JPMorgan Chase Bank, N.A. v. Prof'l Pharmacy II

Decision Date31 December 2014
Docket NumberNO. 02–11–00373–CV,02–11–00373–CV
Citation508 S.W.3d 391
Parties JPMORGAN CHASE BANK, N.A., Appellant v. PROFESSIONAL PHARMACY II, Appellee
CourtTexas Court of Appeals

Steven J. Pawlowski, for JPMorgan Chase Bank, N.A.

John M. Hafen, for Professional Pharmacy II.

PANEL: GARDNER, MCCOY, and MEIER, JJ.

OPINION

ANNE GARDNER, JUSTICE

I. Introduction

Appellee Professional Pharmacy II (Pharmacy II) sued Washington Mutual Bank, F.A. (WaMu), alleging, among other things, breach of contract and negligence in connection with the opening of a checking account and the garnishment of funds from that account. At the conclusion of a five-day jury trial, the jury found both parties negligent, apportioned eighty-five percent of the negligence to WaMu and fifteen percent to Pharmacy II, and found that Pharmacy II's damages totaled $180,683. The trial court entered judgment on the verdict against Appellant JP Morgan Chase Bank, N.A. (JP Morgan), as the acquirer of certain assets and liabilities of WaMu from the Federal Deposit Insurance Corporation acting as receiver,1 awarding Pharmacy II $153,580.55 in damages, $22,681.12 in prejudgment interest, and postjudgment interest.

JP Morgan appealed. In thirteen issues, it contends that Pharmacy II failed to obtain a finding that it is a partnership, which bars its recovery; Pharmacy II lacks standing to raise a negligence claim; WaMu owed no legal duty to Pharmacy II; the jury's answer to the negligence question was immaterial because there was no contractual relationship between WaMu and Pharmacy II; the economic loss rule bars Pharmacy II's recovery of economic damages on its negligence claim; the evidence is legally and factually insufficient to support the jury's findings that WaMu failed to exercise ordinary care, that WaMu's negligence was a proximate cause of Pharmacy II's injuries, and that Pharmacy II suffered $180,683 in damages; Pharmacy II's negligence claim is barred by limitations, res judicata, and collateral estoppel; the evidence is legally and factually insufficient to support the jury's failure to find that Pharmacy II's partners were negligent; and the trial court erred by awarding prejudgment interest. For the reasons that follow, we affirm the trial court's judgment conditioned on a remittitur.

II. Background

In late 2001 and early 2002, Pamela Ashu, Fidelis Bisong, and Tusmo Jama formed Professional Pharmacy Plus (Pharmacy Plus) for the purpose of opening a retail pharmacy that delivered prescriptions to customers. Ashu, Bisong, and Jama operated Pharmacy Plus as a partnership in which each of them held an approximate one-third ownership interest. A year later, Ashu, Bisong, and Jama formed Professional Pharmacy II (Pharmacy II) for the purpose of opening a second pharmacy. Like Pharmacy Plus, Pharmacy II was operated as a partnership, and Ashu, Bisong, and Jama each held an approximate one-third ownership interest in the partnership. There was no written partnership agreement for either Pharmacy Plus or Pharmacy II.

Ashu, Bisong, and Jama filed an assumed name certificate for Pharmacy II. Ashu obtained a pharmacy license and Employer Identification Number (EIN) in the name of Pharmacy II. When she applied for the EIN with the Internal Revenue Service (IRS), Ashu stated that Pharmacy II was a partnership. Ashu also registered Pharmacy II in the Texas Department of Public Safety's Controlled Substances Registration Program and with the Drug Enforcement Administration and applied for a Medicaid identification number on Pharmacy II's behalf.

On January 14, 2003, Ashu and Bisong went to the WaMu branch where Pharmacy Plus had a business checking account to set up a checking account for Pharmacy II. Bisong testified that Pharmacy Plus's checking account at WaMu was a partnership account. Ashu and Bisong met with Naomi Moller, the manager of the branch, to set up the account for Pharmacy II. Jama was not present.2 Both Ashu and Bisong testified that it was their intent to set up a partnership account for Pharmacy II similar to Pharmacy Plus's account and that they informed WaMu of their intent when opening the account for Pharmacy II. Ashu and Bisong testified that they provided WaMu with the assumed name certificate for Pharmacy II, Pharmacy II's EIN, a completed Form W–9,3 a partially completed Texas Medicaid Vendor Direct Deposit Authorization bearing Pharmacy II's EIN and identifying Pharmacy II as the payee, and personal identification.

