Nevada Savings & Loan Ass'n v. Hood

— 915 — OPINION By the Court, Steffen, J.: Respondents Barbara Hood and Kathryn J. Green (hereinafter collectively “Hood”)1 filed an action against appellant Nevada Savings and Loan Association, now known as Primerit Savings Bank (Nevada Savings), alleging negligence, breach of contract, and negligent misrepresentation. The primary thrust of the action was that Hood acted upon negligent representations of an agent of Nevada Savings in determining how to protect her mother’s money. Kathryn B. Clay comb (Clay comb or mother) was given access to her money by Nevada Savings and proceeded quickly to squander the entire sum. After a jury trial, Claycomb’s money was restored through Hood, who received a money judgment equalling the amount of the misspent funds. For reasons noted hereafter, we conclude that Hood could not prevail in her action as a matter of law, and therefore reverse.2 Facts Viewing, as we must, the record in a light most favorable to the prevailing parties, the operative facts disclose that Hood, Clay-comb’s daughter, sought to protect her elderly, manic-depressive mother from the possibility of an improvident spending spree attributable to a maniacal episode. As a result of a discussion with a new accounts representative at Nevada Savings, Hood elected to invest her mother’s funds in money market accounts — 916 — evidenced by two certificates of deposit (CDs). Hood decided on that course of action because she was told by the new accounts representative that the money could not be withdrawn without surrendering the CDs. Hood felt safe in the described transaction because she intended to maintain physical possession of the CDs, thereby effectively denying her mother access to the funds without first consulting with her daughter. Although Hood had not sought to place her mother under a guardianship prior to the time relevant to this case, in 1978 Hood had received a power of attorney from her mother in order to facilitate Hood’s management of her mother’s financial affairs. There is nothing in the record to suggest that Hood acted in any way other than to protect and care for her mother. Importantly, it is uncontroverted that the money invested in the money market accounts (approximately $34,000) belonged to the mother. Both accounts were opened with signature cards vesting the accounts in the names of “Kathryn B. Claycomb or Barbara M. Hood or Kathryn J. Green.” Notwithstanding the three names on the account, Hood emphasized at trial that the money was her mother’s and that it was to be used for her benefit. It was also apparent from Hood’s testimony concerning the longevity of her mother’s family that she expected her mother to live a long life. Prior to settling on the money market accounts, Hood had questioned the new accounts representative about the desirability of requiring two signatures for the withdrawal of any of her mother’s funds. Hood was dissuaded from using the two-signature requirement because of the assurance given her by the Nevada Savings representative that any withdrawal of funds placed in the money market accounts would require surrender of the CDs.3 Hood did retain possession of the certificates in reliance upon the efficacy of the representation made to her. Unfortunately, Claycomb met a scoundrel by the name of Bye T. Moore who talked her into matrimony as a prelude to absconding with her money. Predictably, Claycomb went to Nevada Savings, closed her accounts, and opened a new interest-bearing checking account under the name of “Kathryn B. Claycomb A/T/ F [as trustee for] Bye T. Moore. Two days later, Claycomb and the scoundrel were married and shortly thereafter they presented the certificate of marriage to Nevada Savings as a basis for having the checking account changed to a joint account vesting in the names of “Kathryn B. Claycomb or Bye T. Moore.” Within six weeks, Claycomb’s funds were depleted and the scoundrel had left for parts unknown. Understandably, Hood was distressed to — 917 — discover that her mother had been able to withdraw her funds and close the money market accounts without presenting the certificates of deposit. Discussion Unfortunately, Nevada Savings had no alternative other than to deliver the mother’s funds to her upon her demand and Hood should not have received the benefit of a judgment for money damages since, in legal contemplation, she sustained no damage. Moreover, since the money belonged to Clay comb, who actually received the funds from Nevada Savings and thereafter used them, there is no legal basis for requiring Nevada Savings to pay out the money twice. The first reason why the judgment should not be allowed to stand is dictated by statute. NRS 100.085(1) provides: When a deposit has been made in the name of the depositor and one or more other persons, and in form to be paid or delivered to any one of them, or the survivor or survivors