Thompson v. Alexander

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ROBERT THOMPSON, personal representative of the Estate of Billy J. Alexander, Plaintiff/Counterdefendant/ Appellant, v. PAULINE ALEXANDER, Third-Party Plaintiff/ Appellee. ) ) ) ) ) ) ) ) ) ) ) ) ) ) 1 CA-CV 10-0057 DIVISION ONE FILED: 12/21/2010 RUTH WILLINGHAM, ACTING CLERK BY: GH DEPARTMENT D MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Yuma County Cause No. S1400CV200900438 The Honorable Mark W. Reeves, Judge AFFIRMED Clark & Associates By A. James Clark Attorneys for Plaintiff/Counter-Defendant/Appellant Snell & Wilmer LLP By Kevin J. Parker Attorneys for Third-Party Defendant/Appellee And Law Office of Larry W. Suciu By Barry L. Olsen Co-Counsel for Third-Party Defendant/Appellee Yuma Phoenix Yuma W I N T H R O P, Judge ¶1 Robert Thompson, personal representative of the estate of Billy J. Alexander ( the Estate ) and Pauline Alexander, the decedent s wife ( Wife ) dispute entitlement to an investment account the decedent, Bill Alexander ( Husband ) and Wife held at Edward Jones. favor of Wife. The trial court granted summary judgment in The Estate appealed. We affirm. FACTUAL AND PROCEDURAL BACKGROUND ¶2 Husband and Wife opened two certificates of deposit ( CDs ) in 2005 at Foothills Bank. Both CDs were designated Multiple-Party with Right of Survivorship accounts. The two CDs were later combined into a single CD, also designated a Multiple-Party with Right of Survivorship account. ¶3 Approximately three years later, Husband and Wife met with a customer service representative at Foothills Bank and stated that they wanted additional deposit insurance protection for the CD due to the state of the financial markets. They wanted to redeem the CD so they could deposit the funds in an institution providing greater deposit insurance. Foothills Bank issued a check to Bill J and Pauline Alexander in the amount of $725,983.51, the balance in the CD account. Two days later, Husband and Wife opened an account at Edward Jones, depositing the entire check from Foothills Bank. 2 ¶4 The financial advisor at Edward Jones provided Husband and Wife with an Account Authorization and Acknowledgement Form. On this form, the financial advisor designated the account as 02-Joint. they were Husband and Wife signed this form indicating that opening a joint account. At his deposition, the financial advisor testified that he added a W to the computer screen to reflect survivorship. that the account was joint with right of He also testified that he had explained to Wife that the Edward Jones account would have to be held in the same form as the parties previous CD account at Foothills Bank, i.e., joint account with right of survivorship. ¶5 On October 14, 2008, Edward Jones sent a confirmation letter to Husband and Wife indicating that the account was joint with right of survivorship. This letter asked Husband and Wife to notify Edward Jones of any incorrect information regarding the account. Neither party made any corrections. Husband died four days later on October 18, 2008. ¶6 The Estate then filed an action against Edward Jones to recover the funds in this account. Wife also asserted an interest filed in the funds. Edward Jones an interpleader action, deposited the funds with the court, and was dismissed. Wife and the Estate filed motions for summary judgment regarding their competing claims to the funds. 3 After oral argument, the trial court ruled that Wife was entitled to the funds because the Edward Jones survivorship. account was a joint account with right of Alternatively, the court concluded that Wife was entitled to the funds under Arizona Revised Statutes ( A.R.S. ) section 14-6212(A) (2005). ¶7 The Estate filed a timely notice of appeal. We have jurisdiction pursuant to A.R.S. section 12-2101(B) (2003). DISCUSSION I. Standard of Review ¶8 genuine Summary issues judgment of is material appropriate fact and when the there moving entitled to judgment as a matter of law. are no party is Orme School v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). In reviewing a trial court s rulings on cross-motions for summary judgment, we review questions of law de novo, but view the facts in the light most favorable to the losing party. See Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 191, 888 P.2d 1375, 1378 (App. 1994) (citing Wagner v. City of Globe, 150 Ariz. 82, 83, 722 P.2d 250, 251 (1986) (overruled on other grounds)). II. ¶9 Probate