Wilson v. Pulaski Bank & Trust

Citations: 383 S.W.3d 919; 2011 Ark. App. 383; 2011 Ark. App. LEXIS 408Docket: No. CA 10-1152

Court: Court of Appeals of Arkansas; May 25, 2011; Arkansas; State Appellate Court

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Carol Calaway Wilson, personal representative of Richard Calaway's estate, appealed the Pulaski County Circuit Court's summary judgment favoring Pulaski Bank Trust and Margarita Calaway. Wilson's lawsuit alleged fraud and negligence against the bank for allowing Margarita to add her name to Richard's account without proper verification. She amended her complaint to include Margarita and Hartford Insurance, asserting that Margarita fraudulently added her name and wrongfully received life insurance proceeds that should have gone to Richard's daughter from a previous marriage.

Richard, a divorced father and administrative law judge, initially designated his daughter as the beneficiary of his $250,000 life insurance policy but changed it to his sister, Carol, as trustee for his daughter after being diagnosed with terminal cancer. He married Margarita in March 2007 and subsequently named her as the sole beneficiary of the insurance policy in December 2007, despite intending to change his will to benefit her or a friend—a change that was never executed.

Wilson claimed that Richard lacked the mental capacity to authorize these changes, citing a hospital admission shortly before his death where a doctor noted his impaired decision-making abilities. After Richard's death in April 2008, Margarita received the insurance proceeds and withdrew about $19,000 from his bank account. Wilson sought to reclaim these funds for the estate and alleged that the bank was negligent in allowing Margarita's addition to the account.

The bank filed a motion for summary judgment, contending that the funds in question were used for Richard's expenses and that Wilson was aware of Margarita's access to the account before his death. The court ultimately affirmed the summary judgment in favor of the bank and Margarita.

The bank contended that Wilson's fraud claim was baseless since she lacked factual evidence and only provided her belief regarding Calaway's alleged fraudulent actions in adding her name to the account. The bank moved for summary judgment against Calaway, mirroring arguments in its motion against Wilson. On September 11, 2009, Calaway filed her own summary judgment motion concerning Wilson’s claims, supported by an affidavit from Louise Logue, the agent who facilitated a beneficiary change for the decedent's Hartford policy. Logue attested that the decedent understood the process and acted without duress during their two-hour meeting, confirming the proper execution of the beneficiary change. She stated she had never met Calaway. Calaway highlighted Wilson's deposition acknowledgment that she had no information on how Calaway's name was added to the account and supplemented her motion with a forensic handwriting analyst's report suggesting the decedent likely signed the relevant documents.

Wilson countered by asserting that the account agreement dated January 3, 2008, was executed when the decedent lacked capacity. On November 12, 2009, Wilson amended her complaint, alleging fraud and seeking a constructive trust on Hartford policy proceeds. Both the bank and Calaway denied the allegations, renewed their summary judgment motions, leading to the circuit court granting summary judgment to the bank on Wilson’s fraud claim and to Calaway regarding fraud claims and life insurance benefits on December 9, 2009. On June 21, 2010, Calaway sought summary judgment on the third amended complaint, asserting the decedent understood his decisions and denying any influence on him regarding the beneficiary change. She provided another affidavit from Logue, while Wilson pointed out inconsistencies between the affidavits and prior testimony, claiming Logue had a personal relationship with the decedent.

Wilson provided a joint affidavit from Linda Marshall and Cindy Rogers, who were co-workers of the decedent at the Workers’ Compensation Commission. They testified that they saw the decedent frequently from December 2007 until his death in April 2008. Notably, they recalled hearing Calaway express her intention to care for the decedent's daughter, stating she would take care of her education and college expenses. Wilson also included a notarized handwritten statement reflecting discussions with the decedent regarding his wishes for his daughter's future. Additionally, Shelley Muscovalley’s affidavit supported these claims, indicating she overheard Calaway affirming her commitment to use insurance proceeds for the daughter's college education.

On June 25, 2010, the bank filed a motion for summary judgment, arguing that Wilson did not provide evidence of negligence or fraud related to Calaway's name being added to the account. The bank highlighted Wilson's deposition testimony, where she admitted to lacking knowledge about how Calaway's name was added and acknowledged that Calaway could write checks on the account before the decedent's death. On August 11, 2010, the circuit court granted summary judgment to Calaway and the bank without explanation. 

The appellate review follows a standard where summary judgment is appropriate only when there are no genuine issues of material fact. The court examines evidence presented, viewing it favorably for the non-moving party, and assesses whether the moving party adequately demonstrated a lack of material fact issues. Summary judgment is not suitable if the moving party fails to provide evidence on a disputed issue, regardless of the opposing party's evidence. The review hinges on whether the evidence is sufficient to raise a factual issue rather than compel a specific conclusion.

A fact issue arises when undisputed facts can lead to different legal conclusions regarding a party's entitlement to judgment. Summary judgment is inappropriate in such cases. Wilson contends the circuit court wrongly granted summary judgment to Calaway concerning a constructive trust and argues that Calaway's affidavit should be disregarded as it comes from an interested party. However, the cases Wilson cites are not applicable as they do not relate to affidavits supporting summary judgment, and Arkansas Rule of Civil Procedure 56(e) allows self-serving affidavits. Wilson also challenges the credibility of Louise Logue’s affidavit, claiming it conflicts with her deposition but fails to substantiate her argument with legal authority, which is necessary for appellate consideration. Wilson further argues that the existence of a constructive trust is a factual issue requiring cross-examination of Calaway and Logue, but again, she does not provide supporting authority.

On her second point, Wilson argues that the court erred in granting the bank’s summary judgment, asserting she should demonstrate the bank's breach of duty in allowing Calaway’s name on the account. However, she admitted in her deposition that she was not present during this process and lacked evidence for her claims. Her belief of negligence was based on an assumption that the bank violated its guidelines, which the bank refuted by providing its guidelines and an affidavit from an officer confirming that customer presence was not always required. Wilson did not contest this affidavit, leading the court to find that the bank made a prima facie case for summary judgment. Consequently, the court affirmed the summary judgment ruling. Claims against Hartford were later severed and the case removed to federal court for resolution.