Barrett v. Farmers & Merchants Bank of Piedmont

• Decision Date: 06 April 1984
• Citation: 451 So.2d 257
• Parties: Joyce BARRETT, Administratrix of the Estate of Lois Williams, Deceased, et al. v. FARMERS & MERCHANTS BANK OF PIEDMONT, et al. 82-962.
• Court: Alabama Supreme Court

Page 257

451 So.2d 257

Joyce BARRETT, Administratrix of the Estate of Lois Williams, Deceased, et al. v. FARMERS & MERCHANTS BANK OF PIEDMONT, et al.

82-962.

Supreme Court of Alabama.

April 6, 1984.

Rehearing Denied May 25, 1984.

Ronald L. Allen of Merrill, Merrill, Mathews & Allen, Anniston, for appellants.

Ralph D. Porch of Merrill, Porch, Doster & Dillon, Anniston, for appellees.

MADDOX, Justice.

I

The issue before the Court is whether the trial court correctly granted a summary judgment for the defendants in a suit with counts of negligence, wantonness, outrage, fraud and conversion of a check. The trial court granted the defendants' motion for summary judgment on all counts of the amended complaint. We affirm in part, reverse in part, and remand for further proceedings.

The plaintiffs' decedent, Lois Williams, died intestate on May 19, 1982, and was survived by five daughters. Joyce Barrett and Brenda Smith are two of the surviving daughters. At the time of Lois Williams's death, National Home Life Assurance Company (hereinafter insurer) had in effect a policy of life insurance in the amount of $5,000. Lois Williams's husband was the named beneficiary, but he had predeceased her. Plaintiffs timely filed a claim for the insurance proceeds. The insurer issued a check on July 12, 1982, for $5,033.57 payable to "The Estate of Lois Williams, Rt. 5, Box 10, Piedmont, Alabama 36272" and mailed the check to Debra Danford, a sister of the plaintiff, who resided at this address. The endorsements of the five daughters were purportedly made by only two of the daughters. Debra Danford signed the names of three daughters on the check; her own and those of Brenda Smith and Bobby Jo Williams, who was a minor at the time of the signing. The check was endorsed personally by Joyce Barrett and Billie Pogue. No guardianship for this minor child had been established, nor had probate proceedings for the intestate's estate been instituted at the time of these endorsements.

The plaintiffs' evidence tended to show that the check was presented to Farmers & Merchants Bank of Piedmont (hereinafter Bank) to be cashed, on July 22, 1982. The teller obtained permission to send the check to the "issuing" bank for clearance. Brenda Smith alleged, in an affidavit, that Latta, a vice president of Bank, telephoned Smith on August 12, 1982, and informed her the check had been cleared for payment, but that before Bank would cash the check, two notes held by Bank, which Lois Williams had signed as guarantor, would have to be paid. This affidavit further stated that the family had relied on this information.

Defendants' evidence, ¹ consisting of answers to the plaintiffs' interrogatories, tended to show that:

"On or about July 22, 1982, one of Lois Williams's daughters brought in a check payable to the estate of Lois Williams. There were several signatures on the back of the check, none of which was in the name of administrator or administratrix of the estate of Lois Williams. The check was processed by the teller to the issuing [drawee] bank for clearance. An explanation was given to [plaintiffs] at that time that the check would be forwarded to see if it would be honored....

"Teller, Linda Morgan, referred them to [Franklin W. Latta, a vice-president] and [he] sent them to Ruby Gresham, vice-president, and Ms. Gresham sent the check off for collection (clearance) to issuing bank ... the same day.... Plaintiff [sic] asked bank to send check off for collection [clearance]." [Defendant's answers to plaintiff interrogatories.]

The defendants admitted "the check was returned from clearance payable to Farmers & Merchants Bank."

Defendants' evidence also showed that the decedent Lois Williams had co-signed as guarantor on two notes made by Joyce Barrett and her husband, Jimmy Barrett, and that Bank had encountered some difficulty in the collection of installment payments on these two notes. No evidence is in the record as to whether any defaults had occurred on the notes nor what would constitute a default under each contract or note. Defendants' only evidence of the notes indicates that they had identical language, which stated:

"In the event of a default, the lender may (when and where legally permissible ), without demand or notice of any kind, set-off all or any portion of this note against any balances, credits, deposits, accounts, monies or other property of the borrower at any time held by the lender." (Emphasis added.)

