DENNIS A. BRADLEY, IN HIS CAPACITY OF MARSHALL H. THOMAS v. NATIONAL CITY BANK OF KENTUCKY
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RENDERED:
December 30, 2004; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-002711-MR
DENNIS A. BRADLEY, IN HIS CAPACITY
AS PUBLIC ADMINISTRATOR FOR THE ESTATE
OF MARSHALL H. THOMAS
APPELLANT
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE LAURANCE VANMETER, JUDGE
ACTION NO. 03-CI-00164
v.
NATIONAL CITY BANK OF KENTUCKY
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
JOHNSON, KNOPF, AND SCHRODER, JUDGES.
JOHNSON, JUDGE:
Dennis A. Bradley, in his capacity as public
administrator for the estate of Marshall H. Thomas, has appealed
from an order of the Fayette Circuit Court entered on December
4, 2003, granting summary judgment in favor of National City
Bank of Kentucky on the estate’s claim for conversion of two
checks.
Having concluded that the trial court correctly ruled
that the three-year statute of limitations of KRS1 355.3-118
barred the claim, we affirm.
On April 9, 1997, Marshall H. Thomas died testate in
Fayette County, Kentucky.
On April 30, 1997, his will was filed
for probate and an executor was appointed.
After the initial
executor resigned, Karen L. Snider, the decedent’s daughter, was
appointed the successor executrix pursuant to the will.
She
served in this capacity from January 9, 1998, until August 16,
2001.
In August 1998 Snider received two tax refund checks
from the Internal Revenue Service made payable to “Karen Snider,
as Executrix of the Estate of Marshall H. Thomas.”
On or about
October 20, 1998, Snider deposited both checks, without
endorsement, into her personal account at National City Bank.
The Bank collected the full amount of the checks, totaling
$58,716.00, from the United States Treasury.
By order of the Fayette District Court, Probate
Division, entered on August 16, 2001, Snider was removed from
her duties as executrix and Bradley, the Public Administrator
for Fayette County, was appointed as administrator of the
estate.
On January 14, 2003, Bradley, on behalf of the Thomas
estate, filed a petition for declaration of rights against the
Bank in the Fayette Circuit Court alleging conversion of the two
1
Kentucky Revised Statutes.
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negotiable instruments and demanding that the Bank reimburse the
estate the full amount of the two checks.
After the Bank filed
its response to the petition, it moved the trial court for a
summary judgment on the ground that the claim was barred by the
three-year statute of limitations at KRS 355.3-118(7)(a).
In
his response to the motion for summary judgment, Bradley limited
his argument to claiming that the discovery rule should apply to
his claim, causing it to fall within the three-year period.
The
trial court granted the Bank’s motion for summary judgment and
this appeal followed.
The standard of review governing an appeal of a
summary judgment is well-settled.
We must determine whether the
trial court erred in concluding that there was no genuine issue
as to any material fact and that the moving party was entitled
to a judgment as a matter of law.2
Summary judgment is
appropriate “if the pleadings, depositions, answers to
interrogatories, stipulations, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled to
a judgment as a matter of law.”3
In Paintsville Hospital Co. v.
Rose,4 the Supreme Court of Kentucky held that for summary
2
Scifres v. Kraft, Ky.App., 916 S.W.2d 779, 781 (1996).
3
Kentucky Rules of Civil Procedure (CR) 56.03.
4
Ky., 683 S.W.2d 255, 256 (1985).
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judgment to be proper the movant must show that the adverse
party cannot prevail under any circumstance.
The Court has also
stated that “the proper function of summary judgment is to
terminate litigation when, as a matter of law, it appears that
it would be impossible for the respondent to produce evidence at
the trial warranting a judgment in his favor.”5
There is no
requirement that the appellate court defer to the trial court
since factual findings are not at issue.6
“The record must be
viewed in a light most favorable to the party opposing the
motion for summary judgment and all doubts are to be resolved in
his favor.”7
Furthermore, “a party opposing a properly supported
summary judgment motion cannot defeat it without presenting at
least some affirmative evidence showing that there is a genuine
issue of material fact for trial.”8
Bradley contends the statute of limitations for this
action did not commence to run until the wrongful act was
discovered by him when he was appointed the administrator of the
estate.
