Mancuso v. United Bank of Pueblo

Decision Date07 October 1991
Docket NumberNo. 90SC142,90SC142
Citation818 P.2d 732
PartiesGrace MANCUSO, Petitioner, v. UNITED BANK OF PUEBLO, a state banking corporation, Respondent.
CourtColorado Supreme Court

James M. Croshal, Ripperger & Croshal, Pueblo, for petitioner.

James T. Flynn, Brent E. Rychener, Holme Roberts & Owen, Colorado Springs, for respondent.

Phillip S. Figa, Geoffrey P. Anderson, Burns, Figa & Will, P.C., Englewood, for amicus curiae Colorado Trial Lawyers Ass'n.

Justice MULLARKEY delivered the Opinion of the Court.

We granted certiorari to consider whether the Colorado Court of Appeals erred when it affirmed the trial court's order of summary judgment in Mancuso v. United Bank of Pueblo, 796 P.2d 7 (Colo.App.1990). The trial court held that, as a matter of law, petitioner's funds at United Bank were not special deposits, and petitioner's accounts at United Bank were not subject to either a constructive trust or a resulting trust. We affirm the court of appeals' conclusion with respect to the first issue, reverse the court of appeals' judgment with respect to the second issue, and remand to the court of appeals with instructions to return the matter to the trial court for further proceedings consistent with this opinion. 1


In 1977, following the death of her husband, the petitioner, Grace Mancuso ("Ms. Mancuso"), moved from Buffalo, New York to Pueblo, Colorado to live near her son Neal Mancuso. Shortly after she arrived, she transferred her savings to two accounts, a checking account in her name only and a joint savings account in her name and her son's name, at what was then Republic Bank. In October of that year, she transferred her savings to United Bank ("the Bank") because her son recommended the Bank.

At the Bank, which represented itself as a "full service bank," she was assisted by a Bank employee with the title of "personal banker." The duties of a "personal banker" at the time included working with new customers to help them select the type of account to fit their needs and to explain their different options. Ms. Mancuso alleges that she asked the Bank's advice concerning what type of account she should open and she instructed the Bank that she wanted an account that would allow her son only to withdraw money on her behalf when she was traveling or if she was involved in an emergency. The Bank employee allegedly recommended that she open a joint account with her son without explaining the nature of a joint account or that the Bank would have a statutory right to set off the funds in the joint account against any other debts of either of the signatories. Ms. Mancuso could not recall the name of the Bank employee nor the specifics of the conversation.

Ms. Mancuso, believing that the joint accounts were suitable to her needs, opened a joint account by signing the signature card. 2 At the same time, Ms. Mancuso purchased three certificates of deposit payable to herself or her son. There were no terms on the certificates that specified the terms of the agreement between the Bank, Ms. Mancuso and her son. Ms. Mancuso alleges that she believed that this arrangement too was the proper way to provide her son with limited access to the funds in case she needed money while traveling or in case she had an emergency.

In 1980, Neal borrowed $65,000 from the Bank on behalf of Trinity Consultants, Inc., a corporation in which he was the majority stockholder. One year later, he borrowed another $20,000 from the Bank on behalf of the corporation. In filling out his individual finance statements to obtain the loans, he alleged that the Bank told him that he should list his mother's funds as assets because he was a signatory to the account.

In 1985, Neal defaulted on his loans and the Bank exercised its statutory right of set off against the funds held in the joint savings account and the jointly held certificates of deposit. See § 11-6-105, 4B C.R.S. (1990 Supp.). 3 By 1985, there was approximately $6,200 in the savings account and two unmatured certificates of deposit, one for $10,000 and the other for $13,423.98. 4 Until the time the Bank seized the funds, it appears that Neal Mancuso had not withdrawn any of the funds from the accounts.

When Ms. Mancuso learned that the Bank had seized the funds, she filed suit against the Bank alleging that the Bank was not entitled to set off the funds from her accounts because her funds were special deposits and because her funds were subject to a constructive or resulting trust. Prior to trial, the Bank filed a motion for summary judgment and the trial court granted the Bank's motion.


In order to address Ms. Mancuso's claims, it is useful to summarize the principles governing summary judgment review.

