Title: Brad Dupree v. PeoplesSouth Bank
Citation: N/A
Docket Number: 1180095
State: Alabama
Issuer: Alabama Supreme Court
Date: May 8, 2020

REL:  May 8, 2020
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM 2019-2020
____________________
1180095
____________________
Brad Dupree
v.
PeoplesSouth Bank
Appeal from Houston Circuit Court
(CV-14-900757)
MITCHELL, Justice.
Brad Dupree sued PeoplesSouth Bank ("PeoplesSouth"),
alleging that PeoplesSouth wrongfully gave the proceeds of a
$100,000 certificate of deposit to his father, not him.  The
Houston Circuit Court entered a judgment for PeoplesSouth
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following a bench trial.  Brad now appeals, arguing that he
should have won on his breach-of-contract claim and been
awarded damages in the amount of $100,000.  We affirm the
judgment in favor of PeoplesSouth.
Facts and Procedural History
Jimmy Dupree is the father of Brad Dupree.  On June 29,
1993, Jimmy deposited $100,000 with Peoples Community Bank,
now known as PeoplesSouth, and, in return, received a
nonnegotiable certificate of deposit issued in the names of
"Brad Dupree and Jimmy Dupree" ("the CD").  Handwritten edits
on the CD later reversed the order of the names to "Jimmy
Dupree and Brad Dupree" and also replaced Brad's taxpayer ID
number with Jimmy's taxpayer ID number.  A handwritten note,
dated December 16, 1993, on the back of the CD stated "changed
order of names to report interest under Jimmy's SS#."  No
evidence was offered as to who made the handwritten changes,
and they were not initialed by either Jimmy or Brad. 
Brad was a minor at the time the CD was issued and did
not contribute any money to the purchase of the CD.  He
testified that he did not recall ever seeing or signing the
CD.  All interest derived from the CD was paid to Jimmy, and
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he, not Brad, reported that interest as income on his tax
returns.  After the CD was issued, it was immediately pledged
to PeoplesSouth by Jimmy as collateral, along with five other
$100,000 certificates of deposit, for a business loan. 
PeoplesSouth maintained possession of the CD from its 
issuance
until Jimmy withdrew the funds.
A. The 2010 Action  
In November 2010, before filing this case against
PeoplesSouth, Brad, his mother, and his stepbrother sued Jimmy
in the Houston Circuit Court, alleging that Jimmy had
wrongfully converted certain personal property, including the
CD ("the 2010 action").  Both sides filed competing motions
for a summary judgment.  Rather than ruling on the motions for
a summary judgment, however, it appears that the trial court
ordered the parties to mediate.  
On November 20, 2012, while the 2010 action was pending,
Jimmy went to PeoplesSouth and cashed in the CD without
notifying Brad.  PeoplesSouth issued a cashier's check payable
to the order of "Jimmy Dupree or Brad Dupree" for the amount
of the CD less amounts set off by PeoplesSouth related to
Jimmy's business loan.  Jimmy cashed the check and then spent
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the funds.  Brad learned during mediation of the 2010 action
that Jimmy had cashed in the CD and was advised by the
mediator to sue PeoplesSouth. 
An order from the 2010 action, dated November 21, 2014,
disposed of that case.  That order stated: "The property
issues in this case were resolved by mediation. Motion for
summary judgment granted." It is not clear, however, which
party's summary-judgment motion was granted.
B. The PeoplesSouth Litigation
On December 1, 2014, nine days after the order was
entered in the 2010 action, Brad sued PeoplesSouth, asserting
claims for breach of the Uniform Commercial Code, breach of
contract, money had and received, negligence, and wantonness
and seeking restitution.  PeoplesSouth answered the complaint
and added Jimmy as a third-party defendant.  All parties filed
motions for a summary judgment, which were all denied.  The
case then proceeded to a bench trial.
