Date: 05-21-2002

Case Style: Barbara McAuley v. Southington Savings Bank, et al.

Case Number: AC 21461

Judge: Hennessy

Court: Connecticut Court of Appeals

Plaintiff's Attorney: Kristen Schultze Greene

Defendant's Attorney: John F. Kania

Description: The plaintiff, Barbara McAuley, appeals from the judgment rendered by the trial court following the granting of a motion for summary judgment in favor of the defendant Southington Savings Bank (bank).1 On appeal, the plaintiff claims that the court improperly granted the motion for summary judgment on the basis of its incorrect conclusions that (1) the bank owed no duty of care to the plaintiff, who was the named beneficiary on a certificate of deposit from which funds were wrongfully withdrawn pursuant to a forged withdrawal slip, (2) there was no genuine issue of material fact as to whether she was an owner of the certificate of deposit and (3) as a matter of law, the plaintiff lacked standing to bring an action against the bank for an alleged violation of General Statutes § 42a- 4-401, which prohibits a bank from withdrawing funds from a customer’s account on the basis of a forged item. We affirm the judgment of the trial court.

The following facts are undisputed. In 1988, Alfreda DeVoe invested in a certificate of deposit (CD) at the defendant bank. DeVoe held the CD in trust for the benefit of her daughter, the plaintiff in this action. In March, 1998, the bank received, through the mail, a withdrawal slip that requested that the full balance of the matured CD be transferred to DeVoe’s checking account. The withdrawal slip also contained a note stating, ‘‘I will be in [Connecticut] in 3 or 4 weeks to make other arrangement[s].’’ The withdrawal slip was signed with Alfreda DeVoe’s name, which the plaintiff alleges was forged by Alfreda DeVoe’s husband, Roland DeVoe.2 On April 6, 1998, the bank transferred the balance of the CD into Alfreda DeVoe’s checking account. On May 1, 1998, Alfreda DeVoe appeared in person at the bank and directed that an amount approximate to that transferred from the CD be withdrawn from her checking account and deposited into six separate certificates of deposit in trust for persons other than the plaintiff.

In 1999, the plaintiff brought this action against the bank and Roland DeVoe by a seven count complaint. Counts one and two were directed at the bank and are the subject of this appeal. Counts three through seven were directed against Roland DeVoe and are not at issue in this appeal. In count one, the plaintiff alleges that Alfreda DeVoe’s signature on the March 24, 1998 withdrawal slip was a forgery and the resulting transfer was a violation of General Statutes § 42a-4-401.3 Count two, a negligence count, alleges that the bank breached its duty to the plaintiff by failing to ascertain that Alfreda DeVoe’s signature on the withdrawal slip dated March 24, 1998, was a forgery. On July 12, 2000, the bank filed a motion for summary judgment as to both counts, which was granted. This appeal followed.

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The plaintiff first claims that the court improperly concluded that with regard to the negligence count, the bank did not have a legal duty to protect her from the harm caused by the wrongful transfer of the balance of the CD to Alfreda DeVoe’s checking account executed by a forged withdrawal slip.4 Specifically, the plaintiff claims that the court should have concluded that the bank owed a duty of care to her because (1) she was a named beneficiary of the CD, (2) she was a foreseeable and readily identifiable plaintiff because of the ‘‘strong, immediate and direct’’ nexus between the bank’s act of withdrawing the funds and her injuries, and, therefore, a finding of liability on the part of the bank would not have ‘‘create[d] limitless liability for an unending class of plaintiffs,’’ and (3) the bank was a ‘‘third party’’ with respect to the CD against whom an action by a beneficiary is authorized for the wrongful withdrawal of money from an account before the death of the depositor. See IA A. Scott & W. Fratcher, The Law of Trusts (4th Ed. 1987) § 58.4, p. 224.5

The bank argues that the court properly ruled that it owed a duty of care only to the owner of the CD and that the plaintiff did not have an ownership interest in the account. The bank claims that (1) the plaintiff’s status as a named beneficiary of the CD, which was entitled ‘‘Alfreda DeVoe in Trust for Barbara McAuley,’’ did not confer an ownership interest on her, (2) there are factors that indicate that Alfreda DeVoe was the sole owner of the account, such as the fact that the CD was created under Alfreda DeVoe’s social security number and the only signature on the signature card was that of Alfreda DeVoe, and (3) although the plaintiff would have obtained an ownership interest in the CD if the CD still existed at the time of Alfreda DeVoe’s death and the plaintiff survived Alfreda DeVoe, the first of those requirements was not met and, thus, the plaintiff did not have an ownership interest in the account. Finally, the bank argues that it is not a ‘‘third party’’ with respect to the CD, against whom a wrongful withdrawal action is authorized, because it is a party to the agreement that gave rise to the creation of the account.

In its memorandum of decision, the court noted that the parties were in agreement as to the material facts relevant to this claim and that the only issue before the court was whether the defendant owed a duty to the plaintiff.

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In the present case, the court granted the motion for summary judgment as to the plaintiff’s negligence claim upon concluding that the defendant did not owe a legal duty to the plaintiff to verify the signature of the depositor on a withdrawal slip before transferring funds. ‘‘The existence of a duty of care is a prerequisite to a finding of negligence.’’ Gomes v. Commercial Union Ins. Co., 258 Conn. 603, 614, 783 A.2d 462 (2001). Our Supreme Court has stated that ‘‘the test for the existence of a legal duty of care entails (1) a determination of whether an ordinary person in the defendant’s position, knowing what the defendant knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result, and (2) a determination, on the basis of a public policy analysis, of whether the defendant’s responsibility for its negligent conduct should extend to the particular consequences or particular plaintiff in the case.’’ (Internal quotation marks omitted.) Id., 616.

In its memorandum of decision, the trial court noted that although it found that the first prong of the test for the existence of a legal duty of care was satisfied, public policy precluded it from extending liability to the bank for the plaintiff’s loss because the plaintiff did not have an ownership interest in the CD. The parties agreed at trial that the CD at the focus of this case was a trust account governed by General Statutes § 36a- 296.6 Thus, applying our standard of review, we must determine whether the court’s conclusion that public policy precluded it from extending liability to the bank for the plaintiff’s loss of her beneficial interest in the trust account was ‘‘legally and logically correct.’’

Our Supreme Court’s reading of General Statutes § 36-110, now § 36a-296, in Salvio v. Salvio, 186 Conn. 311, 322, 441 A.2d 190 (1982), is dispositive of our resolution of this question. In Salvio, our Supreme Court interpreted § 36-110, now § 36a-296, to provide that the beneficiary of an unqualified savings account trust acquires no legal interest in the funds on deposit until the death of the depositor. In the present case, the trust account entitled ‘‘Alfreda DeVoe in Trust for Barbara McAuley’’ matured, was not renewed and the depositor redistributed its funds. The court was correct in finding that the plaintiff, a named beneficiary to the trust account, did not have a legal interest in the trust account at the time of Alfreda DeVoe’s death.

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Click the case caption above for the full text of the Court's opinion.

Outcome: Accordingly, we conclude that the court properly ruled that public policy precluded it from finding that a duty of care was owed to the plaintiff by the bank, and, thus, its ruling was legally and logically correct.

The judgment is affirmed.

Plaintiff's Experts: Unavailable

Defendant's Experts: Unavailable

Comments: None