Handy v. U.S. Bank, National Association

• Decision Date: 10 January 2008
• Docket Number: No. 20060529-CA.,20060529-CA.
• Parties: George B. HANDY, Trustee, Plaintiff and Appellant, v. U.S. BANK, NATIONAL ASSOCIATION, Defendant and Appellee.
• Court: Utah Court of Appeals

177 P.3d 80

2008 UT App 9

George B. HANDY, Trustee, Plaintiff and Appellant, v. U.S. BANK, NATIONAL ASSOCIATION, Defendant and Appellee.

No. 20060529-CA.

Court of Appeals of Utah.

January 10, 2008.

Karra J. Porter and Nathan D. Alder, Salt Lake City; and Preston L. Handy and Garrett S. Handy, Murray, for Appellant.

Michael W. Homer, Jesse C. Trentadue, and Kevin D. Swenson, Salt Lake City, for Appellee.

Before Judges BENCH, BILLINGS, and ORME.

OPINION

ORME, Judge:

¶ 1 George B. Handy found a passbook in his "junk drawer." The passbook pertained to a savings account that, at least according to the entries in the passbook, had lain dormant for over thirty years. Handy now appeals the trial court's determination that he failed to prove he was entitled to the money reflected in the passbook. We reject some of the trial court's rationale but affirm its disposition.

I. BACKGROUND¹

A. The Passbook Account

¶ 2 In October 2003, Handy, an eighty-four-year-old Ogden attorney, found a passbook in the junk drawer of his office credenza.² The passbook was in the name of "George B. Handy, Trustee," The passbook account was issued by the United States National Bank of Oregon (the Oregon Bank). The passbook showed that someone had made five deposits totaling $150,000 between July 24 and September 14, 1971, but did not indicate that any withdrawals had been made. There were no entries showing accrued interest. Until he stumbled upon the passbook, Handy did not know he possessed it. And despite his name being on the passbook and it being in his credenza in a drawer with his personal papers, he testified that this was "the first time that the] ever saw this passbook." Handy could not remember how the passbook came to be in his junk drawer. It was "an absolute complete mystery to [him]." He further testified that normally he would have kept a document of such importance in a more "secure place." He did not initially know who opened the account; who made the deposits; who the beneficiary of the trust was; who wrote his name on the passbook; or who, if anyone besides him, was authorized to withdraw money from the passbook account. However, after thinking about the matter, he recalled that he represented a man named Richard Anderson about thirty-five years ago, with whom he traveled to Oregon to discuss some business matters with state officials. Handy further recalled Anderson's asking him if he could place money in a trust account in Handy's name, a request to which Handy consented. Not long thereafter, Anderson died in a plane crash.

¶ 3 Handy testified that he never made any of the deposits listed in the passbook account, never withdrew any money from the passbook account, and never authorized any withdrawals. He further testified that he never signed an affidavit of a lost passbook, never received any form of payment on the passbook account, and never received any correspondence regarding the passbook account. He never received any 1099 forms, any documents regarding the passbook account's accrued interest, or any documents notifying him that the account would be converted to a statement account. Handy also confirmed that he never saw a signature card on the account and did not know whose address the Oregon Bank had on file for the account. He also had no evidence that an express trust linked to the passbook account actually existed. Nonetheless, with the stated intention of returning the proceeds to Anderson's estate or other rightful owner, Handy, as trustee, sought to collect the funds reflected in the passbook from the Oregon Bank.

¶ 4 Handy presented the passbook to the U.S. National Bank Association (the Bank), the Oregon Bank's successor,³ seeking to withdraw the $150,000 plus accumulated interest.⁴ The Bank acknowledged that the passbook was authentic and was a record that the deposits had been made into the passbook account. However, the Bank refused to give Handy the funds because its computerized records did not indicate the account still existed.⁵ One of the Bank's vice presidents opined that the account must have been closed after the funds were withdrawn.