At trial, Brad testified that the CD was a gift to him
from Jimmy.  Brad's mother and stepbrother also testified that
Jimmy told them that he added Brad's name to the CD to provide
for Brad in the event something happened to Jimmy or Brad’s
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mother.  Jimmy testified, however, that the only purpose of
adding Brad's name to the CD was to provide additional
protection for the investment under Federal Deposit Insurance
Corporation ("FDIC") regulations.
After hearing all the evidence, the trial court entered
a judgment in favor of PeoplesSouth and Jimmy, holding that
Brad's claims were barred by the doctrine of res judicata
based on the order entered in the 2010 action.  The trial
court also held, as an alternative basis for its judgment in
favor of PeoplesSouth, that there was no breach of contract
because Jimmy never made an inter vivos gift of the CD to
Brad.
Brad does not appeal the judgment in favor of Jimmy. 
Brad appeals only the judgment in favor of PeoplesSouth on his
breach-of-contract claim.
Standard of Review
We review final judgments where ore tenus evidence has
been taken by a court in a bench trial, not a jury trial,
based on the following rule, referred to as the ore tenus
rule:
"'[W]hen a trial court hears ore tenus
testimony, its findings on disputed facts are
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presumed correct and its judgment based on those
findings will not be reversed unless the judgment
is palpably erroneous or manifestly unjust.' 
Philpot v. State, 843 So. 2d 122, 125 (Ala. 2002). 
'"The presumption of correctness, however, is
rebuttable and may be overcome where there is
insufficient evidence presented to the trial court
to sustain its judgment."'  Waltman v. Rowell, 913
So. 2d 1083, 1086 (Ala. 2005) (quoting Dennis v.
Dobbs, 
474 
So. 
2d 
77, 
79 
(Ala. 
1985)). 
'Additionally, the ore tenus rule does not extend
to cloak with a presumption of correctness a trial
judge's conclusions of law or the incorrect
application of law to the facts.'  Id."
Fadalla v. Fadalla, 929 So. 2d 429, 433 (Ala. 2005).  See also
Hall v. Mazzone, 486 So. 2d 408, 410 (Ala. 1986) ("The ore
tenus rule is grounded upon the principle that when the trial
court hears oral testimony it has an opportunity to evaluate
the demeanor and credibility of witnesses.").  Although we
must presume that the trial court's findings of fact here,
which are based on ore tenus evidence, are correct, to the
extent we are reviewing the trial court's conclusions of law
or its application of the law to the facts, our review is de
novo.  Fadalla, 929 So. 2d at 433. 
In reviewing the trial court's judgment, we are not
limited to the reasoning that the trial court applied but can
affirm its judgment for any legal, valid reason.  Brannan v.
Smith, 784 So. 2d 293, 297 (Ala. 2000).  Further, "a correct
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decision will not be disturbed even if the court gives the
wrong reasons." Boykin v. Magnolia Bay, Inc., 570 So. 2d 639,
642 (Ala. 1990).
Analysis
We affirm the judgment in favor of PeoplesSouth, but do
so on different grounds than those upon which the trial court
principally relied in entering it.  The trial court entered a
judgment for PeoplesSouth based on the doctrine of res
judicata, while also providing several alternative bases for
its judgment if the doctrine of res judicata proved to be
inapplicable.  Having reviewed the law and the record in this
case, we cannot agree that the doctrine of res judicata barred
Brad's claims against PeoplesSouth.  Nevertheless, as
discussed below, PeoplesSouth was entitled to prevail on
Brad's breach-of-contract claim because there was sufficient
evidence from which the trial court could conclude that Brad
is unable to prove any damages. 
A. Res Judicata
PeoplesSouth asserted the doctrine of res judicata as an
affirmative defense and had the burden of proving all four
elements of that defense.  See Stewart v. Brinley, 902 So. 2d
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1, 11 (Ala. 2004); see also Batchelor-Robjohns v. United
States, 788 F.3d 1280, 1285 (11th Cir. 2015) ("The party
asserting res judicata bears the burden of showing that the
later-filed [claim] is barred.").  "The essential elements of
res judicata are (1) a prior judgment on the merits, (2)
rendered by a court of competent jurisdiction, (3) with
substantial identity of the parties, and (4) with the same
cause of action presented in both actions."  Equity Res.
