RAYMOND BOROWSKI, )

) Plaintiff-Appellant, ) ) vs. ) No. SD34136 ) J.P. MORGAN CHASE BANK, N.A., ) Filed: December 21, 2016 ) Defendant-Respondent. )

APPEAL FROM THE CIRCUIT COURT OF STONE COUNTY

Honorable Mark A. Stephens
AFFIRMED Raymond Borowski ("Mr. Borowski") appeals from the trial court's judgment in favor of J.P. Morgan Chase Bank, N.A. ( "Chase") in a case involving unauthorized withdrawals from Mr. Borowski's accoun ts. Mr. Borowski raises two points: (1) that the trial court erred in gran ting summary judgment for Chase because to do so the trial court had to resolve num erous issues of disputed material fact and (2) that the trial court erred in dismissing Mr. Borowski's claim of negligence in the performance of a contract. Po int One fails because the undisputed material facts show Mr. Borowski failed to notify Chase of the unauthorized transactions within the time period sp ecified by the account2

agreement. Moreover, under the terms of the accoun t agreement, resolution of Point One renders Point Two moot. Consequently, we affirm the trial court's judgment. Factual and Procedural Background On appeal from an order granting summary judgment, this Court views "the record in the light most favorable to the part y against whom judgment was entered" and accords "the non-movant the benefit of all reasonable inferences from the record." ITT Comm. Fin. Corp. v. Mid-America Marine Supply Corp. , 854 S.W.2d 371, 376 (Mo. banc 1993). So viewed, th e following facts appear in the parties' summary judgment documents. On March 1, 2008, Mr. Borowski was added 1 to a checking account 2 belonging to Andrew Dumelle, Jr. ("Mr. Dumelle"). Sometime later, Mr. Dumelle died, leaving Mr. Borowski as the sole owner of the account.

1 In his response to Chase's statement of material u ncontroverted facts, Mr. Borowski takes issue with the use of the phrase "added to a checking acc ount." However, this phrase, like many of the other facts asserted in Chase's statement of materi al uncontroverted facts, was deemed admitted under Rule 74.04. Rule 74.04 requires the party seeking summary judgm ent to attach a statement of uncontroverted material facts to the m otion for summary judgment. Rule 74.04(c)(1). Then, the party responding to a movin g party's statement of uncontroverted material facts must "set forth each statement of fact in its original paragraph number and immediately thereunder admit or deny each of movant's factual s tatements." Rule 74.04(c)(2). Furthermore, "[a] denial may not rest upon the mere allegations or denials of the party's pleading[,]" and "the response shall support each denial with specific re ferences to the discovery, exhibits or affidavits that demonstrate specific facts showing that there is a genuine issue for trial." Id. "A response that does not comply with this Rule 74.04(c)(2) wit h respect to any numbered paragraph in movant's statement is an admission of the truth of that numbered paragraph." Id. Incorporation of legal arguments does not satisfy the requirement s of the rule. See Mothershead v. Greenbriar Country Club, Inc. , 994 S.W.2d 80, 85 (Mo. App. E.D. 1999). Mr. Boro wski's responses to paragraphs 4, 15-18, 22-23, 31-32, 36, and 45 do not comply with Rule 74.04(c)(2) because they do not include a citation to the disco very, exhibits or affidavits. Mr. Borowski's paragraphs 4, 15-18, 22-23, 31-32, 36, and 45 are t hus deemed admitted. Those facts will be included above and treated as true for purposes of this opinion without further notation or discussion. All rule references are to Missouri Co urt Rules (2016).

2 The parties' summary judgment documents also inclu de information about a savings account. Mr. Borowski does not appear to allege any unauthor ized transactions involved that account.3

On January 17, 2009, Jesse Padgett ("Mr. Padgett") went to a Chase branch and presented a power of attorney purportedl y signed by Mr. Borowski. A Chase employee accepted the power of attorney and c reated new signature cards for Mr. Borowski's accounts. Throughout 2008 and 2 009, several transactions were made from Mr. Borowski's accounts by and to Mr . Padgett. On July 14, 2010, Mr. Borowski granted a power of attorney to Paul Fisher ("Mr. Fisher"). In August 2010, Mr. Fisher went to a Chase branch, notified someone at the branch of "problems" with Mr. Borows ki's accounts, and requested records pertaining to the accounts. On February 24, 2011, Mr. Borowski sued Mr. Padget t, Chase, and several others based on allegations that Mr. Padgett made u nauthorized transfers from Mr. Borowski's accounts. As ultimately amended, Mr . Borowski's claims against Chase included conversion, fraudulent transfer, neg ligence, breach of contract, and negligence in the performance of a contract. C hase thereafter filed a motion for summary judgment, arguing Mr. Borowski was barr ed from recovery because he failed to report the unauthorized transfers, and a motion to dismiss, arguing that Mr. Borowski failed to state a cause of action for conversion or fraudulent transfer and that negligence in the performance of a contract was not a valid cause of action as between contracting parties. The trial court granted Chase's motions, thereby r esolving all Mr. Borowski's claims against Chase, and certified the judgment as final for purposes of appeal. 3 Mr. Borowski appeals.