The evidence tended to show that on August 14, 1982, Joyce Barrett and her husband went to the defendant bank. Upon arrival, the Barretts informed defendant David Martin, a vice-president of the bank, that they had come to collect the proceeds of the policy and to 'clear up' the two notes with the bank. Joyce Barrett had borrowed over $1,100 and her husband had borrowed over $2,100 from the bank on April 24, 1981, and February 4, 1982, respectively. Joyce Barrett acknowledged, in her deposition taken on October 8, 1982, that the payments on the loans were at least one month behind. She also, in this deposition, stated that she told the defendant Martin to deduct the remainder owing on the smaller loan from the insurance proceeds and that she and her husband would bring the larger loan's payments up to date. She stated that Martin went to speak with Latta and then came back and told her and her husband they would have to meet with Latta. In her deposition, plaintiff Barrett related the substance of the Barretts' conversation with Latta:

"Well, we went in and told him about the note, that Mother's name was supposed to come off the note after the small note was paid and that he could take that payment out of the $5,000. He said, 'Well, we need the whole thing paid in full, both notes.' Jimmy told him we would get someone else to sign with us on the truck note because this is my money and they can't take the money that's not his and pay his note with it. He thought about that for a minute. My husband said, 'Well, what if I get Randy Smith to sign with me?' He thought about that for a minute and then he said, 'We're going to need the payment in full.' Then Jimmy said, 'Well, you can just have the truck back.' He said, 'We don't need the truck. We have the check.' Then Jimmy said, 'That's a bunch of stuff.' And then he said, 'Well, it might be that.' "

Barrett then informed her sisters of these events, and she said in her deposition they were "very upset because everybody had been calling them and dunning them and threatening to put a lien on our house [Lois Williams's house] because we hadn't paid our bills [Lois Williams's personal debts]."

Joyce Barrett stated in her deposition that the decision to hire a lawyer came as a result of a conversation her sister Brenda Smith had later with Latta. Barrett, in her deposition, said, "he told her that if she didn't believe he could hold the check for the note that she could get a lawyer. So she called a lawyer."

A petition for letters of administration was filed with the probate court on August 17, 1982, and this lawsuit was filed on August 25, 1982. Joyce Barrett and her four sisters were named as plaintiffs, and the insurer, the bank, Martin, and Latta were named as defendants. The bank moved to interplead the insurance proceeds on August 31, 1982. Motions to dismiss made by the defendants were denied. A motion to strike all plaintiffs except Joyce Barrett, as administratrix, was granted on December 7, 1982. ² Summary judgment

motions for all defendants were filed on December 20, 1982. The trial court granted summary judgment for the insurer and Martin on January 5, 1983. The plaintiffs amended their complaint in toto with counts of conversion, negligence and outrage, and two counts of fraud, and named Latta, Martin, the insurer, and the bank as defendants. The trial court, on motion of the defendants, dismissed Barrett and Smith as individual plaintiffs, dismissed the insurer as a party, and granted summary judgment on all counts for Martin, Latta, and the bank on June 3, 1983. Joyce Barrett, as administratrix, and individually, and Brenda Smith appeal.

II

Appellants raise three issues on appeal:

"Was there a genuine issue of any material fact as to the plaintiffs' allegation of conversion relative to the defendants Franklin W. Latta and Farmers & Merchants Bank of Piedmont?

"Was there a genuine issue of any material fact as to the plaintiffs' allegation of fraud relative to the defendants Franklin W. Latta and Farmers & Merchants Bank of Piedmont?

"Was there a genuine issue of any material fact as to the plaintiffs' allegation of outrageous conduct relative to the defendants Franklin W. Latta and Farmers & Merchants Bank of Piedmont?" (Emphasis added.)

We first make note that the appellants/plaintiffs do not appeal from the summary judgment as it related to the negligence count, nor as it related to the insurer. As those issues are not raised on appeal, they are considered waived and we will not review them. See Dethlefs v. Etnire, 387 So.2d 201 (Ala.1980); Mullins v. Mullins, 416 So.2d 1063 (Ala.Civ.App.1982).

The trial judge entered an order in which he made extensive findings of fact on disputed matters and conclusions of law. This order, in pertinent part, reads:

"1. Lois Williams, a resident of Piedmont, Calhoun County, Alabama, died on May 19, 1982 at Northeast Alabama Regional Medical Center in Anniston, being survived by five daughters, Bobbie Jo Williams, age 17, unmarried; Debra Jean Danford, age 26, married; Brenda Smith, age 24, married; Billie Pogue, of legal age, married; and the plaintiff, Joyce Barrett, of legal age and married. At the time of her death, National Home Life Assurance Company had in force and effect a policy of insurance on the life of Lois Williams in the amount of $5,000.00, being Policy No. 010LA35299.

" * * * *

"... The check, after endorsements, was presented to the defendant bank to be cashed and an unidentified lady...