Lamp v. First National Bank of Garretson
496 N.W.2d 581
S.D.
1993
Check Treatment

*1 LAMP, Administratrix With Marjorie the Estate of Louise Annexed

Will Deceased, Edmundson, Plaintiff

Appellant, BANK OF NATIONAL

FIRST Dakota,

GARRETSON, South Appellee.

Defendant

No. 17693. Dakota. of South

Supreme Court May

Argued 19, 1992.

Reassigned Oct. 3, 1993.

Decided Feb. J.,

Wuest, separate opinion con- filed dissenting part.

curring JJ., Amundson, filed

Henderson and dissenting opinions.

separate *2 residing in a

mundson). was Edmundson Dakota, Garretson, South nursing home appeal. Ed- relevant to at all times checking at account mundson maintained (Braa) Bank, daughter, Braa Carol and her signature on an authorized named as was also owned Edmundson the account. (CD) by Savings Certificate issued Time appeal. of this subject Bank which is however, sig- not, authorized an Braa was on the CD. nature negotiated this August 7, Braa On checking account deposit CD for her names to signing and Edmundson’s deposited amount of the CD. The back $42,695.51. depos- of this amount was September, it noted check- on An IRS Form No. ing account statement. reflecting payment of the CD was January later sent to Edmundson 31, 1986. 31, 1987, Edmundson

On December Allan president, wrote a letter to Bank’s (Hammer), advising had that she Hammer money gone, informed that her been statements, to her bank never access accounting her requesting an of all and 1, 1983, to banking from June transactions responded by let- July Hammer 4, 1988, informing Edmund- January ter on accounting get son that she could if Braa she wanted Bank from but provide same, would do so. Edmundson 10, 1988, having re- April without died on accounting. requested ceived Lammers, Lammers, B. Lam- Jerome mers, Parent, Madison, & Kleibacker brother, her Milton Edmund- plaintiff appellant. (Milton) commenced an action son Evans, Davenport, E. Hayes, alleging

Robert it had July Falls, Smith, & Sioux defen- Hurwitz permitted the CD for- Braa endorse appellee. dant and forgery, of such gery, and that reason those funds Braa was able convert SABERS, (On reassignment). Justice completion After of discov- her own use. (Lamp) ery, judgment appeals moved Marjorie Lamp ground Na- that no notice had been favor First (Bank). therefore, re- given forgery tional Bank Garretson Bank of the verse for trial. and remand precluded by the statute the action was granted

limitations. Trial court FACTS on the judgment in favor Bank based Lamp’s dismissed statute of limitations and Lamp is the administratrix of estate (Ed- Lamp appeals. mother, Louise action. her Edmundson findings court's ISSUE factual and must conduct independent Tag- review of the record. of material fact Whether issues gart v. Ford Motor Credit judgment precluding summary exist Eckrich, (S.D.1990); Koeniguer regarding favor of Bank notice of *3 600, 601 forgery of CD SDCL 57A-4- under Lamp argues that Braa’s endorsement of 406(4). Edmundson’s CD constituted an unautho- genuine hold that material We issues of rized endorsement and that this fact was precluding summary judgment. fact exist reported discovered and to Bank within the Summary Judgment three-year statutory period. limitation 57A-4-406(4) provides: SDCL grant Our standard of review regard Without to care or lack of care of judgment or denial is well either the customer or the bank a cus- Dewey County Waddell v. In settled. tomer year who does not within one from Bank, stated: we the time the statement and items are reviewing grant In or a denial of sum- (subsec- made to the available customer 15-6-56(c), mary judgment under SDCL (1)) report tion discover and his unautho- moving we must determine whether the signature any rized alteration on the party any demonstrated the absence of face or back of the item or does not genuine issue of material fact years within three that time dis- from judgment showed entitlement on the report any cover and unauthorized en- merits as a matter of law. The evidence dorsement precluded asserting is favorably must be viewed most against sig- the bank such unauthorized nonmoving party and reasonable doubts nature or endorsement or such altera- against moving should be resolved added.) (Emphasis tion. however, party. non-moving party, present specific showing must facts dispute There is no that Bank sent state- genuine, material issue for trial exists. concerning ments to Edmundson her ac- appeal only Our task on is to determine count and that she would have received an genuine whether issue material 31, January form IRS 1099 no later correctly exists and whether the law was three-year period Accordingly, 1986. applied. If there exists basis which 31, January would not have run until 1989 court, ruling supports the of the trial “notice,” under SDCL affirmance of a is sufficient, Lamp argues was the which proper. 31, 1987, December letter Edmundson court concluded wrote to Bank. The trial Bank, Dewey Cnty. v. Waddell 471 provide adequate notice this letter did not (S.D.1991) (citations N.W.2d 593 omit- negotiated Bank that had been CD ted). signature. with an unauthorized Edmund- “Summary judgment generally is Hammer states: son’s letter to in negligence feasible cases because the my money I have informed that is been man must standard reasonable be gone. my I have never had access to applied conflicting testimony.... It is appreciate I an bank statements. would only when the evidence is such that rea- accounting banking of all transactions one sonable men can draw but conclusion July My from June 1983 to they from facts and inferences that be- you. # account is 9-083-7. Thank come a matter of law and this occurs rarely.” genu must determine whether a Co., Trammell v. Prairie States Ins. ine issue of material fact exists and wheth (S.D.1991) (quoting Wil- er the correctly applied trial court N.W.2d 57A-4-406(4). Waddell, son Great N.R.R. 83 S.D. 212- 471 N.W.2d at 13,157 (1968) (citations reading N.W.2d omit- 593. We think a fair of Edmund- ted)). reviewing grant put letter Bank on notice that Ed- son’s judgment, accounting we are not the trial mundson of her bound wanted no erred in its conclusion is trial court There #9-083-7.

