Bank of New York v. Bright

• Decision Date: 30 June 1986
• Docket Number: No. 2-985A290,2-985A290
• Citation: 494 N.E.2d 970
• Parties: The BANK OF NEW YORK and Dreyfus Liquid Assets, Inc., Defendants-Appellants, v. Mildred BRIGHT, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 970

494 N.E.2d 970

The BANK OF NEW YORK and Dreyfus Liquid Assets, Inc. Defendants-Appellants, v. Mildred BRIGHT, Plaintiff-Appellee.

No. 2-985A290.

Court of Appeals of Indiana Second District.

June 30, 1986.

M. Kent Newton, Kelly R. Norris, Tabbert & Capehart, Indianapolis, for defendants-appellants.

C. Wendell Martin, Robert L. Hartley, Jr., Martin, Wade, Hartley, Hollingsworth, Indianapolis, for plaintiff-appellee.

RATLIFF, Judge, writing by designation.

STATEMENT OF THE CASE

Appellants, The Bank of New York and Dreyfus Liquid Assets, Inc., appeal from a judgment entered by the Hamilton Circuit Court on a jury verdict in favor of Mildred Bright for $30,000. We affirm.

FACTS

Mildred Bright opened an investment account with Dreyfus Liquid Assets in December, 1981. The Bank of New York, as transfer agent for Dreyfus Liquid Assets, had custody of and administered this account. By October, 1982, Mildred's account had a balance of $6,165.84.

Sometime near the end of September, 1982, the bank received instructions from a Mildred Bright of Solana Beach, California, to liquidate the account she held in the Dreyfus Mutual Fund. The signature on this order was guaranteed by the brokerage firm of Dean Witter Reynolds. The bank, however, liquidated the Dreyfus Liquid Assets account belonging to Mildred Bright of Indianapolis, Indiana. On October 4, 1982, the bank issued a check to Mildred Bright of Indianapolis, Indiana, for $6,185.84, but mailed it to Mildred Bright of Solana Beach, California, who promptly cashed it.

On February 7, 1983, Mildred Bright of Indianapolis, Indiana, received her quarterly dividend advice statement from Dreyfus Liquid Assets showing that her account had a zero balance. The following day Mildred's husband, Joe, called the toll free number printed on the advice to inquire about the status of her account. He was told that the bank had a research department to handle these problems and to call again in 24 to 48 hours. When Joe called on February 10, 1983, he was told the matter was being researched. At that time, he requested a copy of the liquidation transaction and was told one would be sent. Five days later Joe made his third call to the bank's toll free number and was informed that the matter was still being researched.

                He once again requested a copy of the transaction and the bank assured him that one would be sent.  On February 17, 1983, Joe made his fourth call to the bank.  He was told the matter was in research, but was denied the opportunity to speak with anyone in the research department.  The bank again promised that a copy of the questioned transaction would be forwarded.  Joe contacted the bank again on February 23, 1983.  He informed the operator that he was concerned because he was not receiving any cooperation from the bank and had not yet received a copy of the transaction.  The bank promised that one would be sent.  That same afternoon, the bank contacted Mildred.  They claimed that she had received, signed, and cashed a disbursement check in California.  Mildred in turn informed them that she had not been in California for fourteen years.  She also requested that a copy of the check or transaction be sent to her and the bank indicated that they would do that.  Joe called the bank for a sixth time on March 7, 1983.  In response to his request for information, he was told, "Mr. Bright, that account is closed.  Mrs. Bright got her money and the account is closed."   Record at 736.  The bank did promise, however, that the Brights would receive a copy of the disputed transaction.  On March 9, 1983, Joe called the bank for the final time.  He was again informed that Mildred's account had been liquidated.  When he asked why a copy of the transaction had not been sent to him, he was told, "Well, Mr. Bright, this is a big organization and we're just awfully busy.  And we can't do that."   Record at 737.  The Brights then decided to seek the assistance of an attorney.  On March 14, 1983, their attorney mailed a letter to the bank notifying them that Mildred's account had been mistakenly liquidated.  He also requested that the bank immediately issue a check to Mildred for the proper account balance.  The bank never responded to this letter
                