Mgmt., Inc. v. Vinson, 723 So. 2d 634, 636 (Ala. 1998).  
Brad argues that the first element of res judicata was
not met because no prior judgment on the merits was presented
to the trial court.  We agree.  "'A judgment is on the merits
when it amounts to a decision as to the respective rights and
liability of the parties ....'" Mars Hill Baptist Church of
Anniston, Alabama, Inc. v. Mars Hill Missionary Baptist
Church, 761 So. 2d 975, 978 (Ala. 1999) (quoting 50 C.J.S.
Judgment § 728 (1997)).  PeoplesSouth submitted two documents
as evidence of a prior judgment on the merits.  The first
document was a copy of the initial complaint in the 2010
action in which Brad alleged that Jimmy had wrongfully
converted the CD.  The second document was an order entered in
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the 2010 action after competing summary-judgment motions were
filed in that action; the motions themselves, however, were
not provided to the trial court.  Despite that omission,
PeoplesSouth argues that the order from the 2010 action had a
preclusive effect and served to bar Brad's claim in this case. 
PeoplesSouth's res judicata argument is unavailing.  The
order from the 2010 action merely states: "The property issues
in this case were resolved by mediation.  Motion for summary
judgment granted."  The order did not indicate the party or
parties for whom summary judgment was entered.  Nor did the
order declare the respective rights and liabilities of the
parties or state upon what basis the judgment was entered. 
The rights and liabilities of each party following the 2010
action are not clear from the evidence submitted to the trial
court; therefore, PeoplesSouth does not satisfy the first
element necessary to establish the defense of res judicata.
Accordingly, its res judicata defense fails.
B. Breach-of-Contract Claim
We now consider the merits of Brad's breach-of-contract
claim against PeoplesSouth.  "'The elements of a breach-of-
contract claim under Alabama law are (1) a valid contract
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binding the parties; (2) the plaintiffs' performance under the
contract; (3) the defendant's nonperformance; and (4)
resulting damages.'"  Shaffer v. Regions Fin. Corp., 29 So. 3d
872, 880 (Ala. 2009) (quoting Reynolds Metals Co. v. Hill, 825
So. 2d 100, 105 (Ala. 2002)).  To obtain a reversal of the
trial court's judgment on his breach-of-contract claim, Brad
must demonstrate a degree of error by the trial court
sufficient to overcome the ore tenus rule.  Fadalla, 929 So.
2d at 433 (noting that a trial court's judgment based on ore
tenus testimony will be reversed only if the judgment is
"palpably erroneous or manifestly unjust").  That is a high
bar, and Brad does not clear it here.
It is first necessary to determine whether the trial
court 
properly 
considered 
extrinsic 
evidence 
when 
adjudicating
Brad's breach-of-contract claim.  Alabama law does not allow
courts to look beyond the four corners of an instrument unless
the instrument contains an ambiguity.  Kershaw v. Kershaw, 848
So. 2d 942, 955 (Ala. 2002).  Generally speaking, two types of
ambiguity may arise as to an instrument: patent or latent.  A
patent ambiguity is apparent on the face of the instrument
when the language used is "defective, obscure or insensible." 
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Jacoway v. Brittain, 360 So. 2d 306, 308 (Ala. 1978).  A
latent ambiguity, by contrast, exists when the "writing
appears clear and unambiguous on its face, 'but there is some
collateral matter which makes the meaning uncertain.'" 
Medical Clinic Bd. of City of Birmingham-Crestwood v. Smelley,
408 So. 2d 1203, 1206 (Ala. 1981) (quoting Ford v. Ward, 272
Ala. 235, 240, 130 So. 2d 380, 384 (1961)).  In making the
threshold determination of whether there is a latent
ambiguity, a court may consider extrinsic evidence.  Brown v.
Mechanical Constructors, Inc. v. Centennial Ins. Co, 431 So.
2d 932, 942 (Ala. 1983).  If it determines that a latent
ambiguity exists, the court may then consider and rely upon
extrinsic evidence to determine the true intentions of the
parties to the contract.  Mass Appraisal Servs., Inc. v.