checking account Braa, con- however, any endorse- of material fact existed mention, Ed- signature, right to assert an plaintiff’s cerning or unauthorized ment in Edmundson’s Nothing Koeniguer, CD. mundson’s Bank. action nego- the CD been letter mentions that 602-03. N.W.2d at forged tiated, negotiated awith much less argue they gave Lamp Milton also noth- Accordingly, we find endorsement. en- of Braa’s unauthorized Bank notice put Bank on the ing which in this letter they had through dorsement conversations 57A-4-406(4) that required by SDCL of 1988. in the summer Bank officials signature or endorse- Braa’s unauthorized nor reflects neither The record Edmundson’s CD. appeared ment *4 a date on these conversations placed Milton Mary that Bank teller Lamp asserts during depositions, instead sub- their but (Schreurs) negotiated the CD Schreurs to Bank’s in resistance mitted an affidavit aware of the unauthorized Braa and was placing a motion for therefore, and, Bank was endorsement “prior to on these conversations date deposition in her Schreurs stated notice. August 1988.” The trial court concluded en- Braa did not recall whether that she in the contra- the statements affidavit that only presence, in her the CD dorsed testimony Lamp deposition dicted the payment. presented the CD Braa affidavit did and Milton and held this stated that while she was Schreurs also of fact. We not raise a authority any actual Edmund- unaware disagree. CD, negotiate given Braa son had to money problem perceived no since the she Lamp’s depo- The reflects that in record being into Edmundson’s deposited was learned of the CD stated she sition she checking account. Braa in 1988.” She cashed “sometime spoken she had with Hammer also stated claims in The fact that Schreurs times, remembering specific discus- several did not recall deposition her that “she checking ac- of the sions status about pres the CD in her whether Braa endorsed count, the CD. although never about ence,” it is immaterial because was for endorsed in or out gery, whether was also that Milton The record reveals signed moth presence. Braa her her Carol deposition present in his that he stated CD and er’s name to the converted Lamp’s during conversations with one has the to her use.1 funds own Hammer had said Hammer and that is, therefore, signature on file and mother’s ask Milton did not Ham made a mistake.2 least, very it. At the the evi bound was and the CD was mer what the mistake genuine issue of material dence raises a specifically in this mentioned conversa pursuant the Bank had notice fact whether deposition Therefore, Bank claims that this tion. The to Id. me, too, prise any, depend he said. So he went in liability, 1. if would Bank’s ultimate Lamp prove slumped which can Braa came on the extent to and he back back room and — (indi- the funds her own use. put converted he his hands down in his chair and guess cating). says, a mis- He I we’ve made testimony was as follows: Milton’s words he said. take. That’s the (Counsel) Lamp Q Mrs. indicated Any Okay. Q other discussion other you present on an occasion when—on were that? occasions, guess, you I when visited two A That it. No. concerning your at the Allan Hammer bank Q either visit? On mother’s account? Nope. A Milton) (by And I’ve been sittin' here A Q was? didn’t ask him what the mistake You thinking that. about No, words said. A no. But that's the he you right. Q me have All Tell whether Okay. questions you Q No other you add as what was other information can anybody else? those visits. discussed on word, just, I there, but could A No. I never said Marjorie why, When went in A we said, said, just yesterday. guess it was I we’ve made got big surprise, like we sure she mistake, thing. says, big he sur- said. about And he it’s Inc., testimony give (S.D.1985); re- is insufficient to 364 N.W.2d Swee quired notice Lamp because neither nor Inc., Myrl Roy’s Paving, & specified Milton that the mistake was (S.D.1979)(citation omitted). forgery or the unauthorized endorsement. Milton, however, Lamp affidavit of did summary judgment purposes, For the Bank deposition testimony. not contradict their pretend cannot not to know what this mis- They clearly pointed both out the reaction could, if take was. Even the Bank ostrich- of the banker his regarding statement like, pretend specifics not to know the the mistake on the of the Bank. Al- mistake, knowing it- “mistake” though placed neither nor Milton enough put self was the bank on notice event, Lamp exact date on this stated that of the claim. she could by looking recall the date in her summary judgment, On the evidence checkbook. deposition And the of Milton light must be viewed most favorable cursory provide was so opportuni- as to nonmoving party. every That means ty pinpoint for him to the date of this All reasonable inference. reasonable Therefore, Lamp conversation. and Mil- doubts must be resolved the mov necessary, ton’s affidavit was not much ing (citations omitted). party. Id. at 601 *5 ineffective,” less “rendered as claimed. properly light, Viewed in appears paying the mistake was out over a questions fact, With of doubts must forged or unauthorized endorsement which against be resolved moving Bank as the reported was discovered and three within party. The Bank has failed to establish years. deposi The genuine there is NO of material testimony tion established notice to Bank fact. contrary The trial court’s decision is years genuine within three or a issue of summary judgment to recent law in South material precludes summary fact which Dakota, State, especially Dept. Revenue State, judgment. Dept. of Revenue v. Thiewes, (S.D.1989), v. 448 N.W.2d 1 a Thiewes, 1, 448 N.W.2d 2 Sum opinion by unanimous written Justice mary judgment is remedy an extreme not Henderson where we reversed the trial appropriate disposing of factual issues moving party court because the or as a substitute for trial. failed to Koeniguer, (citations omitted); 422 N.W.2d at 601 genu sustain Wil its burden that there were no son, 212, at S.D. 157 N.W.2d at 21 ine issues of material fact. Where reason (citations omitted). persons might able reach different conclu sions, summary judgment should be denied. above, Lamp