3 Mr. Borowski subsequently obtained a default judgm ent against Mr. Padgett for a total amount of $476,171.52 in actual damages and $2 million in punitive damages.4 Discussion Point One: Summary Judgment In his first point, Mr. Borowski claims the trial court erred in granting summary judgment in favor of Chase because that rul ing improperly resolved several issues of disputed fact, including whether Chase exercised ordinary care in accepting the power of attorney from Mr. Padgett , whether account statements were actually sent, and whether Mr. Borowski timely notified Chase of the allegedly unauthorized transactions. Mr. Borowski also makes several legal and factual arguments about the 2009 signature cards. Mr. Borowski's argument fails because, under the terms of the account agreement, Mr. Borowski had no claim against Chase unless he notified Chase of unauthori zed items within 30 days or of errors with respect to electronic funds transfers ( "EFTs") within 60 days and the undisputed material facts show Mr. Borowski did not notify Chase of the unauthorized transactions within that time. "When considering appeals from summary judgments, the Court will review the record in the light most favorable to th e party against whom judgment was entered." ITT

, 854 S.W.2d at 376. Moreover, the Court will "acco rd the non-movant the benefit of all reasonable inferences from the record." Id. Appellate review of the order granting summary judg ment is de novo

. Id. "The criteria on appeal for testing the propriety of summary judgment are no different from those which should be employed by the trial court to determine the propriety of sustaining the motion initially." Id. Those criteria are in turn determined by the classification of the moving part y as either a claimant or a5

defending party. Id. at 380. Here, Chase was a defending party because Mr. Borowski sought to recover from Chase. See id. [A] "defending party" may establish a right to judg ment by showing (1) facts that negate any one of the claimant's elements facts, (2) that the non-movant, after an adequate period of di scovery, has not been able to produce, and will not be able to produ ce, evidence sufficient to allow the trier of fact to find the e xistence of any one of the claimant's elements, or (3) that there is no ge nuine dispute as to the existence of each of the facts necessary to support the movant's properly-pleaded affirmative defense. Id. at 381. In its motion for summary judgment, Chase sought judgment because Mr. Borowski failed to report the unauthorized tran sactions. That is, Chase sought judgment on the ground that there was no gen uine dispute as to the existence of each of the facts necessary to support its contract defense. "Generally speaking, the relation of a bank to its depositor is . . . subject to contract." Scott v. Union Planters Bank, N.A. , 196 S.W.3d 574, 577 (Mo. App. S.D. 2006) (quoting Washington County Mercantile Bank v. Kennedy , 855 S.W.2d 520, 522 (Mo. App. E.D. 1993)). Here, the account agreement contained several provisions regarding un authorized transactions. First, the account agreement stated: If we honor a check or other item drawn on or poste d to your Account that is altered in any way or was not drawn or otherwise authorized by you ("unauthorized item") or if your Account statement contains any errors, you agree to notify us in writing of such unauthorized item or error within 30 days of the date on which the unauthorized item, or the Account stateme nt that contained a description of the unauthorized item or error, was mailed, transmitted or otherwise made available to you. (Emphasis added). The agreement went on to provide consequences for failure to comply with the notice provisions:6 Failure to report an unauthorized item or error, or that you did not receive your scheduled statement, within the 30-day time frame set forth above, or to abide by the conditions set fort h herein, shall be deemed conclusive proof that you failed to exercise reasonable care and promptness in examining the items and statement s of the affected Account and in notifying us of the unautho rized item or error. You agree that such items and errors shall therefore be fully enforceable against you and you shall have no claim against us for same and shall be barred from bringing any action a gainst us that is in any way related to the unauthorized items or err ors. The account agreement also required Mr. Borowski to notify Chase of any errors involving EFTs no later than 60 days after the firs t statement on which the error appeared. Chase paid the first unauthorized item on October 15, 2008, and the last unauthorized item October 7, 2009. The checks and EFTs appeared on statements that were sent to Mr. Borowski's residen tial address. Nevertheless, Mr. Borowski took no action to notify Chase about a ny of these items until August 2010, approximately nine months after Chase paid th e last unauthorized item. That is, Mr. Borowski's attempt to notify Chase of the unauthorized items was made well after the end of the 30 and 60 day time l imits set forth in the account agreement. Under these circumstances, Mr. Borowski failed to comply with the notice provisions of the account agreement. The co nsequences of that failure are that Mr. Borowski was precluded from bringing any t ype of suit against Chase based on those transactions. None of Mr. Borowski's arguments alter this conclu sion. Mr. Borowski first argues the trial court's grant of summary jud gment was in error because the grant of summary judgment required the trial court to make the factual inference7

