Leeds Federal Savings & Loan Ass'n v. Metcalf

KARWACKI, Judge. Leeds Federal Savings and Loan Association (Leeds) timely appealed to the Court of Special Appeals from a judgment entered by the Circuit Court for Baltimore County upon a jury verdict in favor of Delores J. Metcalf and Merrill W. Metcalf, her husband, in the amount of $73,617. We issued a writ of certiorari prior to consideration of the case by the intermediate appellate court. 329 Md. 757 , 621 A.2d 897 . The ultimate issue to be resolved is whether there was legally sufficient evidence presented to the jury that Leeds breached its contracts with the Metcalfs when it permitted five passbook savings accounts of which the Metcalfs were joint tenants with Anna M. Lanahan to be closed without their consent.

The resolution of that issue in turn depends in part upon what preclusive effect should be accorded a judgment entered in earlier litigation brought by the Metcalfs against Donna M. Buppert and Craig E. Buppert, her husband. I. Viewing the evidence and the permissible inferences therefrom in the light most favorable to the Metcalfs, Maryland Rule 2-519, the following facts were established at trial. ¹¹⁰ Anna M. Lanahan, who died on March 15, 1988, at the age of 84 years, was the aunt of Delores J. Metcalf and the grandaunt of Donna M. Buppert. Mrs. Lanahan had resided with the Metcalfs from August 1978 to December 1987 at their former residence on Ashbourne Road in Baltimore City. Mrs. Lanahan resided with the Metcalfs on a full-time basis at their Baltimore home from August 1978 until December 1980 when they took up part-time residence in Stevensville on Kent Island in Queen Anne’s County.

Until finally taking up permanent residence in Stevensville in 1987, the Metcalfs maintained a room at the Ashbourne Road address for Mrs. Lanahan and provided care for her, including housecleaning, shopping, and transportation for her medical visits. They also maintained a room for her at their Stevensville home. On October 23, 1983, Mrs. Lanahan and the Metcalfs went to the Arbutus branch of Leeds in Baltimore County where they established three passbook savings accounts held as joint tenants with right of survivorship. These were accounts numbered 43470, 1904495 and 1904496.

On January 6, 1984, they opened account no. 1904523 under the same terms. On July 18,1984, the three established account no. 0900143. Mrs. Lanahan was the source of all the funds on deposit in the five accounts. 1 Furthermore, Mrs. Lanahan used her social security number for the required tax identification purposes to open the accounts. The accounts were opened by execution of signature cards by Mrs. Lanahan and the Metcalfs.

Above the signature lines, the signature card provides: “The undersigned hereby apply for a savings deposit account in the LEEDS FEDERAL SAVINGS AND LOAN ASSOCIATION, BALTIMORE, MD. In accordance with provisions and in the form provided for on the face and reverse sides hereof, subject to its Charter and By-laws, and amendments thereto, to the rules, regulations and laws governing said Association, and subject also to the following: ¹¹¹ Each of the undersigned hereby authorizes any one of the others to endorse any check or other instrument payable to the order of anyone or more of the others, and to present same for credit to this account.” On the reverse side, the signature card further provides: “By the signatures of the persons shown on the reverse side hereof, application is hereby made for a savings deposit account in the LEEDS FEDERAL SAYINGS AND LOAN ASSOCIATION, BALTIMORE, MD. in the names of the persons whose signatures are firstly, secondly, thirdly and fourthly shown on this card, as joint tenants, with the right of survivorship, subject to the order of any one of said joint tenants, or to the order of any one of the survivors after the death of any one or more of them. By the placing of money or funds in such form in said Association, it is agreed by and between the parties to this account that, in any action or proceedings in which said Association and/or any such survivor(s) may be a party, it shall be conclusively presumed that it was the intention of said parties to create a joint tenancy and to vest title in said money or funds, including any subsequent additions or accruals thereon in such survivor/s). Specimens of the signatures of said persons are shown on the reverse side hereof and the Association is hereby authorized to act without further inquiry in accordance with writings bearing any one of such signatures, and upon the death of any one or more of said persons, the Association is thereupon authorized to act without further inquiry in accordance with writings bearing the signature(s) of any one of the survivors of said persons; it being understood and agreed that any one of said persons who shall first act shall have power to act in all matters relating to the membership and such account in said Association held by said persons, including the pledging of such account in whole or in part as security for any loan made by said Association to any one or more of said persons who shall first act, whether or not the other persons named in the account be living.