Statutes Apply The trial court found that even if the account were a joint account and not a joint tenancy account with right of survivorship, Wife would be entitled to the funds pursuant to 4 A.R.S. § 14-6212(A). Implicit in this holding is the conclusion that the Edward Jones account falls within the definition of account in the probate code. the Edward Jones account The Estate argues, however, that does not fit within the statutory definition of account, so the probate statutes do not apply. See A.R.S. § 14-6201(1) (2005). Section 14-6201(1) defines an [a]ccount as a contract of deposit between a depositor and a financial institution and includes a checking account, savings account, certificate of deposit and share account. The Estate contends financial that, institution, [a]ccount because Edward the account pursuant to at Jones issue section is not does not 14-6201(1), a constitute and the an probate statutes do not apply. ¶10 A [f]inancial [i]nstitution is defined as an organization authorized to do business under state or federal laws relating to financial institutions and includes a bank, trust company, savings and savings loan bank, company A.R.S. § 14-6201(4). or building and association loan and the enough to definition encompass credit union. The Estate argues that Edward Jones is a stock brokerage investment firm and not a bank. that association, of [f]inancial Edward Jones, Arizona law as a financial institution. 5 Wife contends [i]nstitution which is is broad licensed under ¶11 The trial court relied on the Edward Jones financial advisor s testimony that Edward Jones is a full-service financial institution that is licensed by Arizona as a financial institution and regulated by the federal government as such. The Estate qualified argues to that offer Edward opinion an the on Jones this advisor legal was not question and, accordingly, this testimony lacked foundation and was improper. The Estate claims that Husband and Wife advising also strategies supports its the letter regarding claim that from Edward their Edward Jones investment Jones is not a financial institution. ¶12 The Estate did not question or otherwise challenge the financial advisor regarding his knowledge as to what federal and state laws governed Edward Jones. did not know which laws testimony was untrue. There is no evidence that he governed his employer or that his Absent such controverting evidence, the trial court properly accepted the financial advisor s testimony on this issue. summary judgment See Ariz. R. Civ. P. 56(e) (when a motion for is supported by affidavits or deposition testimony, the opposing party may not rest on mere allegations or denials, but must, by affidavits or as otherwise provided . . . set forth specific facts showing that there is a genuine issue for trial. ); see also GM Development Corp. v. Community 6 American Mortg. Corp., 165 Ariz. 1, 5, 795 P.2d 827, 831 (App. 1990) (holding that if a party opposing a motion for summary judgment fails to competent evidence, present, facts either that by affidavit controvert the or moving other party s proof, the facts alleged by the moving party may be considered as true). ¶13 The financial advisor s concession that Edward Jones is not a bank is not dispositive of the issue. The definition of [f]inancial [i]nstitution is not limited to banks; rather, it lists several types See A.R.S. § 14-6201(4). of organizations, including banks. The word includ[ing] is ordinarily a term of enlargement, not of limitation. Sec. Sav. & Loan Ass n v. Milton, 171 Ariz. 75, 77, 828 P.2d 1216, 1218 (App. 1991). [I]t is generally improper to . . . conclude that items not specifically enumerated are excluded. Id. The list of organizations in section 14-6201(4) is not exhaustive. Other organizations that are authorized and regulated by state and federal law as financial institutions, like Edward Jones, may constitute [f]inancial [i]nstitution[s] although they are not specifically listed. ¶14 The trial court cited Deutsch, Larrimore & Farnish, P.C., v. Johnson, 848 A.2d 137, 145 (Pa. 2004), in implicitly recognizing Edward Jones as a 7 financial institution whose account is subject to the probate code. The Estate attempts to distinguish Deutsch on the basis that Pennsylvania s definition of financial institution is broader than Arizona s. As noted above, the list of organizations in section 14-6201(4) is not exhaustive. See Sec. Sav. & Loan Ass n, 171 Ariz. at 77, 828 P.2d at 1218. Therefore, like