Title: Schall v. Gilbert

State: vermont

Issuer: Vermont Supreme Court

Document:

Schall v. Gilbert  (98-316); 169 Vt. 627; 741 A.2d 286

[Filed 3-Aug-1999]
                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 98-316

                              APRIL TERM, 1999

Gary H. Schall, Esq. Guardian	     }	APPEALED FROM:
of Henriette Gilbert and Daniel	     }
T. Monte, Executor of Estate of	     }
Eustache Gilbert	             }	Orange Superior Court
	                             }	
     v.	                             }
	                             }	DOCKET NO. 108-7-97 Oecv
James Gilbert, Northfield Savings    }
Bank and Wells River Savings Bank    }

       In the above-entitled cause, the Clerk will enter:

       Plaintiffs Gary H. Schall, guardian of Henriette Gilbert, and Daniel
  Monte, executor of the  estate of Eusatache Gilbert, appeal from the
  superior court's summary judgment decision  concluding that the statute of
  limitations pursuant to 9A V.S.A. § 4-111 barred their claim against 
  defendant Northfield Savings Bank (NSB).  Plaintiffs also seek
  interlocutory review of the trial  court's ruling on the applicable statute
  of limitations and the validity of the two powers of attorney  related to
  their claim against Wells River Savings Bank (WRSB).  We affirm.

       Defendant James Gilbert is the nephew of Eustache and Henriette
  Gilbert (Gilberts).  On   January 25, 1993, the Gilberts each executed a
  power of attorney naming James Gilbert as their  attorney in fact.  On this
  same date, the Gilberts accompanied their nephew to a NSB branch where 
  they personally signed withdrawal requests to close out two certificates of
  deposit and a joint  savings account.  

       On April 15, 1993, James Gilbert visited a WRSB branch with Samuel
  Palmisano.  There,  they presented powers of attorney previously executed
  by the Gilberts and asked to close out two  certificates of deposit.  Due
  to the large dollar amount of the transaction, a WRSB employee  consulted
  with a supervisor who eventually contacted a WRSB attorney.  The bank then
  rejected the  powers of attorney because they did not contain a "durable"
  clause necessary for James Gilbert to  exercise his authority in the event
  that one or both of the Gilberts suffered from a mental disability.  The
  powers of attorney were amended to include the clause and again presented
  to WRSB the  same day.  The bank closed out both certificates of deposit
  pursuant to the amended powers of  attorney executed by the Gilberts. 
  James Gilbert, on behalf of the Gilberts, signed the withdrawal  requests
  and transferred the funds into a money market account held in his own name
  as attorney-in-fact.  

       James Gilbert allegedly turned all the withdrawn funds over to Joseph
  C. Palmisano, Samuel  Palmisano's father, who invested and lost them. 
  Plaintiffs brought suit against NSB, WRSB, and  James Gilbert.  Plaintiff's
  seek the monies withdrawn from both banks, alleging that the banks 
  breached their duty of care concerning their dealings with the elderly
  Gilberts.  The superior court  granted NSB's motion for summary judgment,
  concluding that plaintiffs' claim was filed  subsequent to the three-year
  statute of limitations under 9A V.S.A § 4-111.  In denying WRSB's  motion
  for summary judgment, the superior court concluded that there was a genuine
  issue of  material fact as to when the Gilberts knew or should have known
  of WRSB's alleged negligence.   The superior court also denied plaintiffs'
  motion for summary judgment against WRSB stating that  the clear and
  unambiguous language in the powers of attorney authorized James Gilbert to
  withdraw  the funds.  This appeal followed.      

       We first address whether an action involving certificates of deposit
  falls under article three or  four of the Vermont Uniform Commercial Code
  (UCC).  The superior court concluded that article  four, which concerns
  bank deposits and collections, applied.  See Official Comment 3, 9A V.S.A. 
  § 4-101.  Plaintiffs argue that either article three of Vermont's UCC or 12
  V.S.A. § 511 governs  the matter.  While we agree with the superior court's
  ultimate conclusion, we do not agree that  article four of Vermont's UCC
  governs this action.  Article three governs negotiable instruments,  and
  certificates of deposit are negotiable instruments under 9A V.S.A. §
  3-104(j).  See Miller v.  The Merchants Bank, 138 Vt. 235, 238,