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Szyller v. Capital One, N.A.

United States District Court, E.D. Louisiana

October 11, 2018


         SECTION: “J” (4)



         Before the Court are a Motion for Summary Judgment (Rec. Doc. 32) filed by Defendant, Capital One, N.A.; a Motion for Summary Judgment (Rec. Doc. 33) filed by Plaintiff, Bobette R. Szyller; and a Motion to Strike Jury (Rec. Doc. 35) filed by Capital One. Parties have briefed each of the Motions extensively. Having considered the Motion and legal memoranda, the record, and the applicable law, the Court finds that Defendant's Motion for Summary Judgment should be GRANTED and the remaining Motions should be DENIED.


         Plaintiff in this case is Bobette Szyller, widow to decedent Leon Szyller. She alleges that Defendant is liable for its failure to make payments to her from several accounts upon the death of her husband. Mr. and Mrs. Szyller were married for 30 years before Mr. Szyller died on April 27, 2017, at the age of 88. (Rec. Doc. 1-2 at 1). Before his death Mr. Szyller opened up several accounts with Capital One. Three accounts maintained at Capital One (collectively the “Accounts”), named as follows, are relevant here:

1. Bobette R Szyller OR Leon A Szyller OR Anna S Arshad, Account Number 6607 (“Account 6607”).
2. Leon A Szyller OR Anna S Arshad POD Bobette Szyller, Account Number ending in 6812 (“Account 6812”)
3. Leon A Szyller POD Bobette Szyller, Account Number ending in 9983 (“Account 9983”)

(Rec. Doc. 32-2 at 2). Mr. Szyller established Account 6607 in 1999. According to a new account information card dated November 14, 2014 (Rec. Doc. 33-10), Anna Arshad-Mr. Szyller's daughter from a previous marriage-became a signatory and co-owner of the account on that date. The card, unsigned by Mrs. Szyller, designates her as “POD BOBETTE SZYLLER.” The card further states:


(Rec. Doc. 33-10). The referenced Rules Governing Deposit Accounts[1] (the “Rules”) (Rec. Doc. 35-4 at 66-75) clarify that “POD” means “Payable on Death.” According to the Rules, an individual designated as a Payable On Death or POD beneficiary is entitled to the to the account balance upon death of the owner of the account. (Rec. Doc. 35-4 at 71). “[O]r if there are co-owners, upon the death of the last co-owner.” (Rec. Doc. 35-4 at 71). The Rules make clear that the POD beneficiary has no interest in the account until each of the co-owners of the account have died. Up until death, an owner may freely withdraw from the account, add co-owners, close the account, and add or remove POD designations. The Rules also clarify that applicable state law governs these types of accounts and that the account owner is “solely responsible for meeting the requirements for establishing [the] account as a POD, including any titling requirements.” (Rec. Doc. 35-4 at 71).

         When Mr. Szyler died Capital One refused to pass the proceeds left in Account 6607-$68, 969.42-to Mrs. Szyller on the ground that there was a living account owner, Ms. Arshad, and because the bank had not received an affidavit required by state law. (Rec. Doc. 33-1 at 4). POD accounts are specifically authorized by Louisiana Revised Statute § 6:314. However, for an account to constitute a “trust deposit, ”- Louisiana's nomenclature for a POD account-the law requires the “depositor [to] give to the depository bank an affidavit in authentic form or an act under private signature executed in the presence of an officer or a branch manager of the depository bank and two additional persons, stating the names of one or more beneficiaries.” La. Stat. Ann. § 6:314. Capital One claims it never received this authentic form affidavit (“POD affidavit”) from Mr. Szyller, and so it was unable to disburse the funds to Mrs. Szyller.

