Memphis Credit Union v. Mary Montgomery

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON MAY 1999 SESSION
FILED
June 15, 1999
Cecil Crowson, Jr.
Appellate Court Clerk
CITY OF MEMPHIS ) SHELBY CIRCUIT
CREDIT UNION, ) (No.87890-3 T.D.)
)
Plaintiff/Appellant )
)
v. ) APPEAL NO. 02A01-9810-CV-00286
)
MARY HELEN )
MONTGOMERY, )
)
Defendant/Appellee )
APPEAL FROM THE CIRCUIT COURT OF SHELBY COUNTY
AT MEMPHIS, TENNESSEE
THE HONORABLE KAREN R. WILLIAMS, JUDGE
For the Appellant:
Roger A. Stone
Stone, Higgs & Drexler
200 Jefferson Ave., Ste. 1000
Memphis, TN 38103
For the Appellee:
Randall J. Fishman
James W. Curry
Ballin, Ballin & Fishman, P.C.
200 Jefferson Avenue, Suite 1250
Memphis, TN 38103
AFFIRMED WILLIAM H. INMAN, Senior Judge
CONCUR:
DAVID R. FARMER, JUDGE
ALAN E. HIGHERS, JUDGE
OPINION
The plaintiff’s action to recover funds mistakenly paid to a depositor whose
name was similar to the purported owner of the funds was dismissed on motion for
summary judgment alleging the bar of the three-year statute of limitations. The
plaintiff appeals, insisting that the issue of when it reasonably should have
discovered its mistake involved a genuine dispute and that summary judgment was
inappropriate. Our review is de novo on the record, with no presumption of
correctness. Warren v. Estate of Kirk, 954 S.W.2d 723 (Tenn. 1997).
In 1974, the defendant was married to Ralph Montgomery. She sold her
beauty salon for $3,600.00, and delivered the check to him with instructions to
deposit it with the Credit Union. He apparently failed to provide the Credit Union
with his wife’s social security number. Whether the funds were in fact deposited
is unclear. No documentation was executed.
In 1984 or 1985 she opened an IRA account through her employer, an
insurance agency known as Milico, and executed the necessary documentation.
In 1991, another customer of the plaintiff, whose name was Helen A.
Montgomery, entered the picture. She was residing on Chutt Road in Memphis,
and the plaintiff admittedly and mistakenly changed her address on its records to
141 CRIII, Walnut, Mississippi, where the defendant and her husband were
residing. Whereupon, the plaintiff began mailing quarterly statements of an IRA
opened by Helen A. Montgomery to 141 CRIII, Walnut, Mississippi. The
defendant testified that she believed these statements concerned the account her
husband opened for her in 1974 with the proceeds of the sale of her business, and
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that she failed to notice that the middle initial and social security number on the
statements were different from her own.
On November 25, 1992, the defendant, in writing, requested the funds in the
IRA. The plaintiff supplied her with an appropriate form, which she executed.
Before mailing the form, the plaintiff wrote, “Helen A. Montgomery” in the space
provided to identify the owner of the account, together with a social security
number which the plaintiff believed had been assigned to Helen A. Montgomery.
A check in the amount of $4,743.81 was issued by the plaintiff payable to
Helen A. Montgomery. The defendant, Mary Helen Montgomery, struck through
the middle initial, and endorsed the check “Helen Montgomery.”
The plaintiff never questioned these events.
On December 27, 1996, Helen A. Montgomery enquired of the plaintiff
about her IRA. Research ensued, which revealed that the funds had been paid to
Mary Helen Montgomery in 1991.
The plaintiff thereupon searched its records extensively, and found nothing
to indicate that Ralph Montgomery had opened an account in 1974 in the name of
his wife, Mary Helen Montgomery.
This action was commenced in February, 1997, to recover the funds paid to
Mary Helen Montgomery. The defendant’s motion for summary judgment alleging
the bar of the statute of limitations of three years was granted.
Suits alleging conversion of funds must be commenced within three years
from the accrual of the cause of action. T.C.A. § 28--3-105(2). The date of accrual
is interpreted as the time when the plaintiff knew, or reasonably should have
known, that a cause of action existed. Stone v. Hinds, 541 S.W.2d 598 (Tenn. App.
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1976). The ignorance of the plaintiff or its failure to discover the facts will not toll
the statute. Vance v. Schulder, 547 S.W.2d 927 (Tenn. 1977).
We think the plaintiff was put on enquiry notice, at the least, when its check
payable to Helen A. Montgomery was altered by striking the initial “A”, and
endorsed by a signature different from that of the payee. This occurred more than
three years before suit was filed, and the plaintiff took no action, investigative or
otherwise. Plaintiff argues that accepted banking practices did not require it to
compare the endorsement with the signature card, but this argument begs the
question. The alteration on the face of the check was a clear, unmistakable
indicator that something was amiss; superimposed is the fact that the endorsing
signature differed from the name of the payee.
Summary judgment is appropriate in cases when no genuine issue of
dispositive fact exists. Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993). We agree that
summary judgment was properly granted. The judgment is affirmed at the costs
of the appellant.
_______________________________
William H. Inman, Senior Judge
CONCUR:
_______________________________
David R. Farmer, Judge
_______________________________
Alan E. Highers, Judge
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