Harvey v. First Nat. Bank of Powell
| Decision Date | 19 September 1996 |
| Docket Number | No. 96-19,96-19 |
| Parties | 32 UCC Rep.Serv.2d 214 Douglas W. HARVEY d/b/a Homestead House Associates; and The Homestead House, a Montana Corporation, Appellants (Plaintiffs), v. FIRST NATIONAL BANK OF POWELL, a National Banking Corporation, Appellee (Defendant). |
| Court | Wyoming Supreme Court |
James P. Castberg, Sheridan, for Appellants (Plaintiffs).
John G. Fenn of Yonkee & Toner, Sheridan; and Cecil Alice Johnstone of First National Bank of Powell, Powell, for Appellee (Defendant).
Before TAYLOR, C.J., and THOMAS, MACY, GOLDEN * and LEHMAN, JJ.
Appellants Douglas Harvey, doing business as Homestead House Associates, and The Homestead House, a Montana corporation, appeal from a judgment as a matter of law which was entered in favor of Appellee First National Bank of Powell.
We affirm.
Appellants request our review of the following issues:
I. The Court erred in not allowing the jury to hear the Appellants' evidence concerning the attorney's fees expended by the Appellants as a result of the wrongful acts of the Appellee.
II. The Court erred in not allowing the Appellants to present the question of punitive damages for consideration by the jury.
III. The Court erred in granting the Appellee's Motion For Judgment As A Matter Of Law following a verdict in favor of the Appellants by the jury.
Julia Achilles, through JBA Furniture, Inc., operated furniture stores in several Wyoming cities. The store at issue in this case, the Furniture Center, was located in Powell. JBA Furniture used First National Bank for its banking and financial needs while it operated the Furniture Center. In 1986, JBA Furniture decided to close the Furniture Center and sought Harvey's assistance in conducting a "going out of business sale" since he had been involved in several similar sales.
On October 28, 1986, Achilles, Harvey, and the loan officer for First National Bank met to discuss a loan for the going out of business sale and other transactions. First National Bank agreed to loan Achilles $20,000 so that she could initiate the sale. A checking account was opened in the name of "JBA Furniture Center Special Account" to be used during the course of the sale, and the $20,000 was placed in that account. First National Bank prepared a signature card for the account and gave it to Achilles, requesting that she obtain the appropriate signatures.
On November 13, 1986, Harvey and Achilles returned the signature card to First National Bank. Achilles, Pam Mooney (Furniture JBA Furniture provided First National Bank with its corporate authorization resolution which was dated November 13, 1986, and which provided in part that two signatures were required on checks and orders for the payment of money and the withdrawal of funds which were on deposit at the bank. The corporate authorization resolution listed Julia Achilles--President, Charles Achilles--Vice President, and Allen Heinze--Secretary as the persons who were authorized to be one of the required two signatures. The second page of the resolution, however, provided:
Center's employee), Maxine Allred (Harvey's employee), and Allen Heinze (Achilles's accountant) had signed the card. Notations were written on the card in red ink which read: "2 if over $500" and "2 over $500."
RESOLVED, that The First National Bank of Powell, Wyoming is hereby designated a depository of this corporation and that all checks or orders drawn against our account be signed as follows:
CHECKS written in amounts up to $500.00 require one of the following signatures:
Pam Mooney or Maxine Allred
CHECKS [w]ritten in amounts in excess of $500.00 require TWO signatures:
Pam Mooney, Maxine Allred or one of the officers of the Corporation listed below.
CHECKS may be written in amounts in excess of $500.00 with one signature, Julia I. Achilles, President. In the absence of Julia I. Achilles, Allen Heinze or C.L. Achilles may sign checks over $500.00.
(Emphasis added.)
