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Horton v. JP Morgan Chase Bank, N.A.

Court of Appeals of Texas, Fifth District, Dallas

January 22, 2018

ROBBIE LESA HAMES HORTON, Appellant
v.
JP MORGAN CHASE BANK, N.A., AND KIMBERLY A. STOVALL, Appellees

         On Appeal from the County Court at Law No. 5 Dallas County, Texas Trial Court Cause No. CC-14-01162-E

          Before Justices Lang-Miers, Brown, and Boatright

          MEMORANDUM OPINION

          JASON BOATRIGHT, JUSTICE.

         Appellant Robbie Lesa Hames Horton (Hames) sued her bank, appellee JP Morgan Chase Bank, N.A. (Chase), based on allegations that Chase converted Hames's individual account to a joint account without her consent and thereafter permitted the purported co-owner of the account to make an unauthorized withdrawal of all of the account's funds. The trial court rendered summary judgment in favor of Chase, which Hames has appealed. We affirm.

         BACKGROUND

         Hames opened the subject account, an individual checking account, by a signature card dated September 14, 2011. By her signature, Hames acknowledged receipt of Chase's "Account Rules and Regulations" (Account Terms, or Terms) and "agree[d] to be bound by the terms and conditions contained therein[, ] as amended from time to time."

         Hames was employed as a paralegal for the law firm of Stovall & Associates, P.C. Hames's paychecks were directly deposited into the subject account. On November 14, 2011, Chase received a second signature card that purported to convert the subject account to a joint account with right of survivorship. The signature card was purportedly signed by Hames and by Kimberly Stovall (of the Stovall firm) as co-owners of the joint account. However, Hames denies that she signed the second signature card or that she authorized any modification of the subject account. Stovall also denies that she signed the second signature card or that she was at that time aware of the subject account.

         Chase mailed monthly statements for the account. The first two statements (for the months of September and October of 2011) were addressed solely to Hames at her place of employment, the Stovall firm. Subsequent to Chase's receipt of the second signature card, it sent account statements addressed to Hames and to Stovall at the Stovall firm.

         On July 23, 2012, Stovall terminated Hames's employment at the firm. On the same day, Stovall withdrew all of the funds from the subject account, which totaled over $345, 000. Hames did not consent to this withdrawal. Presumably at Stovall's request, Chase also removed Hames from the subject account.

         Hames sued Chase in 2014 and asserted claims for breach of contract, negligence, and conversion-all premised on the unauthorized withdrawal of the funds from, and her removal from, the subject account. Chase filed a motion for summary judgment that asserted, among other grounds, that Hames's claims were barred under the Account Terms and under the Texas Uniform Commercial Code (UCC) because Hames did not timely notify Chase of any errors in her monthly account statements or of the unauthorized withdrawal. The trial court granted Chase's summary-judgment motion without stating the grounds for the court's ruling. Hames filed a motion for new trial, which the trial court denied by an interlocutory order. The court's orders were made final by a take-nothing judgment against Hames that the court rendered on April 7, 2016.[1] This appeal followed.

         TRADITIONAL SUMMARY JUDGMENT

         Chase's summary-judgment motion asserted both traditional and no-evidence grounds. Hames's first three issues challenge Chase's traditional grounds. Although we usually address a no-evidence motion first when both no-evidence and traditional summary-judgment motions are filed, here we will first review the propriety of granting Hames's traditional motion because this motion is dispositive of all of her claims. See Reynolds v Murphy, 188 S.W.3d 252, 258 (Tex. App.-Fort Worth 2006, pet. denied) (reviewing traditional motion first under similar circumstances).

         Timeliness of Notice

         Chase's traditional motion urged that all of Hames's claims were barred under the Account Terms and under the UCC because Hames did not give timely notice to Chase of the purported errors regarding the subject account. Hames's second issue contends that her claims were not so barred. Our resolution of this issue is dispositive of this appeal, though we will also consider Hames's third and fourth issues, which challenge alternative summary-judgment grounds asserted by Chase against Hames's negligence and conversion claims.[2]

         We begin by examining the statutory provisions relevant to our analysis. Article 4 of the UCC establishes the rights and duties of banks and their customers regarding deposits and collections. Am. Airlines Emps. Fed. Credit Union v. Martin, 29 S.W.3d 86, 91 (Tex. 2000). Section 4.401 provides that a bank can only charge against a customer's account "an item that is properly payable." Tex. Bus. & Comm. Code Ann. § 4.401(a) (West 2002). To be properly payable, an item must be "authorized by the customer and . . . in accordance with any agreement between the customer and the bank." Id. A bank is ...


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