Gibson v. Bank of America, N.A.

• Decision Date: 29 April 2009
• Docket Number: No. 4536.,4536.
• Citation: 383 S.C. 399,680 S.E.2d 778
• Parties: Roberta Cook GIBSON, as Trustee and Personal Representative of the Estate of Georgia F. Mitchell, deceased, Respondent, v. BANK OF AMERICA, N.A., Appellant.
• Court: South Carolina Court of Appeals

680 S.E.2d 778

383 S.C. 399

Roberta Cook GIBSON, as Trustee and Personal Representative of the Estate of Georgia F. Mitchell, deceased, Respondent, v. BANK OF AMERICA, N.A., Appellant.

No. 4536.

Court of Appeals of South Carolina.

Heard February 18, 2009.

Decided April 29, 2009.

Thomas William McGee, III, and Erik T. Norton, of Columbia, for Appellant.

J. Boone Aiken, III, of Florence, James B. Richardson, Jr., of Columbia, for Respondent.

GEATHERS, J.:

In this negligence and conversion action, Respondent Roberta Gibson obtained a judgment for actual and punitive damages against Appellant Bank of America (BOA) on Gibson's cause of action for negligence. BOA appeals the trial court's denial of its motions for a directed verdict and judgment notwithstanding the verdict (JNOV) on the ground that Gibson's negligence claim is barred by the three-year statute of limitations, as set forth in S.C.Code Ann. § 15-3-530(5) (2005).¹ We reverse.

FACTS/PROCEDURAL HISTORY

Gibson is the personal representative of the Estate of Georgia F. Mitchell. Mitchell died on November 19, 2000, at the age of ninety-two. Prior to her death, Mitchell maintained an interest-bearing checking account and a money market account at BOA's banking center on Parker Road in Florissant, Missouri. Both accounts were joint accounts co-owned by Mitchell and her best friend, Lucille Gilda. From November 16, 1999 through March 28, 2000, sixteen unexplained withdrawals from Mitchell's account occurred. During this time period, Mitchell relocated from Missouri to Cheraw, South Carolina on January 22, 2000 to live with Gibson, the widow of Mitchell's nephew. Within a few weeks after Mitchell's arrival in South Carolina, Gibson contacted her estate planning attorney to inquire about estate planning services for Mitchell, who was very affluent. As a result of his meeting with Mitchell, the attorney prepared a trust, will, and power of attorney for Mitchell. Gibson was named as the trustee of Mitchell's trust and Gibson's children were named as beneficiaries of Mitchell's will.

Mitchell received statements for her BOA accounts for the months ending February 7, 2000 and June 9, 2000.² The February 7 statement showed a balance of $43,961.37 for the money market account and a balance of $25,526.97 for the checking account. The June 9 statement showed an approximate balance of $1,288.53 for the money market account and a balance of $20,537.99 for the checking account.³ Thus, the combined depletion of the money market and checking accounts from February 7, 2000 to June 9, 2000 totaled $47,661.82. The statements for the intervening months, which showed the last six unexplained withdrawals, were held at the Parker Road banking center at the direction of the center's manager, Victoria Gan. According to Gan's deposition testimony, she had asked another BOA employee working in the statements department to send Mitchell's account statements to Gan's attention at the Parker Road banking center because Lucille Gilda had requested that the statements be held at the bank due to mail security concerns. Gan also testified that she mailed those statements to Mitchell at her South Carolina address in May 2000. After Mitchell had an opportunity to go through her mail, Gibson forwarded Mitchell's BOA statements to Gibson's daughter, Elizabeth Chanter, who was a certified public accountant. Chanter did not review those statements at that time.

Gan acted as the teller for virtually all of the sixteen unexplained withdrawals, and most of those withdrawals were in amounts of $5,000 or $10,000. According to Gan's testimony, after Mitchell relocated to South Carolina, she wrote a letter to Gan requesting that Gan mail to her four cashier's checks in the amount of $10,000 each. That letter has never been produced. Gan also testified that after she mailed the checks, Mitchell showed up at the Parker Road banking center on March 8, 10, and 15, respectively, to cash three of those checks and that Mitchell also appeared for all of the other unexplained withdrawals that Gan handled from November 1999 through March 2000. However Gibson disputed Gan's testimony and presented evidence that Mitchell was in South Carolina on the dates in question. Notably, Gibson presented evidence of Mitchell's execution of her will on the afternoon of March 15, 2000, in her attorney's office in South Carolina.

