Opinion ID: 1921907
Heading Depth: 1
Heading Rank: 4

Heading: The Alleged Gift of the Funds in the Collateralized CD Accounts

Text: By February 1995 Citizens Bank (the bank) had acquired the $72,000 loan to Charles, as well as the collateralized joint accounts. The bank soon demanded payment on the loan because, by this date, Charles was more than ninety days delinquent on his loan payments. After Charles failed to respond to the bank's requests for payment, it seized the joint accounts and used the money in them to satisfy the unpaid principal, interest, and penalties due on the loan. The bank then issued a check to Mary and Charles jointly for the small remaining balance in the joint accounts after discharging the unpaid loan balance. Charles swore in an affidavit that he was unaware that the bank had decided to default him on the loan because the bank had sent notice of default only to his previous address, where Mary and George, but not Charles, then were living. Furthermore, even though Charles conceded that he alone was responsible to repay the loan, he argued that he should not have to reimburse Mary for the money that the bank seized from their joint accounts because Mary had given him the money in these accounts as a gift when she added his name to them, converted them to joint accounts with mutual survivorship rights, and then pledged the accounts as collateral for Charles's bank loan. Unable toobtain reimbursement from Charles, Mary eventually sued him in Superior Court, asserting that she had added Charles's name to her CD accounts merely for convenience and that she never intended to give Charles the money as a gift. Thus, she sought a judgment against Charles to recover from him the amount of money she lost when the bank seized the joint accounts to pay off Charles's delinquent loan. Charles contends that summary judgment was improper because a genuine issue of material fact existed concerning whether Mary had completed an inter vivos gift to him of the money in the accounts by converting her CD accounts into joint accounts with him  each person having the right of survivorship  and by pledging the accounts to secure his bank loan. Charles suggests that Mary effectively gave up her sole ownership, dominion, and control over the accounts when she converted them to joint accounts, and thereby completed a valid inter vivos gift of the money therein. He insists that, as a result of this joint-account conversion, he acquired an immediate possessory right to the money in the accounts. Mary counters that the money she used to fund the accounts always belonged only to her. She suggests that she added Charles's name to her accounts merely for convenience, and that neither her conversion of the CD accounts to joint accounts with Charles nor her pledge of the accounts as collateral for Charles's bank loan equated to a completed gift of that money to Charles. Recently, we discussed a surviving party's right to the funds in a joint account after the other party has died. In Robinson v. Delfino, 710 A.2d 154 (R.I.1998), we noted that the establishment of a joint bank account with survivorship rights is conclusive evidence of the intention to transfer to the survivor an immediate in praesenti joint beneficial possessory ownership right in the balance of the account remaining after the death of the depositor, absent evidence of fraud, undue influence, duress, or lack of mental capacity. Id. at 161 (emphases added). While both parties are still alive, however, the existence of a joint bank account only gives rise to a rebuttable presumption of an intent to make a giftof a joint interest therein, albeit the establishment of a joint account is one that create[s] immediate possessory as well as survivorship rights in both joint-account parties. Id. at 160. (Emphasis added.) Thus, in Bielecki v. Boissel, 715 A.2d 571 (R.I.1998), we held that the mere addition of a second name to a bank account, thereby transforming it into a joint bank account with a right of survivorship, does not always evidence an intent on the part of the original owner to create any present joint ownership rights in the account because [n]othing said in Robinson even suggests that joint bank accounts established for purposes of convenience only are no longer permitted. Neither does Robinson proclaim that any right of present ownership in the account funds is transferred in a joint bank account to a person whose name is placed thereon for purposes of convenience only. Id. at 574. Rather, in the context of joint bank accounts with a right of survivorship, we adopted in Robinson the Ohio Supreme Court's rule in Wright v. Bloom, 635 N.E.2d 31 (Ohio 1994), that: [i]t would seem that when a depositor opens a joint and survivorship account and executes signature cards which recite that the account is to be paid to either during the depositors' joint lives and to the survivor upon the death of either, a rebuttable presumption of an intent to make a gift of a joint interest should arise. Robinson, 710 A.2d at 160 (quoting Donald Kepner, The Joint and Survivorship Bank Account  A Concept without a Name, 41 Cal.L.Rev. 596, 621 (1953)). (Emphasis added.) Therefore, a rebuttable presumption arose in this case that when Mary converted the CD accounts into joint accounts with Charles, she intended then and there to make a gift of a joint interest in the CD accounts' funds to Charles. Here, Charles and Mary were both still living when the Superior Court ruled on this case, yet both claimed a different understanding of Mary's actions in adding Charles's name to the accounts, in converting them to or establishing them as joint accounts with rights of survivorship, and in pledging the joint accounts as collateral for Charles's loan. Whereas Mary's swornaffidavit stated that she established the CD accounts as joint accounts for convenience purposes only, Charles's testimony at his deposition revealed that he believed she intended to give him the money in the accounts as a gift when she established them as joint accounts and pledged them as collateral to secure his bank loan. Although the mere addition of Charles's name to Mary's CD accounts is not conclusive as a matter of law that Mary intended to give Charles a present joint interest in these accounts, a rebuttable presumption arose that she did so for this purpose. Although Mary's affidavit tends to rebut that presumption, it merely created an issue of fact concerning her intentions in doing what she did. Thus, in cases like this where conflicting evidence of donative intent exists, the trier of fact  not a motion justice  should resolve the contested issue. See, e.g., Blanchette v. Blanchette, 362 Mass. 518, 287 N.E.2d 459, 463 (1972). It may well be that a jury ultimately will reject Charles's contention that his mother intended to give him these joint-account funds as an outright gift, but such a determination is one the fact-finder should make because Mary's actions are subject to different interpretations about her intent. Therefore, the motion justice erred when he granted summary judgment in favor of Mary on this issue.