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A.G. Edwards & Sons v. Beyer

Court of Appeals of Texas, Eighth District, El Paso

June 30, 2005

A.G. EDWARDS & SONS, INC., Appellant

          Appeal from 384th District Court of El Paso County, Texas (TC# 2001-1701)

          Before Barajas, C.J., McClure, and Chew, JJ.



         This appeal arises from a failed attempt to create a joint tenancy with right of survivorship between a father and a daughter. A.G. Edwards & Sons, Inc. appeals from a judgment in favor of Maria Alicia Beyer. We modify the judgment and affirm as modified.


         In 1985, Maria Alicia Beyer and her father, Federico Beyer, created a joint account at A.G. Edwards & Sons, Inc. (AGE). This account was set up as a joint tenancy with rights of survivorship (JTWROS). In 1997, Beyer obtained permanent alien status which required her to pay taxes on the account. To avoid paying taxes, the account was converted into a single account held only in Mr. Beyer's name. After Mr. Beyer suffered a stroke in October of 2000 which resulted in significant impairment, Beyer met with James Niemeier, Mr. Beyer's investment broker at AGE, to discuss how she could gain access to Mr. Beyer's account in order to pay his medical bills. Because Mr. Beyer could not speak due to the stroke, Niemeier informed Beyer that he could not help her.

         Mr. Beyer later recovered his speech and on the morning of December 8, 2000, he instructed Beyer to phone Niemeier about the account. After Niemeier got on the line, Beyer handed the telephone to her father who instructed Niemeier to "put the account in [Ms. Beyer's] name." Mr.Beyer returned the phone to Beyer, and according to Beyer, Niemeier told her "that it's good for you to have a joint account agreement with right of survivorship." Niemeier informed Beyer that he was leaving the office early but she could pick up the required documents and return them to him before 4 p.m. that same day. Beyer went to AGE that same morning and met with Niemeier who filled out documents necessary to reflect the change to Mr. Beyer's account. Niemeier completed the following documents: (1) a new account card which reflected the name of the account as "Maria Alicia Beyer or Federico V. Beyer JTWROS" [1]; (2) a check-writing authorization form; (3) a request for taxpayer identification number and certification, which is a substitute for IRS W-9 form; and (4) a letter of authorization which reflected a change in ownership of the account from "Federico V. Beyer" to "Maria Alicia Beyer or Federico V. Beyer JTWROS." Niemeier denied discussing how the joint account would be held and he listed the account as joint tenancy with right of survivorship "out of habit" since most joint accounts are opened as JTWROS. Beyer, on the other hand, testified that Niemeier explained to her what joint tenancy with right of survivorship meant and Niemeier set up the account in this manner based on his discussions with Mr. Beyer.

         At Niemeier's request, Beyer completed and signed a certificate of alien claiming residence in the United States. She also signed the request for taxpayer identification number. AGE's document system [2] reflects that the three documents signed by Beyer in AGE's office (the new account card, the certificate of alien claiming residence, and the request for taxpayer identification number) were entered into AGE's document system on December 13, 2000 and were scanned in St.Louis on December 20.

         Beyer took three documents with her to obtain her father's signature: (1) the letter of authorization form; (2) the check-writing authorization; and (3) the joint account agreement. Beyer and her father signed the documents in the presence of Mr. Beyer's housekeeper, Nora Aldaba. Mr.Beyer discussed the documents with Beyer and understood that he was creating a joint account with her. Aldaba confirmed that Beyer returned from AGE with three documents but Aldaba could not read them because they were in English. Aldaba heard Beyer explain to Mr. Beyer that the effect of the documents was to transfer the account to Beyer. Over AGE's objections, Beyer specifically testified that it was Mr. Beyer's intent to create a joint tenancy with right of survivorship. Beyer did not make copies of the documents because she expected Niemeier to make copies for her, and she placed all three of them in an envelope and put it in her briefcase to return to AGE later that day. Shortly after 3:30 that afternoon, Beyer stopped at AGE and Aldaba carried the envelope inside. Aldaba asked for Niemeier but since he had already left the office, she left the envelope with the receptionist.

         Beyer went to AGE about a week later to determine whether the joint account had been approved. At first, Niemeier could not find any of the documents returned by Beyer on December8, but he then found them at the front desk and showed them to her. He advised Beyer that it would take a couple of days to process them. Sometime prior to December 18, Beyer received a telephone call from Niemeier advising that she had not signed the IRS W-9 form. He mailed her a new one and she signed it and returned it to AGE on December 18, 2000.

