171 So. 3d 505
Miss.2015Background
- John McAdams, Harrison County Chancery Clerk, was guardian for Sybil Bowden and Jonathan Dunn and was sole signatory on their bank accounts at The Peoples Bank of Biloxi.
- Attorney Woodrow W. “Woody” Pringle III, without authority, caused disbursements: a 2005 cashier’s check for Bowden ($6,609.40) and two Dunn disbursements ($30,000 in 2008; $8,000 in 2009); Pringle forged endorsements and retained funds.
- Bank records show monthly statements reflecting those disbursements were mailed to the Chancery Clerk’s office addresses; McAdams claims he never received them because Pringle intercepted them.
- McAdams discovered the embezzlement scheme in late 2010 and obtained account statements in January 2011; he filed suit on May 8, 2013 asserting conversion, negligence, and gross negligence claims.
- The Bank moved for summary judgment asserting statutes of limitation bar the claims; the trial court denied the motion and the Supreme Court of Mississippi granted interlocutory review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 60-day contractual notice or §75-4-406(f) one-year notice bars claims | McAdams relied on discovery rule to toll limitations | Bank argued contractual and statutory notice periods run from statement availability | Court found resolution unnecessary after holding three-year statutes bar claims; other notice arguments moot |
| Whether conversion claims (three-year statute under §75-3-118) are tolled by discovery rule | McAdams: discovery rule under §15-1-49 saves conversion claims | Bank: discovery rule inapplicable to conversion absent the defendant’s fraudulent concealment | Held: conversion claims time-barred; discovery rule inapplicable because Bank did not fraudulently conceal (Smith controls) |
| Whether negligence/gross negligence claims (three-year statute under §15-1-49) accrued when statements were available or when discovered | McAdams: tolling under §15-1-49(2) because he did not learn of fraud until 2010 | Bank: statements were available earlier; McAdams unreasonably failed to request missing statements so claim accrued when statements were available | Held: negligence claims time-barred—McAdams lacked diligence in failing to obtain/inspect statements (Union Planters and Stringer applied) |
| Whether summary judgment was appropriate | McAdams: factual dispute over receipt of statements precludes summary judgment | Bank: undisputed mailing evidence and law entitle Bank to judgment as a matter of law | Held: summary judgment should have been granted for the Bank; circuit court reversed and judgment rendered for Bank |
Key Cases Cited
- Smith v. Franklin Custodian Funds, Inc., 726 So. 2d 144 (Miss. 1998) (discovery rule inapplicable to conversion of negotiable instruments absent defendant’s fraudulent concealment)
- Union Planters Bank, N.A. v. Rogers, 912 So. 2d 116 (Miss. 2005) (plaintiff must act reasonably to replace missing statements; failure to request statements defeats discovery tolling)
- Stringer v. Trapp, 30 So. 3d 339 (Miss. 2010) (timing of accrual under discovery rule is often factual but can be decided as a matter of law when reasonable minds cannot differ)
- Andrus v. Ellis, 887 So. 2d 175 (Miss. 2004) (de novo review standard for legal issues such as statute of limitations)