Carmichael, 404 So. 2d 666, 672 (Ala. 1981). 
It is clear in this case that the trial court properly
considered extrinsic evidence to determine whether there was
a latent ambiguity in the CD with respect to the ownership and
beneficiaries of the CD.  Although Brad argues that the trial
court should not have considered any extrinsic evidence to
determine how to enforce the terms of the CD, Brad himself
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went beyond the four corners of the CD when he made the
allegation in his complaint that Jimmy made a gift to him of
the CD.  Conversely, other extrinsic evidence, including
handwritten changes on the face of the CD that resulted in
attributing all interest income to Jimmy, Brad's testimony
that he did not recall signing the CD, and the lack of any
writings on or related to the CD regarding Jimmy's donative
intent, indicated that there had been no inter vivos gift of
the CD to Brad.  With this body of conflicting extrinsic
evidence before it, the trial court had a sufficient basis
from which to find that the CD contained a latent ambiguity,
and, thus, the court was entitled to consider additional
extrinsic evidence in an effort to ascertain the true
intentions of the parties and to adjudicate the merits of
Brad's breach-of-contract claim.  
The party asserting a breach-of-contract claim must prove
every element of that claim; the failure to prove any one
element necessarily results in a judgment for the opposing
party.  Ex parte Steadman, 812 So. 2d 290, 295 (Ala. 2001). 
Thus, even if there was undisputed evidence establishing a
valid contract between Brad and PeoplesSouth -– or even a
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valid contract between Jimmy and PeoplesSouth to which Brad
was a third-party beneficiary –- and that Brad and Jimmy
performed their obligations under that contract but that
PeoplesSouth failed to similarly do so, Brad still would not
be entitled to relief unless he also established that he was
damaged by PeoplesSouth's nonperformance.  
See State Farm Fire
& Cas. Co. v. Williams, 926 So. 2d 1008, 1018 (Ala. 2005)
(explaining that the defendant was entitled to a judgment in
its favor because the plaintiffs had failed to prove "an
essential element of their breach-of-contract claims –-
damages").  
As explained below, the trial court heard ore tenus
evidence from which it could have concluded that Brad suffered
no 
damage 
in 
connection 
with 
PeoplesSouth's 
alleged
nonperformance, and, for that reason, the judgment entered in
favor of PeoplesSouth is due to be affirmed.  The issue of 
whether Brad suffered damage turns on whether he had any
ownership interest in the CD or was otherwise entitled to any
of its proceeds.  The amount of damages in a breach-of-
contract action is generally the "'sum which would place the
injured party in the same condition he would have occupied if
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the contract had not been breached.'"  Steadman, 812 So. 2d at
295 (quoting Brendle Fire Equip., Inc. v. Electronic Eng'rs,
Inc., 454 So. 2d 1032, 1034 (Ala. Civ. App. 1984)).  Brad
argues that he had rights to the proceeds of the CD, either as
an owner or as a third-party beneficiary, and that his damages
resulting from the alleged breach were $100,000, the full
amount on the face of the CD.  PeoplesSouth argues, on the
other hand, that Brad is entitled to no damages because, it
says, Brad was neither an owner nor a third-party beneficiary
of the CD.  Neither party asserts that Brad may have been
entitled to an intermediate amount of damages.
This Court analyzed similar circumstances in Messer v.
Kennedy, 574 So. 2d 788 (Ala. 1991).  In Messer, several
certificates of deposit were issued in the name of an 84-year
old man ("the uncle") and his adult nephew.  All the funds
used to purchase the certificates of deposit were provided by
the uncle or were intended for his benefit; the nephew put
nothing toward the purchase of the certificates.  The nephew
kept possession of the certificates and had access to the
interest generated by the funds because it was deposited in a
joint account owned by him and the uncle.  At some point, the
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uncle's adult children sought to wrest control of their
father's financial affairs from the nephew.  When the nephew
resisted, the uncle filed suit seeking, among other remedies,
rescission or reformation of the certificates.  The trial
court entered a partial summary judgment in favor of the
uncle, finding that he was the rightful owner and ordering the
nephew to return the certificates to the uncle.
