Estate Of Haire v. Webster

• Decision Date: 20 March 2019
• Docket Number: No. E2017-00066-SC-R11-CV,E2017-00066-SC-R11-CV
• Citation: 570 S.W.3d 683
• Parties: ESTATE OF Ella Mae HAIRE et al. v. Shelby J. WEBSTER et al.
• Court: Tennessee Supreme Court

570 S.W.3d 683

ESTATE OF Ella Mae HAIRE et al.

v.Shelby J. WEBSTER et al.

No. E2017-00066-SC-R11-CV

Supreme Court of Tennessee, AT KNOXVILLE.

January 9, 2019 Session

FILED March 20, 2019

Robin M. McNabb, Knoxville, Tennessee, for the appellants, Phillip Daniel Haire and Estate of Ella Mae Haire.

J. Michael Winchester, Knoxville, Tennessee, for the appellee, First Tennessee Bank National Association.

Cornelia A. Clark, J., delivered the opinion of the Court, in which Jeffrey S. Bivins, C.J., and Sharon G. Lee, Holly Kirby, and Roger A. Page, JJ., joined.

Cornelia A. Clark, J.

We granted this appeal to determine whether a person listed as a joint tenant with right of survivorship on checking and savings accounts sufficiently alleged claims for relief against a bank by asserting that the bank removed his name from the accounts without his consent and breached its duty to him as a co-owner of the account by accepting forged signature cards. We conclude that the allegations of the complaint are sufficient to survive the bank’s motion to dismiss because, under Tennessee law: (1) each joint tenant with right of survivorship of a multiple-party account is deemed an owner of the account; (2) all joint tenants have presumptively equal ownership of account funds; (3) a contractual relationship arises between a bank and joint tenants upon the creation of joint tenancy bank accounts; (4) contracts cannot be modified except upon consent of the parties; and (5) no statute affords banks protection from liability for removing a joint tenant’s name from an account without the joint tenant’s consent. Accordingly, we reverse the decision of the Court of Appeals affirming the trial court’s judgment granting the bank’s motion to dismiss for failure to state a claim and remand this matter to the trial court for further proceedings consistent with this decision.

I. Factual and Procedural Background

This appeal arises from the trial court’s grant of a motion to dismiss for failure to state a claim on which relief may be granted, pursuant to Rule 12.02(6) of the Tennessee Rules of Civil Procedure. The following facts are summaries or quotations of the allegations of the complaint, which are taken as true for purposes of this appeal.¹

Ella Mae Haire ("Mother") and Paul Haire ("Father") were married and had five children. They held title as joint tenants with right of survivorship to real property in Knoxville, Tennessee, and to bank accounts, including a savings account and a checking account at First Tennessee Bank, N.A. ("Bank"). In the early 2000s, Mother and Father grew too aged to manage their own affairs. Thus, their eldest son, Philip Daniel Haire ("Mr. Haire"), the plaintiff in this case, assisted his parents with managing their finances. On August 1, 2005, Mother executed a durable power of attorney naming Mr. Haire as her attorney-in-fact for financial matters. Father died on April 1, 2008, and Mother became the sole owner of all the property she and Father had owned as joint tenants with right of survivorship, including the checking and savings accounts at issue in this appeal.

Mother was ninety-one years old when Father died and "incapable of managing her finances." On April 18, 2008, about three weeks after Father’s death, Mother and Mr. Haire completed a new signature card for the checking account at the Bank. A year later, on October 30, 2009, Mother and Mr. Haire completed a new signature card for the savings account at the Bank. In the sections of the signature cards titled "Style of Account," Mother’s and Mr. Haire’s names were listed. On both signature cards, an "X" had been placed in boxes next to preprinted text reading, "Joint tenants with right of survivorship." Mother’s and Mr. Haire’s cursive signatures appeared on lines at the bottom of the signature cards beneath the preprinted instruction "SIGN HERE (exactly as Account is to read and as checks or withdrawals are to be signed)."

From 2008 to 2012, Mr. Haire served as Mother’s primary caretaker, and during this time, Mother’s health continued to decline. She no longer drove and rarely left her home. Mr. Haire hired a home health care service to visit her and attend to her personal needs, paying for the expenses related to her care with funds from certificates of deposit he and Mother also held jointly at the Bank.

Near the beginning of 2012, due to disagreements with his younger sister, Shelby Webster, Mr. Haire "relinquished management of [Mother’s] affairs" to Mrs. Webster and to his brother, Paul David Haire ("Mr. David Haire"). Mrs. Webster "lived in New Mexico and visited [Mother] a few times a year for one to two weeks at a time." Mr. David Haire and his wife lived in Knoxville.

