In re Guardianship of Duckett

• Decision Date: 12 June 2008
• Docket Number: No. 2006-CA-01738-SCT.,2006-CA-01738-SCT.
• Parties: In re The GUARDIANSHIP OF Albert Jermaine DUCKETT and Walter Williams, Jr. Walter Williams, Sr., Guardian: BancorpSouth Bank f/k/a Bank of Mississippi v. Albert Jermaine Duckett, Walter Williams, Jr., and Walter Williams, Sr.
• Court: Mississippi Supreme Court

991 So.2d 1165

In re The GUARDIANSHIP OF Albert Jermaine DUCKETT and Walter Williams, Jr.

Walter Williams, Sr., Guardian: BancorpSouth Bank f/k/a Bank of Mississippi v. Albert Jermaine Duckett, Walter Williams, Jr., and Walter Williams, Sr.

No. 2006-CA-01738-SCT.

Supreme Court of Mississippi.

June 12, 2008.

Rehearing Denied October 23, 2008.

James Patrick Caldwell, Les Alvis, Tupelo, attorneys for appellants.

John R. White, Iuka, Gregory D. Keenum, attorneys for appellees.

Before DIAZ, P.J., DICKINSON and RANDOLPH, JJ.

STATEMENT OF THE CASE

DIAZ, Presiding Justice, for the Court.

¶ 1. The Chancery Court of Tishomingo County granted summary judgment in favor of Albert Jermaine Duckett (Albert) and Walter Williams, Jr. (Junior) on their claims against BancorpSouth for allowing their father and former guardian, Walter Williams, Sr. (Walter), to convert the guardianship funds that had been deposited in a BancorpSouth savings account. After conducting a hearing to determine the damages owed by BancorpSouth, the chancery court awarded Albert and Junior $1,770,480.40 in actual damages, punitive damages, attorney's fees and prejudgment interest. Aggrieved, BancorpSouth now appeals and raises the following issues for review: (1) whether the court erred in granting Albert summary judgment because his claim is barred by the three-year statute of limitations; (2) whether the court erred in not reducing the actual damages awarded against BancorpSouth by the amount of the unauthorized expenditures made by Walter for the benefit of the wards; (3) whether the court erred in awarding punitive damages against BancorpSouth; (4) whether the court erred in awarding attorney's fees to the plaintiffs; (5) whether the court erred in its calculation of prejudgment interest; and (6) whether the court erred in allowing Walter to testify during the hearing on damages.

FACTS AND PROCEEDINGS BELOW

¶ 2. On April 3, 1993, Sharron Williams was shot and killed by an inmate of the Tishomingo County Jail who was picking up meals at the hospital facilities of her employer, Tishomingo Health Services, Inc. She left behind two minor children, Albert and Junior. Walter, the former husband of Sharron Williams and the father of both children, was appointed by the Chancery Court of Tishomingo County as their guardian on June 7, 1993. He posted a $50,000 guardianship bond with the United States Fidelity & Guaranty Company (USF & G, now Saint Paul Insurance Company).

¶ 3. Walter filed on behalf of his two minor sons a workers' compensation suit against Tishomingo Health Services and two wrongful death actions against the Sheriff of Tishomingo County and the members of the Tishomingo County Board of Supervisors, among others. On March 10, 1995, the Tishomingo County Chancery Court entered an order authorizing Walter to settle the workers' compensation claim for $5,000. On the same day, the court also issued a decree authorizing Walter to settle the wrongful death claim for an undisclosed amount. The decree approving the settlement of the wrongful death claim provided in pertinent part:

This Court finds and Orders that, with the exception of sums to be paid as attorneys fees and/or as reimbursement for necessary costs and expenses of litigation which may forthwith be withheld and distributed to the appropriate counsel described herein, the remainder of the settlement funds shall be placed in trust in a federally insured interest bearing account for the benefit of the heirs at law of Sharron Williams.

The decree further provided that the guardianship funds "shall be held in trust in a federally insured account with the deposit of said sums to be acknowledged by record of deposit to be filed of record in a sealed envelope protected from public scrutiny and said funds may not be distributed prior to or without such adjudication of heirship and/or further approval and consent of this Court."

¶ 4. On July 21, 1995, Walter deposited $267,233 into a variable-rate savings account at the Iuka Guaranty Bank styled "Albert Jermaine Duckett and Walter J. Williams, Jr., Minors, Walter J. Williams, Guardian." A bank officer signed a "Waiver of Process and Entry of Appearance of Depository," which provided that the guardianship funds in the savings account could not be disbursed without an order of the chancery court. The officer also signed a "Receipt of Funds and Governing Court Order," in which the bank acknowledged its receipt of a certified true copy of the court's decree authorizing Walter to settle the wrongful death claim.