After Mitchell's death, several charities filed a petition in the Chesterfield County Probate Court to contest Mitchell's will. As a result of that litigation, in June 2002, BOA sent to Gibson several subpoenaed documents pertaining to Mitchell's accounts at the Parker Road banking center. Gibson gave the documents to Elizabeth Chanter to review. Upon reviewing the monthly statements for the first time, Chanter noticed the unexplained withdrawals, and, in July 2002, she prepared a chart summarizing the withdrawals. In October 2002, through counsel, Gibson finally contacted BOA to inquire about the withdrawals.

On September 26, 2003, Gibson filed the instant action against BOA, asserting causes of action for negligence, conversion, and intentional infliction of emotional distress. BOA later sought leave to file a third-party complaint against Victoria Gan on the theory that Gan may have participated in the unexplained withdrawals without BOA's knowledge or approval. Gan was suspected of embezzling funds from Mitchell's accounts through the unexplained withdrawals. The trial court denied the motion to file a third-party complaint but granted BOA's motion for summary judgment on Gibson's emotional distress claim. The trial court also ruled that Gibson's complaint stated a claim for common law conversion in addition to statutory conversion.

At trial, BOA made a motion for a directed verdict on several grounds, including the preclusion of Gibson's claims by the three-year statute of limitations for tort actions, S.C.Code Ann. § 15-3-530(5) (2005). The trial court granted BOA's directed verdict motion on all causes of action as they related to the ten unexplained withdrawals that occurred before Mitchell's relocation to South Carolina. The trial court based this ruling on the ground that the corresponding bank statements were mailed to Mitchell at her Missouri address, providing her with notice of the withdrawals within just a few weeks and, thus, the statute of limitations barred Gibson's claims as to those particular withdrawals. As to the remaining six unexplained withdrawals, the trial court denied BOA's directed verdict motion on the negligence and common law conversion claims, concluding that whether the February 7, 2000 and June 9, 2000 account statements placed Mitchell on notice that she had a claim against BOA was a question of fact for the jury. The trial court granted BOA's directed verdict motion as to Gibson's statutory conversion claim.

The jury returned a verdict against BOA on the negligence claim for $55,510.18 in actual damages and $40,000 in punitive damages. The jury returned a verdict for BOA on Gibson's common law conversion claim. BOA filed a motion for a JNOV, but the trial court denied the motion. This appeal followed.

ISSUE ON APPEAL

Was Gibson's negligence claim barred by the statute of limitations?

STANDARD OF REVIEW

"When reviewing the denial of a motion for directed verdict or JNOV, this Court applies the same standard as the trial court." Gadson ex rel. Gadson v. ECO Serv.s of S.C., Inc., 374 S.C. 171, 175, 648 S.E.2d 585, 588 (2007). The Court is required to view the evidence and inferences that reasonably can be drawn from the evidence in the light most favorable to the non-moving party. Id. at 175-76, 648 S.E.2d at 588. The motions should be denied when the evidence yields more than one inference or its inference is in doubt. Id. at 176, 648 S.E.2d at 588. "An appellate court will only reverse the [trial] court's ruling when there is no evidence to support the ruling or when the ruling is controlled by an error of law." Id.

LAW/ANALYSIS

BOA argues that the trial court erred in denying its motions for a directed verdict and JNOV on the ground that Gibson's negligence claim is barred by the statute of limitations. We agree.

The limitations period of S.C.Code Ann. § 15-3-530(5) (2005), which is the applicable limitations period for a negligence claim, begins to run when the plaintiff "knew or by the exercise of reasonable diligence should have known that he had a cause of action." S.C.Code Ann. § 15-3-535 (2005) (emphasis added). In other words, the clock starts running when the facts and circumstances of an injury would put a person of common knowledge and experience on notice that some claim against another party might exist. Burgess v. Am. Cancer Soc'y, S.C. Div., Inc., 300 S.C. 182, 186, 386 S.E.2d 798, 800 (Ct.App.1989).

The standard as to when the limitations period begins to run is objective rather than subjective. Burgess, 300 S.C. at 186, 386 S.E.2d at 800. Therefore, the limitations period "begins to run when a person could or should have known, through the exercise of reasonable diligence, that a cause of action might exist in his or her favor, rather than when a person obtains actual knowledge of either the potential claim or of the facts giving rise thereto." Id. (emphasis in original).

The exercise of reasonable diligence means simply that an injured party must act with some promptness where the facts and circumstances of an injury would put a person of common knowledge and experience on notice that some right of his has been invaded or that some claim against another party might exist. The statute of limitations begins to run from this point and not when advice of counsel is sought or a full-blown theory developed.

Grillo v. Speedrite Products, Inc., 340 S.C. 498, 503, 532 S.E.2d 1, 3 (Ct.App.2000) (quoting Snell v. Columbia Gun Exch. Inc., 276 S.C. 301, 303, 278 S.E.2d 333, 334 (1981)).

A key element in the reasonable diligence test is ...