that Chase exercised ordinary care. This argument is without merit because it ignores the effect the Uniform Commercial Code ("UC C") has on this agreement. The relevant provision of Missouri's UCC is Section 400.4-406(f) 4 which provides in pertinent part that: Without regard to care or lack of care of either th e customer or the bank , a customer who does not within one year after the statement or items are made available to the customer (subsec tion (a)) discover and report the customer's unauthorized sig nature on or any alteration on the item is precluded from assert ing against the bank the unauthorized signature or alteration. § 400.4-406(f) (emphasis added); see also § 400.4A-505. This statute "evidence[s] a public policy in favor of imposing o n customers the duty of prompt examination of their bank statements and the notifi cation of banks of forgeries and alterations and in favor of reasonable time lim itations on the responsibility of banks for payment of forged or altered items." Knight Comms., Inc. v. Boatmen's Nat. Bank of St. Louis , 805 S.W.2d 199, 202 (Mo. App. E.D. 1991) (internal citation omitted). The provision c reates an absolute limitation which "is not merely a statute of limitations, but a rule of substantive law barring absolutely a customer's untimely asserted right to make a claim against the bank." Id. (internal citation omitted). Moreover, the partie s may vary this provision by agreement so long as the standards ado pted in that agreement "are not manifestly unreasonable." See § 400.4-103(a); § 400.4A-501(a). Mr. Borowski does not claim that the contractual time l imits of 30 and 60 days for giving notice of unauthorized transactions constitu te a manifestly unreasonable modification of the one-year time limit contained i n Section 400.4-406(f), and

4 All statutory references are to RSMo (2000).8

the trial court did not need to evaluate the issue of whether Chase acted with ordinary care because the provisions of Section 400. 4-406(f) made ordinary care irrelevant to the analysis of the issue of Chase's liability in this case. Mr. Borowski next argues that the 2009 signature c ards created a new account with Mr. Padgett so Mr. Borowski was no lon ger bound by the account agreement. In support, he relies on Kennedy , 855 S.W.2d 520, for the proposition that "a change in title is tantamount t o terminating the account and replacing it with a new one." Id. at 523. This reliance is misplaced because the facts in that case were different. In Kennedy , the altered signature card removed an owner's name from the account and replac ed it with another name. Id. Here, in contrast, Mr. Borowski's name was never removed from the title of the account. Moreover, Chase continued sending sta tements to Mr. Borowski. Mr. Borowski still owned the funds deposited in the bank after the completion of the 2009 signature cards, so he was still a custome r of the bank, subject to the terms of the account agreement. Third, Mr. Borowski argues the trial court erred i n finding Chase actually sent the statements because Chase did not provide e vidence that it sent the items. This argument is without merit. Chase supported it s assertion that it sent the statements with an affidavit from a bank employee r egarding Chase's usual practices regarding mailing account statements. Co ntrary to Mr. Borowski's vigorous assertions that this evidence is a mere se lf-serving conclusion, an affidavit is one of the types of evidence which may be used to support an assertion of uncontroverted material fact in suppor t of a motion for summary judgment. See Rule 74.04(c)(1). Mr. Borowski offered no evidence to rebut that9

proof. While Mr. Borowski attempted to dispute tho se facts with legal argument, he did not provide any contrary facts and did not s upport his denial with a citation to the discovery, exhibits or affidavits. Those facts are deemed admitted.
See Rule 74.04(c)(2). The trial court did not err in determining Chase w as entitled to judgment as a matter of law on the ground that Mr. Borowski failed to notify Chase of the unauthorized items within the time period provided by the account agreement. Mr. Borowski's first point is denied. Point Two: Motion to Dismiss In his second point, Mr. Borowski claims the trial court erred in dismissing his claim for negligence in the performa nce of a contract because negligence in the performance of a contract is a di stinct cause of action from common law negligence. However, in light of our co nclusion with respect to Point One, Point Two is moot. "The doctrine of mootness is triggered when an eve nt occurs that alters the position of the parties and any judgment would be a hypothetical opinion." Brock v. Brock , 142 S.W.3d 204, 206 (Mo. App. E.D. 2004). "When a n event occurs that makes a court's decision unnecessary or makes granting any relief by the court impossible, then the case is rendered moo t and generally should be dismissed." Id. Here, the analysis in Point One shows Mr. Borowski failed to notify Chase of the unauthorized transactions as required under the terms of the account agreement. Under the terms of the account agreemen t, that failure bars Mr. Borowski from bringing any action against Chase on the basis of the10

unauthorized transactions. Any action would includ e an action for negligence in the performance of a contract. Thus, the denial of Point One would render any opinion with respect to Point Two a hypothetical op inion regarding the nature of a claim of negligence in the performance of a contr act. Point Two is moot. Mr. Borowski's second point is denied. Decision The trial court's judgment is affirmed. MARY W. SHEFFIELD, C.J. – OPINION AUTHOR JEFFREY W. BATES, P.J. – CONCURS DON E. BURRELL, J. – CONCURS