Kristofik v. Bank One, Akron, N.A. , 34 Ohio App. 3d 104 ( 1986 )

This case is before us following the granting of summary judgment. It does not involve the "realities of ownership." The "realities" concern only the owners of the money market certificate of deposit. It does not matter to the bank which owner's money was used to purchase the certificate. The relationship or agreement between the owners can be a constantly changing situation. In re Estate of Thompson (1981), 66 Ohio St. 2d 433, 20 Ohio Op. 3d 371, 423 N.E.2d 90.

The owners contracted with the bank for a joint or survivorship certificate of deposit which on its face required surrender of the certificate before payment. Bank policy or rules required that both joint owners execute a "lost certificate" affidavit or indemnity agreement if it in fact was lost. Here, the bank admittedly violated its own rules by paying out to one joint owner without surrender of the certificate, when it had knowledge that the certificate was not lost. A jury could reasonably conclude from the record before the court on this summary judgment that the bank was negligent and should respond in damages.

The case of Badders v. Peoples Trust Co. (1975), 236 Ind. 357,140 N.E.2d 235, is on all fours with this case, i.e., Peoples Trust, just as Bank One did here, enlarged its responsibility by contract.

Additionally, there are disputed facts surrounding the purported signatures of Stossel on both the "lost certificate and indemnity agreement" and the withdrawal draft. A jury could reasonably conclude from the totality of circumstances that the bank officer did not act as a reasonable man in accepting the "signatures" as genuine, voluntary, and knowledgeable when he knew Stossel was on his deathbed and being urged by relatives to "cut off" the plaintiff's rights as a survivor which he held by contract with the bank.

The bank seeks to avoid liability under R.C. 1107.08(A). However, this statute in my opinion only protects against the "realities of ownership" when the bank disburses to either joint owner in accordance with their contract. Here, the contract required surrender of the certificate, or in lieu thereof, the signature of both joint owners on a "lost" affidavit. The statute does not give them immunity. It merely protects the bank against the "other" depositor when it disburses the proceeds to one of them in accordance with their contract. When it executes its contract negligently, it is liable.

Likewise, the bank chooses to ignore the enlargement of its contract, and attempts to rest behind R.C. 1107.06(F). Even so, its statutory obligation under R.C. 1107.06(F) may only be waived for "good cause." Certainly, "good cause" raises factual issues and is a jury question.

The bank justifies its actions by relying on the "realities of ownership" rather than the actual contract. Thus, it states that it only did what the true owner wanted and Kristofik eventually got the money anyhow. The undisputed facts are that Kristofik and his father had provided Stossel with a home for seven years. Stossel wanted his nephew to inherit everything from him. He made out his will to Kristofik and also made him a joint owner on his certificates of deposit. Thus, Kristofik had a contract to be a surviving owner of that account. Stossel gave him the certificate as evidence of that interest. Kristofik had a right to rely on the bank's keeping its bargain by requiring a surrender of the certificate before disbursal. Then, if Stossel wanted the certificate to make a change, he (Kristofik) would have given it to him as was their understanding. Thus, what happened here could have been prevented, that is, relatives pressuring the dying Stossel to change his will and the survivorship accounts for their own benefit. There is nothing to indicate that the "scratches" on the documents were made freely, and voluntarily by a man of sound mind. Certainly, the facts of this case should have raised a red flag in the eyes of the bank officer and he should have at least contacted Kristofik.

The majority opinion indicates some reliance on a previous decision of this court in Kristofik v. Great Northern SavingsCo. (Mar. 19, 1986), Summit App. No. 12294, unreported. However, that case is distinguishable on its facts since the record there did not show a contract requiring surrender of the passbook or certificate prior to disbursal.

In conclusion, I want to emphasize that this is a summary judgment proceeding. Certainly, there is at least a conflict as to what the contract was between the bank and its depositors. Maybe Kristofik will have a difficult time establishing damages but he has a cause of action for breach of his contract. The "realities of ownership" only have a bearing on damages, not their contractual rights.

I would grant summary judgment for the bank on the fraud and conversion causes of action in the complaint but deny summary judgment on the negligence cause of action.