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Bank of America Liable for Failure to Honor Power of Attorney

By Gregory Herman-Giddens

In a recent Florida case, Bank of America was held liable for refusing to honor a power of attorney:

Copyright 2009 Stuart News Company All Rights Reserved The Stuart News/Port

St. Lucie News (Stuart, Florida) November 15, 2009 Sunday Martin County

Edition SECTION: LOCAL; Pg. B5 LENGTH: 496 words HEADLINE: Stuart man

takeson Bank of America BYLINE: Melissa E. Holsman staff writer BODY:

STUART

-- When Clarence H. Smith Jr. sued Bank of America in 2007 over its

refusal to honor the power of attorney his now-deceased father had enacted years

before, he called it as a case of David against Goliath. And like

David, Smith on Friday walked out of court a winner, armed with a jury award

worth $64,142. "I'm glad we won, but I think it's a victory for more than

just us," said Smith, 67, of Stuart. "It's a victory for anyone who gets a

rough deal from a big bank -- that a little person can prevail against a huge

international bank." After a week-long trial, it took a one-man,

five-women jury 15 minutes to determine Bank of America had not acted

reasonable in September 2007 when it denied Smith Jr.'s request to

transfer $65,000 his father, Clarence H. Smith Sr, then held in a joint account

with a female friend he knew from living at Ocean Palms Retirement Center.

Smith said his ordeal with the bank began when he became suspicious

money may be missing from his father's bank accounts. He presented to

former Stuart branch manager Victoria Carscadden the durable power of attorney

he'd had on behalf of his father with a request to transfer money from the

elder Smith's jointly held accounts into a new account only the father and son

could access. But instead of honoring the request, Carscadden

testified that she consulted bank policies and called the woman on the account

with Clarence Smith Sr., and she accused the son of trying to steal his

father's money. Carscadden said she refused Smith's request because bank

rules governing jointly held accounts require that all signatures on an

account must agree to any transfers or changes. The woman sharing Clarence

Smith Sr.'s account, she said, had refused to allow any money to be moved.

At trial, Smith's Stuart attorney William R. Ponsoldt Jr. showed that

despite Carscadden visiting Clarence Smith Sr. to see he was competent and that

he wanted his son to manage his affairs, she still refused to recognize

Clarence Smith Jr.'s power of attorney. Shortly afterward, Ponsoldt told

jurors, the woman sharing Clarence Smith Sr.'s account moved all the

money into an account only she could access. Clarence Smith Sr. died about

three weeks later, Ponsoldt said. He argued that the bank's refusal to =

honor Smith's power of attorney went against state law. During his closing

argument, Bank of America attorney J. Randolph Liebler of Miami, said

based on bank policies, "it would be absolutely inappropriate to have honored

the power of attorney where there was some allegation of abuse -- rightly or

wrongly." After court, Bank of America spokeswoman Shirley Norton

said they were disappointed in the jury's verdict. "We believe that

neither the facts nor the law support the verdict," she said, "and we plan to

appeal." Smith meanwhile, said he'll use the money to pay bills from

his father's estate. "I feel fortunate we were able to take on Bank of

America," he said. "Think of all the people who can't."

Thanks to Brevard attorney Nicola Melby for bringing this to my attention.  North Carolina also has laws to help with enforcement of a valid power of attorney.  N.C.GS. Section 32A-40 et sq.

Full post as published by North Carolina Estate Planning Blog on November 23, 2009 (boomark / email).