Allred assisted in the sale and kept track of the bookkeeping aspects of the sale for Harvey. Mooney performed bookkeeping duties and acted as assistant manager for the Furniture Center. She also continued to maintain the bookkeeping activities for JBA Furniture. At the beginning of the sale, Mooney and Allred shared an office in the Furniture Center facility which contained all the accounting data and records as well as the checkbook to the First National Bank account. Within a week or two, Harvey decided that Mooney should no longer perform her duties in that office and that he and Allred would use the desks in that office. He, therefore, moved Mooney to the front counter where she was to do her work, and he moved into the office with Allred, keeping the checkbook in that office.
First National Bank sent monthly bank statements to the Furniture Center address listed on the signature card. Mooney reconciled the bank statements and placed them in a filing cabinet which was located in the office that Harvey and Allred shared. Allred saw some of the statements which were mailed to the store. She was aware that Mooney reconciled them and that they were available to her if she wanted them.
On February 18, 1987, and February 23, 1987, Achilles wrote two checks on the account to withdraw $50,821.80 and $37,653.84, respectively. She presented the checks simultaneously to First National Bank for payment. Upon review of the signature card and the resolution, and in reliance on the second page of the resolution, a loan administrator for First National Bank determined that the resolution took precedence over the signature card and that, therefore, only one signature was required on the checks, and he allowed Achilles to withdraw the funds.
Appellants filed a complaint against First National Bank on February 22, 1991, wherein they claimed that the bank had breached the account agreement by allowing Achilles to withdraw the money from the account with checks which contained only her signature and that, as a result of that breach, Appellants were denied the funds which they were entitled to have. A jury trial was held from June 19, 1995, through June 22, 1995. At the close of Appellants' case in chief, First National Bank moved for a judgment as a matter of law pursuant to W.R.C.P. 50. The trial court granted the motion with respect to the punitive damages claim, finding that no evidence supported a finding of willful and wanton misconduct on First National Bank's part. With regard to the other claims, the trial court took the motion under advisement. At the close of the evidence, First National The jury found that First National Bank had breached the account agreement, had been negligent in performing its duties to Appellants, and had breached its fiduciary duties to Appellants. The jury assessed fault at fifty percent for Appellants and at fifty percent for First National Bank and found that the total damages sustained by Appellants was $10,000.
Bank renewed its motion for a judgment as a matter of law. The trial court indicated that the motion was still under advisement.
First National Bank again renewed its motion for a judgment as a matter of law. After a hearing on the motion, the trial court granted First National Bank's motion, set aside the jury's verdict, and dismissed Appellants' complaint. Appellants appeal from that decision.
Our standard for reviewing a judgment as a matter of law is well established:
Generally, a motion for [a judgment as a matter of law] is reviewed by determining whether the jury reached the one conclusion reasonable jurors could have reached under the circumstances. However, W.R.C.P. 50(a)(1) allows a court to grant a motion for [a judgment as a matter of law] if the evidence presented at trial is legally insufficient. Thus, when the case is allowed to go to the jury and the jury renders a verdict which is not supported by legally sufficient evidence, the trial court has an obligation to direct the entry of judgment as a matter of law. This obligation must be fulfilled despite the fact that judgment as a matter of law should be granted cautiously and sparingly. The decision to grant or deny a motion for [a] judgment as a matter of law is reviewed de novo.
Del Rossi v. Doenz, 912 P.2d 1116, 1118-19 (Wyo.1996) (citations omitted).
Appellants maintain that the trial court erred in granting First National Bank's motion for a judgment as a matter of law following the jury verdict which favored Appellants. First National Bank argues that Appellants' claims were barred under WYO. STAT. § 34-21-475 (1977), renumbered WYO. STAT. § 34.1-4-406(d) (1990) (amended 1991), since Harvey failed to notify the bank within one year that the checks contained unauthorized signatures.
Section 34-21-475(d) provided:
(d) Without regard to care or lack of care of either the customer or the bank a customer who does not within one (1) year from the time the statement and items are made available to the customer (subsection (1) [subsection (a) ] ) discover and report his unauthorized signature or any alteration on the face or back of the item or does not within three (3) years from that time discover and report any unauthorized indorsement is precluded from asserting against the bank such unauthorized signature or indorsement or such alteration.
This statute placed an absolute time limit of one year on a customer's...
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