As noted and Milton filed a Sittner, (S.D. Dahl v. 429 N.W.2d joint opposition affidavit in to Bank’s mo- 1988) (citation omitted). summary judgment tion for which stated 1, 1988, prior August affiants “[t]hat summary judgment No one is entitled to president, discussed with Defendant bank unless entitled thereto as a matter of law Hammer, Allan that the said certificate of and there are no issues of material deposit improperly had been endorsed and Here, 15-6-56(c). fact. SDCL the trial cashed Braa.” The affidavit further incorrectly placed upon court the burden stated that Hammer “admitted to affiants non-moving party upon instead of per- that the bank had made a mistake in moving party, the Bank. For all of the mitting deposit this certificate of to be above reasons and all of the well-reasoned failing cashed and in to know what use was Dakota, summary judgment in cases South being made of the funds.” (See improper. was party It is well settled that a can proge and Wilson v. Great N.R.R. Co. its not claim the benefit of a version of the Therefore, ny.) and we reverse remand for facts more favorable to his contentions trial. gave than he in his testimony. own sworn Waddell, (citations 471 N.W.2d at n. 3

omitted); MILLER, C.J., Lalley Safway Scaffolds, v. Steel concurs. feed the argument will not Such

WUEST, J., part in and dissents above. concurs such advo- bulldog. Our Court addressed part. in Kimball, 75 cacy Flaherty in JJ., AMUNDSON, HENDERSON (1955). We ana- S.D. dissent. lyzed, Flaherty, predecessor statute in (concurring in WUEST, Justice This statute. Court barred the aforesaid part). dissenting in set forth claim the bank and state opinion majority our I with the observations: concur joint affidavit filed Lamps’ Miltons’ presented is question whether motion for opposition to Banks’ liability irrespective is relieved of bank joint my opinion, the affida- judgment. negli- knowledge facts its deposition and cre- supplements their vit if depositor instance gence in the first must be resolved issue which ates conformity give fails Therefore, in my opinion, the trial. People’s In Herbel v. State this statute. granting judg- court erred Ellinwood, 170 Kan. Bank of ment. construing a similar stat- P.2d ute, “that the Court said the bank issues, agree I with the On the other depositor notified unless the not liable Amundson. dissent of Justice conformity provisions the bank HENDERSON, (dissenting). nonliability Justice statute.” And such stat- virtue of the the bank resulted wrong party, to- Marjorie Lamp sued the negli- irrespective of the bank’s utes not, Bank—Bank wit: Garretson legislative man- gence. That is clear not, wrongdoer. Carol Braa is and is by it. The and the courts are bound date *6 suing target a Lamp is wrongdoer. the Rapid City Nat. Bank v. McCormick defendant. 444, impli- 293 S.D. N.W. case 819] [67 pursu- give requisite to the notice Failure is of recognizes such the effect edly is, 57A-4-406(4) by over- ant SDCL the statute. authority, bar suit whelming an absolute 68 N.W.2d at 109. alleged forged Spears the instrument. requires a no- specific SDCL 57A-4-406 Mills, Century Carpet Inc. v. National Ed- Lamp’s on the letter. case rests tice. Orleans, 85 B.R. 86 New of accounting of her requested an munson EssexBank, (W.D.Ark.1988); 396 v. Jensen expressed Edmunson account. checking 65, 821, 41 U.C.C. Re- Mass. 483 N.E.2d negotiated concerning being a CD nothing (1985); Space 1366 porting Distrib- Service support factual for or Without forgery. a utors, Flagship Bank Mel- Inc. v. of forgery the notice claim a bourne, 586, Reporting 402 So.2d 32 U.C.C. of given, Marjorie Lamp suit of is barred the (Fla.App.1981); Service 517 Indiana Na- by Flaherty at FACO, Inc., 400 Corp. tional v. N.E.2d 202, (Ind. Reporting 194 29 Service