         Mr. Szyller opened Account 6812 in 2012. A new account information card for Account 6812 dated November 14, 2014 (Rec. Doc. 33-8) also designates Mrs. Szyller as “POD BOBETTE SZYLLER” and Ms. Arshad as co-owner.[2] When Mr. Szyller died, the bank refused to deliver the proceeds left in the account-$195, 426.22-to Mrs. Szyller, again on the grounds that an owner of the account was still alive and because the Defendant had not received the POD affidavit. (Rec. Doc. 33-1 at 3).

         Mr. Szyller established Account 9983 around January of 2015. (Rec. Doc. 33-1 at 4). This account differs from the others in that the effective new account information card lists Mr. Szyller as the only owner and Mrs. Szyller as the POD beneficiary. (Rec. Doc. 33-11). Nevertheless, upon Mr. Szyller's death, Capital One also refused to grant Mrs. Szyller access to the funds in this account-$14, 249.87- on the sole ground that the bank had not received a POD affidavit from Mr. Szyller.

         After Mr. Szyller's death, both the executor of Mr. Szyller's estate and Mr. Szyller's adult children-the primary beneficiaries of Decedent's will-alleged that Mrs. Szyller was not entitled to the funds because they properly belonged to the estate. (Rec. Doc. 33-1 at 5). Mrs. Szyller settled with the estate and the legatees for $100, 000 of the total $278, 645.51 left by Mr. Szyller in the Accounts. Mrs. Szyller then filed the instant lawsuit in state court to recover $178, 645.51 from Capital One.[3](Rec. Doc. 33-1 at 5). With the settlement, this is the amount she would have received if Capital One had delivered the funds to her following Mr. Szyller's passing. (Rec. Doc. 33-1 at 5). Plaintiff claims Defendant was negligent in helping Mr. Szyller to form the POD Accounts, negligent in training its employees and that Capital One negligently misrepresented the Accounts as POD accounts to Plaintiff and Mr. Szyller, and that Capital One breached its contract with Mr. Szyller. (Rec. Doc. 1-2). Defendant then removed the proceeding to federal court and filed its Motion for Summary Judgment. Plaintiff then filed her own Motion for Summary Judgment. Defendant then filed its Motion to Strike Jury Demand.


         Defendant first argues that Plaintiff cannot assert claims against Defendant for adding Ms. Arshad as a co-owner to the accounts because Plaintiff had no interest in the accounts before Mr. Szyller's death. Second, Defendant relies on Louisiana Revised Statute 6:314 and the Rules adopted by reference by all signatories to the new account information cards. Together, Defendant argues, the Rules and state law firmly establish it was Mr. Szyller's responsibility to provide Capital One with a POD affidavit in authentic form to render the Accounts' POD designations effective. Therefore, according to Defendant, Plaintiff's claims relating to POD designated accounts must be dismissed. Third, Defendant argues it owed no duty to Mr. Szyller to instruct him as to the effect of his adding his daughter to the account or to what effect the POD designation had. Finally, Defendant argues it did not have a fiduciary relationship with Mr. Szyller. Thus, Plaintiff's negligent misrepresentations must therefore be dismissed.

         Plaintiff counters that banks do owe a duty to third-party beneficiaries under Louisiana law. Plaintiff relies almost exclusively on a single case, In re Succession of McKnight, 768 So.2d 794 (La.App. 2 Cir. 10/4/2000), in which a Louisiana appellate court recognized a bank had assumed a duty to its customer because the bank's signature card “purported to provide the rules applicable to a joint-tenant account, with a right of survivorship.” Plaintiff argues that the Rules, which are incorporated by the new account information cards by reference, describe the function of a POD account as one which pays the designated beneficiary upon death of the owner. Moreover, Plaintiff argues that Defendant breached its duty to the Szyllers in four different ways:

(1) by misrepresentation about the proper establishment of the POD designations, (2) by failing to follow its own procedures and appropriate banking practice in the creation of the POD designations, (3) by failing to properly train its bankers on the creation and maintenance of the POD accounts, and (4) by failing to follow its own policy and reasonable banking practices when ...

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