The withdrawal or repurchase or redemption value of any such account or other rights relat ¹¹² ing thereto may be paid or delivered in whole or in part to any one or more of said persons, who shall first act, or to any one or more of the survivors after the death of any one or more of them, and such payment or delivery, or a receipt or acquittance signed by any one or more of said persons or by any one or more of the survivors after the death of any one or more of them shall be a valid and sufficient release and discharge of said Association. “*Signature of any one co-tenant (with right of survivor-ship) is binding on the others.” Moreover, each of the passbooks issued for the five accounts bore the admonition as part of its “Information for Members”: “NO WITHDRAWALS PERMITTED WITHOUT THIS BOOK.” From the time that the several accounts were opened, Mrs. Lanahan retained possession of all five passbooks. On January 25,1988, Mrs. Lanahan telephoned Ms. Dorothy Dowell, then a vice president of Leeds. Lanahan informed Dowell that she was now living with her grandniece, Donna Buppert, at Westminster in Carroll County and wanted to move her accounts closer to her new home. She further informed Dowell that she wanted Donna Buppert’s name on the accounts instead of the Metcalfs.

Mrs. Lanahan did not wish to appear at the bank in person. Dowell informed her that the request would have to be reduced to a writing bearing her signature. The following day, Donna Buppert appeared at the Arbutus branch of Leeds Federal where she presented the passbooks for the five savings accounts. She also presented a writing dated January 26, 1988 and bearing the signature of Anna M. Lanahan which read: 1-26-88 To Leeds Federal S & L, I give my permission to Donna M. Buppert to change ¹¹³ alternate ownership & signature from: Delores MetcalfiMerrill Metcalf to: Donna M. Buppert Signed, 1-26-88 Anna M. Lanahan Upon presentation of the passbooks and the writing, accounts numbered 1904495, 1904496, 1904523 and 0900143 were closed and the funds transferred to a new joint account, no. 46002, opened in the names of Anna M. Lanahan and/or Donna M. Buppert, using Mrs. Lanahan’s social security number for tax identification purposes.

The same day, $7,423.24 was transferred from account no. 43470 2 to the newly opened account. The total amount of funds transferred into the new account was $60,565.46. On the same day, the balance of the new account was withdrawn by check no. 838812 made payable to “Anna M. Lanahan and/or Donna M. Buppert”, thus closing the account. The check was subsequently endorsed by Mrs. Lanahan and Mrs. Buppert and deposited in a joint savings account in their names at the Westminster branch of the Taneytown Bank & Trust Company.

Mrs. Lanahan’s social security number was used as the tax identification number for that account.

II

In June 1988, the Metcalfs filed suit in the Circuit Court for. Carroll County against Donna M. Buppert and her husband, Craig E. Buppert. The Metcalfs subsequently filed an amended complaint containing four counts. In count one the Metcalfs alleged that the transfer of $60,565.46 from the Leed’s accounts in the joint names of the Metcalfs and Lanahan to the account in the Taneytown Bank & Trust Company ¹¹⁴ opened in the joint names of Lanahan and Donna M. Buppert was accomplished by Buppert without the authority of Lanahan and constituted a misappropriation by Buppert of the funds in the joint accounts of the Metcalfs and Lanahan. 3 The Metcalfs asked the court to order Buppert to account for those funds and sought damages against her for the alleged misappropriation.