B. Passbook Accounts and the Oregon Bank's Procedures

¶ 5 Passbook savings accounts were common until the latter part of the twentieth century. When a person opened a passbook account, the passbook was his or her record of the deposits to and withdrawals from the account. The Oregon Bank kept its own records of these transactions on microfilm— before it switched to computers—and retained signature cards, which indicated who owned the account. Two of the Bank's vice presidents testified at the hearing. They both indicated that the signature card represented a contract between the owner of the account and the Oregon Bank. Those listed on the signature card had legal title to the account and could deposit and withdraw funds from the account. The vice presidents also testified that usually the name or names on the signature card would appear on the corresponding passbook. However, at times—for instance, if many names appeared on the signature card—the owners of the account chose which name or names would appear on the passbook. In such situations, those named on the signature card were still owners of the account and could withdraw funds without a passbook if they provided identification proving that they had an ownership interest in the account, i.e., that their signature was on the signature card for the account. If a person did not have a passbook and his or her name was not on the signature card, he or she would not be able to withdraw funds from the account.

¶ 6 The passbook in question contained this statement: "For your protection, all withdrawals from this account require presentation of the passbook. Please notify us at once should you lose your passbook.", However, the two vice presidents outlined a procedure by which account holders who forgot their passbooks could still withdraw money from their accounts.⁶ The teller would ask for identification, verify via the signature card that the person was indeed authorized to withdraw money, and then obtain a bank officer's approval. If everything was in order, the teller would then effectuate the withdrawal. The next time the customer presented the passbook, a teller—after checking the records—would update the missing transaction in the passbook and make the notation "NOB," for "no book," where the teller's initials would have appeared had the passbook been presented during the prior transaction.

¶ 7 The Oregon Bank began computerizing its records in 1974. In 1980, the Oregon Bank stopped offering passbook accounts and converted all existing passbook accounts to statement accounts. The Oregon Bank placed signs around its branches and mailed notices to its clients about the conversion. For the new statement accounts, the Oregon Bank sent its customers itemized statements showing their withdrawals and deposits up to that time. After the conversion, a passbook provided a record of the account as it existed at the time of conversion, but, as the trial court found, the passbooks themselves became worthless. Banks thereafter relied on account statements and their records for an up-to-date summary of their clients' accounts. The Oregon Bank advised its account holders to throw their passbooks away. It later distributed its supply of old passbooks to school children for use as scratch pads or in connection with "personal finance day[s]" at schools.

C. The Proceedings Below and Arguments on Appeal

¶ 8 After the Bank refused to honor Handy's request to withdraw funds from the passbook account, he filed this lawsuit in March 2004. The Bank later filed a motion for summary judgment, contending that Handy's claims were barred by the "twenty-year presumption of payment" doctrine, laches, and Oregon's Uniform Disposition of Unclaimed Property Act. The trial court denied summary judgment because material facts were in dispute. It also determined that the passbook was prima facie evidence that the passbook account existed and that its funds had not been withdrawn. After a bench trial early in 2006, the trial court determined that Oregon's common law presumption that "after 20 years, an obligation is presumed to have been paid" applied to bank deposits. It then determined that Handy failed to overcome the presumption.⁷

¶ 9 Handy appeals, arguing that the trial court erred in determining that the twenty-year common law presumption applied to savings accounts. He alternatively asserts that, if applying the presumption was appropriate, the date on which the twenty-year period began to run was the date when Handy first made a demand for payment in late 2003, not when the account was opened or when the deposits were made. Finally, he contends that even if the twenty-year presumption of payment applied, his evidence rebutted the presumption.

¶ 10 The Bank asserts that the twenty-year presumption of payment was properly applied under Oregon law. The Bank argues that, "[i]rrespective of whether the District Court correctly applied the common law presumption of payment rule, it found that Handy had failed to prove his claim by [a] preponderance of the evidence" because he failed to present a signature card showing that he was the owner of the account and failed to present trust documents showing that a trust actually existed. Thus, the Bank argues, "as a matter of law ... Handy was not entitled to the monies in the account."

II. ISSUES AND STANDARDS OF REVIEW

¶ 11 The first issue is whether the trial court properly determined, under Oregon law,⁸ that a twenty-year presumption of payment applies in this case. The second issue is when the presumptive period would begin to run in the savings account context. Both of these issues involve interpretation of case law, and we review a trial court's legal interpretations and conclusions regarding case law for correctness. See Christiansen v. Farmers Ins. Exch., 2005 UT 21, ¶ 7...