals
• Writing for the Court: Blackburn
• Citation: Atlanta Sand & Supply Co. v. Citizens Bank, 622 S.E.2d 484, 276 Ga.App. 149 (Ga. App. 2005)
• Decision Date: 31 October 2005
• Docket Number: No. A05A1845.
• Parties: ATLANTA SAND & SUPPLY COMPANY v. The CITIZENS BANK.

276 Ga. App. 149

622 S.E.2d 484

ATLANTA SAND & SUPPLY COMPANY v. The CITIZENS BANK.

No. A05A1845.

Court of Appeals of Georgia.

October 31, 2005.

Craig N. Cowart, Miller, Coward & Howe, Macon, for Appellant.

Arthur L. Phillips, Pamela L. Coleman, Phillips & Phillips, Macon, for Appellee.

BLACKBURN, Presiding Judge.

Atlanta Sand & Supply Company sued The Citizens Bank for conversion, alleging that for a period of six years, Citizens Bank accepted deposits over endorsements forged by Atlanta Sand employee Lisa Leslie and unlawfully provided Leslie with cash back totaling approximately $239,000. Citizens Bank moved for summary judgment, arguing that Leslie had authority to endorse instruments and that Citizens Bank was not liable for her abuse of that authority. The trial court entered summary judgment in favor of Citizens Bank and Atlanta Sand filed this appeal. For the reasons set forth below, we affirm.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp.¹

So construed, the evidence shows that in October 1995, Atlanta Sand opened a savings account with the local Citizens Bank to which employees could make contributions from their paychecks. The account was not intended to serve as a business account but as a source of emergency funds for employees. In April 1996, Atlanta Sand provided Citizens Bank with a corporate resolution designating the officers and employees authorized to administer the account. The resolution stated in part:

[T]he Secretary is directed to certify to said depository... a statement naming the officers of this corporation authorized to endorse or sign notes, drafts, checks, etc., with specimens of their respective signatures for use by said depository for purposes of comparison; and such signature shall be binding upon this corporation until revocation in writing be filed with said bank; and

FURTHER RESOLVED that all drafts, checks, etc., drawn against such account shall be signed by the following: (State whether such papers must bear one or more signatures.) One signature must be either Dugger Jamison or Lisa Leslie.

The resolution further stated that

Any officer mentioned above [(only Jamison's and Leslie's names appear above)] is authorized to endorse all notes, checks or drafts payable to the corporation and deposited to the credit of such account, or such endorsement may be made by rubber stamp or facsimile signature. The bank is hereby authorized to honor, receive, certify or pay all instruments signed in accordance with the foregoing resolution even though drawn or endorsed to the order of any officer signing the same, payable to cash or bearer or in payment of the individual obligation of such officer, or for deposit to his personal account and said bank shall not be required or be under any obligation to inquire as to the circumstances of the issuance.

Below this language, the resolution also listed three officers (all vice-presidents) and their signatures. In addition, Atlanta Sand provided Citizens Bank with a signature card for the account which listed Jamison and Leslie as authorized signatories (with only one signature required) and contained examples of their respective signatures.

At some point in 1997, Leslie began taking customer checks payable to Atlanta Sand for walk-in sand sales and endorsing those checks for deposit into the savings account. Leslie usually endorsed the checks with the words "Atlanta Sand" or a rubber-stamped signature for Jamison. On the deposit ticket, Leslie signed her own name to request cash back and unlawfully pocketed those funds for her own use. Leslie continued this cash back scheme until Atlanta Sand discovered the embezzlement in January 2003. Citizens Bank had no actual knowledge of Leslie's embezzlement until Atlanta Sand informed it shortly after the scheme was discovered.

In June 2003, Atlanta Sand filed a complaint against Citizens Bank, alleging conversion pursuant to OCGA § 11-3-420. Specifically, Atlanta Sand claimed that Citizens Bank was liable for conversion because it accepted deposits to the account over endorsements forged by Leslie and allowed her unlawfully to obtain cash back from those deposits. Following discovery, Citizens Bank moved for summary judgment. The trial court granted Citizens Bank's motion, declaring that the corporate resolution and signature card authorized Leslie to endorse instruments relevant to the account and that Citizens Bank was not liable for Leslie's abuse of that authority. This appeal followed.

Atlanta Sand argues that (i) the corporate resolution did not grant Leslie authority to endorse checks for deposit to its account with Citizens Bank, (ii) OCGA § 7-1-352 does not shield Citizens Bank from liability for Leslie's embezzlement, and (iii) questions of fact remain regarding whether Citizens Bank is liable for conversion. We disagree and affirm the trial court's order.

1. Atlanta Sand first contends that the corporate resolution did not grant Leslie authority to endorse checks for deposit to its saving account with Citizens Bank and that therefore such endorsements constituted forgeries. Atlanta Sands further contends that Citizens Bank is liable for conversion because it accepted these deposits and provided cash back over forged endorsements. We hold that the corporate resolution and signature card granted Leslie authority to endorse checks for deposit to the subject account (as well as to draft checks from the account) and that consequently Citizens Bank is not liable for conversion.

Georgia law holds that "the relationship between a bank and its depositor is contractual in nature." APCOA v. Fidelity Nat. Bank.² See Fed. Deposit Ins. Corp. v. West.³ Such contracts are often evidenced in the form of a corporate resolution, which designates the agents authorized to act on the corporation's behalf with regard to the relationship between the corporation and its bank. See Trust Co. of Ga. v. Nationwide Moving, etc. Co.⁴ Here, the issue is whether the corporate resolution that Atlanta Sand provided to Citizens Bank granted Leslie authority to endorse deposits to and to withdraw money from the subject account.

In construing a written contract "the trial court must decide whether the language is clear and unambiguous. If it is, the court simply enforces the contract according to its clear terms; the contract alone is looked to for its meaning." Woody's Steaks, LLC v. Pastoria.⁵ Atlanta Sand's corporate resolution states that "all drafts, checks, etc., drawn against such account shall be signed by the following: (State whether such papers must bear one or more signatures.) One signature must be either Dugger Jamison or Lisa Leslie." The corporate resolution further states:

Any officer mentioned above [(Jamison and Leslie are the only names listed above)] is authorized to endorse all notes, checks or drafts payable to the corporation and deposited to the credit of such account, or such endorsement may be made by rubber stamp or facsimile signature. The bank is hereby authorized to honor, receive, certify or pay all instruments signed in accordance with the foregoing resolution even though drawn or endorsed to the order of any officer signing the same, payable to cash or bearer or in payment of the individual obligation of such officer, or for deposit to his personal account and said bank shall not be required or be under any obligation to inquire as to the circumstances of the issuance.

In conjunction with the resolution, Atlanta Sand also completed a signature card which listed Jamison and Leslie as authorized signatories for the account (with only one signature required) and contained examples of their signatures. We hold that the language in these two documents is clear and unambiguous. The corporate resolution in combination with the signature card clearly granted Jamison and Leslie the authority to act on behalf of Atlanta Sand with regard to this account. This authority included signing drafts and checks (i.e., withdrawing money), as well as endorsing checks for deposit.

Atlanta Sand's argument that neither Jamison nor Leslie had authority to endorse checks or withdraw money because neither was specifically designated as an "officer" in the corporate resolution fails in light of our decision in Bank South v. Grand Lodge, etc.⁶ There we held that an agent's authorized signature in the application for an account granted the agent authority despite his title as an officer not being noted with his signature and despite his name not being listed in the specific part of the form requesting the names of those authorized to make withdrawals. Id. at 778, 780-781(1), 331 S.E.2d 629. We further held that given the...