On May 17, 1991, the Bupperts filed a Motion for Summary Judgment which they supported with affidavits and depositions taken in connection with the case. A hearing was held on November 21, 1991 before Judge Francis M. Arnold. On December 2, 1991, Judge Arnold issued a Memorandum Decision and Order, granting summary judgment on all four counts of the amended complaint. In granting summary judgment as to Count I, the court ruled: “There is no dispute that all of the money in these bank accounts was deposited by Mrs. Lanahan nor is there any dispute that she purchased the bonds.

On January 26, 1988 Donna Buppert closed the Leeds Federal accounts and placed the money in a Taneytown Bank and Trust Company account titled to Mrs. Lanahan and herself jointly. Mrs. Lanahan endorsed the check for deposit. Mrs. Buppert asserts by affidavit that these actions were done at Mrs. Lanahan’s direction.” The court continued: “The Defendants seek Summary Judgment as to Count One asserting that Ms. Lanahan directed the banking transactions and that she had every right to make these transactions. The Accounts at Leeds Federal were titled as joint accounts.

Mrs. Lanahan alone was the source of these funds. Mrs. Lanahan never relinquished control over the ¹¹⁵ accounts and therefore never made an inter vivos gift of this money to the Plaintiffs. Mrs. Lanahan, at all times prior to her death, had the authority to close the accounts. The court concluded: “Based on the affidavits and the depositions, the Court finds that there is no genuine dispute that Mrs. Lanahan had the mental capacity to direct that the accounts be closed and that she authorized Mrs. Buppert to close the accounts.

Further, there is no dispute that Mrs. Buppert’s actions were in compliance with Mrs. Lanahan’s wishes and were not in breach of a fiduciary duty.” On January 13, 1992, the court entered a final judgment on its December 2, 1991 order. No appeal was taken from that judgment. While the Carroll County litigation was pending, on January 9, 1991, the Metcalfs filed a three count complaint in the instant case in Circuit Court for Baltimore County against Leeds. Prior to trial, the court granted Leeds’ Motion for Summary Judgment as to Counts Two and Three, claiming damages for breach of fiduciary duty and for breach of “standard of care”.

Count One, claiming damages for breach of contract, survived to trial. On March 25, 1992, at the close of all the evidence at trial, Leeds moved for judgment pursuant to Md. Rule 2-519. Leeds argued that the issue of Buppert’s authority to act on behalf of Lanahan in closing the joint savings account which Lanahan held with the Metcalfs on January 26, 1989, had been fully litigated in Metcalf v. Buppert in Carroll County. Consequently, Leeds contended that the judgment in that action barred the Metcalfs from relitigating that issue in the instant case under the doctrine of defensive nonmutual collateral estoppel. 4 ¹¹⁶ We first embraced that exception to the usual rule applicable to collateral estoppel, requiring that before a party may be collaterally estopped to relitigate an issue decided in a previous case that party or its privy must have been a party to the earlier litigation, in Pat Perusse Realty v. Lingo, 249 Md. 33 , 238 A.2d 100 (1968).

In that case a husband and wife who had decided to separate employed a real estate broker to sell their home. The broker procured a buyer, but when the wife refused to consummate the sale, the broker sued both the husband and wife for his commission. Because the wife had moved from this state, she could not be served with process. Nevertheless, the broker elected to proceed against the husband alone.

The court ruled in favor of the husband, finding that the broker had not procured a ready, willing and able buyer and consequently that he had not earned a commission under the terms of his contract. Later, the broker sued the wife for the same commission. She defended on the ground of collateral estoppel. The trial court agreed with the wife.

We affirmed despite the fact that the wife was not a party to the earlier litigation between the broker and the husband. Chief Judge Hall Hammond, writing for the court relied heavily on the decision of District Judge Edward S. Northrop in State of Maryland v. Capital Airlines, Inc., 267 F.Supp. 298 (D.Md.1967). There Judge Northrop concluded: “It would seem to this court that as long as the party against whom the judgment was sought to be used had a full and fair