Bryant v. Community Choice Credit Union
| Decision Date | 25 January 2007 |
| Docket Number | No. 05CA0910.,05CA0910. |
| Citation | 160 P.3d 266 |
| Parties | Betty BRYANT, Personal Representative of the Estate of Everald Grace Nichols, Plaintiff-Appellant, v. COMMUNITY CHOICE CREDIT UNION, Defendant-Appellee. |
| Court | Colorado Court of Appeals |
Benson & Case, LLP, John Case, Denver, Colorado, for Plaintiff-Appellant.
Collins & Pringle, LLC, Patrick J. Collins, Dwight L. Pringle, Denver, Colorado, for Defendant-Appellee.
Opinion by Judge CARPARELLI.
This case concerns a fiduciary's alleged improper use of a credit union account, the credit union's duties to the alleged principal, and the credit's union's rights to setoff. Plaintiff, Betty Bryant, the personal representative of the Estate of Everald Grace Nichols, appeals the trial court's judgment in favor of defendant, Community Choice Credit Union. We affirm in part, reverse in part, and remand for further proceedings.
Nichols was eighty-one years old when she and Charles Richard Lynch, who was her agent under the terms of a general power of attorney, opened an account with the defendant credit union. When Nichols went to the credit union a year later to transfer funds to another financial institution, she was told the account was closed. She later learned that Lynch had transferred funds out of the account for his own benefit, purchased two certificates of deposit with assets from the account, and pledged those certificates of deposit as collateral for his personal loans from the credit union. She also learned that the credit union had taken the pledged assets after Lynch defaulted on those loans.
About two years later, plaintiff was appointed as Nichols's conservator, and she sued the credit union, asserting claims titled forgery and theft, accepting a forged instrument, ultra vires acts, negligence and negligence per se, conversion, breach of duty of good faith, money had and received, resulting and constructive trust, statutory liability, and punitive damages. After Nichols died, the trial court granted the credit union's motion for summary judgment on all claims except the claim titled negligence and negligence per se and the one titled punitive damages.
The two surviving claims were tried to a jury. At the end of plaintiff's case, the credit union moved for a directed verdict pursuant to C.R.C.P. 50. The trial court concluded, among other things, that, in accordance with §§ 15-15-221 and 15-15-222, C.R.S.2006, the credit union owed no duty to Nichols with regard to Lynch's use of the funds in the account. Accordingly, it granted the credit union's motion and entered judgment for the credit union as to both claims.
Plaintiff asserts that the trial court erred when it granted the credit union's motions for directed verdict and summary judgment. She argues that she is entitled to recoup from the credit union $142,974 that it obtained when it liquidated two certificates of deposit that secured Lynch's personal debt. We agree that the claims entitled negligence and negligence per se, punitive damages, and conversion were improperly dismissed.
Plaintiff contends that the trial court erred when it granted the credit union's motion for directed verdict as to her negligence and punitive damages claims. We agree.
The parties do not dispute the following facts pertinent to the account activities.
The credit union president and an employee helped Nichols and Lynch open account 9770 at the credit union. The account card was filled out by the credit union employee. It includes a check mark in a box indicating that it was a "multiple party account with survivorship," but the space provided to identify the account owners contains only Lynch's name. The section for account designation contains no agency designation; the box to indicate "agency" is not checked and the line for the name of the agent is blank.
At the same time, either Nichols or Lynch presented the credit union president with a general power of attorney designating Lynch as Nichols's agent. A notation of "P.O.A." was made in the credit union's computerized account records, and a copy of the power of attorney was placed in the account file. The power of attorney granted Lynch the following banking powers:
To make, receive and endorse checks and drafts, deposit and withdraw funds, acquire and redeem certificates of deposit, in banks, savings and loan associations and other institutions, execute or release such deeds of trust or other security agreements as may be necessary or proper in the exercise of the rights and powers herein granted.
Two days later, a check payable to Nichols in the amount of $331,069, the proceeds from the sale of her home, was deposited into the account. On the same day, Lynch transferred $131,069 to account 9769, and $100,000 to account 6278, both of which were in his name alone. Four days later, Lynch used multiple-party account funds to purchase a $100,000 three-month certificate of deposit bearing his name and that of Nichols, which the credit union designated as account 9770/msc. Lynch also purchased a certificate of deposit in the amount of $50,000 using the assets in account 6278.
Eight days later, the credit union loaned Lynch $50,000 secured by the certificate of deposit associated with account 6278. Six days later, the credit union loaned Lynch $100,000 secured by the jointly held certificate of deposit.
When Lynch defaulted on the $100,000 loan after only three months, the credit union accepted a new note at a higher interest rate. Lynch signed that note in his own name, but also signed it in Nichols's name as a maker under the purported authority of the power of attorney. In that note, Lynch also pledged $100,000 of the assets in account 9770 as security.
About the same time, Lynch defaulted on the $50,000 loan, and the credit union accepted a note in the amount of $43,000 at the same interest rate as the original note. Lynch signed that note as the only maker.
Less than a year later, after Lynch again defaulted on both loans, the credit union took ownership of the $100,000 certificate of deposit and $43,000 of the $50,000 certificate to satisfy the loan obligations. It, thereby, emptied the multiple-party account.
