Wells Fargo Bank, N.A. v. Chapman

90 So. 3d 774, 2012 WL 593279, 2012 Ala. Civ. App. LEXIS 49
CourtCourt of Civil Appeals of Alabama
DecidedFebruary 24, 2012
Docket2101200
StatusPublished
Cited by7 cases

This text of 90 So. 3d 774 (Wells Fargo Bank, N.A. v. Chapman) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wells Fargo Bank, N.A. v. Chapman, 90 So. 3d 774, 2012 WL 593279, 2012 Ala. Civ. App. LEXIS 49 (Ala. Ct. App. 2012).

Opinion

PER CURIAM.

Wells Fargo Bank, N.A. (“Wells Fargo”), and Teresa Grier appeal from the judgment of the Tallapoosa Circuit Court denying their motion to compel John Robert Chapman, Jr. (“Chapman”), individually and as administrator of the estate of Margaret McCall Chapman (“the estate”), to arbitrate the claims brought against Wells Fargo and Grier arising out of the “cashing in” of a certifícate of deposit (“CD”) on April 2, 2009, and the death of Margaret McCall Chapman (“Maggie”) on April 2 or 3, 2009.

In May 2003, Maggie, who was then approximately 15 years old, opened a checking account (“the account”) at what was then SouthTrust Bank (“SouthTrust”). The account was a “multiple-party with survivorship” account, with Chapman, Maggie’s father, designated as the other party to, and other authorized signer on, the account. Both Maggie and Chapman signed the signature card, with Maggie also signing an Internal Revenue Service (“IRS”) certification on the signature card. The signature card contained, in pertinent part, the following deposit agreement:

“I/We hereby authorize each person whose name appears above to transact business with this account in writing, by telephone, in person, by telegram, by telex, and by means of any automated teller machine, point of sale terminal, or other electronic device. I/We acknowledge receipt of the Bank’s Rules and Regulations Governing Deposit Accounts and its Schedule of Services and Service Charges, and I/we acknowledge that we received a copy of the Bank’s Schedule of Funds Availability before signing this agreement. I/We agree to be bound by such Regulations and Schedule and all amendments made to either of them from time to time upon notice to any one of the persons signing above, each of whom is hereby designated as agent for the others in connection with all matters concerning this account.”

The arbitration agreement contained in the SouthTrust Rules and Regulations Governing Deposit Accounts (“account regulations”) in effect at the time Maggie and Chapman opened the account read, in part:

“34. ARBITRATION OF DISPUTES. BY OPENING OR MAINTAINING YOUR ACCOUNT, YOU AND WE AGREE THAT ANY CONTROVERSY BETWEEN YOU AND US, OR BETWEEN YOU AND ANY OF OUR OFFICERS, EMPLOYEES, AGENTS, OR AFFILIATED ENTITIES, THAT ARISES OUT OF OR IS RELATED TO YOUR ACCOUNT, OR ANY PRODUCT OR SERVICES RELATED TO YOUR ACCOUNT, OR ANY ADVERTISEMENT, INDUCEMENT, DISCLOSURE OR AGREEMENT RELATED TO YOUR ACCOUNT OR ANY SUCH PRODUCT OR SERVICES, OR THAT QUESTIONS THE ENFORCEABILITY OF THIS AGREEMENT TO ARBITRATE, OR ANY RELATIONSHIP THAT RESULTS FROM ANY OF THE FOREGOING, WHETHER THE CONTROVERSY IS NOW EXISTING OR ARISES IN THE FUTURE AND WHETHER BASED ON CONTRACT, IN TORT, OR ON ANY OTHER LE[777]*777GAL THEORY, INCLUDING CLAIMS OF FRAUD, SUPPRESSION, MISREPRESENTATION AND FRAUD IN THE INDUCEMENT (INDIVIDUALLY AND COLLECTIVELY, ANY ‘CLAIM’), WILL BE SETTLED BY BINDING ARBITRATION UNDER THE FEDERAL ARBITRATION ACT (‘FAA’), 9 U.S.C. SECTION 1ET SEQ....
“The arbitration will be administered by the American Arbitration Association (‘AAA’) under its Arbitration Rules for the Resolution of Consumer-Related Disputes....
“.... Any question regarding whether a particular dispute is subject to arbitration, including claims of unconscionability, will be decided by the arbitrator. ...”