This Court affirmed the judgment on appeal.  In doing so,
it expressly carried forward a principle in Ex parte Lovett,
450 So. 2d 116, 118 (Ala. 1984), and held that "where two
parties' names appear on a CD and the funds used to purchase
the CD belonged to one of the parties, unless there is
evidence that the party whose funds were used to purchase the
CD intended to make a gift or create a trust, the other
party's claim to the funds must fail."  574 So. 2d at 790. 
Although Messer and Lovett are factually distinguishable
from this case, the principle applied in Messer and
Lovett applies with equal force here.  Because Brad
undisputedly did not furnish any of the funds used to purchase
the CD and because he is not a trustee over those funds, the
only way he could prevail is if he established that the CD was
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an inter vivos gift to him from Jimmy.  To prove the existence
of such a gift, Brad was required to satisfy, by clear and
convincing evidence, the following three elements: "[a]n
intention to give and surrender title to, and dominion over,
the property; delivery of the property to the donee; and
acceptance by the donee."  First Alabama Bank of Montgomery v.
Adams, 382 So. 2d 1104, 1110 (Ala. 1980) (quoting Garrison v.
Grayson, 284 Ala. 247, 249, 224 So. 2d 606, 608 (1969)).  
The trial court properly found that Brad did not carry
his burden of proving that an inter vivos gift was made. 
First, there was an absence of clear and convincing evidence
indicating that Jimmy intended to give and surrender title to,
and dominion over, the CD to Brad.  If anything, the evidence
indicated the opposite.  It is undisputed that, immediately
after purchasing the CD, Jimmy pledged the CD, along with five
other certificates of deposit, as collateral for a business
loan from PeoplesSouth.  Once Jimmy pledged the CD as
collateral, he did not have the authority to surrender the
funds to Brad or the ability to deliver the CD to Brad.  It is
also undisputed that Jimmy received all interest payments on
the CD and paid income tax on those financial gains.  Further,
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Jimmy testified that putting Brad's name on the CD was not an
indication that he was making a gift to Brad; Jimmy testified
that it was merely an effort to ensure that there would be
additional coverage under FDIC regulations for the funds that
he had on deposit with PeoplesSouth.
Second, there is no evidence indicating that Jimmy ever
delivered the CD to Brad.  And even if Jimmy had wanted to
make such a delivery, he was unable to do so because he had
pledged the CD as collateral to PeoplesSouth for his business
loan, and the bank had taken possession of the CD in
accordance with Jimmy's pledge. 
Finally, without surrender or delivery of the CD, there
could be no acceptance by Brad.  Thus, the trial court
properly held that Brad failed to meet his burden of proving
that the CD was an inter vivos gift.
Without any rights in the CD by virtue of an inter vivos 
gift, Brad cannot show he was damaged by PeoplesSouth's
alleged nonperformance, and he is therefore unable to prevail
on his breach-of-contract claim.  For that reason, the
judgment in favor of PeoplesSouth must be affirmed, and it is
unnecessary to address any other issue. 
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AFFIRMED.
Parker, C.J., and Shaw, Bryan, and Mendheim, JJ., concur
in the result. 
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MENDHEIM, Justice (concurring in the result).
I agree with the main opinion that the trial court's
judgment in favor of PeoplesSouth Bank 
("PeoplesSouth") is due
to be affirmed.  I also agree that the trial court's
application of the doctrine of res judicata in this case was
not appropriate because there is no indication in the previous
judgment as to in whose favor the judgment was entered or as
to what claims were addressed.  However, I disagree with the
main opinion's approval of the trial court's consideration of
extrinsic 
evidence. 
 
Specifically, the 
main 
opinion 
highlights
the trial court's finding that there was a latent ambiguity in
the certificate of deposit ("CD") with respect to the
ownership and beneficiaries of the CD.  I do not believe that
any alleged latent ambiguity in the CD is relevant to Brad
Dupree's claim of breach of contract against PeoplesSouth --
the bank -- as opposed to any claims he may have asserted
against Jimmy Dupree, which are not before us in this appeal.