of them, the deposit is the property of the persons as joint tenants. The money or property shall be held for the exclusive use of the persons named, and may be paid or delivered to any of them during the lifetime of all, or to the survivor or survivors after the death of the depositor, and payment or delivery is a valid and sufficient release and discharge of the depository. (Emphasis added.) NRS 104.4405(1) provides: A payor or collecting bank’s authority to accept, pay or collect an item or to account for proceeds of its collection if otherwise effective is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes such authority to accept, pay, collect or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it. (Emphasis added.) Within the context of the instant case, the thrust of the above statutes is clear. When a deposit has been made in the name of the depositor (in this case Kathryn Claycomb) and other persons who are also authorized to draw against the deposited funds, payment by the bank to any of the authorized persons constitutes a release — 918 — and discharge of the bank. Moreover, the bank’s release and discharge is unaffected by the incompetence of the depositor or other authorized signatories on an account unless the bank is made aware of an adjudication of incompetence. Here, Clay-comb, the depositor and authorized signatory on the bank’s signature card, actually, recieved her money from the bank and she had not been adjudicated incompetent. Nevada Savings was released and discharged from liability as a matter of law. No verbal misrepresentation by a bank employee to someone other than Claycomb concerning how the money could be withdrawn serves to deprive Nevada Savings of the protection of the referenced statutes where the money was lawfully paid over to the depositor.4 The second reason we will address that supports reversal of the judgment is Hood’s lack of standing to maintain an action against Nevada Savings. The record unequivocally establishes that the funds at issue belonged to Kathryn Claycomb, the mother. Hood asserted no claim of entitlement to the funds and indeed had nothing more than a bare expectancy that she might one day inherit whatever may have remained of the deposited funds. Hood testified that she expected her mother to live a long time and that she intended only to manage the money for the care of her mother. Although it is extremely unfortunate that the mother squandered her money under the influence of the scoundrel who married her, it is nevertheless clear that Claycomb actually received it from Nevada Savings at her own lawful insistence. Despite the fact that the new accounts representative at Nevada Savings negligently advised Hood, no damage was sustained by Hood as a result. Claycomb had not been adjudicated an incompetent and Hood elected to have Claycomb listed on the account in a manner that would allow her to withdraw her funds. Although Claycomb did not spend her money wisely, as Hood had planned, it was still Claycomb’s money, and it is strictly a matter of conjecture whether, upon the mother’s demise, any of the funds would have remained for Hood. Nevada Savings lawfully delivered Claycomb’s money to her upon demand and we are unaware of any legal principle that would justify a judgment requiring Nevada Savings to pay out the money a second time to Claycomb or to Hood on her mother’s behalf. We consider the points discussed above to be dispositive of this — 919 — appeal and therefore elect not to address other issues raised. Considering the financial hardship that Claycomb will suffer, and perhaps Hood as well if she feels compelled to use some of her own resources to help compensate for the wasted funds, we are especially reluctant to overturn the jury’s verdict and the judgment entered pursuant thereto. However, as observed previously, there are no principles of law or equity revealed by our research that would sanction the imposition of liability against Nevada Savings under the circumstances of this case. For the reasons discussed above, the judgment entered pursuant to the jury verdict is reversed. Springer and Rose, J J., concur. Footnotes [1] It is not essential to include Hood’s sister, Kathryn J. Green, in our analysis of this appeal. Her involvement in the operative facts of the action filed below was minimal or non-existent. [2] In view of our disposition of this appeal, it is unnecessary to address the issues in Case No. 22661 involving Nevada Savings’ third-party subrogation claim against Clay comb. [3] The new accounts representative was apparently unaware that the law regarding CDs had changed the previous year and no longer required the presentation of the CD to withdraw funds. [4] Although Hood actually purchased the money market certificates from Nevada Savings with Claycomb’s money, and in one sense is the “depositor,” this fact is of no legal significance to our analysis.