Case Name: Marjorie LAMP, Administratrix With Will Annexed of the Estate of Louise Edmundson, Deceased, Plaintiff and Appellant, v. FIRST NATIONAL BANK OF GARRETSON, South Dakota, Defendant and Appellee
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1993-02-03
Citations: 496 N.W.2d 581
Docket Number: No. 17693
Parties: Marjorie LAMP, Administratrix With Will Annexed of the Estate of Louise Edmundson, Deceased, Plaintiff and Appellant, v. FIRST NATIONAL BANK OF GARRETSON, South Dakota, Defendant and Appellee.
Judges: MILLER, C.J., concurs.
Reporter: North Western Reporter 2d
Volume: 496
Pages: 581–589

Head Matter:
Marjorie LAMP, Administratrix With Will Annexed of the Estate of Louise Edmundson, Deceased, Plaintiff and Appellant, v. FIRST NATIONAL BANK OF GARRETSON, South Dakota, Defendant and Appellee.
No. 17693.
Supreme Court of South Dakota.
Argued May 28, 1992.
Reassigned Oct. 19, 1992.
Decided Feb. 3, 1993.
Wuest, J., filed separate opinion concurring in part and dissenting in part.
Henderson and Amundson, JJ., filed separate dissenting opinions.
Jerome B. Lammers, Lammers, Lam-mers, Kleibacker & Parent, Madison, for plaintiff and appellant.
Robert E. Hayes, Davenport, Evans, Hurwitz & Smith, Sioux Falls, for defendant and appellee.

Opinion:
SABERS, Justice
(On reassignment).
Marjorie Lamp (Lamp) appeals from summary judgment in favor of First National Bank of Garretson (Bank). We reverse and remand for trial.
FACTS
Lamp is the administratrix of the estate of her mother, Louise Edmundson (Ed-mundson). Edmundson was residing in a nursing home in Garretson, South Dakota, at all times relevant to this appeal. Ed-mundson maintained a checking account at Bank, and her daughter, Carol Braa (Braa) was named as an authorized signature on the account. Edmundson also owned a Time Savings Certificate (CD) issued by Bank which is the subject of this appeal. Braa was not, however, an authorized signature on the CD.
On August 7, 1985, Braa negotiated this CD for deposit in the checking account by signing her and Edmundson's names to the back of the CD. The amount deposited was $42,695.51. The amount of this deposit was noted on the September, 1985, checking account statement. An IRS Form No. 1099 reflecting the payment of the CD was sent to Edmundson no later than January 31, 1986.
On December 31, 1987, Edmundson wrote a letter to Bank's president, Allan Hammer (Hammer), advising that she had been informed that her money was gone, never had access to her bank statements, and requesting an accounting of all her banking transactions from June 1, 1983, to July 31, 1987. Hammer responded by letter on January 4, 1988, informing Edmund-son that she could get that accounting from Braa but that if she wanted Bank to provide same, it would do so. Edmundson died on April 10, 1988, without having received the requested accounting.
Lamp and her brother, Milton Edmund-son (Milton) commenced an action against Bank on July 3, 1990, alleging that it had permitted Braa to endorse the CD by forgery, and that by reason of such forgery, Braa was able to convert those funds to her own use. After completion of discovery, Bank moved for summary judgment on the ground that no notice had been given Bank of the forgery and therefore, the action was precluded by the statute of limitations. Trial court granted summary judgment in favor of Bank based on the statute of limitations and dismissed Lamp's action. Lamp appeals.
ISSUE
Whether genuine issues of material fact exist precluding summary judgment in favor of Bank regarding notice of the forgery of the CD under SDCL 57A-4-406(4).
We hold that genuine issues of material fact exist precluding summary judgment.
Summary Judgment
Our standard of review for a grant or denial of summary judgment is well settled. In Waddell v. Dewey County Bank, we stated:
In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The non-moving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.
Waddell v. Dewey Cnty. Bank, 471 N.W.2d 591, 593 (S.D.1991) (citations omitted).
"Summary judgment is generally not feasible in negligence cases because the standard of the reasonable man must be applied to conflicting testimony.... It is only when the evidence is such that reasonable men can draw but one conclusion from facts and inferences that they become a matter of law and this occurs rarely."