the court in Deutsch, we agree that [f]inancial the term [i]nstitution is defined broadly enough to include investment banking firms like Edward Jones, at least on this record. ¶15 The Estate identifies other states that have held that stock brokerages are not financial institutions under probate statutes. See In re Estate of Ashe, 787 P.2d 252 (Idaho 1990); In re Estate of Palmer, 187 P.3d 758 (Wash. Ct. App. 2008); In re Estate of Hayes, 941 S.W.2d 630 (Mo. Ct. App. 1997). We find these cases to be distinguishable. ¶16 In Ashe, 787 P.2d at 254, the Idaho court considered whether Merrill Lynch constituted a financial institution. Idaho s statutory definition of [f]inancial [i]nstitution is nearly identical to A.R.S. § 14-6201(4). See Idaho Code Ann. § 15-6-101(3) (2010) (defining Financial Institution as any organization authorized to do business under state or federal laws relating to financial institutions, including, without limitation, banks and trust companies, savings banks, building 8 and loan associations, savings associations, and credit unions. ). and loan companies or The court concluded that the evidence in the record did not establish the nature of the account or which, if any, state and federal laws related to Merrill Lynch. Ashe, 787 P.2d at 254. For this reason alone, the court held it could not conclude that Merrill Lynch was a financial institution. ¶17 Id. Wife argues that Ashe is of no support to the Estate because the court expressly limited its holding to the record before it. We agree. Unlike Ashe, the record in this case established that Edward Jones was a [f]inancial [i]nstitution pursuant to section 14-6201(4). ¶18 In Hayes, 941 S.W.2d at 631-33, a joint owner of an Edward Jones account argued that he was entitled to the balance of the account upon the death of the other joint owner pursuant to a Missouri probate statute. The Missouri statute provided that deposits made with banks and trust companies made in the name of the depositor and one or more other persons shall become the property of [the surviving owner(s)] after the death of any one of the joint tenants. § 362.470.1 (1994)). Id. at 633 (citing Mo. Rev. Stat. The court in Hayes held that Edward Jones was not a bank, which the applicable Missouri statute defined as any corporation soliciting, receiving, or accepting money, 9 or its equivalent, on deposit as a business. Rev. Stat. § 362.010.3 (1994)). did not accept instruments. Id. deposits, but Id. (quoting Mo. The court found Edward Jones instead, sold stocks and Therefore, Hayes held that Edward Jones was not a bank whose accounts were subject to the probate statutes. Id. ¶19 Hayes is distinguishable because the Missouri statute in question applied to banks and trust companies only, not the broader term financial institutions. As noted above, Arizona s definition of [f]inancial [i]nstitution is broader than Missouri s definition of bank. Based upon the record in this case, Edward Jones falls within Arizona s definition of a [f]inancial [i]nstitution. ¶20 Finally, Husband relies on Palmer, 187 P.3d at 765, ¶ 26. Palmer held that Edward Jones, as a stock brokerage firm, did not fall under the Washington probate code definition of financial institution. Id. The Washington statute specifically limits the definition of financial institution to five specific types of institutions: bank, trust company, mutual savings bank, savings and loan association, or credit union. See Palmer, 187 P.3d at 765 n.7, ¶ 26 (citing Wash. Rev. Code § 30.22.040(12)). Arizona s statute, on the other hand, is inclusive, and does not limit the type of institution that 10 may qualify as a [f]inancial [i]nstitution to those listed. See Sec. Sav. & Loan Ass n, 171 Ariz. at 77, 828 P.2d at 1218. ¶21 The record below established that Edward Jones was a [f]inancial [i]nstitution as defined by A.R.S. § 14-6201(4). Thus, we conclude that the trial court properly considered application of the probate statutes. III. Wife Is Entitled to the Account ¶22 The Estate argues that the trial court erred in its application of the probate statutes. The trial court concluded that Wife was entitled to the funds pursuant to A.R.S. § 146212(A), which provides: Except as otherwise provided in this section, on the death of a party, sums on deposit in a multiple party account belong to the surviving party or parties. If two or more parties survive and one is the surviving spouse of the decedent, the amount to which the decedent, immediately before death, was beneficially entitled under § 146211 belongs to the surviving spouse. If two or more parties survive and none is the surviving spouse of the decedent, the amount to which the decedent, immediately before death, was beneficially entitled under § 146211 belongs to the surviving parties in equal shares and augments the proportion to which each survivor, immediately before the decedent s death, was beneficially entitled under § 14-6211. The right of survivorship continues between the surviving parties. ¶23 Wife argues that the first sentence of this section supports the trial court s decision. 