UNION PLANTERS NAT. BANK, NA v. Jetton

• Decision Date: 15 July 2003
• Docket Number: No. 2001-CA-01609-COA.,2001-CA-01609-COA.
• Citation: 856 So.2d 674
• Parties: UNION PLANTERS NATIONAL BANK, N.A., Oxford Square Office, Appellant, v. Arline K. JETTON, Appellee.
• Court: Mississippi Court of Appeals

856 So.2d 674

UNION PLANTERS NATIONAL BANK, N.A., Oxford Square Office, Appellant, v. Arline K. JETTON, Appellee.

No. 2001-CA-01609-COA.

Court of Appeals of Mississippi.

July 15, 2003.

Rehearing Denied September 23, 2003.

Thad J. Mueller, Attorney for Appellant.

Thomas Henry Freeland, Oxford, Attorney for Appellee.

Before KING, P.J., THOMAS, MYERS and GRIFFIS, JJ.

THOMAS, J., for the Court.

¶ 1. Arline Jetton brought suit against Union Planters Bank for conversion of monies which were in possession of the bank because Ms. Jetton had purchased certificates of deposit from the bank which also included the names of her two sons as joint owners. She was awarded $109,649.10 plus pre-judgment interest as well as attorney's fees in the amount of $27,777.61. Aggrieved Union Planters asserts the following:

I. AS A MATTER OF LAW, UNION PLANTERS HELD A CONTRACTUAL RIGHT OF SETOFF BY VIRTUE OF THE PROVISIONS IN THE CERTIFICATES OF DEPOSIT AND PROMISSORY NOTE.

II. THE COURT ERRED BY ALLOWING, OVER OBJECTION, PAROL EVIDENCE TO ALTER THE CONTRACT CREATING A JOINT TENANCY.

III. MS. JETTON, WAYNE AND JIM FAILED TO READ THE CONTRACTS; THE ACCOUNT WAS A GENERAL ACCOUNT SUBJECT TO CONTRACTUAL SETOFF.

IV. CONTRARY TO THE CHANCELLOR'S DECISION, THE BANK DID NOT HOLD ITSELF OUT AS AN "EXPERT" IN INVESTMENTS.

V. THE COURT ERRED IN AWARDING ATTORNEY'S FEES AND COSTS.

FACTS

¶ 2. In 1995 Arline Jetton purchased two $70,000 certificates of deposit and one $10,000 certificate of deposit from Southtrust Bank which were subsequently acquired by Union Planters Bank, hereafter referred to as UPB, when UPB bought Southtrust. Accompanying Ms. Jetton were her two sons, Jim and Wayne. Ms. Jetton's husband had recently passed away and she wanted to be sure her sons could take care of her if need be, so she brought them with her and put their names on the certificates of deposit as joint owners. The interest payment from the CD's came directly to her pursuant to her request, which was signed by all parties. ¶ 3. On September 3, 1996, Wayne executed a promissory note in favor of UPB in the amount of $247,044, due and payable on November 10, 1996. The loan was secured by a contemporaneous deed of trust on a "spec" home in the Grand Oaks subdivision in Oxford. After granting a number of requested extensions and after numerous requests to pay the loan, UPB was forced to begin foreclosure proceedings against Wayne. UPB suggested pledging real property known as Patio Gardens Apartments to allow UPB to extend Wayne's loan even further. Wayne verbally agreed to do this, but just two days later deeded both Patio Gardens and his home to his wife. When asked about this at trial Wayne testified, "I did not want the bank to take them." UPB was forced to foreclose on the security interest which left a deficiency in the amount of $109,649.10. UPB executed its right to setoff against the certificates of deposit, leaving a balance of $40,350.90. A bank draft in that amount was made payable to Ms. Jetton, Wayne and Jim.

¶ 4. The effect of the joint tenancy was not orally explained to Ms. Jetton, but was plainly apparent in the contract signed by Ms. Jetton. The terms of the original certificate of deposit contracts, as well as numerous renewals, contained standard setoff provisions outlined in bold print, RIGHT OF SETOFF, on the first page of the certificate of deposit.

¶ 5. When questioned at trial about the verbal statements made prior to the written contract, counsel for UPB objected, citing the parol evidence rule. The chancellor ruled that the testimony was allowed because, "Chancery Court is a court of equity, I sit as judge and jury. I'm going to let her answer it for what it is worth. I know that I was a guardian of a man here in Lafayette County, a disabled war veteran, and I had heck with banks with his funds, he had close to half a million dollars. They kept putting him and me down as joint tenants on the CD's." He further explained, "I am going to let her testify as to what her conversation was with the bank at the time that she purchased the CD."

¶ 6. On direct examination the following exchange occurred between Ms. Jetton and her attorney:

Q. I understand that you have said you asked the people at the bank to set this CD up so that your sons could have access to the money to use it for your benefit, is that what I understand you have said?

