2020 Ohio 3679
Ohio Ct. App.2020Background
- Decedent Leslie Hillier held two Fifth Third accounts (checking ending 636 and savings ending 518) containing $203,758.09 at his death in August 2015.
- On April 17, 2015 Leslie signed a Fifth Third signature card for the checking account showing him as sole owner with no POD beneficiaries; no signed signature card could be produced for the savings account.
- On April 17, 2015 Leslie also signed a POA appointing his grandson James; on August 13, 2015 James (as POA) signed bank signature cards that listed Leslie’s daughter Judith and Leslie’s son (deceased) as POD beneficiaries.
- After Leslie died, Fifth Third paid the full account balances to Judith based on its records; James (as executor and individually) sued Fifth Third and Judith for breach of contract, conversion, negligence, bad faith, estoppel, and unjust enrichment.
- The trial court granted summary judgment to Fifth Third and Judith on most claims; the appellate court reversed in part, holding the April 17, 2015 signature card (and lack of a signed savings-card) controlled and that James’s POA lacked express authority to change beneficiaries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Formation/interpretation of POD contract & POA authority | Hillier: POD requires a writing signed by the account owner; last owner-signed card (Apr 17, 2015) had no PODs so funds belong to estate | Fifth Third: Aug 13, 2015 signature cards (signed by POA) superseded earlier cards; PODs were in bank system | Held: Apr 17, 2015 card controls; no valid owner-signed POD writing for savings; POA lacked express authority to change beneficiaries; summary judgment for Fifth Third on breach reversed — funds should have been paid to estate |
| Bad faith (bank) | Hillier: bank acted in bad faith by paying funds despite dispute | Fifth Third: payment complied with records; no dishonesty or malice | Held: Affirmed for Fifth Third — no evidence of bad faith or consequential damages beyond contract remedy |
| Negligence (bank) | Hillier: bank negligently disbursed funds | Fifth Third: claims are contract-based; no independent tort shown | Held: Affirmed for Fifth Third — no independent duty or distinct harm outside the contract |
| Conversion / Unjust enrichment (bank & Judith) | Hillier: payment to Judith constituted conversion and Judith was unjustly enriched | Fifth Third/Judith: payment honored POD designation; Judith not the disbursing party | Held: Conversion — summary judgment for Fifth Third reversed (estate had right to possession); conversion against Judith affirmed (she did not directly pay) but unjust enrichment — summary judgment for Judith reversed (she retained money that belongs to estate) |
Key Cases Cited
- Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51 (1989) (unambiguous integrated written contract controls; parol evidence excluded)
- Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (2003) (court gives effect to parties' intent when construing contracts)
- Miller v. Peoples Fed. Sav. & Loan Assn., 68 Ohio St.2d 175 (1981) (depositor retains ownership during life; beneficiary interest vests at death)
- Witt v. Ward, 60 Ohio App.3d 21 (1989) (POD accounts are testamentary in nature and require a writing signed by the owner)
- Powell v. City Nat. Bank & Tr. Co., 2 Ohio App.3d 1 (1981) (discussing Totten-trust/tentative trust doctrine for POD arrangements)
- Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453 (2018) (punitive damages are not recoverable for mere breach of contract; separate tort with distinct harm required)
- Cincinnati Ins. Co. v. First Nat. Bank of Akron, 63 Ohio St.2d 220 (1980) (banks may be liable for consequential damages or fees only when acts are willful or malicious)
- Natl. City Bank v. Rhoades, 150 Ohio App.3d 75 (2002) (bank can be liable for improperly disbursing customer funds; bad faith may permit consequential damages)