Thomas v. Branch Banking & Trust Co. , 304 F. App'x 200 ( 2008 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-2017
LAURA K. THOMAS,
Plaintiff – Appellant,
v.
BRANCH BANKING & TRUST COMPANY,
Defendant – Appellee,
and
PAUL F. THOMAS,
Defendant.
Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg. Irene M. Keeley,
District Judge. (1:06-cv-00052-IMK)
Argued: October 30, 2008 Decided: December 24, 2008
Before WILKINSON, Circuit Judge, Samuel G. WILSON, United States
District Judge for the Western District of Virginia, sitting by
designation, and Henry E. HUDSON, United States District Judge
for the Eastern District of Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: William J. Leon, Jr., Morgantown, West Virginia, for
Appellant. Ray Cooley Stoner, JACKSON KELLY, P.L.L.C.,
Pittsburgh, Pennsylvania, for Appellee. ON BRIEF: Jeffrey A.
Ray, Morgantown, West Virginia, for Appellant. Parween S.
Mascari, JACKSON KELLY, P.L.L.C., Morgantown, West Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
This appeal involves a dispute between a woman, her ex-
husband, and their bank. Paul Thomas pledged shares of stock to
Branch Banking & Trust Company (“BB&T”) as collateral for a
loan. Before the loan was repaid, Mr. Thomas transferred his
ownership of some of those shares to Laura Thomas, his wife at
the time. The disagreement in this case centers on the number
of shares that Mr. Thomas actually transferred to Ms. Thomas.
When the loan was repaid, BB&T returned fewer shares to Ms.
Thomas than she thought she was due. Ms. Thomas then filed suit
against BB&T. BB&T defeated Ms. Thomas’s claim for breach of
contract on summary judgment, and BB&T defeated Ms. Thomas’s
claim under Article 9 of the Uniform Commercial Code at trial.
Because BB&T owed no duty to Ms. Thomas to transfer or maintain
the disputed shares, we affirm.
I.
Mr. Thomas and Ms. Thomas obtained a loan from One Valley
Bank in 1994. One Valley Bank was the predecessor of BB&T, and
the two banks are indistinguishable for the purposes of this
case. As collateral for the loan, Mr. Thomas delivered to BB&T
a stock certificate in Mr. Thomas’s name for 8,926 shares of
State Bancorp, Inc.
3
Mr. Thomas later decided to transfer ownership of some of
those shares to Ms. Thomas for the purposes of estate planning.
With that end in mind, Mr. Thomas, Ms. Thomas, and BB&T executed
a “Collateral Transfer Agreement.” The agreement stated that
BB&T would permit Mr. Thomas to transfer 6,501 of the 8,926
shares into Ms. Thomas’s name, but only on the condition that
all 8,926 shares remained pledged to BB&T as collateral for the
loan.
Two weeks after executing the collateral transfer
agreement, Mr. Thomas wrote a letter to BB&T. The letter stated
that Mr. Thomas planned to replace the certificate held by BB&T
with two certificates, one in his name for 6,501 shares, and one
in Ms. Thomas’s name for 2,425 shares -- that is, the opposite
of the allocation described in the collateral transfer
agreement. According to State Bancorp’s records, Mr. Thomas
then transferred 2,425 shares to Ms. Thomas, and State Bancorp
issued certificates in Mr. Thomas’s name for 6,501 shares and in
Ms. Thomas’s name for 2,425 shares. But when Mr. Thomas
delivered the new certificates to BB&T, the bank amended its
collateral register receipt for the loan to state that the bank
had received a certificate in Ms. Thomas’s name for 6,501 shares
and a certificate in Mr. Thomas’s name for 2,425 shares.
When the loan was subsequently repaid, BB&T returned a
certificate for 2,425 shares to Ms. Thomas. Ms. Thomas filed
4
suit and alleged that BB&T should have given her a certificate
for 6,501 shares. Ms. Thomas sought damages under two legal
theories. First, she claimed that BB&T had breached the
collateral transfer agreement by failing to transfer ownership
of 6,501 shares into her name. Second, she claimed that BB&T
had breached its statutory duty to use reasonable care to
preserve collateral in its possession -- namely, a stock
certificate in Ms. Thomas’s name for 6,501 shares -- as required
by Article 9 of the Uniform Commercial Code. See W. Va. Code
§ 46-9-207.
The district court granted summary judgment to BB&T on Ms.
Thomas’s breach of contract claim. The court held that the
collateral transfer agreement required only that BB&T permit Mr.
Thomas to transfer shares to Ms. Thomas, not that BB&T itself
transfer any shares to Ms. Thomas.
The district court allowed Ms. Thomas’s statutory claim to
proceed to trial. The parties stipulated that the only issue
for the jury was whether BB&T had possessed a stock certificate
in Ms. Thomas’s name for 6,501 shares. The district court
denied Ms. Thomas’s motion in limine to exclude evidence of
State Bancorp’s stock records; those records tended to show that
the disputed stock certificate never existed. The jury returned
a verdict in favor of BB&T. The district court entered judgment
in favor of BB&T, and Ms. Thomas appealed.