On cross-examination, the credit union president agreed that, when Nichols gave her the power of attorney, she understood that Nichols expected Lynch to act as her fiduciary agent. The credit union president also testified that she knew that Lynch contributed only $26 to the account assets and that Nichols contributed $331,069, the proceeds from the sale of her home.
Plaintiff also presented evidence that credit union employees were suspicious that Lynch was misusing the account funds.
Plaintiff's expert testified regarding the standard of care required of financial institutions in Colorado, and opined that the credit union breached that standard when it permitted Lynch to pledge the assets from the multiple-party account to secure his personal debt.
When granting the motion for directed verdict, the court stated that the evidence was, for all relevant purposes, uncontested as to certain facts, and that, considering the evidence in the light most favorable to plaintiff, a reasonable juror could not find different facts.
The court stated that Nichols knowingly opened the account, after the rights and risks of co-ownership of the account were explained to her, including the full authority of either party to deal with all funds in the account. It also noted that the provision on the account card that would indicate an agency account was not marked. The court ruled that the power of attorney was presented to the credit union president, but it was not operational or relevant to the transaction in any way and did not transform the account into a trust account.
The court also reached conclusions which can be summarized as follows:
• Sections 15-15-221 and 15-15-222 specifically negate the common law duty that would exist under the theories and standards of care to which plaintiff's expert testified and plaintiff's common law and statutory claims of negligence and negligence per se. Any duty that might exist under common law for a financial institution to look to the source of deposits or to question the application of payments from the account by an account member is negated, specifically, by these statutes. To impose a duty on the credit union to specifically recognize the source of the funds from Nichols, as compared to from Nichols and Lynch, or from only Lynch, would be specifically contrary to these statutes.
• Under these statutes, it is not the responsibility of a credit union to audit or analyze the application of multiparty accounts to see whether they are going to the benefit of only one accountholder which responsibility is the basis of plaintiff's claims.
• There is no liability on the part of the credit union.
• Although a common law cause of action might have otherwise existed, it was negated when the legislature passed the referenced statutes.
We review a directed verdict de novo. Park Rise Homeowners Ass'n v. Res. Constr., 155 P.3d 427 (Colo.App. 2006); City of Westminster v. Centric-Jones Constructors, 100 P.3d 472 (Colo.App.2003).
A directed verdict should be granted only in the clearest of cases. Huntoon v. TCI Cablevision of Colo., Inc., 969 P.2d 681, 686 (Colo.1998). A court considering a motion for directed verdict must view the evidence and all reasonable inferences arising from it in the light most favorable to the nonmoving party. Huntoon, supra. If the evidence viewed in this light cannot support a verdict in favor of the nonmoving party, the court may grant a motion for directed verdict, and the issue should not be submitted to the jury. Huntoon, supra.
Plaintiff's contentions are premised on the following arguments:
• The holdings in Cox v....
To continue reading
Request your trial
-
Sterenbuch v. Goss
...Lawry v. Palm, 192 P.3d 550, 562 (Colo.App.2008), is not to be pled as a separate cause of action, Bryant v. Community Choice Credit Union, 160 P.3d 266, 276 (Colo.App.2007), we analyze only the timeliness of Sterenbuch's unjust enrichment claim. And because unjust enrichment is a form of r......
-
Marks v. Gessler
...interpretation, which we review de novo. Fischbach v. Holzberlein, 215 P.3d 407, 409 (Colo.App.2009) (citing Bryant v. Cmty. Choice Credit Union, 160 P.3d 266, 274 (Colo.App.2007) ). ¶ 26 Our primary objective in construing a statute is to effectuate the intent of the General Assembly. Spec......
-
Bernache v. Brown
...P.3d 807, 811 (Colo. 2004), and courts "avoid constructions that are at odds with the legislative scheme," Bryant v. Cmty. Choice Credit Union , 160 P.3d 266, 274 (Colo. App. 2007). ¶ 26 We review evidentiary rulings in civil cases for harmless error. C.R.C.P. 61 ; Laura A. Newman, LLC v. R......
-
DA Mountain Rentals, LLC v. Lodge at Lionshead Phase III Condo. Ass'n Inc., Court of Appeals Nos. 14CA2195 & 15CA0203
...or is at odds with the legislative scheme. In re J.N.H. , 209 P.3d 1221, 1223 (Colo. App. 2009) ; Bryant v. Cmty. Choice Credit Union , 160 P.3d 266, 274 (Colo. App. 2007).¶ 28 As a general matter, CCIOA does not apply to common interest communities created in Colorado before July 1, 1992. ......
-
Lewis v. Lewis and Non-married Partner Litigation
...1062, 1069 (Colo. 2005). 21.Page v. Clark, 592 P.2d 792 (Colo. 1976). 22.Id. at 797-98. See alsoBryant v. Community Choice Credit Union, 160 P.3d 266 (Colo.App. 2007). 23.Page, supra note 21at 797. See also In re Marriage of Heinzman, 596 P.2d 61 (Colo. 1979); Bogert et al., Bogert on Trust......