Bland v. Branch Banking & Trust Co.

• Decision Date: 01 May 2001
• Docket Number: No. COA00-113.,COA00-113.
• Citation: 143 NC App. 282,547 S.E.2d 62
• Court: North Carolina Court of Appeals
• Parties: Marshall Edward BLAND, Administrator C.T.A. of the Estate of Lela B. Bland; and Marshall Edward Bland, individually, Plaintiff, v. BRANCH BANKING & TRUST CO., Frankie Bland, Tommy Bland, Sarah Bland, Chris Gates, Jeff Bland, and Chuck Bland, Defendants.

547 S.E.2d 62

143 NC App. 282

Marshall Edward BLAND, Administrator C.T.A. of the Estate of Lela B. Bland; and Marshall Edward Bland, individually, Plaintiff, v. BRANCH BANKING & TRUST CO., Frankie Bland, Tommy Bland, Sarah Bland, Chris Gates, Jeff Bland, and Chuck Bland, Defendants.

No. COA00-113.

Court of Appeals of North Carolina.

May 1, 2001.

Gerrans, Foster & Sargeant, P.A., by William W. Gerrans, Kinston, for plaintiff-appellant.

William D. Spence, Kinston, for defendants-appellees.

HUDSON, Judge.

Lela B. Bland (decedent) died on 16 October 1998. Decedent's son, Marshall E. Bland (plaintiff), was appointed Administrator of decedent's estate. At the time of her death, decedent had funds in a savings account (the savings account) at Branch Banking & Trust Company (BB & T). The savings account had been opened on 13 March 1990. In connection with the savings account, decedent had signed and executed an instrument entitled "Discretionary Revocable Trust Agreement" (the trust agreement), also dated 13 March 1990. The trust agreement names decedent as trustee, and names her three sons as beneficiaries, all three of whom were living at the time: Marshall E. Bland, A. Frank Bland, and Charlie D. Bland. The trust agreement provides, in pertinent part:

The funds in the account indicated on the reverse side of this instrument, together with earnings thereon, and any future additions thereto are conveyed to the trustee as indicated for the benefit of the beneficiary as indicated. The conditions of said trust are: (1) The trustee is authorized to hold, manage, pledge, invest and reinvest said funds in his sole discretion; (2) The undersigned grantor reserves the right to revoke said trust in part or in full at any time and any partial or complete withdrawal by the original trustee if he is the grantor shall be a revocation by the grantor to the extent of such withdrawal, but no other revocation shall be valid unless written notice is given to the institution named on the reverse side of this card; ... (4) This trust, subject to the right of revocation, shall continue for the life of the grantor and thereafter until the beneficiary is [left blank] years of age, or until his death if he dies before such age, and then the proceeds may be delivered by the institution to the beneficiary, or to his heirs, or to the trustee on his or their behalf, and if the age of the beneficiary is not specified this trust is for twenty-one years.

At the time of decedent's death, plaintiff was the only one of the three named beneficiaries still living. The other two named beneficiaries, A. Frank Bland and Charlie D. Bland, were survived by their respective children. BB & T acknowledged the death of decedent and its obligation to pay the principal balance of the account plus interest. However, BB & T expressed to plaintiff that it was unable to determine the respective parties' entitlements to the funds. Therefore, on 14 May 1999, plaintiff filed a declaratory judgment action, naming as defendants BB & T, as well as the surviving children of A. Frank Bland and Charlie D. Bland (the individual defendants). The complaint seeks a declaratory judgment as to the rights and obligations of the parties, and specifically requests that the court instruct BB & T as to how it should distribute the funds in the account. BB & T and the individual defendants filed answers admitting each and every allegation of the complaint; thus, the pertinent facts are undisputed.

On 14 September 1999, plaintiff filed a motion for summary judgment pursuant to N.C.R. Civ. P. 56 (Rule 56). On 5 October 1999, the individual defendants also filed a motion for summary judgment pursuant to Rule 56. On 11 October 1999, plaintiff and the individual defendants appeared before the trial court for a hearing on the summary judgment motions. BB & T notified the parties that it would not appear at the hearing, and that it would distribute the funds as determined by the court. On 21 October 1999, the trial court entered an order setting forth nine findings, including a finding that decedent had opened the account with BB & T on 13 March 1990, and a finding that the residuary clause in decedent's will instructed that the residue of her property be distributed to her three sons. The order also sets forth two conclusions as a matter of law: (1) that the savings account at issue failed to comply with N.C.G.S. § 54B-130 (1999) ("Trust accounts") as that statute existed on 13 March 1990; and (2) that the funds in the savings account therefore became the property of decedent's estate upon her death and should be distributed in accordance with the residuary clause of her will. Thus, the order instructs BB & T to disburse the funds to decedent's estate, and further instructs the administrator of the estate to distribute onethird of the funds to the surviving children of A. Frank Bland, one-third to the surviving children of Charlie D. Bland, and one-third to plaintiff, in accordance with the residuary clause of decedent's will. Plaintiff appeals from this order.