Whether there is a latent ambiguity in the CD simply is not
relevant to Brad's claim against PeoplesSouth.
The main opinion views the appropriateness of examining
extrinsic evidence as 
relevant to discussing whether Jimmy had
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intended the CD as an inter vivos gift to Brad, which, in
turn, allows for a discussion of the last element of a breach-
of-contract claim, i.e., whether Brad sustained any damage as
a result of PeoplesSouth's alleged breach.  I write to express
my view that Brad's breach–of-contract claim must 
fail because
Brad did not establish the first element of such a claim: the
existence of a contract between the relevant parties.  See,
e.g., Avis Rent A Car Sys., Inc. v. Heilman, 876 So. 2d 1111,
1118 (Ala. 2003) (noting that "[o]ne of the elements of a
breach-of-contract claim under Alabama law is 
the 
existence of
'a valid contract binding the parties'" (quoting Reynolds
Metals Co. v. Hill, 825 So. 2d 100, 105 (Ala. 2002)).
As both parties to this appeal have observed: "A
certificate of deposit represents a contractual relationship
between the issuer of the certificate and the purchaser of it.
Failure of the issuer to make good on its contractual duty to
pay is a breach of the contract."  SouthTrust Bank v. Donely,
925 So. 2d 934, 942 (Ala. 2005) (emphasis added).  See also
Montgomery v. Smith, 226 Ala. 91, 95, 145 So. 822, 826 (1933).
(explaining that "[a] certificate of deposit is defined to be
a written acknowledgment by a bank of the receipt of a sum of
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money on deposit which it promises to pay to the depositor, to
his order, or to some other person or his order, whereby the
relation of debtor and creditor between the bank and the
depositor is created").  It is undisputed that Jimmy purchased
the CD from PeoplesSouth solely with his own funds and that
Brad never possessed the CD or received any interest from it.
Therefore, a contract existed between Jimmy and PeoplesSouth
that Jimmy had a right to enforce.  Brad argues that he is a
third-party beneficiary to that contract, but he does not cite
any Alabama law establishing that a payee on a CD is a third-
party beneficiary with a contractual right that is enforceable
against the issuer.1  Cf. Parke State Bank v. Akers, 659
N.E.2d 1031, 1034 (Ind. 1995) ("Certificates of deposit are
contracts, and can create third-party beneficiary rights in
those parties identified with rights of survivorship.");
1In the trial court, Brad noted that a portion of the
Uniform Commercial Code ("UCC") provides that "[i]f an
instrument 
is 
payable 
to 
two 
or 
more 
persons 
not
alternatively, it is payable to all of them and may be
negotiated, discharged, or enforced only by all of them."  §
7-3-110(d), Ala. Code 1975.  However, the trial court
concluded that, because the CD conspicuously stated that it
was "Non-Negotiable," "the CD is not a negotiable instrument
and [Brad's] claim for breach of § 7-3-110 fails as § 7-3-110
only applies to negotiable instruments."  Brad does not
present an argument based on the UCC in this appeal.
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Peoples Bank v. Baxter, 41 Tenn. App. 710, 723, 298 S.W.2d
732, 738 (1956) ("A donee third-party beneficiary of a
certificate of deposit may enforce his rights in a
jurisdiction which holds that such contracts are valid.").