U.C.C. Tag- majority reliance on writer’s App.1980); Higher Board Education ludicrous. An eleventh gart of of borders the Co., York v. Trust 86 City New Bankers (in case there filed the of hour affidavit was (N.Y.Sup.Ct. Misc.2d 383 N.Y.S.2d 508 it is “eleventh hour” and before us also Bank, 1976); v. Union 55 Cal. Kiernan an fact contradictory) to create issue of 18 Cal.Rptr. App.3d U.C.C. case). (the the in In same as this (1976); Reporting Pine Service 1026 have Supreme Court would Bluff South Dakota Kesterson, 257 Ark. National Bank shenanigans. At 503 legal of such Reporting Ser- U.C.C. S.W.2d such a ruse and deplored we Taggart, (1975). vice 805 expressed: Tires, Inc. v. Tire Marjorie Lamp knowledge In Michelin advocates Camfield (8th Cir.1983), had, 719 F.2d 1361 Corp., should have been which the Bank or of, specific quick pierce the ruse supplant the court was aware will contradictory requirement imposed by the cited submitted statute affidavit mile, they might peruse year is- a case one purpose creating á material explana- (Wilson) grand-daddy when there was no after the old sue change testimony in tion handed down: Northwestern Public Ser Echoing deposition to the Chicago Ry. vice Co. v. & N.W. affidavit. sentiment, said: Eighth 271, 170 (1969). our Circuit N.W.2d 351 In S.D. North western, sham, however, language our mentioned “a oath, testimony If under can frivolous, or unsubstantial fact” so “that it many months later be abandoned affidavit, try.” futile to filing probably no would be If a trial court can of an reasonably appropriate expose hazard that the facts cases would be for sum- lawsuit; or a mary judgment. party A should not “sham” “frivolous” or if a court can obviously be allowed to create issues of credibili- conclude “that it ty by contradicting try” his own earlier tes- futile would-be because there are (as timony. no material facts at issue it reviews pleadings), why then futility? exercise Likewise, barring explanation ... Again, get you mere issues fact do not change testimony showing in his Sabers, summary judgment ambiguous motion. answers were that his J., upon them, quote takes it himself to a recent Taggart’s af- the affidavit clarified opinion author, of unanimous written this fidavit did not create a fact_ material mine). (Emphasis supplied Thiewes 1989. Thiewes is not inconsis writing writing tent or the consistency, In the name of I would not for, Thiewes, Justice Amundson the mov jettison previous holdings Flaherty our burden; party ing did fail to meet its Taggart. case, contrary, in this the First National reaches, Summary just is- judgment not met its burden as outlined above. Summary judgment of material fact. sues it, it, Dice it or slice it or rub scrub actions, as a also reaches the dismissal of affidavit, up” filed to contradict “cover words, if you matter of law. other take testimony deposition, simply sworn law, then, apply the facts and them to the credibility par contradicts the of the same law, as a matter of if the cause of action probative force to ty, which is a valid fails, should be en- fact; legally, it create a material issue of exactly tered. This is the course of action *7 deprive the of its vital con does not bank Simply which the trial court followed. be- summary judg tent and force to secure a there are fact not cause issues of does My at 503. is: Taggart ment. conclusion grant mean that a trial court cannot try the It is futile to this case because summary judgment. It must be a materi- legal cannot be controlling material facts al fact—a related to the cause fact plugged alleged into the cause of action. ly this, years said it like 10 be- action. We affirmed. The trial court should be Court, fore I came to serve on this as follows: AMUNDSON, (dissenting). Justice clearly appear