11 The Estate contends that A.R.S. § 14-6212(A) only applies to an account involving two or more surviving parties, which is certainly not the case here. To the contrary, a multiple party account consists of at least two parties. See A.R.S. § 14-6201(5). The first sentence of section 14-6212(A) clearly applies to multiple party accounts with just two owners when one of the two owners dies. more than one owner survives, the remainder of Where section 6212(A) details how the remaining owners hold the funds. 14- These later provisions do not apply in this case because Wife was the only surviving party. ¶24 The 6212(A), a trial Thus, only the first sentence applies. court multiple concluded party account, that under whether section joint or 14- joint tenancy with right of survivorship, goes to the surviving party. Applying section 14-6212(A) to this case, Wife as the surviving party of the two-party multiple party account is entitled to the funds on deposit. The Estate argues that this statute does not give multiple party accounts an automatic right of survivorship. We disagree. ¶25 The first sentence states: [e]xcept as otherwise provided in this section, on the death of a party, sums on deposit in a multiple party or parties. party account belong to the surviving A.R.S. § 14-6212(A) (emphasis added). The statute does not require that a multiple party account contain 12 specific language regarding the right of survivorship for the surviving party to receive the funds. A multiple party account is defined as an account payable on request to one or more of two or more parties, whether or not a right of survivorship is mentioned. A.R.S. § 14-6201(5) (emphasis added). definition of multiple legislature was aware party account in party that using section account, the we Given this presume general term would give 14-6212(A) the multiple rise to automatic rights of survivorship whether or not such rights were expressly provided in the account language. See McCandless v. United Southern Assur. Co., 191 Ariz. 167, 174, 953 P.2d 911, 918 (App. 1997) (stating that [the courts] regularly presume the legislature knows its own laws. ). ¶26 also Other statutes in this article of the probate code recognize survivorship. that For section example, 14-6212(A) A.R.S. creates section a right 14-6213(B) of (2005) states that a right to survivorship can arise pursuant to: (1) the express terms of the account; (2) section 14-6212; or (3) a pay on death designation. A.R.S. section 14-6216(B) (2005) also recognizes [a] right of survivorship between parties married to each other arising from the express § 14-6212 may not be altered by will. 13 terms of the account or ¶27 The Estate argues that this automatic right of survivorship is contrary to the caselaw requiring clear evidence that the parties survivorship. agreed to a joint tenancy with right of The Estate contends the joint account does not give rise to a right of survivorship unless Wife can establish by clear evidence that Husband agreed to and knew the account had such a right. ¶28 The cases the Estate cites requiring proof that the parties intended to hold an account as joint tenants are not inconsistent with the right of survivorship granted in A.R.S. § 14-6212(A). See Smith v. Tang, 100 Ariz. 196, 204-05, 412 P.2d 697, 703 (1966) (holding that proceeds from sale of real property held in joint tenancy are not subject to survivorship absent an intent indicated by the contract of sale to take the proceeds as joint tenants. ); In re Baldwin s Estate, 50 Ariz. 265, 275, 71 P.2d 791, 795 (1937) (holding that the party who relies on a joint tenancy clause in a deed should bear the burden of showing that the spouse whose property he claims is governed thereby knew that the deed so provided. ); Bostwick v. Jasin, 170 Ariz. 15, 17, 821 P.2d 282, 284 (App. 1991) (noting that a clearly