Likewise, the principle upon which the main opinion bases
its rationale -- that "where two parties' names appear on a CD
and the funds used to purchase the CD belonged to one of the
parties, unless there is evidence that the party whose funds
were used to purchase the CD intended to make a gift or create
a trust, the other party's claim to the funds must fail" --
addressed a dispute between parties claiming ownership of a CD
and its funds, not a dispute between an alleged beneficiary of
a CD and the issuer.  Messer v. Kennedy, 574 So. 2d 788, 790
(Ala. 1991).  This distinction is critical.  Indeed, Messer
involved a dispute between the two named parties on a
certificate of deposit, and the other case the main opinion
cites for this proposition,  Ex parte Lovett, 450 So. 2d 116,
118 (Ala. 1984), was a suit by a daughter against her mother's
estate alleging ownership of the funds from some certificates
of deposit.  The principle applied in Lovett and Messer does
not establish a contractual duty by an issuer to pay
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certificate-of-deposit funds to a particular party named on
the certificate of deposit. Thus, as the trial court concluded
in one of its alternative rationales: "[Brad] has failed to
prove a contractual relationship between [PeoplesSouth] and
him and therefore has failed to prove that [PeoplesSouth]
breached a contract with him."  Accordingly, I caution that I
do not believe the Court endorses the main opinion's expansion
of the Lovett/Messer principle to include the issuer of a
certificate of deposit, as opposed to the individuals named on
the certificate of deposit in question.
Furthermore, as the trial court also explained, it
appears that the Uniform Multiple Persons Account Act, §
5-24-1 et seq., Ala. Code 1975 ("the UMPAA"), dictated that
PeoplesSouth was not liable to Brad for paying the funds of
the CD to Jimmy upon Jimmy's request.2  The UMPAA is divided
2In his initial appellate brief, Brad argues that
PeoplesSouth waived this affirmative defense by not raising
the UMPAA in its answer.  However, as PeoplesSouth notes, it
did raise the defense of the UMPAA in its summary-judgment
motion, and Brad did not object to this assertion on the
ground of waiver.  In fact, Brad addressed PeoplesSouth's
UMPAA argument on the merits in his response to its summary-
judgment motion.  Accordingly, the defense was revived, and
the trial court did not err in discussing it. See, e.g., Smith
v. Combustion Res. Eng'g, Inc., 431 So. 2d 1249, 1251 (Ala.
1983) ("'If an affirmative defense is not pleaded it is waived
to the extent that the party who should have pleaded the
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into four articles: Article 1, §§ 5-24-1 through 5-24-6;
Article 2, §§ 5-24-11 through 5-24-15; Article 3, §§ 5-24-21
through 5-24-27; and Article 4, §§ 5-24-31 through 5-24-34. 
The UMPAA defines a "multiple party account" as "an account
payable on request to one or more of two or more parties,
whether or not a right of survivorship is mentioned,"  §
5-24-1(8), and it defines an "account" as "a contract of
deposit between a depositor and a financial institution, and
includes a checking account, savings account, time deposit,
certificate of deposit, and share account."  § 5-24-1(1)
(emphasis added). Section 5-24-6 explains that 
"[t]he provisions of Article 2 concerning
beneficial ownership as between parties or as
between parties and beneficiaries apply only to
controversies between those persons and their
creditors and other successors, and do not apply to
the right of those persons to payment as determined
by the terms of the account.  Article 3 governs the
liability 
and 
set-off 
rights 
of 
financial
institutions that make payments pursuant to it."
Thus, the UMPAA draws a clear distinction between claims
between parties as to ownership of the subject account,
affirmative defense may not introduce evidence in support
thereof, unless the adverse party makes no objection in which
case the issues are enlarged, or unless an amendment to set
forth the affirmative defense is properly made.'" (quoting 2A
J. Moore, Federal Practice § 8.27[3] at 8–251 (2d ed. 1948)
(emphasis added))).
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addressed in Article 2, and claims by parties against the
financial institution that makes payments pursuant to the
subject account, addressed in Article 3.  Section 5-24-11(b),
in Article 2, echoes the principle enunciated in Lovett and
Messer: "During the lifetime of all parties, an account
belongs to the parties in proportion to the net contribution
of each to the sums on deposit, unless there is clear and
convincing evidence of a different intent."  But § 5-24-11
does not speak to a financial institution's liability toward
a party on the subject account.  