If it is made on such a [summary judgment] that even motion appeal, In this the trial court issued a though there is an issue [formal granting summary judgment. opinion letter by supporting may be revealed affida- decision, receipt of this initial counsel After pleadings under the there is in fact vits] appellants the wrote the trial court dispute controlling no as to the materi- expressing the court’s decision. shock with then the should enter sum- facts, al court light of went on to state that in Counsel judgment. mary claiming of his clients the sworn affidavits Larson, improper discussed the endorse- Hackworth v. 83 S.D. 165 to have (1969). are, president, ordinarily, There ment of the CD with Bank’s N.W.2d given in notice under the questions every of fact lawsuit. Our there was sufficient 57A-4-406(4) so try every requirements courts cannot case where SDCL re- genuine, If material issue of fact issue arises. some of the that a trial. judgment students would walk the extra mained for certainly provides A this opinion first holds that review of record majority holding. The for the trial court’s signa- basis Edmundson’s since Bank Mrs. gave required Bank appellants never the Bank is bound it. ture on file that signature, of the unauthorized notice nothing There 57A-4-406 which is merely the Bank transferred funds fact, specifically so In this statute states. checking CD account to her Edmundson’s as “Without reads at the onset follows: happened to funds thereaf- account. What regard or lack of care of either to care dispute. apparently ter is the this basis certainly ...” which customer or bank reviewing This court a motion for sum- say presumed is to have does not that Bank mary judgment principle adheres to the signature on a notice of unauthorized if exists proper that an affirmance is there Bank the custom- document whenever has any to affirm the lower court’s hold- basis Nor this signature on file.1 does sec- er’s ing. Weinaug, Ruple N.W.2d code, any tion of the for that matter The facts forth 859-60 set appellants or referred to section certainly pro- majority and this dissent being majority opinion, equate notice as vide that basis. signa- given since a bank has customer’s deposition, Lamp In her that she stated If ture on file in the this was the bank. place a her could not date on conversation case, need lack of there would for the be president specifically with Bank’s but did Further, language care the code. a re- admit that whenever this took discussion binding record view of the reveals that any place, not she did discuss CD a signature on file was not alleged signature it with unauthorized presented resisting as a the sum- basis Likewise, president. Bank’s Ed- Milton mary judgment nor as an motion raised deposition testimony mundson’s does appeal. issue in this Matters which any regarding set forth the CD be- opportunity has not had an court ing given president during to Bank’s appeal. cannot raised on consider be meetings present. he where Service, Patzer, Husky Spray Inc. v. majority’s reliance the admission (S.D.1991). Nor N.W.2d 153-54 satisfy of a does not the custom- mistake should this court raise new when issues notify duty er’s the unautho- deciding a case. signature. rized The admission of an al- After the trial received the letter court leged certainly is no mistake more counsel, expressing appellants' shock from which, admitting pursuant to “lack of care” Relying reconsidered the case. on the statute, equate does not to notice. precedent judgment deci- fact, deposition testimony the sworn Taggart sion of this court in v. Ford Motor Lamp place and Edmundson does not even (S.D. 1990), Credit N.W.2d 493 a time when mistake admission was *8 prior ruling. its court reaffirmed The hand, made. the confront- On other when reviewing trial court concluded after the summary judgment, ed with the motion for depositions, pleadings, and affidavits that Lamp conveniently and Edmundson were appellants could not claim better version exactly able to remember when this discus- resisting of the facts in their affidavit the place in the mo- sion took order to resist they tion, motion than thereby attempting to create an issue during deposition prior testified to their preserved of fact which was the filing deposition testimony. of the motion. their sworn Anderson, imposed year 1. In A. 7 Ronald Anderson on the one and three limitations (3rd 4-406(4) merely § Uniform Commercial Code 4-406:15 ed. UCC are not statutes of § 1985), object the author of discusses but are rules of law limitations substantive 57A-4-406(4) and states: scope that define the of the customer’s reme- dy absolutely bar a customer’s claim that The time UCC are limitations of 4—406 § timely regard destroy right bar is not made "without to the care substantive sue bank, regardless theory care of or the of the on which lack of either the customer plaintiff brings suit. bank.” filed and Milton affidavits for Bank’s motion opposition to their conversation