joint appears tenancy that is the not created grantees 14 have in Arizona agreed to unless accept it the conveyance as joint tenants. ) (citing Collier v. Collier, 73 Ariz. 405, 242 P.2d 537 (1952)). ¶29 First, we note that each of these cases involve real property. The applicable statute governing transfer of real property requires language expressly stating that a grant to two or more persons is with a right of survivorship in order for such a right to exist. See A.R.S. § 33-431 (2007). contrary to the language in section 14-6212(A). language general in section understanding 14-6212(A) of a is joint also Further, the consistent tenancy: that This is with each the joint tenant owns an individual whole and if any tenant dies, the other remaining survivors hold the totality as before. Graham v. Allen, 11 Ariz. App. 207, 208, 463 P.2d 102, 103 (1970); see also 4 Ariz. Prac. Community Property Law § 4.4 (3d ed.) (West 2010) ( The principal feature of joint tenancy is the right of survivorship. ); 9 C.J.S. Banks & Banking § 294 (West 2010) ( There is a rebuttable presumption that a party to a joint account has survivorship rights. ); 48A C.J.S. Joint Tenancy § 3 (West 2010) ( Generally, the surviving joint tenant of a bank account held in joint tenancy takes the entire account. ). ¶30 Further, this court in Safley v. Bates, 26 Ariz. App. 318, 320, 548 P.2d 31, 33 (1976), recognized that, pursuant to A.R.S. section 14-6104(A) (1973), a predecessor to section 1415 6212, the sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created. Institutions account § with importance See also 10 Am. Jur. 2d Banks & Financial 667 (West right that of the 2010) ( In survivorship, particular creating it terms is a a joint matter joint bank of ownership no and joint account are not used; the determinative factor is the intent of the parties opening the account). bears the burden of proving that Husband Thus, the Estate intended to create something other than a joint account. 1 ¶31 We agree with the trial court that the evidence clearly established the parties intent to hold a joint account at Edward Foothills Jones. Bank survivorship. It were was that in held undisputed tenancy joint the funds with in right the of The trial court found that the cashier s check from Foothills Bank did not negate the joint tenancy with right of survivorship unities 1 required because to the create transaction and maintain never joint severed tenancy. the See For this reason, we need not address the Estate s argument that the trial court applied an improper burden of proof by allowing Wife to prove Husband s intent by substantial evidence. 16 Smith, 100 Ariz. at 204, 412 P.2d at 703. The court found no intent to sever the joint tenancy with right of survivorship based on (1) the affidavit from the Foothills Bank representative that the parties were moving the funds to obtain more deposit protection; (2) testimony from the Edward Jones advisor that he had to place the funds in an account with the same designation as the account at the Foothills Bank (i.e., joint tenancy with right of survivorship); (3) the account class code designation of joint with right of survivorship; and (4) the letter asking Husband and Wife to correct any account errors which went unanswered. 2 We conclude that the actions of the parties, the evidence of their reason for redeeming the CD, and the financial advisor s testimony that the account would be held in the same form sufficiently established an intent to continue to hold the funds as joint tenants. ¶32 05, The Estate argues that under Smith, 100 Ariz. at 204412 P.2d at 703-04, the four unities creating a joint tenancy were destroyed once the funds were withdrawn from the Foothills Bank. parties Wife argues that there was no evidence that the intended to sever the joint tenancy survivorship by opening the Edward Jones account. 2 with right of We agree with We give this last factor little or no weight in light of the fact that it is unlikely that Husband ever saw this letter. 