In Churchey v. Adolph Coors Co., 759 P.2d 1336, 1339-40 (Colo.1988), we stated: "Summary judgment is a drastic remedy and is never warranted except on a clear showing that there exists no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See also Closed Basin Landowners' Ass'n v. Rio Grande Water Conservation Dist., 734 P.2d 627, 632 (Colo.1987); Americans United for Separation of Church & State Fund, Inc. v. State, 648 P.2d 1072, 1087 (Colo.1982). The moving party has the initial burden to show that there is no genuine issue of material fact. See, e.g., Continental Airlines, Inc. v. Keenan, 731 P.2d 708, 712 (Colo.1987); Ginter v. Palmer & Co., 196 Colo. 203, 206, 585 P.2d 583, 585 (1978). However, once the moving party has met its initial burden of production, the burden shifts to the nonmoving party to establish that there is a triable issue of fact. Id. In determining whether summary judgment is proper, the nonmoving party "must receive the benefit of all favorable inferences that may be reasonably drawn from the undisputed facts," Tapley v. Golden Big O Tires, 676 P.2d 676, 678 (Colo.1983), and we must resolve all doubts as to whether an issue of fact exists against the moving party. See, e.g., Dominguez v. Babcock, 727 P.2d 362, 365 (Colo.1986); Tapley, 676 P.2d at 678; Jones v. Dressel, 623 P.2d 370, 373 (Colo.1981). Furthermore, even where "it is extremely doubtful that a genuine issue of fact exists," summary judgment is not appropriate. Abrahamsen v. Mountain States Tel. & Tel. Co., 177 Colo. 422, 428, 494 P.2d 1287, 1290 (1972).

With these principles in mind, we address Ms. Mancuso's claims.


We first address whether Ms. Mancuso's funds were special deposits and, as a consequence, were unavailable for set off by the Bank against her son's debts. We find as a matter of law that Ms. Mancuso's funds were not special deposits.

It is established law that a deposit is either general or special and it cannot be both. See 5B Michie on Banks and Banking, § 328 (1991). When a depositor makes a general deposit, the depositor transfers ownership of the money to the bank which holds the money as a debtor. Cox v. Metropolitan State Bank, Inc., 138 Colo. 576, 584, 336 P.2d 742, 747 (1959). In contrast, when a depositor makes a special deposit, title to the money vests directly in the depositor with the bank holding the money as a bailee. In re B & L Oil Co., 46 B.R. 731, 738 (Bankr.D.Colo.1985).

It is also established that if an account is determined to be a special deposit, the bank holding the deposit may not set off the account against other debts of the depositor. In Sherberg v. First National Bank of Englewood, 122 Colo. 407, 411, 222 P.2d 782, 784 (1950), we stated, "[w]hen a bank knowingly accepts a deposit of money, as here, for a specific purpose, it thereby impliedly binds itself not to set off against such deposit a debt due it from the depositor." See generally 5B Michie on Banks and Banking, §§ 328-349 (1991). See also Glenn Justice Mortgage Co. v. First Nat'l Bank of Fort Collins, 592 F.2d 567, 570 (10th Cir.1979); Cox, 138 Colo. at 587, 336 P.2d at 749. Although a determination of whether an account is a special deposit will depend upon "the mutual intent and understanding of the parties," Sherberg, 122 Colo. at 411, 222 P.2d at 784, the special deposit must be made for a specific purpose. An account is a special deposit if its funds were designated for a particular purpose or to be paid to a particular person. See First City Nat'l Bank of Oxford v. Long-Lewis Hardware Co., 363 So.2d 770, 772 (Ala.Civ.App.1978).

Case law indicates that the purpose of limiting the access of one signatory to an account would not be a special purpose under this doctrine. See, e.g., Glenn Justice Mortgage Co., 592 F.2d at 571 (funds deposited into debtor's account were not a special deposit because there was no special understanding between debtor and bank concerning the purpose for which the deposited funds were to be used); Rainsville Bank v. Willingham, 485 So.2d 319, 323 (Ala.1986) (funds deposited in debtor's account determined to be special deposit because debtor specifically told banker that funds were to be used to pay certain bankruptcy debts with which the bank was familiar); Cox, 138 Colo. at 583, 336 P.2d at 747 (funds paid to agent to be transmitted to principal deposited into agent's account treated as special deposit because of trust relationship existing between agent and principal); Sherberg, 122 Colo. at 409, 222 P.2d at 784 (bank accepted deposit knowing that it was intended to be used to pay debtor/contractor to build house and thus could not set off deposit); Henderson v. Greeley Nat'l Bank of Greeley, 111 Colo. 365, 367, 142 P.2d 480, 481 (1943) (deposits made for the purpose of purchasing livestock were considered accounts created for a special purpose); Hugh v. Washington Indus. Bank, 757 P.2d 1154, 1156 (Colo.App.1988) (deposits made by debtor for the specific purpose of paying investor were special deposits).

In this case, Ms. Mancuso's funds were not segregated for a specific purpose or use. She made the deposits in anticipation of using the money...

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