Opinion
No. 2000-CT-00443-SCT.
May 15, 2003. Rehearing Filed June 12, 2003.
COURT FROM WHICH APPEALED: BOLIVAR COUNTY CIRCUIT COURT, TRIAL JUDGE: HON. JOHN L. HATCHER, DATE OF JUDGMENT: 2/25/2000
DISPOSITION: COURT OF APPEALS' JUDGMENT AFFIRMED
ATTORNEY FOR APPELLANT: ELLIS TURNAGE
ATTORNEYS FOR APPELLEE: GERALD H. JACKS, A. LEE ABRAHAM
EN BANC.
ON WRIT OF CERTIORARI
FACTS
¶ The Court of Appeals opinion included the following factual background:
Fifteen hundred dollars was withdrawn from Clara Wise's savings account with Valley Bank on January 3, 1997. The withdrawal was processed on the authority of a written withdrawal slip containing seemingly the signature of Clara Wise. After subsequent investigations by the bank and Wise, it was discovered that a bank employee had forged Wise's signature on the withdrawal slip and taken the money.
Wise first noticed a discrepancy in her savings account balance when she inquired about her balance when withdrawing fifty dollars from the savings account in March of 1997. Wise was informed by the bank teller processing her transaction that her balance was approximately $1,500. Wise asserted that there was an error as she was certain that approximately $3,000 was contained in her account. Wise was then told that she should discuss the discrepancy with the bank's branch manager the next day. Wise returned to the bank the following day where she met with the branch manager. During this meeting, Wise alleges that the branch manager informed her that he had a videotape of her in the bank on the day the transaction occurred and that he could arrange to have the tape pulled in three days time. Wise asserts that she told the branch manager to get the tape. The branch manager never produced the tape and informed Wise that the tape had been destroyed. The branch manager denies making these statements to Wise. Pursuant to bank policy, the videotape in question would have been destroyed before the discrepancy in Wise's account was discovered.
The bank conducted an investigation of the discrepancy by questioning its employees, including the teller who fraudulently converted the money, and asserted that she remembered Wise being in the bank on the date in question. The bank also had its officials compare the signature on the January withdrawal slip to the signature card Wise signed when the account was opened. The signatures closely resembled one another. Wise continued to assert throughout the bank's investigation that she had not withdrawn the money. Wise decided to consult an attorney in an effort to find a remedy to her situation. The attorney retained a handwriting expert who reviewed the withdrawal slips from Wise's savings account and determined that the signature on the January withdrawal slip was not Wise's signature but a tracing of it from an earlier withdrawal slip. Wise did not inform the bank of this discovery and proceeded to file the present litigation.
After receiving notice that Wise had filed suit but before the Bank answered, counsel for Wise showed the Bank's counsel the report of Wise's handwriting expert. Thereafter, the Bank replaced the $1,500 wrongfully taken from Wise's account along with the interest the money would have accrued through the date of reimbursement. The Bank was granted summary judgment on Wise's claim for punitive damages. Aggrieved by this decision, Wise perfected this appeal.
Wise v. Valley Bank, 2002 WL 1839975 (¶¶ 3-6) (Miss.Ct.App. 2002).
¶ The Court of Appeals reversed the trial court's granting of summary judgment, finding that there were genuine issues of material fact to be determined by a jury. The Court of Appeals remanded for trial on the issue of punitive damages. Valley Bank petitioned this Court for certiorari and, after considering the briefs of both parties and the amicus curiae brief of the Mississippi Bankers Association, we, as an evenly divided Court, affirm the judgment of the Court of Appeals.
I. RELATIONSHIP BETWEEN BANKS AND ITS DEPOSITORS
¶ Valley Bank has raised issue with the Court of Appeals opinion wherein it stated
"[t]he bank was in a relationship of trust with Wise . . .," and held that there was an issue of material fact for the jury to determine as to whether the bank acted in bad faith in its investigation of the wrongfully withdrawn funds. Wise v. Valley Bank, No. 2000-CA-00443 at ¶ 10. Valley Bank contends that the Court of Appeals is in direct conflict with prior decisions of this Court. Specifically, Valley Bank points our attention to Deposit Guar. Bank Trust Co. v. Merchants' Bank Trust Co., in which this Court held that "[t]he relationship between a bank and a depositor, without an agreement to the contrary, is simply one of debtor and creditor, and a deposit is not, ordinarily a trust fund." 171 Miss. 553, 15. So. 136, 137 (1934). See also Deposit Guar. Nat'l Bank v. B.N. Sumrall Son, Inc., 524 So.2d 295, 299-300 (Miss. 1997) ("It is now, and has been for a long time, the law in this State that the relationship between a bank and its depositors is one of debtor creditor."). Valley Bank also correctly points out that this Court has previously held that the relationship between a bank and it depositors is generally not a fiduciary relationship. Merchants Planters Bank of Raymond v. Williamson, 691 So.2d 398, 403 (Miss. 1997). "There is precedent, however, for the proposition that the relationship between a debtor and creditor may rise to the level of fiduciary based on the particular facts of the case." Id. There is nothing offered that would evidence the relationship between Valley Bank and Wise gave rise to a fiduciary relationship.