On appeal, plaintiff raises six assignments of error. In his first and second assignments of error, plaintiff contends that the trial court was without authority to include findings and conclusions in its summary judgment order. Findings of fact and conclusions of law are not necessary in an order determining a motion for summary judgment. See Mosley v. Finance Co., 36 N.C.App. 109, 111, 243 S.E.2d 145, 147, disc. review denied, 295 N.C. 467, 246 S.E.2d 9 (1978). "However, such findings and conclusions do not render a summary judgment void or voidable and may be helpful, if the facts are not at issue and support the judgment." Id. In the instant case, the findings in the order appear after an introductory statement that "[t]he following are material facts which are not at issue and upon which the Court has based its decision." The inclusion of such undisputed material facts does not constitute error since the order makes clear that the findings were merely a summary of the material facts not at issue which justified entry of judgment. See Trust Co. v. Broadcasting Corp., 32 N.C.App. 655, 658, 233 S.E.2d 687, 689,disc. review denied, 292 N.C. 734, 235 S.E.2d 788 (1977). Furthermore, given the nature of this case, we believe the inclusion of the undisputed material facts and the trial court's conclusions provides helpful guidance for this Court in reviewing the Rule 56 order. Plaintiff's first and second assignments of error are overruled.

Plaintiff's four remaining assignments of error all essentially challenge the trial court's two conclusions of law: that decedent's savings account failed to comply with G.S. § 54B-130 as it existed on 13 March 1990, and that the funds in the account became the property of decedent's estate upon her death to be distributed in accordance with the residuary clause of her will. We therefore turn to an examination of whether the trial court's legal conclusions, and its order, were in accordance with applicable law.

Plaintiff contends that decedent established a valid trust pursuant to either G.S. § 54B-130 or the common law. In general, when a savings account is established by a grantor to be held by the grantor as trustee for the benefit of another, the resulting trust is referred to as a "tentative trust" or a "Totten Trust." See Baker v. Cox, 77 N.C.App. 445, 446, 335 S.E.2d 71, 72 (1985), disc. review denied, 315 N.C. 389, 338 S.E.2d 877 (1986). North Carolina has expressly recognized such trusts, established at savings and loan associations, provided that the trust conforms with the statutory provisions set forth in G.S. § 54B-130. Id. Among the many requirements set forth in G.S. § 54B-130, the person establishing the account must "execute a written agreement with the association containing a statement that it is executed pursuant to the provisions of this subsection." G.S. § 54B-130. The statute also limits the number of beneficiaries to "not more than one person." Id. Furthermore, the statute requires that:

The person establishing an account under this subsection shall sign a statement containing language set forth in a conspicuous manner and substantially similar to the following: ...

I understand that by establishing a trust account under the provisions of North Carolina General Statute 54B-130(a) that:

1. During my lifetime I may withdraw the money in the account; and

2. By written direction to the savings and loan association ... I may change the beneficiary; and

3. Upon my death the money remaining in the account will belong to the beneficiary, and the money will not be inherited by my heirs or be controlled by my will.

Id. The trust agreement here does not reference G.S. § 54B-130; it purports to name three beneficiaries rather than one; and it does not contain provisions substantially similar to either the change of beneficiary provision, or the provision that the funds in the account are not to be inherited by the grantor's heirs or controlled by the grantor's will. Thus, the purported trust agreement does not comply with G.S. § 54B-130.

However, G.S. § 54B-130 itself states in subdivision (a1):

This section shall not be deemed exclusive. Deposit accounts not conforming to this section shall be governed by other applicable provisions of the General Statutes or the common law, as appropriate.

Id. As there are no other provisions of the General Statutes applicable to tentative trusts established at a savings and loan association, the issue is whether the trust agreement created a valid trust pursuant to the common law.

Defendants argue that a valid trust was not created by the trust agreement. Defendants rely primarily on two cases which have held that a valid trust requires the transfer of a "present beneficial interest." In Wescott v. Bank, 227 N.C. 39, 40 S.E.2d 461 (1946), the decedent had deposited money in a bank account with written instructions to the bank as...