5
II.
We first affirm the judgment in favor of BB&T on Ms.
Thomas’s claim under Article 9 of the U.C.C. On appeal, Ms.
Thomas does not argue that the evidence presented to the jury on
her statutory claim was insufficient to support the jury’s
verdict against her. Instead, she argues that the jury should
not have seen certain evidence at all. In particular, Ms.
Thomas claims that the district court erred when it denied her
motion in limine and admitted evidence of State Bancorp’s stock
records. If the district court had granted her motion, Ms.
Thomas contends, she would have prevailed on her statutory claim
because the only evidence in the case would have been the
collateral register receipt stating that BB&T received a
certificate in Ms. Thomas’s name for 6,501 shares. And Ms.
Thomas argues that the district court should have granted her
evidentiary motion because BB&T used the stock records only to
support an improper defense of unilateral mistake.
Ms. Thomas’s argument lacks merit. The issue for the jury
on Ms. Thomas’s Article 9 claim was whether BB&T ever possessed
a stock certificate in Ms. Thomas’s name for 6,501 shares. BB&T
did not raise a legal defense of mistake against that claim.
BB&T argued instead -- as a factual matter -- that it never
possessed the disputed certificate, and that the collateral
register receipt stating otherwise was incorrect. And BB&T
6
presented the evidence of State Bancorp’s stock records to
demonstrate that the collateral register receipt was in error.
Those records -- which included stock certificates, stock
ledgers, dividend checks, and proxy statements -- all suggested
that a certificate in Ms. Thomas’s name for 6,501 shares had
never existed. The district court did not abuse its discretion
in admitting this evidence, which went to the heart of the
factual question before the jury -- indeed, this evidence
adequately supported the jury’s verdict in favor of BB&T. We
therefore affirm both the district court’s evidentiary decision
and the jury’s verdict on the Article 9 claim.
III.
We also affirm the district court’s grant of summary
judgment in favor of BB&T on Ms. Thomas’s breach of contract
claim. Ms. Thomas makes the same argument on appeal that she
made before the district court: that summary judgment was
unwarranted because BB&T breached its obligation under the
collateral transfer agreement to transfer 6,501 shares of State
Bancorp stock into her name. Applying de novo review, see
Darveau v. Detecon, Inc., 515 F.3d 334, 338 (4th Cir. 2008), we
hold that summary judgment for BB&T was proper for the reasons
stated by the district court in its opinion below.
7
As the district court correctly held: “Under the
unambiguous terms of the collateral transfer agreement, . . .
BB&T had no obligation to transfer or deliver 6,501 shares” into
Ms. Thomas’s name. Thomas v. Branch Banking & Trust Co., No.
1:06-cv-00052, at 1 (N.D.W. Va. Aug. 31, 2007) (memorandum
opinion). The agreement stated that Mr. Thomas had requested
that BB&T “‘permit 6,501 shares of the Stock to be transferred’”
to Ms. Thomas. Id. at 15 (quoting the agreement) (emphasis
added by the district court). The district court properly
observed: “This contract provision unambiguously establishes
that Mr. Thomas sought permission from BB&T to access the stock
certificate held as collateral . . . so that, in the future, he
could transfer shares into his wife’s name. It does not state
that Mr. Thomas requested BB&T to transfer some of the
collateral into his wife’s name.” Id. The agreement further
stated that BB&T was “‘willing to permit the requested
transfer’” of 6,501 shares, but only on the condition that all
8,926 shares remained pledged as collateral. Id. at 15-16
(quoting the agreement) (emphasis added by the district court).
Even though the agreement referred to the transfer of 6,501
shares, therefore, the district court correctly determined that
“BB&T’s sole interest in the agreement was to ensure that the
total amount of shares were repledged by the Thomases following
a future transfer of bank stock between them.” Id. at 16.
8
Ms. Thomas responds by arguing that Mr. Thomas made a
completed gift of 6,501 shares to Ms. Thomas through the
collateral transfer agreement. Even if that were true, it does
not remedy the fact that the agreement “impose[d] no duty on
BB&T’s part to transfer any shares of stock” to Ms. Thomas. Id.
at 18. The alleged completion of the gift between Mr. Thomas
and Ms. Thomas therefore cannot save Ms. Thomas’s breach of
contract claim against BB&T.
Thus, “all obligations under the collateral transfer
agreement were fulfilled [when] BB&T permitted the transfer and
Mr. Thomas repledged the entire 8,926 shares of State Bancorp
stock as collateral.” Id. at 19-20. Because BB&T satisfied its
obligations under the collateral transfer agreement, Ms.
Thomas’s breach of contract claim fails as a matter of law.
The judgment of the district court is therefore
AFFIRMED.
9