¶ We agree with Wise's contention that the Court of Appeals' opinion does not conflict with previous decisions of this Court. Wise argues that the Court of Appeals did not make an ultimate determination as to whether a fiduciary relationship existed. It is clear from its opinion that the Court of Appeals was assessing the alleged statements made by Valley Bank's branch manger to Wise regarding the videotape for the purpose of reviewing the trial court's summary judgment. The Court of Appeals stated:
These statements when viewed as true, create a genuine issue of material fact for the jury to determine as to whether Valley Bank acted in bad faith during the course of its investigation. The bank was in a relationship of trust with Wise and allegedly misrepresented a material fact to her. As there are genuine issues of material fact for a jury to determine, we reverse the trial court's decision granting summary judgment to Valley Bank and remand this case to the trial court for a trial on the issue of punitive damages.
at ¶ 10. The crux of this assessment was that genuine issues of fact existed with regards to the alleged statements because the branch manager denied making them. The Court of Appeals majority opinion harmlessly mis-labeled the duty owed by Valley Bank as one of "trust." Miss. Code Ann. § 75 4 103(a) (Rev. 2002) reads:
The effect of the provisions of this chapter may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.
It was the duty of acting in "good faith" and "to exercise ordinary care" that Valley Bank owed to Wise. By affirming the Court of Appeals' decision in this case, we are in no way changing our views in prior decisions with regard to the relationship between a bank and its depositors.
II. SUMMARY JUDGMENT ON THE ISSUE OF PUNITIVE DAMAGES
¶ The trial court granted summary judgment in favor of Valley Bank on the issue of punitive damages. The Court of Appeals found this decision in error, and reversed and remanded the case to the trial court for a trial on the issue of punitive damages. We now review this issue de novo.
¶ The foundation of the relationship between bank and customer is the Bank's agreement to pay out the customer's money according to the customer's order, or as the Mississippi Bankers Association would have it, "simply an arms-length contractual relationship." This Court has held that to be eligible for damages in breach of contract cases, the plaintiff must show that the breach resulted from an intentional wrong or that the defendant acted with malice or gross/reckless disregard for the rights of others. Paracelsus Health Care Corp. v. Willard, 754 So.2d 437, 442 (¶ 27) (Miss. 1999) (citing Am. Funeral Assur. Co. v. Hubbs, 700 So.2d 283, 285 (Miss. 1997)),. Additionally, "[p]unitive damages may be imposed for breach of contract where such breach is attended by intentional wrong, insult, abuse, or such gross negligence as amounts to an independent tort." Tideway Oil Programs, Inc. v. Serio, 431 So.2d 454, 465-66 (Miss. 1983).
¶ Wise and her daughter allege that Valley Bank's branch manager informed them that the bank had a videotape that would show Wise withdrew the $1,500.00 in question on January 23, 1997. The two also allege that the branch manager told them he could show them the videotape in three days time if they requested. Wise testified that she was later informed by the branch manager that the videotape had been destroyed. Apparently, pursuant to Valley Bank's policy, the videotape for that date was destroyed prior to Wise's discovery of the missing money from her account. The branch manager denies having made those statements to Wise and her daughter.
¶ As this Court has stated, "[i]ssues of fact sufficient to require denial of a motion for summary judgment obviously are present where one party swears to one version of the matter and another says the opposite." City of Jackson v. Sutton, 797 So.2d 977, 979 (Miss. 2001). Upon a motion for summary judgment, the evidence is viewed "in the light most favorable to the party against whom the motion has been made." Id. Since Valley Bank was the moving party, the Court of Appeals correctly afforded Wise the benefit of the doubt in determining whether a genuine issue of material fact existed for the jury to decide.