According to the allegations of Mr. Haire’s complaint, "from early 2012 until her death on November 15, 2013," Mother was "incompetent to manage her own affairs and did not possess the legal capacity to execute deeds, contracts, and other legal documents." When Mr. Haire surrendered Mother’s care to his siblings, he did not discuss with anyone the savings and checking accounts he and Mother held at the Bank as joint tenants with right of survivorship, nor at any time did he sign paperwork or take any action to remove his name as a joint tenant of those accounts.

Nevertheless, a new set of signature cards was completed on June 7, 2012, for the savings and checking accounts and later processed by the Bank. Mother’s name appeared in the section titled "Style of Account."² A box next to the preprinted text "Joint tenants with right of survivorship" was blank, but an "X" had been marked in a box next to a blank line, and the abbreviations "POD SOL" appeared on that line.³ Mother’s cursive signature and Mrs. Webster’s and Mr. Haire’s names appeared on lines at the bottom of the signature cards beneath the preprinted instruction "SIGN HERE (exactly as Account is to read and as checks or withdrawals are to be signed)." Next to the names of Mrs. Webster and Mr. Haire, the abbreviation "PUD" appeared.

The Bank later processed another set of signature cards that was completed on October 5, 2012. The names of Mother, Mrs. Webster, Mr. David Haire, and Mr. Haire appeared in the section titled "Style of Account."⁴ The abbreviations "POA POD" appeared next to the names of Mrs. Webster, Mr. David Haire, and Mr. Haire. The box next to the preprinted phrase "Joint tenants with right of survivorship" was again blank, but an "X" appeared in the box next to the preprinted phrase "Additional authorized signer (Power of Attorney)." An "X" also appeared in the box next to the blank line, and on that line the abbreviations "POD SOL" had been typed. The cursive signatures of Mother, Mrs. Webster, and Mr. David Haire and the printed name of Mr. Haire appeared below the instruction "SIGN HERE (exactly as Account is to read and as checks or withdrawals are to be signed)." Next to the names of Mrs. Webster, Mr. David Haire, and Mr. Haire were the abbreviations "POA/POD." On October 8, 2012, three days after the foregoing signature cards were completed, Mother executed a durable power of attorney naming Mr. David Haire as her attorney-in-fact and naming Mrs. Webster as his successor, should he be unable to serve as attorney-in-fact.

Yet another set of signature cards was completed on November 16, 2012, and subsequently processed by the Bank. This time, the savings account signature card listed the names of Mother and Mrs. Webster in the "Style of Account" section. The box next to the preprinted text "Joint tenants with right of survivorship" had been left blank, but an "X" appeared in the box next to the blank line, and "SOL owner POD" had been written on that line. Beneath the instruction "SIGN HERE (exactly as Account is to read and as checks or withdrawals are to be signed)" were Mother’s and Mrs. Webster’s cursive signatures and Mrs. Webster’s handwritten printed name. Next to Mrs. Webster’s cursive signature was the abbreviation "POA," and next to her handwritten printed name was the abbreviation "POD."

The checking account signature card completed November 16, 2012, listed the names of Mother and Mr. David Haire in the "Style of Account" section. Next to Mr. David Haire’s name were the handwritten abbreviations "POA/POD." The box next to the preprinted text "Joint Tenants with right of survivorship" was again blank, but an "X" appeared in the box next to the blank line, and on that line the abbreviations "SOL POD" appeared. Beneath the instruction "SIGN HERE (exactly as Account is to read and as checks or withdrawals are to be signed)" were Mother’s and Mr. David Haire’s cursive signatures and Mr. David Haire’s handwritten printed name. Next to Mr. David Haire’s cursive signature was the abbreviation "POA," and next to his handwritten printed name was the abbreviation "POD."

About a year later, on October 17, 2013, the final signature card for the checking account was completed and later processed by the Bank. The names of Mother, Mrs. Webster, and Mr. David Haire appeared in the section titled "Style of Account." Next to Mr. David Haire’s and Mrs. Webster’s names were the abbreviations "POA POD." The box next to the preprinted text "Joint tenants with right of survivorship" was still blank. An "X" appeared in the box next to the preprinted text "Additional authorized signer (Power of Attorney)" and in the box next to the preprinted blank line. On the blank line the abbreviations "POD SOL" were typed. Beneath the instruction "SIGN HERE (exactly as Account is to read and as checks or withdrawals are to be signed)" were Mother’s, Mrs. Webster’s, and Mr. David Haire’s cursive signatures. Next to Mrs. Webster’s and Mr. David Haire’s signatures were the abbreviations "POA POD." Mother died on November 15, 2013, less than a month after this final signature card was completed.

After Mother’s death, Mr. Haire was appointed personal representative of her estate. Mr. Haire then learned, for the first time, that he was not listed...