Bank One, Nat. Ass'n. v. Surber

• Decision Date: 14 January 2009
• Docket Number: No. 29A04-0712-CV-711.,29A04-0712-CV-711.
• Citation: 899 N.E.2d 693
• Parties: BANK ONE, NATIONAL ASSOCIATION, d/b/a Bank One, Appellant-Defendant, v. Jeannene SURBER, Appellee-Plaintiff.
• Court: Indiana Appellate Court

899 N.E.2d 693

BANK ONE, NATIONAL ASSOCIATION, d/b/a Bank One, Appellant-Defendant, v. Jeannene SURBER, Appellee-Plaintiff.

No. 29A04-0712-CV-711.

Court of Appeals of Indiana.

January 14, 2009.

Max W. Hittle, Jr., Marc T. Quigley, Libby Y. Mote, Krieg DeVault, LLP, Indianapolis, IN, Attorneys for Appellant.

Douglas D. Church, Martin E. Risacher, Alexander P. Pinegar, Church, Church, Hittle & Antrim, Noblesville, IN, Attorneys for Appellee.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Bank One appeals the trial court's entry of judgment in favor of Jeannene Surber ("Jeannene") and its award of damages.

We affirm in part, reverse in part, and remand.

ISSUES

1. Whether Jeannene released her claims against Bank One by entering into a settlement agreement in a cause of action separate from this action.

2. Whether the trial court's award of damages constituted an abuse of discretion.

FACTS¹

On September 24, 1997, Jeannene married Thomas Surber ("Thomas"). This was Thomas' third marriage and Jeannene's second. Thomas had two daughters from his first marriage, Jill Duncan and Linda Binion. The couple lived together in a house owned by Thomas.

After Thomas and Jeannene married, Thomas' sister, Polly Armour, made Thomas a joint owner of a savings account ("the Account") she had with Bank One. When Armour died on October 9, 2000, Thomas became the sole owner of the Account.

In January 2002, Thomas began having health problems. Out of concern for Jeannene's financial security, on January 15, 2002, Thomas went to a Bank One branch in Carmel, Indiana where he told Bank One employee Peggy Stone that he wanted to add Jeannene's name to the Account. Stone added Jeannene's name as a joint owner of the Account on Bank One's computer database and gave Thomas a signature card for the Account that Jeannene was to sign. Jeannene signed the signature card later that evening, and Thomas returned the card to Bank One the next day. It is undisputed that between February 2002 and July 2002, bank statements for the Account were sent to and addressed in both Thomas' and Jeannene's names.

On July 8, 2002, Thomas died intestate. On the date of Thomas' death, the Account contained a balance of approximately $425,612. On July 24, 2002, Bank One notified Jeannene that $8,100 from the Account had been transferred to one of Jeannene's checking accounts to cover an overdraft.

Shortly after Thomas' death, Jeannene hired attorney Tanya Overdorf to represent her in her capacity as the personal representative of Thomas' estate. On July 31, 2002, Bank One employee Elaine High told Overdorf that Jeannene was a joint owner of the Account. However, the next day, High informed Overdorf that because a signature card for the Account could not be located, Bank One had determined that Thomas was the sole owner of the Account.

Because Bank One took the position that Thomas was the sole owner of the Account, the funds from the Account became an asset in Thomas' estate rather than Jeannene's sole property. This resulted in substantial litigation between Jeannene and Thomas' daughters over the division of the Account's funds along with the other assets in Thomas' estate. Specifically, Jeannene and Thomas' daughters disputed who should have possession of the marital residence, family photographs, an angelic orb, a coin collection, and an oil painting. Jeannene, by counsel, initiated a claim against Thomas' estate contending that she was entitled to the funds in the Account. Due to this, the probate court appointed a special administrator to examine the Account, prosecute the collection of the Account for the estate, and defend the estate against any claims filed by Jeannene.

On August 5, 2005, Jeannene, by counsel, Thomas' daughters, by counsel, and Thomas' estate, via the special administrator, entered into a voluntary mediated settlement agreement. Bank One did not participate in the mediation, nor was it signatory to the settlement agreement. The settlement agreement resolved all of the disputes between Jeannene and Thomas' daughters regarding the division of Thomas' estate. The agreement specifically provided that "the Estate or Jeannene" was to pay Thomas' daughters $364,000. (Appellant's App. 328). The settlement agreement also contained the following paragraph:

[Jeannene], [Thomas' daughters], and the Estate of Thomas Surber (hereinafter "Signatories"), conditioned upon and for and in consideration of the Court's approval of and the performance of the Compromise, the sufficiency of which is hereby acknowledged, hereby forever release and discharge each other, their heirs, personal representatives, attorneys, agents and assigns, and all other persons or entities who might be liable, none of whom admit any liability to the Signatories, but all dispute any liability to the Signatories, of and from any and all manner of actions, causes of action, suits, accounts, contracts, debts, claims, and demands whatsoever, at law or in equity, and however arising, on or before the date of this release, including but not limited to, all matters asserted, or which could have been asserted, by any of the Signatories in that certain actions pending in the Hamilton Superior Court, State of Indiana, as above entitled under Cause No. 29D01-0207-ES-96.