¶ "The jury should be allowed to consider the issue of punitive damages if the trial judge determined under the totality of the circumstances and in light of defendant's aggregate conduct, that a reasonable, hypothetical juror could have identified either malice or gross disregard to the rights of others." Paracelsus Health Care Corp. v. Willard, 754 So.2d at 442 (¶ 20). The Court of Appeals opined that if Wise's statements are taken as true, then the manager's statements regarding the video recording take on the appearance of an intentional, material misrepresentation and indicate that Valley Bank did not act in good faith throughout the course of its investigation, and we agree.
CONCLUSION
¶ As an evenly divided Court, we affirm the judgment of the Court of Appeals which reversed the trial court's judgment and remanded for a trial on the issue of punitive damages. The opinion of this Court should not be taken as an indication that punitive damages are warranted, just that summary judgment on the issue was improper.
¶ COURT OF APPEALS' JUDGMENT AFFIRMED. McRAE, P.J., DIAZ AND EASLEY, JJ., CONCUR. SMITH. P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY WALLER, COBB AND CARLSON, JJ., PITTMAN, C.J., NOT PARTICIPATING.
¶ The relationship between a bank and its depositor is simply one of debtor and creditor. Deposit Guar. Nat'l Bank v. B.N. Sumrall Son, Inc., 524 So.2d 295, 300 (Miss. 1987). The bank agrees to repay the debt shown by the balance in the depositor's account by disbursing funds according to the terms of the deposit agreement. If Wise is entitled to pursue a punitive damage claim in the present case, it must be based on evidence of both a breach of the deposit contract and a showing that breach was so egregious as to amount to an independent tort. Punitive damages are permissible for wrongs that "import insult, fraud or oppression and not merely injuries but injuries inflicted in the spirit of wanton disregard for the rights of others." First Nat'l Bank v. Langley, 314 So.2d 324, 339 (Miss. 1975) (citation omitted). "In order to warrant the recovery of punitive damages, there must enter into the injury some element of aggression or some coloring of insult, malice, or gross negligence, evincing ruthless disregard for the rights of others." Id. The trial court concluded the evidence would not support a punitive damage claim, and I agree.
¶ There is no dispute the bank violated the terms of its debtor/creditor contract with Wise when it paid $1,500 based on a forged withdrawal slip. There is also no question that a bank teller forged the withdrawal slip and claimed during an interview by the bank manager that "she recalled Wise making the withdrawal." The plurality and the Court of Appeals make much ado about allegations of a supposed video. Wise claimed she learned of the video from the bank manager. The manager, however, denied advising Wise of any video's existence. In fact, there was no video. However, the bank conducted a thorough investigation including the comparison of the signatures with Wise's signature card on file at the bank's operation center in Greenwood. Wise's own deposition indicates that bank officials, Wise, and Wise's daughter all agreed after the comparison that the signature "appeared to be Wise's." Wise continued however to maintain she had not withdrawn the money from her account. The bank continued to investigate by interviewing all tellers including the one who forged the withdrawal slip. It conducted a joint meeting at corporate headquarters in Greenwood and attempted to ascertain whether the bank had a copy of a videotape of the supposed transaction which occurred at the Shelby branch. The bank also conducted a six-month review of the bank statements of all personnel that had worked at the bank on the day of the incident. Nothing was uncovered by the bank which would have led the bank to conclude that Wise's signature was forged. The bank had given the original withdrawal slip back to Wise in her December 24, 1996, bank statement from which Wise's signature had been traced and which was ultimately used by her expert to finally discover the forgery. It is equally clear that the forgery was so good that neither Wise's attorney nor bank officials could determine the withdrawal document's validity. In fact, it ultimately took a handwriting expert to make such determination. Rather than advise the bank immediately that the document was indeed a forgery, Wise's attorney waited some two months and filed suit. This was the bank's first actual knowledge that the withdrawal slip was in fact a forgery. The sole obligation of the bank, absent bad faith in its handling of the matter, was to make restitution. Miss. Code Ann. § 75-4-103 (2002). Restitution was immediately made by the bank upon learning of the forgery. The bank did all that it could do to ascertain what actually occurred concerning this incident. There is no bad faith by the bank thus this is not a punitive damages case.