Trammell v. Prairie States Ins. Co., 473 N.W.2d 460, 462 (S.D.1991) (quoting Wilson v. Great N.R.R. Co., 83 S.D. 207, 212-13,157 N.W.2d 19, 22 (1968) (citations omitted)). In reviewing a grant of summary judgment, we are not bound by the trial court's factual findings and must conduct an independent review of the record. Tag-gart v. Ford Motor Credit Co., 462 N.W.2d 493, 499 (S.D.1990); Koeniguer v. Eckrich, 422 N.W.2d 600, 601 (S.D.1988).
Lamp argues that Braa's endorsement of Edmundson's CD constituted an unauthorized endorsement and that this fact was discovered and reported to Bank within the three-year statutory limitation period. SDCL 57A-4-406(4) provides:
Without regard to care or lack of care of either the customer or the bank a customer who does not within one year from the time the statement and items are made available to the customer (subsection (1)) discover and report his unauthorized signature or any alteration on the face or back of the item or does not within three years from that time discover and report any unauthorized endorsement is precluded from asserting against the bank such unauthorized signature or endorsement or such alteration. (Emphasis added.)
There is no dispute that Bank sent statements to Edmundson concerning her account and that she would have received an IRS form 1099 no later than January 31, 1986. Accordingly, the three-year period would not have run until January 31, 1989 under SDCL 57A-4-406(4). The "notice," which Lamp argues was sufficient, was the December 31, 1987, letter Edmundson wrote to Bank. The trial court concluded this letter did not provide adequate notice to Bank that the CD had been negotiated with an unauthorized signature. Edmund-son's letter to Hammer states:
I have been informed that my money is gone. I have never had access to my bank statements. I would appreciate an accounting of all banking transactions from June 1, 1983 to July 31, 1987. My account is # 9-083-7. Thank you.
We must determine whether a genuine issue of material fact exists and whether the trial court correctly applied SDCL 57A-4-406(4). Waddell, 471 N.W.2d at 593. We think a fair reading of Edmund-son's letter put Bank on notice that Ed-mundson wanted an accounting of her checking account #9-083-7. There is no mention, however, of Braa, any endorsement or unauthorized signature, or Ed-mundson's CD. Nothing in Edmundson's letter mentions that the CD had been negotiated, much less negotiated with a forged endorsement. Accordingly, we find nothing in this letter which put Bank on the notice required by SDCL 57A-4-406(4) that Braa's unauthorized signature or endorsement appeared on Edmundson's CD.
Lamp asserts that Bank teller Mary Schreurs (Schreurs) negotiated the CD for Braa and was aware of the unauthorized endorsement and, therefore, Bank was on notice. Schreurs stated in her deposition that she did not recall whether Braa endorsed the CD in her presence, only that Braa presented the CD for payment. Schreurs also stated that while she was unaware of any actual authority Edmund-son had given Braa to negotiate the CD, she perceived no problem since the money was being deposited into Edmundson's checking account.
The fact that Schreurs claims in her deposition that "she did not recall whether Braa endorsed the CD in her presence," is immaterial because it was a forgery, whether it was endorsed in or out of her presence. Carol Braa signed her mother's name to the CD and converted the funds to her own use. The Bank has the mother's signature on file and is, therefore, bound by it. At the very least, the evidence raises a genuine issue of material fact whether the Bank had notice pursuant to SDCL 57A-4-406(4). Id. Therefore, the trial court erred in its conclusion that no genuine issue of material fact existed concerning the plaintiff's right to assert an action against Bank. Koeniguer, 422 N.W.2d at 602-03.
Lamp and Milton also argue they gave Bank notice of Braa's unauthorized endorsement through conversations they had with Bank officials in the summer of 1988. The record reflects that neither Lamp nor Milton placed a date on these conversations during their depositions, but instead submitted an affidavit in resistance to Bank's motion for summary judgment placing a date on these conversations of "prior to August 1, 1988." The trial court concluded that the statements in the affidavit contradicted the deposition testimony of Lamp and Milton and held that this affidavit did not raise a genuine issue of fact. We disagree.
The record reflects that in Lamp's deposition she stated she learned of the CD cashed by Braa "sometime in 1988." She also stated she had spoken with Hammer several times, remembering specific discussions about the status of the checking account, although never about the CD.
The record also reveals that Milton stated in his deposition that he was present during one of Lamp's conversations with Hammer and that Hammer had said Bank made a mistake. Milton did not ask Hammer what the mistake was and the CD was not specifically mentioned in this conversation. The Bank claims that this deposition testimony is insufficient to give the required notice because neither Lamp nor Milton specified that the mistake was the forgery or the unauthorized endorsement. For summary judgment purposes, the Bank cannot pretend not to know what this mistake was. Even if the Bank could, ostrich-like, pretend not to know the specifics of the mistake, knowing of the "mistake" itself was enough to put the bank on notice of the claim.
On summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party. That means every reasonable inference. All reasonable doubts must be resolved against the moving party. Id. at 601 (citations omitted). Viewed properly in this light, it appears that the mistake was paying out over a forged or unauthorized endorsement which was discovered and reported within three years. SDCL 57A-4-406(4). The deposition testimony established notice to Bank within three years or a genuine issue of material fact which precludes summary judgment. State, Dept. of Revenue v. Thiewes, 448 N.W.2d 1, 2 (S.D.1989). Summary judgment is an extreme remedy not appropriate for disposing of factual issues or as a substitute for trial. Koeniguer, 422 N.W.2d at 601 (citations omitted); Wilson, 83 S.D. at 212, 157 N.W.2d at 21 (citations omitted).
As noted above, Lamp and Milton filed a joint affidavit in opposition to Bank's motion for summary judgment which stated "[t]hat prior to August 1, 1988, affiants discussed with Defendant bank president, Allan Hammer, that the said certificate of deposit had been improperly endorsed and cashed by Braa." The affidavit further stated that Hammer "admitted to affiants that the bank had made a mistake in permitting this certificate of deposit to be cashed and in failing to know what use was being made of the funds."
It is well settled that a party cannot claim the benefit of a version of the facts more favorable to his contentions than he gave in his own sworn testimony. Waddell, 471 N.W.2d at 595, n. 3 (citations omitted); Lalley v. Safway Steel Scaffolds, Inc., 364 N.W.2d 139, 141 (S.D.1985); Swee v. Myrl & Roy's Paving, Inc., 283 N.W.2d 570, 572 (S.D.1979) (citation omitted). The affidavit of Lamp and Milton, however, did not contradict their deposition testimony. They both clearly pointed out the reaction of the banker and his statement regarding the mistake on the part of the Bank. Although neither Lamp nor Milton placed an exact date on this event, Lamp stated that she could recall the date by looking in her checkbook. And the deposition of Milton was so cursory as to provide no opportunity for him to pinpoint the date of this conversation. Therefore, Lamp and Milton's affidavit was not necessary, much less "rendered ineffective," as claimed.
With questions of fact, doubts must be resolved against the Bank as the moving party. The Bank has failed to establish that there is NO genuine issue of material fact. The trial court's decision is contrary to recent summary judgment law in South Dakota, especially State, Dept. of Revenue v. Thiewes, 448 N.W.2d 1 (S.D.1989), a unanimous opinion written by Justice Henderson where we reversed the trial court because the moving party failed to sustain its burden that there were no genuine issues of material fact. Where reasonable persons might reach different conclusions, summary judgment should be denied. Dahl v. Sittner, 429 N.W.2d 458, 461 (S.D. 1988) (citation omitted).
No one is entitled to summary judgment unless entitled thereto as a matter of law and there are no genuine issues of material fact. SDCL 15-6-56(c). Here, the trial court incorrectly placed the burden upon the non-moving party instead of upon the moving party, the Bank. For all of the above reasons and all of the well-reasoned summary judgment cases in South Dakota, summary judgment was improper. (See Wilson v. Great N.R.R. Co. and its progeny.) Therefore, we reverse and remand for trial.
MILLER, C.J., concurs.
WUEST, J., concurs in part and dissents in part.
HENDERSON and AMUNDSON, JJ., dissent.
. Bank's ultimate liability, if any, would depend on the extent to which Lamp can prove Braa converted the funds to her own use.
. Milton's testimony was as follows:
Q (Counsel) Mrs. Lamp had indicated that you were present on an occasion when — on two occasions, I guess, when you visited with Allan Hammer at the bank concerning your mother's account?
A (by Milton) And I've been sittin' here thinking about that.
Q All right. Tell me whether you have any other information you can add as to what was discussed on those visits.
A When we went in there, why, Marjorie said, we sure got a big surprise, she said, about this thing. And he says, it's a big surprise to me, too, he said. So he went in the back room and he came back and — slumped down in his chair and he put his hands (indicating). He says, I guess we've made a mistake. That's the words he said.
Q Okay. Any other discussion other than that?
A No. That was it.
Q On either visit?
A Nope.
Q You didn't ask him what the mistake was? A No, no. But that's the words he said. Q Okay. No other questions from you or anybody else?
A No. I never said a word, but I could just, just like it was yesterday. I guess we've made a mistake, he said.