¶ 5. To prevent the disbursement of funds from accounts to which access was restricted by court order, Iuka Guaranty created a "message field" in its computer system which caused the following message —what in banking parlance is known as a "special instruction"—to appear on a teller's computer screen when an attempt was made to withdraw funds from the account: "CAUTION—WITHERAWAL [sic]—COURT ORDER ONLY." The text of the special instruction was very conspicuous because it appeared on the screen as a reverse image with a green background; according to one Iuka Guaranty employee, the instruction was so noticeable that a teller could not overlook it. The instruction was known as the "green worm."

¶ 6. On September 7, 1995, the chancery court entered another order in the guardianship proceedings authorizing Walter to withdraw $100 per month per minor ward from the Iuka Guaranty savings account. In February 1997, Iuka Guaranty was acquired by and merged into Bank of Mississippi (now BancorpSouth Bank). In March BancorpSouth transferred the data in the Iuka Guaranty computer system to its own computer system as a part of the merger process. The first step in this "system conversion" consisted of BancorpSouth's "conversion team" studying the numerous "fields"¹ in Iuka Guaranty's computer system; learning Iuka Guaranty's "field definitions" and "field codes"; and determining what data each "field" contained. The second step involved a process known as "mapping," in which the conversion team tried to match each field in the Iuka Guaranty system with a corresponding field in the BancorpSouth system. In the third and final step of the conversion, BancorpSouth electronically transferred the data in Iuka Guaranty's computer system—that is, the data stored in the fields in the Iuka Guaranty system that had been found to correspond with fields in the BancorpSouth system—to its own computer system.

¶ 7. The conversion team discovered several fields in the Iuka Guaranty system that could not be transferred via automation to the BancorpSouth system. One of those fields was the field containing the data responsible for sending the green worm special instruction to tellers when an attempt was made to withdraw funds from an account with court-ordered limitations on access. Because this data could not be transferred via automation to the BancorpSouth computer system, the conversion team was forced to print out all of the data relating to the green worm instruction and then manually enter (type) this data into the BancorpSouth system. By all accounts, the conversion team successfully loaded onto the BancorpSouth system the green-worm-instruction data for every Iuka Guaranty account with court-restricted access except the guardianship savings account at issue in this case.² Apparently, the BancorpSouth employees responsible for the manual transfer either did not print out the data indicating that this guardianship account was subject to the green worm special instruction or skipped over the sheet containing this data during the manual transfer.

¶ 8. As a result of BancorpSouth's failure to transfer this data, when Walter attempted to withdraw funds from the savings account (now at a BancorpSouth branch), the special instruction letting the teller know that access to the account was limited by a court order did not appear on the teller's computer screen.³ Because BancorpSouth tellers did not know that Walter, the depositor with signature authority on the account, was not allowed to access the account without restriction, he was suddenly able to withdraw much more than the court-approved $200 per month.⁴ On August 12, 1997, the savings account contained $289,562.08. By July 12, 1999, Walter had withdrawn all of the guardianship funds from the savings account.⁵ He did not appropriate all of the funds for his personal use; $109,946.45 of the withdrawn funds were spent for the benefit of both minor wards. Walter used $39,043 of the funds to buy a house for Albert and his wife. He used another $47,000 to buy Junior a house.⁶ He also executed a check payable to Albert in the amount of $7,000, so Albert could set up a bank account, and bought Albert a car for $16,903.45.

¶ 9. In 1999 Junior, then eighteen, entered the main BancorpSouth branch in Iuka and inquired about the guardianship funds. He discovered that the account was completely empty. On August 23, 2000, Albert reached the age of twenty-one. On July 4, 2002, Junior turned twenty-one. In 2004, Junior returned to the same BancorpSouth branch with all of the court documents relating to the guardianship and the savings account. He showed the documents to several BancorpSouth employees and demanded to know what recourse he might have. Junior was told by one bank employee that if the bank was determined to be at fault, it would compensate him.

¶ 10. On June 23, 2004, Junior filed this action in chancery court against his father, USF & G (Saint Paul) and BancorpSouth. His complaint alleged that his father converted the funds in the guardianship account and breached his duty as a guardian by converting the funds in violation of the orders of the chancery court. With respect to BancorpSouth, the complaint alleged that it "breached [its] duty to this Court and to [Junior] as a minor [by] allow[ing] the funds on deposit to be converted without an order of this Court." On September 22, 2004, an amended...