¶ The plurality glosses over as immaterial a statement in the Court of Appeals Opinion where it stated "[t]he bank was in a relationship of trust with Wise . . ." (Miss.Ct.App. February 5, 2002) at (¶ 10). The majority declares that the Court of Appeals opinion "harmlessly mis-labeled the duty owed by Valley Bank as one of "trust." This is in direct conflict with previous decisions of this Court; "[t]he relationship between a bank and a depositor, without an agreement to the contrary, is simply one of debtor and creditor, and a deposit is not, ordinarily, a trust fund." Deposit Guar. Bank Trust Co. v. Merchants' Bank Trust Co., 171 Miss. 553, 158 So. 136, 137 (1934). There is nothing harmless about such a pronouncement by the plurality. Valley Bank did not owe any fiduciary duty to Wise. Thus, absent behavior described above which supports punitive damages, no such claim could be made. The plurality goes to great lengths to explain that Wise and the bank have different accounts of the facts. What the plurality ignores however is the fact that there are two separate versions of events is immaterial if there is no version sufficient to provide grounds for punitive damages. Miss. Code Ann. § 11-1-65(1) (Rev. 2002), will only allow for punitive damages where a plaintiff shows "actual malice, gross negligence evidencing a willful, wanton, or reckless disregard for the safety of others, or the commission of actual fraud. "In order for punitive damages to be awarded, the plaintiff must demonstrate a wilful or malicious wrong, or the gross, reckless disregard for the rights of others. Punitive damages are only appropriate in the most egregious cases. . . ." Paracelsus Health Care Corp. v. Willard, 754 So.2d 437, 442 (Miss. 1999) (citations omitted). The Court also noted the requirement of examining the totality of the circumstances and the aggregate conduct of the defendant before punitive damages are appropriate. Id. See also Summers ex rel. Dawson v. St. Andrews Episcopal Sch., Inc., 759 So.2d 1203, 1215 (Miss. 2000); Ross-King-Walker, Inc. v. Henson, 672 So.2d 1188, 1191 (Miss. 1996). The act complained of here was committed solely by a single bank teller. The bank's investigation of the matter was certainly complete, thorough and proper. There is also the requirement that there must be ruthless disregard for the rights of others in order to remove the case from the ordinary rule. Fowler Butane Gas Co. v Varner, 244 Miss. 130, 141 So.2d 226 (1962). See also Fedders Corp. v. Boatright, 493 So.2d 301, 311 (Miss. 1986). The bank's conduct considering the totality of the circumstances indicates a thorough attempt to satisfactorily resolve the matter. This Court has only allowed punitive damages where the facts are highly unusual and the cases extreme. South Cent. Bell v. Epps, 509 So.2d 886, 892 (Miss. 1987). See also Aqua-Culture Techs., Ltd. v. Holly, 677 So.2d 171, 184 (Miss. 1996).
¶ Here, the forgery of Wise's withdrawal slip was the act of a single bank employee. There is no indication in this record of any prior notice to the bank of problems with the bank teller involved. Valley Bank acted properly in attempting to thoroughly investigate this matter and determine the truth concerning the missing funds in Wise's account. It took a handwriting expert to ultimately determine the truth. In my view, had the bank been advised of the expert's opinion prior to suit being filed, it would have re-paid the funds immediately because it promptly did so without questioning futher when so advised after the suit was filed. Considering the "totality of the circumstances," the bank acted properly considering it "overall aggregate conduct" in attempting to get to the truth as to what happened here.
¶ The right to have a jury consider punitive damages is dependent upon something more than the plaintiff's bare demand. Whether the defendant's misconduct is sufficiently egregious or offensive as to warrant submission to the jury on the question of punitive damages lies initially with the trial court. Id. By granting Valley Bank's request for summary judgment, the trial court concluded that, even if all of Wise's allegations about the bank's conduct were accepted as true, the bank's actions were not so egregious as to amount to an independent tort. Because the matter is before us on a summary judgment motion, we must review that decision de novo. Yazoo Props. v. Katz Besthoff No. 284, Inc., 644 So.2d 429, 431 (Miss. 1994). I would conclude, as did the trial judge, that the evidence, even viewed in the light most favorable to Wise, did not demonstrate the wilful, insulting, or abusive conduct that would warrant allowing a jury to consider the possibility of punitive damages. I would affirm the judgment of the trial court and reverse the Court of Appeals' judgment.
¶ For these reasons, I respectfully dissent.