Bradley contends that since his predecessor, Snider,
was committing fraud upon the Thomas estate, that the earliest
5
Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476, 480
(1991).
6
Goldsmith v. Allied Building Components, Inc., Ky., 833 S.W.2d 378, 381
(1992).
7
8
Steelvest, 807 S.W.2d at 480 (citation omitted).
Id. at 482.
1995).
See also Philipps, Kentucky Practice, CR 56.03, p. 321 (5th ed.
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the conversion could have been discovered was the date of his
appointment, August 16, 2001.
Since this action commenced on
January 14, 2003, Bradley contends this action was timely filed,
and that the trial court erred by granting summary judgment to
the Bank.
KRS 355.3-420 provides that an instrument is converted
when “a bank makes or obtains payment with respect to the
instrument for a person not entitled to enforce the instrument
or receive payment.”
The statute of limitations provision at
KRS 355.3-118(7)(a) states that “[f]or conversion of an
instrument, for money had and received,” an action “must be
commenced within three (3) years after the claim for relief
accrues.”
Bradley argues that if the three-year limitation is
applied, it should be subject to the discovery rule.
While there is no Kentucky law precisely on point, we
find Haddid’s of Illinois, Inc. v. Credit Union 1 Credit Union,9
to be persuasive.
In Haddid’s, the Court held that “the
discovery rule does not apply to causes of action for conversion
of negotiable instruments” unless there is fraudulent
concealment on the part of the defendant.
In our case the
concealment was by Snider, not the Bank, so under Haddid’s the
discovery rule would not apply to the claim against the Bank.
9
678 N.E.2d 322, 326 (Ill.App. 1997).
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The Court in Stefano v. First Union National Bank of
Virginia,10 addressed the conversion of 23 checks and stated that
“[a] cause of action for conversion of negotiable instruments .
. . accrues when the bank “makes or obtains payment” with
respect to the instrument.”
Similarly, the Court in Yeager v.
Bank of Kentucky,11 a case concerning the conversion of stocks,
stated that “[t]he cause of action accrues so [sic] soon as the
wrong has been committed . . .
[and since] the cause of action
accrues at the time of the conversion, the statute of
limitations runs from that time[.]”
None of the authority cited
by Bradley supports applying the discovery rule to a conversion
action and we decline to do so.
Bradley also makes reference in his brief to KRS
386.120, involving a bank’s obligation in handling a fiduciary’s
account, and the five-year statute of limitations at KRS
413.120(2) for “[a]n action upon a liability created by
statute,” and to “common law claims.”
However, he had failed to
comply with CR 76.12(4)(c)(v) which requires a statement in the
brief as to how these issues were properly preserved for
appellate review, and our review of the record indicates that
10
981 F.Supp. 417, 421 (E.D.Va. 1997)(citing Va.Code § 8.01-230).
11
127 Ky. 751, 756, 106 S.W. 806, 807 (1908).
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the issues were not raised below.
Accordingly, we will not
address them for the first time on appeal.12
Therefore, we conclude that Bradley’s action against
the Bank was not timely filed pursuant to KRS 355.3-118.
The
conversion occurred in October 1998, and this suit was commenced
on January 14, 2003, more than four years after the Bank made
the payments on the two checks.
Since this action was barred by
the three-year statute of limitations set forth in KRS 355.3118(7)(a), summary judgment for the Bank was proper.
For the foregoing reasons, the judgment of the Fayette
Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
C. David Emerson
Lexington, Kentucky
William T. Repasky
Louisville, Kentucky
12
Regional Jail Authority v. Tackett, Ky., 770 S.W.2d 225, 228 (1989).
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