Dean Kelley v. Bank of America (2011)

MEMORANDUM OF DECISION

The plaintiff, Dean Kelley, brings this action against the defendant, Bank of America, seeking various damages in connection with a checking account opened with the defendant bank in the name of White Flames Systems, an unincorporated air conditioning and heating maintenance and repair business conducted by Dean Kelley.

The factual background to this action is based upon the plaintiff setting up an air conditioning and heating business which he called White Flames Systems.   It was his alter ego, owned and operated by Kelley, and was not incorporated.   The financial aspects were set up with a checking account for receiving deposits and paying expenses of the business.   The payments and withdrawals from the account was by a single signator, Virginia Worrell, plus a stamp of her signature which was in the possession, use, and control of the plaintiff, Dean Kelley.

The two, Virginia and Dean, were mother and son.   They lived together in Virginia's house for some time until, after a disagreement between them, Virginia moved out of the house and demanded that her name be removed as the signatory of the checking account and that her signature stamp be given to her.

She persisted in her demand that her name be removed from the checking account and that the signature stamp be turned over to her.   Dean refused to turn over the signature stamp to her and he continued to possess it until January 2007.

The plaintiff agreed to have Virginia's name removed from the checking account and, thereafter, contacted the defendant bank and was put in touch with Debra Oaster, about October 2006.   She explained the process for removing Virginia from the account and the documents that were to be provided by Dean Kelley to facilitate the removal of Virginia Worrell as the signator on the account with the defendant.

Dean's contacts with Oaster were by phone and fax since Dean was in New Britain, Connecticut and dealt with the defendants' New Britain branch, while Oaster was located in defendant's branch at Malvern, Virginia.

Dean first contacted Debra Oaster about October 2006 to have Virginia removed as sole trustee on the account in accordance with her oral request.

During this time, Dean continued to use Virginia Worrell's signature stamp on withdrawal checks on the White Flames account.   Virginia kept pressuring Dean about removing her from the trusteeship of the defendant's account and to give her the signature stamp so that no activity would occur in the defendant's account under her name.   Dean refused to give her the stamp and continued to issue checks stamped with her name.

This ended when Virginia emptied the account about the first week of January 2007 and Dean found out that the account was no longer active.

Although Virginia was named as the sole person authorized to issue checks and withdrawals from the White Flame account with the defendant, the account was in fact completely controlled by the plaintiff using Virginia's name stamp.   Virginia was able to close out the account by signing her name even though the plaintiff, Dean, had initiated her removal by giving the requested documents with the defendant's representative, Debra Oaster.   A month or two later, Dean received various documents from Oaster plus oral assurances from her which Dean construed as indicating that Virginia Worrell was removed and he, Dean Kelley, replaced her as the sole authorized person in control of the White Flames Systems Trust account with the defendant bank.

However, a necessary approval by the defendant's legal department was not given for the removal of Virginia and the change of names on the White Flames account within the defendant bank did not occur.   This resulted in the White Flames account continuing to accept withdrawals by checks issued by Dean Kelley with Virginia Worrell's name stamp and permitted the closing of the account by Virginia when she withdrew the full account balance, by signing her name to do so on or about January 8 or 9, 2007.

Thus, although the relationship was mother and son, Virginia Worrell was not involved directly in the White Flames business except as an accommodation party on the defendant's account.   Other transactions between them did not directly involve the son's White Flames business.

However, disagreement and discord arose between them which the mother-son relationship could not bridge and Virginia demanded that she be taken off as the accommodation party on the defendant's account.

Dean then contacted the defendant bank, Debra Oaster and initiated the removal of Virginia from the account.   This was about October or early November 2006 and proceeded until January 8 or 9, 2007 when Dean was informed that Virginia went to the bank inquiring whether her name was still on the account.   She was told there was no change.   She then closed out the account and received the money and used it for her own purposes including settling-off personal accounts with Dean. However, none of these actions by Virginia concerning the White Flames Systems account were with the permission or knowledge of Dean Kelley who was the owner and responsible party of the White Flames Systems business.

Although the plaintiff, Dean Kelley was in the process of removing Virginia from her position as the sole person authorized to make withdrawals from the White Flames Systems account with the defendant bank, in actual practice, Dean Kelley, was the person who carried out these duties through the use of the signature stamp with Virginia Worrell's name that was in his possession.   He continued to use this stamp during this period while the removal process was proceeding at the defendant's bank.   He would periodically be in contact with the defendant's Debra Oaster and knew that his use of the account and use of the Worrell stamp could continue until she was removed by the bank and that he, Dean Kelley, replaced her.

Dean Kelley continued in possession of and used the Virginia Worrell stamp until he was informed on or about January 8 or 9, 2007 that the account was no longer active as it was closed out when Virginia Worrell withdrew all of the money deposited in it.