Mildred filed suit, in the Marion Superior Court, Civil Division, against The Bank of New York and Dreyfus Liquid Assets, Inc. on April 14, 1983, alleging that they had defrauded her of her investment and claiming total damages in excess of $1,000,000. Appellants failed to respond and, therefore, default judgment was entered against them. Mildred was awarded compensatory damages of $6,494.68 and $100,000 in punitive damages. Mildred's attorney mailed a copy of the default judgment to appellants on June 10, 1983. He received no response. On June 23, 1983, the attorney telephoned the bank to inquire about how they intended to satisfy the default judgment. Finally, on June 28, 1983, the bank mailed a letter to Mildred informing her that her account had been recredited on April 27, 1983. ¹ On July 7, 1983, the default judgment was set aside. ² The cause of action was subsequently venued to the Hamilton Circuit Court. Following extensive discovery, Mildred amended her original complaint twice to include allegations of oppressive conduct and criminal conversion. The trial, which was finally held on May 20 and May 21, 1985, resulted in a jury verdict in favor of Mildred awarding her damages of $30,000. Appellants then perfected this appeal.

ISSUES

Resolution of this appeal requires consideration of the following issues:

1. Whether the trial court abused its discretion when it permitted Mildred to pursue, over appellants' objection, a theory of recovery not included in her pleadings.

2. Whether the trial court abused its discretion when it permitted Mildred to pursue a breach of contract theory despite the fact that she had not attached a copy of the contract to her complaint as required by Indiana Rules of Procedure, Trial Rule 9.2(A).

3. Whether the jury verdict and judgment are contrary to law, not supported by sufficient evidence, and constitute excessive damages.

4. Whether the jury's verdict and the trial court's judgment are supported by sufficient evidence.

5. Whether the account application, signed by Mildred, which absolved appellants of liability for any loss, expense or cost incurred from acting upon an instruction or inquiry believed genuine, had any effect.

6. Whether the trial court erred when it gave its tortious conversion instruction.

7. Whether the trial court erred when it gave its accord and satisfaction instruction.

8. Whether the trial court erred when it refused appellants' tendered instruction on mitigation of damages.

DISCUSSION AND DECISION

Issues One and Two

Initially, we must determine what theories of recovery were properly before the jury. Three days prior to trial, Mildred's counsel informed counsel for appellants that she would assert a breach of contract theory. Appellants promptly filed a verified objection claiming that Mildred's original complaint clearly stated a cause of action for fraud and that her two amended complaints added allegations of oppressive conduct and criminal conversion. Their objection continued, therefore, that Mildred never properly pleaded the breach of contract theory. The trial court overruled this objection and appellants now claim this was error. We need not decide, however, whether, under our notice pleading rules, Mildred's amended complaint stated operative facts sufficient to support a breach of contract theory. Assuming, for purposes of this discussion, that Mildred's complaint did not adequately set out a cause of action for breach of contract, we conclude that the trial court did not abuse its discretion when it permitted her to proceed on that theory.

Where the evidence adduced at trial supports a theory of recovery which was not formulated in the pleadings and pre-trial orders, Indiana Rules of Civil Procedure, Trial Rule 15(B), provides the appropriate mechanism for determining whether that issue has been properly placed before the court. The rule states:

"(B) Amendments to Conform to the Evidence. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment, but failure so to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence. (Emphasis added.)"

This rule was primarily designed to avoid the often harsh results which occurred under the old code pleading system. 6 C. Wright & A. Miller, Federal Practice & Procedure, § 1491 (1971) [hereinafter Wright & Miller]. As this court has often stated: "The rationale underlying Trial Rule 15(B), supra, is to promote relief for a party based upon the evidence actually forthcoming at trial, notwithstanding the initial direction set by the pleadings." Urbanational Developers, Inc. v. Shamrock Engineering, Inc. (1978), 175 Ind.App. 416, 430, 372 N.E.2d 742, 751, trans. denied. See also Ayr-Way Stores, Inc. v. Chitwood (1973), 261 Ind. 86, 90, 300 N.E.2d 335, 338; Indianapolis Transit System, Inc. v. Williams (1971), 148 Ind.App. 649, 658, 269 N.E.2d 543, 550, trans. denied; Wright & Miller, at § 1491. ...