Section 5-24-21 authorizes a financial institution to
"enter into a contract of deposit for a multiple-party account
to the same extent it may enter into a contract of deposit for
a single-party account."  Section 5-24-22 provides, in part:
"A financial institution, on request, may pay
sums on deposit in a multiple-party account to:
"(1) One or more of the parties,
whether or not another party is disabled,
incapacitated, or deceased when payment is
requested and whether or not the party
making the request survives another party
...."
The unofficial comment to this section notes that "[a]
financial institution that makes payment on proper request
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under this section [is] protected unless the financial
institution has received written notice not to."  
Section 5-24-26 spells out a financial institution's
liability in detail:
"(a) Payment made pursuant to this chapter in
accordance with the type of account discharges the
financial institution from all claims for amounts so
paid, whether or not the payment is consistent with
the beneficial ownership of the account as between
parties, beneficiaries, or their successors. Payment
may be made whether or not a party, beneficiary, or
agent is disabled, incapacitated, or deceased when
payment is requested, received, or made.
"(b) 
Protection 
of 
a 
financial 
institution 
under
this section does not affect the rights of parties
in disputes between themselves or their successors
concerning the beneficial ownership of sums on
deposit in accounts or payments made from accounts."
(Emphasis added.)  Section 5-24-26(b) once again emphasizes
that a distinction exists between the financial institution's
liability regarding payment on the account and the rights of
the parties in disputes between themselves concerning
ownership of the account, while § 5-24-26(a) makes it clear
that the financial institution is not liable for "payment made
pursuant to this chapter in accordance with the type of
account" at issue.
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In his reply brief, Brad argues that the UMPAA does not
apply because, he says, the payment to Jimmy was not made
pursuant to a proper "request."  See § 5-24-22.  Section 5-24-
1(15) defines a "request" in relevant part as "a request for
payment complying with all terms of the account, including
special requirements concerning necessary signatures and
regulations of 
the 
financial 
institution." 
 
Section 
5-24-1(19)
states that "terms of the account" "includes the deposit
agreement and other terms and conditions, including the form,
of the contract of deposit."  Brad contends that the request
for payment by Jimmy did not comply with the terms of the
account because "[a]ny 'request' for payment in the absence of
Brad Dupree was a faulty request."  Brad's reply brief, p. 8.
This argument against the application of the UMPAA  is
unavailing, however, because Brad did not raise it in the
trial court or in his initial appellate brief.  In the trial
court, Brad argued that the UMPAA did not apply because it
"only applies to claims by third parties."  (Emphasis
omitted.)  In his initial appellate brief, Brad argued only
that PeoplesSouth had waived the affirmative defense of the
UMPAA.  Therefore, Brad's new argument concerning the
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nonapplicability of the UMPAA is waived.  See, e.g., Melton v.
Harbor Pointe, LLC, 57 So. 3d 695, 696 n.1 (Ala. 2010) (noting
that "this Court will not consider arguments made for the
first time in a reply brief").
Moreover, 
deposition 
testimony 
from 
PeoplesSouth
personnel indicated that the payment was made in accordance
with the terms of accounts at PeoplesSouth.  Debbie Kirkland,
a customer-service representative who handled the payment,
testified that she was trained to treat all joint accounts as
"or" accounts rather than "and" accounts, meaning any party to
the account could withdraw funds, unless special written
instructions providing otherwise were given to PeoplesSouth.
There were no such instructions noted in the computer system
for the CD.  PeoplesSouth assistant compliance officer Cindy
Worsley also testified that in 2009 PeoplesSouth changed its
computer systems such that they no longer recognized accounts
with the conjunction "and"; all joint accounts were treated as
not having conjunctions.  In short, the payment to Jimmy was
made according to the terms of the account, which includes the
regulations of the financial institution. Therefore, under §
5-24-26, PeoplesSouth was discharged from any liability with
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respect to any party on the CD.  This discharge did not affect
any claim to ownership of the CD funds Brad may have had
against Jimmy, but, as I have noted, Brad did not appeal the
trial court's judgment with respect to any of those claims.  
In sum, because I believe rationales not addressed by the
main opinion better explain why the trial court's judgment
should be affirmed, I concur in the result of the main
opinion.
Parker, C.J., concurs.
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