Virginia Worrell was authorized to withdraw the funds from the White Flames Systems account until her removal was accepted by the bank.   Since that had not occurred, Dean had continued to use the Virginia Worrell signature stamp and knew or should have concluded that Virginia was not removed from her position over the White Flames Systems account and that her personal signature was sufficient to authorize the defendant bank to honor her requests for withdrawals from the White Flames Systems account.   Thus, about January 8, 2007 she went to the bank and withdrew all the money in the account.

Further, although the plaintiff contends that the defendant was derelict in its duties to safeguard the plaintiff's interests by accepting Virginia Worrell's signature as sufficient for withdrawals from the White Flames account when it was aware that proceedings were in progress to remove her from her position as the sole signatory on the account.   Also, that the defendant's employee, Debra Oaster, gave a signature card to the plaintiff, Dean Kelley, which he understood was the completion of the removal of Virginia Worrell from her authorization to issue withdrawals from the account.

However, the defendant's documents requests to Dean Kelley included an Amended Trust Agreement concerning the removal and replacement of Virginia.   This document was not provided to the defendant although the plaintiff contends he turned it over to Debra Oaster.   She testified that a search of the defendant's files did not discover it.   The plaintiff testified he did not have a copy, nor did he present any witnesses or evidence as to the actual existence of such a document except for his testimony in court.

Additionally, Virginia Worrell testified that, although she had numerous times orally asked Dean to remove her as the trustee of the account, she was never shown or asked to sign a document to withdraw her name as the authorized person controlling the White Flames account.

In any case, the defendant did not remove Virginia Worrell from her position controlling the White Flames account because of the failure to provide the Amended Trust Agreement by Dean Kelley.

On or about January 8, 2007, Virginia Worrell not being informed about her status concerning the White Flames account went to the bank and was told there was no change in her status controlling the account, closed out the account and pocketed the money.

Dean Kelley subsequently brought this action against the defendant, Bank of America, for damages resulting to him.

To summarize:

The plaintiff and Virginia Worrell are mother and son, both adults.

The plaintiff, Dean Kelley, operated an unincorporated business called White Flames Systems.   He set up a business checking account with the defendant bank, Bank of America.   He had the bank account set up with his mother, Virginia Worrell, the sole person authorized to make withdrawals from the account.   However, all business, including deposits and withdrawals from the White Flames checking account was carried out by Dean Kelley.   He issued checks using the stamp of his mother's name, i.e., Virginia Worrell.

Dean and his mother, Virginia, lived together in her house.   They had serious disagreements that did not involve the White Flame business and Virginia moved out of the house.   She also demanded that Dean remove her name from the checking account at the defendant's bank.

Dean contacted the defendant's representative, Debra Oaster and was given information as to how to proceed and what documents to provide to the defendant to replace Virginia.

This took place the latter part of October or early November 2006.

Dean and Oaster remained in contact while the paperwork proceeded through the defendant's organization with talks and documents exchanged between them.   These documents included placing Dean as the replacement for Virginia as the person responsible for handling the White Flame's checking account.   Dean contends these documents and Debra's oral conversations with him misled him into believing that the removal of Virginia as the responsible person for withdrawals from the checking account with the defendant bank had occurred.

The defendant argues that the removal of Virginia was not completed because a necessary document, an Amended Trust Agreement, was not provided by Dean Kelley and thus Virginia Worrell was not removed from the control of the White Flames account.

Dean Kelley claims he had given the Amended Trust document to Debra Oaster.

However, Debra does not recall receiving the document.   The files of the defendant did not have the document.   The plaintiff did not present a copy to the court nor did he present any evidence that such a document was ever prepared.

Further, Virginia Worrell testified she never saw such a document and never was asked to sign it.

In addition, during this whole period, Dean had possession of Virginia's name stamp and refused her request to give it to her.   He also continued to use it to issue checks from the White Flames account and did not issue checks in his own name during this period that his application to remove Virginia Worrell from her position of authority to issue checks on the White Flames account was pending.

Furthermore, the defendant determined that Dean Kelley failed to provide adequate documentation for Virginia's removal, specifically an Amended or a new Trust Agreement, and thus did not issue documentation of Virginia Worrell's removal.

The plaintiff, Dean Kelley, was aware of this situation since he continued in possession of Virginia's name stamp and had available for use pre-stamped checks.

The defendant, during this period, continued to process the White Flames Systems checks with Virginia Worrell's stamped signature issued by Kelley.   Dean Kelley did not request that checks with her signature not be honored by the defendant.   In fact, he was the source of those checks being issued.   His complaint, that the defendant was negligent in permitting Virginia Worrell to appear in person at the defendant's bank and close out the account, is inconsistent with his own actions in participating in having the defendant continue to permit Virginia Worrell access to the White Flames Systems account.

Therefore, the court finds that the plaintiff, Dean Kelley, has not proved the allegations of his complaint.

Judgment is to enter for the defendant together with court costs.

Kremski, J.T.R.

Kremski, Julius J., J.T.R.