Opinion ID: 1189786
Heading Depth: 2
Heading Rank: 2

Heading: colucci's appeal

Text: We now address the issues raised by Colucci on his direct appeal. We begin by reiterating the time-worn axioms that the judgment of the trial court will not be disturbed on appeal if the findings of fact entered by the trial court are supported by substantial evidence and are sufficient to support the judgment, e.g., Whorton v. Mr. C's, 101 N.M. 651, 653, 687 P.2d 86, 88 (1984), and that substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, e.g., Haaland v. Baltzley, 110 N.M. 585, 588, 798 P.2d 186, 189 (1990). We also note that when a party is challenging a legal conclusion, the standard of review is whether the law was correctly applied to the facts. Golden Cone Concepts, Inc. v. Villa Linda Mall, Ltd., 113 N.M. 9, 12, 820 P.2d 1323, 1326 (1991). Colucci contends that the trial court erred in finding that he had been unjustly enriched. There is no question that [a] person who has been unjustly enriched at the expense of another is required to make restitution to the other. Restatement of Restitution § 1 (1937); see Hydro Conduit Corp. v. Kemble, 110 N.M. 173, 175, 793 P.2d 855, 857 (1990) (citing Restatement of Restitution § 1 and stating that restitution is created by courts for reasons of justice and equity). Therefore, if Colucci was unjustly enriched at the Bank's expense he must make restitution to the Bank. Colucci argues that if he was enriched, it was not at the Bank's expense; he also asserts that he was not unjustly enriched. A person who receives a benefit has been enriched. Restatement of Restitution § 1 cmt. a. A person who receives any sort of advantage, such as possession of or some other interest in money, has been conferred a benefit. Id. § 1 cmt. b. Colucci received a benefit when the Bank gave him a cashier's check for more than $12,000, and he was thus enriched. Colucci maintains, however, that he was not enriched at the Bank's expense, because the Bank had no interest in the funds he received except as custodian for Ms. Rutter. This argument misapprehends the relationship between a bank and its depositor. The relationship between a bank and its depositor is a contractual relationship of debtor and creditor. Loucks v. Albuquerque Nat'l Bank, 76 N.M. 735, 743, 418 P.2d 191, 197 (1966). When money is deposited in a bank, the money becomes the property of the bank and the bank becomes a debtor to the depositor. 1 Raymond Natter et al., Banking Law § 9.05, at 9-19 (1994); see also In re Nat Warren Contracting Co. ( Alexander & Jones v. Sovran Bank, N.A.), 905 F.2d 716, 718 (4th Cir.1990) (money deposited in bank becomes bank's property and depositor is creditor of bank). [2] The funds that Colucci received belonged to the Bank, and so Colucci benefitted at the Bank's expense. Since Colucci clearly benefitted at the Bank's expense, the question remains whether the facts support the court's conclusion that he was unjustly enriched. A person receiving a benefit has been unjustly enriched if retention of the benefit would be unjust. Restatement of Restitution § 1 cmt. a. It is often considered unjust to retain a benefit where there has been a mistake in conferring the benefit. See id. §§ 15 to 55 (stating conditions under which there is right to restitution because of mistake in conferring a benefit). For example, Where a plaintiff has paid money in the mistaken belief that an enforceable contract exists, the plaintiff is entitled to recover the money paid, as restitution. Reynolds v. Slaughter, 541 F.2d 254, 256 (10th Cir.1976) (applying New Mexico law); see also Restatement of Restitution § 15 (person is entitled to recover money paid another pursuant to supposed contract person erroneously believed to exist); Rabbit Ear Cattle Co. v. Frieze, 80 N.M. 203, 204, 453 P.2d 373, 374 (1969) (The general rule is that payments made as a result of a material mistake of fact are regarded as involuntary and are recoverable.). The Account, owned by Mrs. Colucci and Ms. Rutter, was a joint account. [3] See Johnston v. Sunwest Bank, 116 N.M. 422, 424, 863 P.2d 1043, 1045 (1993). When Mr. Cordova, acting on behalf of the Bank, mistakenly closed out the Account, a section of the Probate Code, NMSA 1978, Section 45-6-104(A) (Repl.Pamp.1989), provided in part: [4] Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created. Ms. Rutter, as the surviving party, was the owner of the funds remaining in the Account on the death of Mrs. Colucci in the absence of clear and convincing evidence that the parties had a different intention when creating the account. See Barham v. Jones, 98 N.M. 195, 197, 647 P.2d 397, 399 (1982) (With a joint account, the law presumes a right of survivorship in the surviving party.). Colucci, as a P.O.D. beneficiary of the Account, would be entitled to the account balance only upon the deaths of both Mrs. Colucci and Ms. Rutter. See § 45-6-104(B) (providing that if account is P.O.D. account, sums remaining on deposit on death of survivor of two or more original payees belong to P.O.D. payee). The Bank's employee, Mr. Cordova, testified that he reviewed the wrong signature card before disbursing the funds in the Account to Colucci and that Ms. Rutter was in fact entitled to those funds. We hold that this was substantial evidence to support the trial court's finding that the account balance was mistakenly paid to Colucci. We also hold that this finding supports the court's judgment. Because the Bank mistakenly believed that a debtor-creditor relationship existed between it and Colucci obligating it to pay the balance in the Account to him, the Bank was entitled to restitution for Colucci's unjust enrichment. Colucci contends that the Bank should not receive restitution because of its negligence and failure to exercise due diligence. We disagree. The Restatement states: A person who has conferred a benefit upon another by mistake is not precluded from maintaining an action for restitution by the fact that the mistake was due to his lack of care. Restatement of Restitution § 59. This is so because one is not penalized for lack of care unless it results in harm to someone else. Id. § 59 cmt. a. Although the Bank may have been negligent in disbursing the funds to Colucci, its negligence caused no harm to anyone except itself and Ms. Ruttercertainly not to Colucci. Colucci thus benefitted at the Bank's expense and must make restitution. See Naugle v. O'Connell, 833 F.2d 1391, 1398 (10th Cir.1987) (`[R]estitution, based on mistake of fact, will not be denied because of forgetfulness of once known facts or negligent failure to ascertain the true facts.') (quoting Sawyer v. Mid-Continent Petroleum Corp., 236 F.2d 518, 521 (10th Cir.1956) (applying New Mexico law)). We therefore affirm the trial court's judgment awarding the Bank $12,256.31 in restitution for money mistakenly paid.