Id. at 329.

The probate court entered an order approving the settlement agreement on September 2, 2005. The court specifically ordered Bank One to immediately distribute the funds in the Account "to Jeannene R. Surber." Id., at 324. On September 29, 2005, Bank One issued a check payable to Jeannene in the approximate amount of $436,559, which Bank One contends represented the full amount of principal and accrued interest contained in the Account as of that date. Jeannene endorsed the check in her own name and deposited the proceeds into an account opened for Thomas' estate.

While the estate litigation was still on-going, on December 12, 2003, Jeannene filed this action against Bank One alleging claims of negligence and breach of contract for its failure to maintain her name on the Account. A bench trial in this case began on September 24, 2007. During the trial, Overdorf testified regarding Jeannene's damages. She first noted that following Thomas's death, had Bank One recognized Jeannene as a joint owner of the Account, Jeannene would have received a $25,000 spousal allowance and one third of the value of a life estate in any real property, which in this case amounted to $73,984. Jeannene also would have received the total value of her and Thomas' joint property, which was $602,546. This latter figure also included the $425,612 in the Account. Thus, according to Overdorf, but for Bank One's negligence, the total amount Jeannene should have received was $676,546.

Overdorf then testified to the actual amount Jeannene received through the voluntary mediated settlement agreement that resolved Thomas' estate. Jeannene received a $25,000 spousal allowance; $73,984 which represented one third of the value of a life estate in Thomas' real property; one half of the net probate estate, which totaled approximately $119,653; and $176,950, which represented the total value of her and Thomas' joint property for a grand total of $395,587. Subtracted from the $395,587 figure was the $364,000 payment that was made to Thomas' daughters. According to Overdorf, the net amount received by Jeannene, then, was approximately $31,587.

The figure representing one half of the net probate estate was reached by subtracting $93,234 in special administrative fees and attorneys' fees that were paid by the estate. Overdorf testified that, for various factors, all but $5,000 to $7,000 of these attorney fees was due to Bank One's negligence in the designation of Thomas as the sole owner of the Account.

During the trial, Jeannene asserted that she was entitled to prejudgment interest on the funds in the Account from the date of Thomas's death, July 8, 2002, up to the first day of the trial, September 24, 2007. Using the statutory eight percent interest rate provided for in Indiana Code section 24-4.6-1-102, Jeannene calculated that prejudgment interest on the $425,612 in the Account at the time of Thomas's death would total approximately $177,662.

In calculating her total damages, Jeannene took the $676,546 she contended she would have received had Bank One recognized her as the owner of the Account and added to that the $177,662 in prejudgment interest that she asserted she was entitled to. From this figure, Jeannene subtracted the $31,587 she actually received from Thomas' estate to arrive at her total damages, which she alleged were $822,621.

On November 26, 2007, the trial court issued its Findings of Fact, Conclusions of Law and Judgment. The trial court concluded that Bank One acted negligently and breached its contract with Jeannene. The trial court made the following relevant findings of fact and conclusions of law:

Findings of Fact

* * *

38. The amount of money in [the Account] as of the date of [Thomas's] death was Four Hundred Twenty-five Thousand Six Hundred Eleven Dollars and Seventy-six cents ($425,611.76). From August 1st, 2002 forward, [Jeannene] was not able to access, invest, and use these funds to her financial advantage. Bank One offered no evidence to contradict this finding.

39. Because Bank One took the position that [the Account] was an estate asset, [Jeannene's] net share of the probate estate of [Thomas] plus the value of the jointly owned property turned out to be Thirty-one Thousand Five Hundred Eighty-seven dollars and twenty-four cents ($31,587.24). Bank One offered no evidence to contradict this finding.

40. If [the Account] had been maintained in [Jeannene's] name, she would have received Six Hundred Seventy-six Thousand Five Hundred Forty-six dollars ($676,546.00) following the death of [Thomas]. Bank One offered no evidence to contradict this finding.

41. The difference between what [Jeannene]...