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Estate of Haire v. Webster

Court of Appeals of Tennessee, Knoxville

November 29, 2017

ESTATE OF ELLA MAE HAIRE, ET AL.
v.
SHELBY J. WEBSTER, ET AL.

          September 12, 2017 Session

         Appeal from the Chancery Court for Knox County No. 191583-2 Clarence E. Pridemore, Jr., Chancellor

         This appeal arises from a family dispute over joint bank accounts. Phillip Daniel Haire ("Danny Haire") sued First Tennessee Bank National Association ("the Bank") in the Chancery Court for Knox County ("the Trial Court") alleging, among other things, breach of contract. The Bank had allowed Danny Haire's late mother Ella Mae Haire ("Decedent") to remove him unilaterally as joint tenant with right of survivorship from certain accounts. The Bank filed a motion to dismiss, which the Trial Court granted. Danny Haire appealed. We hold, inter alia, that Danny Haire's complaint failed to identify which contract term the Bank allegedly breached, and that Decedent could have removed all of the funds from the account, thus effectuating the same practical result as that which actually occurred. We affirm the judgment of the Trial Court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed; Case Remanded

          Robin M. McNabb, Knoxville, Tennessee, for the appellants, Phillip Daniel Haire, individually and as personal representative of the Estate of Ella Mae Haire.

          J. Michael Winchester and E. Brian Sellers, Knoxville, Tennessee, for the appellee, First Tennessee Bank National Association.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Charles D. Susano, Jr. and Thomas R. Frierson, II, JJ., joined.

          OPINION

          D. Michael Swiney, C.J.,

         Background

         This appeal involves a family dispute over Decedent's bank accounts. Danny Haire, Decedent's son, is the personal representative of Decedent's estate. According to Danny Haire, the Bank wrongly allowed his siblings to alter for their benefit pay-on-death beneficiaries and survivorship status on Decedent's checking and savings account with the Bank.

         Decedent's husband died in 2008, and Decedent became the sole owner of the property she had held jointly with her husband. Joyce Heath, Danny Haire, Shelby Webster, and David Haire are surviving children of the deceased. Danny Haire took care of his widowed elderly mother. Decedent added Danny Haire as a joint tenant with right of survivorship to her checking and savings accounts with the Bank. Danny Haire also served as Decedent's attorney-in-fact for financial matters from August 2005 through October 2012.

         In 2012, a family disagreement arose. Consequently, Danny Haire's siblings David Haire and Shelby Webster assumed management of Decedent's affairs. In October 2012, Decedent executed a new durable power of attorney designating David Haire as her attorney-in-fact. Signature cards executed in 2012 purportedly removed Danny Haire as joint tenant with right of survivorship from the accounts he shared with Decedent. In November 2013, Decedent died. Upon Decedent's death, the funds in Decedent's checking account, around $11, 500, were paid to David Haire and Shelby Webster, and the funds in the savings account, around $129, 000, were paid to Shelby Webster alone. Danny Haire never received any funds.

         In May 2016, Danny Haire filed suit, individually, and as personal representative of Decedent's estate, against the Bank and a number of family members. This appeal, however, concerns only the Bank. Danny Haire's original complaint alleged breach of contract and conversion. In July 2016, the Bank filed a motion to dismiss for failure to state a claim upon which relief can be granted. In October 2016, Danny Haire filed a motion to amend his complaint, this time dropping the conversion claim and adding negligence and breach of bailment contract claims. The Bank did not oppose the amended complaint, but the Trial Court did not enter an order allowing the amended complaint until some months later in March 2017. Danny Haire's amended complaint stated, in part, as follows:

57. Beginning in June of 2012, David Haire and Shelby Webster, through various signature cards, changed the account owners, authorized account signatories, and pay-on-death beneficiaries for Decedent's Checking Account and Savings Account. (collectively the "Accounts") for the benefit of David Haire and Shelby Webster.
58.Although some of the signature cards might have been signed by Decedent, Decedent was either incompetent or under the undue influence of David Haire and Shelby Webster at the time the signature cards were executed and presented to First Tennessee Bank.
59.A copy of the void or voidable signature cards for the Checking Account are attached hereto and incorporated herein as Collective Exhibit F.
60. A copy of the void or voidable signature cards for the Savings Account are attached hereto and incorporated herein as Collective Exhibit G.
61. Upon information and belief, David Haire and/or Shelby Webster (collectively, the "Fiduciaries") also forged the signature of account co-owner Danny Haire on some of the signature cards.
62.In particular, upon information and belief, the Fiduciaries forged Danny Haire's signatures on the Checking Account signature card dated June 7, 2012, and the Savings Account signature card dated June 7, 2012, which resulted in Danny Haire being removed as a co-owner from both accounts.
63. The Fiduciaries made these changes without Danny Haire's knowledge or permission.
64. Danny Haire did not sign any of the signature cards at issue personally.
65.The Fiduciaries also changed the addresses for the accounts from Decedent's address to David Haire's address.
66.At all times relevant to this action, including the dates on which the signature cards were purportedly signed by Decedent and/or the Fiduciaries, Decedent lacked the legal capacity to execute or understand the nature of those documents.
67. The end result of the wrongful acts of the Fiduciaries was that the balance of the Checking Account (approximately $11, 500.00) was paid to David Haire and Shelby Webster upon Decedent's death, and the balance of the Savings Account (approximately $129, 000.00) was paid to Shelby Webster upon Decedent's death.
68. No funds were paid to Danny Haire, who was a co-owner on both accounts in early 2012 prior to the Fiduciaries' interference.
69. Danny Haire did not become aware of the changes until some time after Decedent's death, when he expected that he would have been contacted by First Tennessee Bank as the surviving co-owner of the Checking Account and Savings Account.
70. The changes made by the Fiduciaries through those signature cards from and after June 2012 are void or voidable due to Decedent's lack of capacity or undue influence.
71.The signature cards dated June 7, 2012, are also void or voidable due to the forged signature of Danny Haire.
72.The Court should impose a constructive trust upon the assets of the Accounts for the benefit of Decedent's Estate and/or Danny Haire personally (as co-owner of the accounts).
73. To the extent that the Account funds are not traceable or recoverable, the Plaintiffs request a judgment for money damages for the benefit of Decedent's Estate and/or Danny Haire personally (as co-owners of the Accounts), plus prejudgment interest.

         Count Ill: Breach of Contract by First Tennessee Bank for Changing Ownership of Jointly Titled Bank Accounts

74. Paragraphs 1 through 73 of this Complaint are incorporated herein as if set forth verbatim.
75. Danny Haire had signed many signature cards for First Tennessee Bank prior to 2012, including signature cards for several certificates of deposit and bank accounts owned jointly with Decedent.
76. First Tennessee Bank knew or should have known that the signature of Danny Haire on the June 7, 2012, signature cards had been forged.
77. First Tennessee Bank breached its contract with Decedent and Danny Haire by removing Danny Haire as a co-owner of the Savings Account and Checking Account without the valid signature or express authorization of Danny Haire.
78. First Tennessee Bank deprived Danny Haire of co-ownership and the use of funds in the accounts by accepting the forged signature on the signature cards and removing Danny Haire as a co-owner of the Savings Account and Checking Account.
79. The actions of First Tennessee Bank constitute a breach of contract, for which Plaintiffs are entitled to damages.

         Count IV: Action for Damages for Negligence by First Tennessee Bank for Changing Ownership of Jointly Titled Bank Accounts

80. Paragraphs 1 through 79 of this Complaint are incorporated herein as if set forth verbatim.
81.First Tennessee Bank owed Danny Haire a duty of care as a co-owner of the Savings Account and Checking Account.
82.First Tennessee Bank breached that duty of care by accepting the forged signature on the signature cards and removing Danny Haire as a co-owner of the Savings Account and Checking Account.
83. Danny Haire suffered damages as a result of First Tennessee Bank's actions.
84. The actions of First Tennessee Bank constitute negligence, for which Plaintiffs are entitled to damages.

         Count V: Breach of Bailment Contract by First Tennessee Bank for Changing ...


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