APPEAL from a judgment of the Superior Court of Butte County, Barbara L. Roberts, Judge. Reversed and remanded with directions. (Super. Ct. No. 136196).
The opinion of the court was delivered by: Scotland, P. J.
CERTIFIED FOR PUBLICATION
This appeal concerns the interpretation and application of the California Multiple-Party Accounts Law (CAMPAL). (Prob. Code, § 5100 et. seq.)
In 1996, plaintiff, Dennis Stevens, and his wife, Jackie, opened a joint bank account with defendant, Tri Counties Bank.*fn1 At some point, Jackie's sister, Nancy Wrinkle, was added to the account and withdrew all the money.
Dennis, who sued the bank for breach of contract, appeals from the judgment entered in Tri Counties' favor. He contends the trial court erred in concluding that Tri Counties did not violate Probate Code section 5303 when it added Wrinkle to the joint bank account without Dennis's and Jackie's written approval, and further concluding that, in any event, the provisions of Probate Code section 5303 do not apply to this controversy because of Probate Code 5201. (Further section references are to the Probate Code unless otherwise specified.)
We shall reverse the judgment. As we will explain, the joint bank account contract with Tri Counties incorporated California law relating to such agreements, except to the extent that the contract explicitly varies from California law. Such a law is Probate Code section 5303, which contains specific limitations on how the terms of a multiple-party account can be changed, for example by adding another person to the account. The contract in this case does not provide a method that varies from the provisions of section 5303. The trial court incorrectly held that the contract is not governed by section 5303 due to section 5201, which states the provisions of the statutory scheme commencing with section 5301, "concerning beneficial ownership as between parties . . . of multiple-party accounts, are relevant only to controversies between these persons and their creditors and other successors, and have no bearing on the power of withdrawal of these persons as determined by the terms of account contracts. [¶] . . . The provisions of Chapter 4 (commencing with Section 5401) govern the liability of financial institutions who make payments pursuant to that chapter." However, section 5201 simply absolves financial institutions of any liability for paying to a party of a multiple-party account a sum from the account that is more than that person's beneficial ownership in the account funds, i.e., the proportion of that person's contribution to the account, provided that the person to whom the institution pays the money is a proper party to the account. Whether a person is a proper party to the account is governed by section 5303, unless the terms of the account vary from the provisions of section 5303. Section 5201 does not deprive account holders of recourse against financial institutions that permit a party to withdraw funds from a multiple-party account when the person is not a proper party to the account pursuant to section 5303 and the account contract. Because the way in which Tri Counties added Wrinkle to the account in this case did not conform to the requirements of section 5303 incorporated in the account contract, Tri Counties can be liable for breaching the contract when it allowed Wrinkle to withdraw all of the money in the account.
The parties' agreed statement of facts discloses the following:
On July 30, 1996, Dennis and Jackie both signed a multi-party signature card for a joint account at Tri Counties, which covered two pre-existing deposit accounts. The account title is "Stevens, Dennis C or Jackie A." Another signature card, containing only Wrinkle's signature, bears the same date, lists just one of the deposit accounts noted on the other signature card, and titles the account, "STEVENS, Dennis C or Jackie A or Wrinkle, Nancy D."
Other evidence disclosed that Wrinkle was not added to the account in 1996, as indicated by the signature card she signed, but at some later date. Wrinkle testified she was certain that she, Jackie, and Dennis went to Tri Counties directly from Jackie's doctor's office when Jackie was diagnosed with cancer in July 1997. According to Wrinkle, she was added to the joint account at that time because she helped care for Jackie's developmentally disabled adult daughter, and because Wrinkle became almost a live-in maid and caregiver for Jackie while Jackie was undergoing chemotherapy.
Dennis disputed the extent of Wrinkle's involvement as a caregiver, and he testified that he never authorized her addition to any deposit account and never discussed doing so with Jackie. Dennis denied that the three of them went to the bank together to add Wrinkle to the account.
Monica Canchola, Tri Counties Bank's vice-president, testified that in September 1997, the bank stopped using the signature card format used by Dennis, Jackie, and Wrinkle. If Dennis and Jackie had added Wrinkle to the account after September 1997, the bank would have required all three of them to sign one signature card.
Dennis and Jackie separated in May 2001, but agreed that Jackie would continue to use their joint account for her expenses and that Dennis would continue to deposit funds into the account. All of the bank statements were sent to Jackie's address.
In early 2004, Dennis and Jackie sold a rental property they owned jointly and deposited approximately $80,000 in sales proceeds into their joint account. According to Wrinkle, while Jackie was in the hospital in Oregon, she asked Wrinkle to withdraw all the money from the bank account and pay $30,000 to Jackie's "significant other," Richard, for money she owed him for their joint purchase of a fifth wheel trailer and other living expenses. Wrinkle also asserted that Jackie instructed her to pay some other miscellaneous expenses and to keep the remaining funds. Wrinkle returned to California and followed Jackie's instructions. The withdrawals occurred on or after August 18, 2004.
On September 20, 2004, Jackie died from cancer. Dennis was the executor and sole beneficiary of her will. Within 30 days of her death, he went to the bank to check on the available balance in the account to pay Jackie's debts. There, he discovered that Wrinkle had closed the account after withdrawing over $50,000. Dennis complained to Tri Counties ...