The Virginia Supreme Court rules that a bank did not breach its contract with a party to a joint account when it added a third party to the account without the consent of all parties. Caine v. NationsBank, N.A. (Va. Sup. Ct., No. 002615, Sept. 14, 2001).
In May 1989, Dr. Andrew A. Freier opened a joint checking account in his name and that of his daughter, Susan Freier Caine, at Sovran Bank, the predecessor to NationsBank. The signature card, signed by both parties, indicated that survivorship rights attached to the account. In 1998, when Dr. Freier's health was deteriorating, his wife, Amy, sought to be added to the account to allow her to pay bills. Although told by a bank employee that the signatures of all parties to the account would be required, Mrs. Freier returned a new signature card to the bank that identified Mrs. Caine, Dr. Freier, and Mrs. Freier in the title of the account, but contained the signatures of only Dr. and Mrs. Freier.
The bank's branch manager visited Dr. Freier at his home to discuss the card and concluded that Dr. Freier did not intend to remove Mrs. Caine from the account. After Dr. Freier again signed the signature card, the bank determined that the new signature card was sufficient to add Mrs. Freier to the account. From January 2 through February 3, 1998, Mrs. Freier wrote thirty-five checks totaling $100,181.13 on the account, including one check for $75,000, which was deposited to her own account on January 27, 1998, the day Dr. Freier died.
Mrs. Caine filed a motion for judgment against the bank seeking $100,181.13 plus interest, asserting that the bank breached its contract with her when it recognized Mrs. Freier as a party to the joint account. The trial court sustained the bank's demurrer, holding that the relevant Virginia statute (Code Sect. 6.1-125.6) authorized the "unilateral addition of a new owner to a multiple-party account." Mrs. Caine appealed, arguing that neither the statute nor the joint account's contract terms authorized Dr. Freier to add Mrs. Freier to the account without Mrs. Caine's consent.
The Virginia Supreme Court affirms. In reaching its decision, the court focuses on the wording of the joint account contract, which provides that "[e]ach owner appoints all other owners as his or her agent to endorse, deposit, withdraw and conduct business for the account." (Emphasis added). The court agrees with the bank that this language, when read in conjunction with the Virginia code governing multiple-party accounts, is broad in scope and must be construed to include the addition of a party to the account. Mrs. Caine had argued that the phrase "conduct business for the account" refers only to "ministerial" and "transactional" matters and does not extend to altering the parties to the account.
For the full-text of this decision, go to: https://www.courts.state.va.us/opinions/opnscvwp/1002615.pdf
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