A. Well, if need be. Yeah.

Q. I notice that the certificate of deposit is made Arline Jetton or Wayne Estes or Jim Estes. Was there any discussion at the bank as to what the way they set this up meant?

A. No discussion

¶ 7. Ms. Jetton further testified that if she would have known that the bank could set off debts of Jim's or Wayne's then she never would have bought the CD. She testified that her sons had a power of attorney allowing them to handle her business which made the joint ownership unnecessary. The bank was never informed of a power of attorney.

ANALYSIS

¶ 8. We must determined if there was any evidence to justify a holding that UPB had a fiduciary relationship with Ms. Jetton which in effect would hold UPB responsible for Ms. Jetton's actions regarding her investments with the bank.

¶ 9. Our standard of review with this issue, again, allows that we only disturb the chancellor's findings if we find manifest error, abuse of discretion, or that the court applied an erroneous legal standard. Andrews v. Williams, 723 So.2d 1175(¶ 7) (Miss.Ct.App.1998).

¶ 10. A fiduciary relationship does not automatically exist in a commercial loan transaction. See, e.g., Hopewell Enters., Inc. v. Trustmark Nat'l Bank, 680 So.2d 812, 816 (Miss.1996)

; Peoples Bank & Trust Co. v. Cermack, 658 So.2d 1352, 1358 (Miss.1995) (overruled on other grounds). The party asserting the existence of a fiduciary relationship bears the burden of proving its existence by clear and convincing evidence. Smith v. Franklin Custodian Funds, Inc., 726 So.2d 144, 150(¶ 28) (Miss.1998). The Mississippi Supreme Court has provided a three-part test for determining whether a fiduciary relationship exists in a commercial transaction: whether (1) the parties have shared goals in each other's commercial activities, (2) one of the parties places justifiable confidence or trust in the other party's fidelity, and (3) the trusted party exercises effective control over the other party. AmSouth Bank v. Gupta, 838 So.2d 205, 216(¶ 32) (Miss.2002).

¶ 11. There has been a refusal to recognize the existence of a fiduciary relationship in cases where the relationship between the two parties was no more than "an arms-length business transaction involving a normal debtor-creditor relationship." Merchants & Planters Bank of Raymond v. Williamson, 691 So.2d 398, 404 (Miss.1997). A fiduciary relationship "arises only if the activities of both parties goes beyond their operating on their own behalf and the activity is for the benefit of both." Carter Equip. Co. v. John Deere Indus. Equip. Co., 681 F.2d 386, 391 (5th Cir.1982); Burgess v. Bankplus, 830 So.2d 1223, 1227(¶ 7) (Miss.2002).

¶ 12. Ms. Jetton's claim and reliance on a bank's fiduciary duty under these circumstances is unfounded by facts or law. There were no previous dealings with the bank, this was nothing more than a normal customer/bank transaction and there was no reason for Ms. Jetton to have justification in a belief that UPB owed her some heightened duty beyond that of any other bank and customer under the same circumstances.

¶ 13. To recover for fraud or mistake, "the circumstances constituting fraud or mistake shall be stated with particularity." M.R.C.P. 9(b). To establish fraud, "there must be a representation of the falsity thereof, the materiality of the false representations, the speaker's intent that it be acted on by the other in the anticipated manner, the hearer's ignorance of its falsity, his reliance on its truth, his right to rely thereon, and his consequent and proximate injury." McMahon v. McMahon, 247 Miss. 822, 836, 157 So.2d 494, 501 (1963); see also M.R.C.P. 9(b) cmt.; Burgess v. Bankplus, 830 So.2d 1223, 1228(¶ 9) (Miss.2002).

¶ 14. There has not been any evidence presented of any fraud on the part of UPB; the chancellor so found. In the Appellee's brief and testimony at trial, the assertion was made that Wayne had acquired the liability of his loan with UPB prior to Ms. Jetton's certificates of deposit purchase and that this somehow gave rise to an intent on the part of UPB to possibly access Ms. Jetton's account. This was not true. Wayne's loan was not procured until some eighteen months after the initial purchase of the certificates. Furthermore, it was secured with separate collateral. Wayne subsequently, in an effort to defraud UPB, changed the ownership of other properties from his name to his wife's name in an attempt to make the bank's endeavor to collect a deficiency against him futile. ¶ 15. Under Mississippi law, where the contract is not ambiguous, the intention of the contracting parties should be gleaned solely from the wording of the contract. Heritage Cablevision v. New Albany Elec. Power Sys., 646 So.2d 1305, 1312 (Miss.1994). Parol evidence will not be received to vary or alter the terms of a written agreement that is intended to express the entire agreement of the parties on the subject matter at hand. Turner v. Terry, ...