17 the trial court that the transactions must be viewed as a whole. The inquiry does not end with the withdrawal of funds from the Foothills Bank. The funds from the Foothills Bank were placed into a check made out to both parties and almost immediately deposited into the Edward Jones account which was listed both parties as joint owners. with the evidence This evidence, taken in conjunction regarding the reason for this transfer of funds, clearly established that there was no intent to sever the joint tenancy. Compare Smith, 100 Ariz. at 205, 412 P.2d at 703-04 (finding no intent to hold proceeds in joint tenancy where the husband deposited proceeds in his separate checking account). ¶33 The Estate also argues that, because the account was without an express right of survivorship, section A.R.S. § 146212(C) applies, rather than A.R.S. § 14-6212(A). Section 14- 6212(C) states: Sums on deposit in a single party account without a pay on death designation or in a multiple party account that, by the terms of the account, is without right of survivorship, are not affected by the death of a party. However, the amount to which the decedent, immediately before death, was beneficially entitled under § 14-6211 is transferred as part of the decedent s estate. A pay on death designation in a multiple party account without right of survivorship is ineffective. For purposes of this subsection, designation of an 18 account as a tenancy in common establishes that the account is without right of survivorship. The Estate A.R.S. § claims the 14-6212(C) trial court applies only designated as a tenancy in common. erred to in an concluding account that expressly Wife argues that the account was not designated as a tenancy in common account, so section 14-6212(C) does not apply. ¶34 We conclude that section 14-6212(C) applies only to accounts that are expressly without rights of survivorship. The Edward Jones account was designated a joint account and not a tenancy in common account. Wife s right of survivorship in the joint account arose by operation of law pursuant to A.R.S. § 14-6212(A). survivorship, To the prevent account Wife s would claim have to designated as being held without such rights. 6212(C). to be a right of specifically See A.R.S. § 14- Having decided that section 14-6212(C) does not apply, we need not reach the Estate s argument that it was entitled to the amount of funds to which Husband contributed pursuant to A.R.S. section 14-6211(A) (2005). ¶35 The Estate argues that because the account was established as a joint account, as opposed to an account held in joint tenancy with right of survivorship, and was never changed 19 in accordance with A.R.S. §§ 14-6216(A) remained only a joint account. or 14-6213(A), 3 it As discussed above, Wife was entitled to the funds whether or not the joint account expressly states with right of survivorship. see also A.R.S. § 14-6213(B) See A.R.S. § 14-6212(A); (recognizing that a right of survivorship arises pursuant to A.R.S. § 14-6212). IV. ¶36 Attorneys Fees on Appeal Wife argues that this is a contract action and she is, therefore, entitled to an award of attorneys fees on appeal pursuant ARCAP. to A.R.S. section 12-341.01(A) (2003) and Rule 21, She also requests an award of costs on appeal pursuant to A.R.S. section 12-331 (2003). ¶37 The Estate argues that this is not a contract action and Wife is not entitled to attorneys fees pursuant to section 12-341.01(A). We agree with the Estate that the action between Wife and the Estate is not a contract matter. involving the interpretation of Arizona s It is a dispute probate statutes. Although the investment account was created by a contract, the contract itself is not central to the dispute between Wife and 3 A.R.S. § 14-6213(A) states: Rights at death under § 146212 are determined by the type of account at the death of a party. The type of account may be altered by written notice given by a party to the financial institution to change the type of account or to stop or vary payment under the terms of the account. The notice shall be signed by a party and received by the financial institution during the party s lifetime. 20 the Estate. See Keystone Floor & More, LLC v. Ariz. Registrar of Contractors, 223 Ariz. 27, 30, ¶¶ 11-12, 219 P.3d 237, 240 (App. 2009). Accordingly, we deny Wife s request for an award of attorneys fees on appeal. ¶38 Wife, however, as the successful party on appeal, is entitled to her costs on appeal pursuant to A.R.S. § 12-341, not A.R.S. § 12-331. CONCLUSION ¶39 For the reasons set forth above, we affirm the judgment in favor of Wife and award Wife her reasonable costs on appeal pursuant to A.R.S. § 12-341. __________________/S/________________ LAWRENCE F. WINTHROP, Presiding Judge CONCURRING: _______________/S/_________________ PATRICK IRVINE, Judge ______________/S/__________________ MARGARET H. DOWNIE, Judge 21

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