Over the following years, changes were made to the account regulations governing the account and SouthTrust Bank merged with Wachovia Bank (“Wachovia”), which instituted its own regulations regarding the account. All the SouthTrust and Wa-chovia account regulations contained arbitration clauses, although they were not identical. Maggie continued to utilize the account until the date of her death on April 2 or 3, 2009.

Upon Maggie’s death, Chapman became the owner of the account by virtue of the survivorship provisions of the account. At some point after Maggie’s death, Wachovia merged with Wells Fargo. As of June 2011, the account remained open.

According to the complaint, Chapman held a CD in his name as “custodian” for Maggie with Wachovia at a branch in Alexander City. On April 2, 2009, Chapman went to the Wachovia branch in Alexander City between 10:30 a.m. and 11:15 a.m. During that visit, Chapman spoke with Grier, whom he informed that the purpose of his visit was to be certain that Maggie could not access or receive the funds held in the CD. Grier represented to Chapman that because he was the custodian of the CD, Maggie could not access the funds held in the CD without his signature. Chapman advised Grier or other agents of Wachovia that “payment of the CD funds [to Maggie] would result in Maggie being placed in imminent danger of suffering bodily injury and/or death.” Chapman then requested that Maggie’s name be removed from the CD entirely, so as to prevent her access to the funds; Grier represented that Maggie’s name had been removed from the CD and that no signature was necessary to effect the removal of Maggie’s name from the CD. However, despite those assurances, at approximately 1:58 p.m. on that same day, Maggie, who was then 21 years old, and another person visited the Wachovia branch in Auburn, Maggie redeemed the CD, and the bank paid her $11,224.17 in cash.

After Maggie received the money, she and others used some of the funds to purchase illegal narcotic drugs, which they consumed together. The remaining funds were taken to Birmingham to be used by others to purchase a vehicle, while Maggie remained in Auburn. Maggie died from a drug overdose on April 2 or 3, 2009.

Chapman, individually and as the administrator of Maggie’s estate, sued Wells Fargo and Grier, among others, alleging various theories of recovery. Against Wells Fargo, the complaint asserted claims of wrongful death, breach of contract, fraudulent misrepresentation, fraudulent suppression, and negligence/wantonness. Against Grier, the complaint asserted the following claims: fraudulent misrepresentation, fraudulent suppression, and negligence/wantonness.

Wells Fargo and Grier moved to compel arbitration of the claims against them. They produced copies of several account regulations that had governed the account [778]*778at SouthTrust, Wachovia, and Wells Fargo between 2003 and 2010. Each of those account regulations contains an arbitration clause. Wells Fargo also presented the affidavit testimony of Timothy O. Merck, a vice president of Wells Fargo. In his two affidavits, Merck testified that Wells Fargo is a National Banking Association, that “it is regulated by the Federal Reserve Board,” that “its deposits are insured by the Federal Deposit Insurance Corporation,” that “it has depositors throughout the United States,” that “its accounts are not segregated by state,” and that “the pool of money used to pay account holders is derived from a pool of funds that regularly flows across state lines.” Merck further stated that Wells Fargo was the legal successor to both SouthTrust and Wacho-via, which had succeeded SouthTrust.

Chapman, on his own behalf and on behalf of the estate, filed a response in opposition to Wells Fargo and Grier’s motion in which he argued that Wells Fargo and Grier had not offered evidence of a contract calling for arbitration, that no agreement governing the CD at issue had been offered as evidence, and that Wells Fargo and Grier had not provided evidence indicating that Maggie or Chapman had ever received notice of the mergers of the respective banks or of changes to the account regulations governing the account.

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Cite This Page — Counsel Stack

Bluebook (online)
90 So. 3d 774, 2012 WL 593279, 2012 Ala. Civ. App. LEXIS 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wells-fargo-bank-na-v-chapman-alacivapp-2012.