The assumed name certificate for Pharmacy II reflected that it was filed by Ashu, Bisong, and Jama. Moller testified that she asked Ashu and Bisong if they were married because the third person on the assumed name certificate was not present and she could not open the account as a partnership account without a written partnership agreement. Moller informed Ashu and Bisong that because they were married to each other, they could open a joint sole proprietorship account for Pharmacy II. WaMu's business banking account disclosures and regulations in place in January 2003 describe a sole proprietorship account as

[a] business account opened by the owner(s) of a business which is not a corporation, association, limited liability company or partnership. Withdrawals are generally paid at the direction of the owner(s) or their designated agents. Owners(s) must be an individual depositor unless husband and wife in states permitting such. If there is more than one owner, the owners may select a joint ownership account.

Moller further testified that in January 2003, an account could be titled in either an assumed name or a person's name, followed by "d/b/a" and the assumed name, and that as the branch manager, she was able to open a joint sole proprietorship account titled in an assumed name.

Moller testified that she prepared the Master Account Agreement for the account (the 3775 Account) using the information provided by Ashu and Bisong. The Master Account Agreement provided that the title of the 3775 Account was "Professional Pharmacy II," listed Pharmacy II's EIN as the tax ID number for the account, and stated that

[t]he account and deposits opened under this Agreement shall be of the following type:
JOINT SOLE PROPRIETORSHIP: THIS ACCOUNT IS HELD IN JOINT TENANCY WITH RIGHT OF SURVIVORSHIP UNLESS INDICATED OTHERWISE.
{ } WE SELECT JOINT TENANCY WITHOUT RIGHT OF SURVIVORSHIP.

Moller testified that after she prepared the Master Account Agreement, she printed out two copies, one for WaMu and one for the customer. Moller testified that only WaMu's copy is signed by the customer. She asked Ashu and Bisong to review WaMu's copy before signing it to make sure the account number, the account name, the account ownership, the tax identification number, and their names were correct. Ashu and Bisong were listed as owners at the bottom of the Master Account Agreement, and their signatures were beneath their printed names. Bisong testified that the signatures on the Master Account Agreement belonged to him and Ashu, but he denied that it was a true and correct copy of the document that he signed when he opened the 3775 Account.

Moller testified that when she opened the 3775 Account, she also completed a "Business Account Opening Checklist," which provided guidelines for opening a business account at WaMu. The checklist for the 3775 Account indicated that it was opened as a joint sole proprietorship account and that the following required information and documentation was received by WaMu: primary and secondary ID for business owners; assumed name certificate; names of the business owners; physical address of the business; home address of the business owners; and the driver's license of the business owner or personal ID number of the business issued by the Department of Public Safety. Moller also completed the financial institution information on the Texas Medicaid Vendor Direct Deposit Authorization, which identified Pharmacy II as the payee.

Moller testified that consistent with her normal and customary practice in January 2003, she put the customer copy of the Master Account Agreement, WaMu's business banking account disclosures and fees, and a starter checkbook into a new account folder. Bisong testified that he received the folder but he did not read the documents inside the folder. Ashu also testified that she did not review the documents. Subsequently, Ashu and Bisong, on behalf of Pharmacy II, executed a durable power of attorney for the 3775 Account appointing Jama as agent.

Bisong testified that the 3775 Account was used as Pharmacy II's operating account and that the funds Pharmacy II received from Medicaid were deposited directly into the 3775 Account. Ashu testified that Medicaid payments, payments from insurance companies, and retail revenue also were deposited into the 3775 Account. She further testified that Pharmacy II used the funds in the 3775 Account for payroll, lease payments, and other business expenses, such as the purchase of pharmaceuticals. Jama testified that she endorsed checks payable to Pharmacy II and deposited those checks into the 3775 Account.

At some point prior to January 2008, Bisong and Juliet Eboh formed Excel Pharmacy, Inc. (Excel). Bisong and Eboh each had a fifty percent ownership interest in Excel. Excel had two retail locations, each of which it leased from Cambridge Gorbutt MOB, L.P. (Cambridge). Bisong personally guaranteed the two leases. Excel failed to make the required rental payments and defaulted on both of the leases. As a result, Cambridge filed suit against Excel, Eboh, and Bisong.

Cambridge non-suited Eboh, and the trial court granted Cambridge's motion for default judgment against Excel and Cambridge's motion for summary judgment against Bisong. On July 5, 2007, the trial court entered judgment against Bisong for $190,903.74 in damages, plus $9,000 in attorney's fees, $713 in court costs, postjudgment interest, and conditional appellate attorney's fees. Seeking to collect the judgment, Cambridge filed an ...

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