Fed. Deposit Ins. Corp. v. Lenk

• Decision Date: 09 March 2012
• Docket Number: No. 08-0908,08-0908
• Parties: FEDERAL DEPOSIT INSURANCE CORP. AS RECEIVER FOR GUARANTY BANK, PETITIONER, v. CHRISTA C. LENK, ADMINISTRATOR OF THE ESTATE OF JOHN ALBERT THOMPSON, RESPONDENT
• Court: Texas Supreme Court

FEDERAL DEPOSIT INSURANCE CORP. AS RECEIVER

FOR GUARANTY BANK, PETITIONER,

v.CHRISTA C. LENK, ADMINISTRATOR OF THE ESTATE

OF JOHN ALBERT THOMPSON, RESPONDENT

No. 08-0908

SUPREME COURT OF TEXAS

Opinion delivered: March 9, 2012

ON PETITION FOR REVIEW FROM THE

COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS

JUSTICE HECHT, joined by JUSTICE GREEN, dissenting.

John Albert Thompson died in January 2000 with about $3,000 on deposit in a Guaranty Bank checking account. A few weeks later, Mel Spillman falsely represented to the Bank that he was Thompson's nephew and estate administrator, and directed that he be named on Thompson's account. The Bank complied. Spillman then deposited around $167,000 to the account, and over the next several months proceeded to withdraw all but a small amount that was eaten up in service charges. The Bank closed the account on September 13, 2001.

Spillman was a fraud. He forged letters of administration in dozens of estates like Thompson's. In June 2002, he was sentenced to ten years in prison.

In September 2003, Christa Lenk was appointed administrator of Thompson's estate and several others Spillman had defrauded. In June 2005, Lenk demanded that the Bank repay the fundsSpillman had withdrawn from Thompson's account years earlier. The Bank refused, and Lenk sued. The trial court granted summary judgment for the Bank; the court of appeals reversed, holding that summary judgment should have been granted for Lenk.¹

The first sentence of Section 34.301(b) of the Texas Finance Code states: "A cause of action for denial of deposit liability on a deposit contract without a maturity date does not accrue until the bank has denied liability and given notice of the denial to the account holder."² Lenk contends that her action against the Bank for allowing unauthorized withdrawals from Thompson's checking account until January 2001 accrued in June 2005, when she demanded that the Bank return the money, and the Bank refused. The Court agrees that this is Lenk's contention — "[Lenk] claimed the bank breached the deposit agreement by refusing her payment demand"³ — and that it is correct — "the bank refused to pay general deposit funds to the rightful account holder (Lenk), and so . . . breached the deposit agreement."⁴

But Lenk's claim ignores the second sentence of Section 34.301(b): "A bank that provides an account statement or passbook to the account holder is considered to have denied liability and given the notice as to any amount not shown on the statement or passbook."⁵ In Jefferson StateBank v. Lenk, we held that a bank that makes account statements available at its offices is considered to have denied liability for, and given notice of, unauthorized withdrawals from a deceased customer's checking account when a representative is appointed for the decedent's estate.⁶ Lenk was appointed the representative of Thompson's estate in September 2003. Under Section 34.301(b), her action against the Bank accrued then, not in June 2005.

The Court observes that suit based on a claim that accrued in September 2003 would be time-barred⁷ and faults the Bank for not making that argument. But the Bank argues, and the Court specifically acknowledges, that Lenk's claim is for the Bank's refusal of her June 2005 demand. Lenk pleaded in her petition:

On June 4, 2005, [Lenk] made demand upon [the Bank] for the payment of [unauthorized withdrawals] from the account, and [the Bank] has failed and refused to pay over to [Lenk] the sums due and owing from the account.

* * *

Under the terms of the depositor's agreement with [Thompson] and applicable law, [the Bank] was required to pay sums on deposit to [Lenk] on demand or to her order to such persons as she may direct. [The Bank] failed and refused to pay to [Lenk] the sums deposited upon her demand. Accordingly, [Lenk] is entitled to judgment in the amount of all sums which were deposited in the name of [Thompson] or his representative since the date of his death.

She asserted in her motion for summary judgment:

On June 4, 2005, [Lenk] made written demand upon [the Bank] for the sums deposited into [Thompson's] account, and [the Bank] has failed and refused to pay the sums deposited into the account to [Lenk].

[The Bank's] failure and refusal to pay to [Lenk] the sums deposited into the account of [Thompson] breached the terms of the depositor's agreement. Accordingly, [Lenk] is entitled to judgment . . . .

She argued to the court of appeals:

In Plaintiff's Original Petition, [Lenk] stated that [her] cause of action is based upon the requirements of the depositors agreement and [the Bank's] refusal to pay [Lenk] the sums deposited into Mr. Thompson's account after her demand.

Lenk could not have been clearer. She alleged that her June 2005 demand triggered her claim. She sued the Bank days later. An assertion by the Bank that her claim for its refusal of her demand was time-barred would have been frivolous.

The problem with the claim Lenk asserts is not that it is time-barred; the problem is that, under Section 34.301(b), the claim does not exist, and for good reason. Allowing a bank customer to create a cause of action merely by writing a...