Opinion
No. 88CA1205
Decided January 11, 1990. Rehearing Denied February 15, 1990. Certiorari Granted August 13, 1990 (90SC142).
Certiorari Granted on the following issues: Whether the respondent bank had the duty to exercise reasonable care in rendering advice to the petitioner. If so, did it violate that duty? Whether the trial court erred inconcluding as a matter of law that petitioner's funds at the respondent bank were not held in a special account. Whether the petitioner's accounts at the respondent bank were subject to a constructive or a resulting trust. Denied as to all other issues.
Appeal from the District Court of Pueblo County Honorable Richard D. Robb, Judge
James M. Croshal, for Plaintiff-Appellant.
Holme Roberts Owen, James T. Flynn, Brent E. Rychener, for Defendant-Appellee.
In this action concerning a bank's right of setoff against funds held in a joint account, plaintiff, Grace Mancuso, appeals the summary judgment entered against her on her claims against defendant, United Bank of Pueblo. We affirm.
After her husband died, plaintiff moved to Pueblo with the remaining assets from her marriage. There, in 1977, she and her son opened a joint tenancy checking account with the bank. Plaintiff was the sole source of funds deposited to the account. According to plaintiff's affidavit, the joint account was selected, at the suggestion of a bank employee, because she wished to have an account from which her son could withdraw funds if she were traveling or if an emergency occurred.
In 1981 and 1982, plaintiff and her son opened three more accounts consisting of a joint certificate of deposit account, a joint savings account, and a second joint certificate of deposit account. In 1982 and 1983, her son personally guaranteed certain loans from the bank. In April of 1985, these loans were in default, and the bank exercised its right of setoff against the funds held by plaintiff and her son in the accounts established in 1981 and 1982.
At no time did the bank inform plaintiff of its statutory right of setoff for any loan owed to the bank by either her or her son.
I.
Plaintiff contends that the trial court erred in dismissing her negligence claim against the bank. She asserts that the bank had a duty to inform her of its right of setoff. We disagree.
Absent special circumstances not present here, the relationship between a bank and its depositor is that of debtor and creditor. Cox v. Metropolitan State Bank, 138 Colo. 576, 336 P.2d 742 (1959); see Palmer v. Idaho Bank Trust, 100 Idaho 642, 603 P.2d 597 (1970).
Neither plaintiff nor her son had loans outstanding at the time the conversation with the bank employee occurred in 1977. Her concerns at the time of the conversation were to provide an account mechanism for her son to write checks on her account if the described contingencies occurred. In addition, in the written agreement establishing the account, plaintiff and her son agreed that they were to be the joint owners of the account and that all of the funds on deposit in the account were subject to withdrawal by either of them.
Under these circumstances, we conclude that no duty of disclosure may be imposed upon the bank under current Colorado law at the time any of the joint accounts were established. Hence, there could be no recovery for negligence in failing to comply with that duty.
II.
Plaintiff next contends that the trial court erred in granting summary judgment on her claim for conversion. Again, we disagree.
To establish conversion, the actor must acquire unauthorized control of the owner's property. Glenn Arms Associates v. Century Mortgage Investment Corp., 680 P.2d 1315 (Colo.App. 1984). However, § 11-6-105, C.R.S.(1987 Repl. Vol. 4B) provides that all deposits made in the names of two or more persons in joint tenancy are subject to a bank's right of setoff.
Thus, at the time the bank exercised its right of setoff, plaintiff's son had both a contractual and statutory right to withdraw from that account. See Taullie v. Decibel Credit Union, 765 P.2d 1087 (Colo.App. 1988).
Plaintiff relies upon cases such as Sherberg v. First National Bank, 122 Colo. 407, 222 P.2d 782 (1950) and Hugh v. Washington Industrial Bank, 757 P.2d 1154 (Colo.App. 1988) in asserting that there is no right of setoff if the bank knows the deposit is of a special nature. However, the existence of a "special account" is dependent upon the knowledge of the parties. For example, in Sherberg, the bank actually loaned the funds to the depositor for the purpose of paying a third person. In Hugh, the face of the check which comprised the deposit noted it was for the benefit of a third party, a fact the bank acknowledged by letter.
Here, in 1981 and 1982, plaintiff and her son opened joint accounts without giving any information to the bank about her specific needs or intent. These facts are insufficient as a matter of law to establish a "special account."
III.
Finally, plaintiff contends that a constructive trust was created when she deposited her funds with the bank. We find no merit in this contention.
Ordinarily, a bank does not act in a fiduciary capacity towards its depositors. In re Werth, 37 B.R. 979 (Bankr. D. Colo. 1984). As relevant here, to create a constructive trust, the bank would have to have acted from a position of superiority over plaintiff or it would have to appear that she justifiably reposed confidence in the bank in some manner such that it could not exercise its legal right of setoff. See Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979). The facts relied upon by plaintiff are insufficient as a matter of law to establish a trust under either theory. Hence, entry of summary judgment was proper.
The judgment is affirmed.
JUDGE JONES concurs.
JUDGE DUBOFSKY dissents.