judgment stated August president occurred Bank’s

with frame, statutory time within topic of more the for- specifically affida- was discussed. The

gery on the CD deposition tes- clearly conflict with the vits Cynthia County of Minnehaha Howard to resolve this timony. The trial court had Office, Falls, Public Defender’s Sioux and, my opinion, correctly. did so conflict appellant father. The majori- I would affirm the trial court. Barnett, Gen., Atty. Mark W. Joan P. proverbial holding appellants the ty awards Gen., Baker, Pierre, Atty. appel- Asst. appellants deep pocket pursue, but lee State. recovery from required be to seek should Braa, an affirmance sister which their Falls, Eggers, appellee Laurel Sioux reversing By the trial require. would mother. court, placed position in the Bank has been dispute between the an insurer for of WUEST, Justice. heirs the estate. (hereinafter “Father”) appeals an Y.V.N. rights. terminating parental his

order serving year While Father was a five sen- penitentiary, his wife tence in the state left children South Da- of their three with two The circuit court Social Services. kota neglected dependent and found the children pa- and Father’s and terminated Mother’s thereafter, rights. Shortly Father rental K.S., P.S., A.S., In the Matter penitentiary and re- was released from Dependent Alleged Children. quested the termination reconsideration rights. The circuit court con- parental No. 17853. request and reaffirmed its sidered Father’s Supreme Dakota. Court South termination order. agree Father that several with Nov. 1992.

Considered Briefs clearly are findings trial court's Decided Feb. they unsupported by are erroneous because example, For in the record. evidence efforts” that “reasonable trial court found return the children to made to had been fact, there is no evidence that Father. made efforts work Social Services that before Father. It is fundamental terminated, rights “reason- parental can be parents made to aid efforts” must be able *9 A.D., children. In re maintaining their order ter- circuit court’s reverse the parental rights and re- minating Father’s trial. mand for new MILLER, AMUNDSON, J., C.J., and concur.