         Niemeier recalled the events differently. He had forgotten Beyer had signed an IRS W-9 form on December 8, so he mailed her the second one. When Beyer called on December 18 and asked when she could begin writing checks on the account, Niemeier explained that she could begin writing checks as soon as she returned the documents. Beyer explained that she had already returned them. Niemeier called the main office in St. Louis and was told that they had not received the check-writing authorization, but he did not inquire about the joint account agreement or the letter of authorization. Niemeier then found a check-writing authorization document which had been received in his office that same day, December 18, 2000. [3] Niemeier called Beyer and informed her that he had the check-writing authorization. AGE's document system reflects that the second IRS W-9 form (dated December 18), the check-writing authorization (dated December 8), and the letter of authorization (dated December 8) were entered into the document system in El Paso on December18 and were scanned in St. Louis on December 21, 2000. A joint account agreement was never entered into the AGE document system in El Paso and was not located in either the El Paso branch office or the main office St. Louis. Ordinarily, when a joint account agreement is missing, the AGE computer system automatically sends a wire to the branch office ten days after the account is opened. A wire was sent to the El Paso office on December 27 notifying them that the joint account agreement was missing, but Niemeier apparently did not read the wire. That same day, AGE sent a letter to Mr. Beyer stating:

This will confirm that we received and are processing your request to transfer assets from your account according to your written instructions, a copy of which is attached. If the transfer is correct you do not need to do anything . . . .

         Attached to the letter was a copy of the letter of authorization, dated December 8, 2000, reflecting Mr. Beyer's requested change of ownership to the account with a right of survivorship. On December 29, the St. Louis office generated a delinquent document report regarding the missing joint account agreement but it was not received by the El Paso branch prior to the time Mr. Beyer lapsed into a coma on December 31, 2000. He never regained consciousness and died intestate on January 9, 2001.

         Prior to Mr. Beyer's death, Beyer wrote checks on the joint account to pay Mr. Beyer's medical bills and those checks were honored. Near the end of December, Beyer received a statement from AGE reflecting the name on the account as Maria Alicia Beyer and Federico V. Beyer, joint tenants with right of survivorship. Approximately two weeks after her father's death, Beyer went to AGE and asked Niemeier to close the joint account and open an account in only her name. She signed a letter of authorization requesting a transfer of the funds to an individual account. In early February, Niemeier called Beyer and informed her that there was a problem with the account because one of the documents was missing. He assured her they would look for it but asked that she not write any more checks on the account. At a later date, Niemeier later called Beyer to inform her they could not find the joint account agreement. On March 23, 2001, AGE notified Beyer by letter that it did not have a signed joint account agreement on file for the account, and therefore, it could not be determined whether the account was joint tenancy with right of survivorship, tenancy in common, or tenancy of the entireties. AGE froze the account until ownership of the account could be determined and advised Beyer that if ownership could not be ascertained, it would interplead the assets into court. Beyer filed a negligence suit against AGE and Niemeier on May 4, 2001. Almost two years later, on February 11, 2003, AGE deposited the account funds in the amount of $1, 185, 807.24 in federal court in El Paso. AGE deposited an additional $916.01 on June 6, 2003 for a total of $1, 186, 723.25. Beyer's five siblings disputed her claim to the balance of the account. Due to the absence of the joint account agreement indicating joint tenancy with right of survivorship, Beyer entered into an agreement with her siblings that the funds would pass to each of the six heirs equally. Consequently, each heir, including Beyer, received $197, 787.21.

         Beyer amended her suit against AGE and Niemeier to allege conversion, negligence, fraud, negligent misrepresentation, breach of contract, and breach of fiduciary duty. She sought damages of $988, 986.04, representing the difference between the amount she actually received and the amount she would have received had the defendants properly set up the account as joint tenancy with right of survivorship. Beyer subsequently non-suited her claims against Niemeier. The jury found in favor of Beyer on all six theories of liability submitted, including breach of contract, and awarded damages in the amount of $791, 200. [4] In connection with the breach of contract claim, the jury also awarded attorney's fees: for preparation and trial--$225, 000; for appeal to the Court ...

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