Tully v. IDS/American Express ( 2003 )


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  •                           UNPUBLISHED
    
    UNITED STATES COURT OF APPEALS
                    FOR THE FOURTH CIRCUIT
    
    
    KAREN L. TULLY,                          
                      Plaintiff-Appellant,
                      v.
    ROD TOLLEY; IDS/AMERICAN EXPRESS
    FINANCIAL ADVISORS, INCORPORATED,
                 Defendants-Appellees,               No. 02-1143
    
                    and
    MAXEY ANN TULLY; ANN P. TULLY;
    TANDY T. SHIELDS,
                        Defendants.
                                             
                Appeal from the United States District Court
         for the Southern District of West Virginia, at Charleston.
                  John T. Copenhaver, Jr., District Judge.
                             (CA-98-1070-2)
    
                           Argued: October 30, 2002
                           Decided: April 18, 2003
    
        Before WILKINSON and GREGORY, Circuit Judges, and
             Frank J. MAGILL, Senior Circuit Judge of the
          United States Court of Appeals for the Eighth Circuit,
                         sitting by designation.
    
    
    Affirmed by unpublished per curiam opinion.
    
    
                                 COUNSEL
    
    ARGUED: Roger Dale Hunter, NEELY & HUNTER, Charleston,
    West Virginia, for Appellant. Mark Stephen Weiler, MILLER, SNY-
    2                            TULLY v. TOLLEY
    DER, WEILER & WALTERS, Charleston, West Virginia, for Appel-
    lees. ON BRIEF: Karen H. Miller, MILLER, SNYDER, WEILER &
    WALTERS, Charleston, West Virginia, for Appellees.
    
    
    
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    
    
                                    OPINION
    
    PER CURIAM:
    
       Plaintiff-Appellant Karen Tully ("Karen") appeals the district
    court’s grant of summary judgment in favor of Defendants-Appellees
    IDS/American Express Financial Advisors, Inc. ("IDS") and Rod Tol-
    ley ("Tolley"), a financial advisor with IDS. The district court found
    no genuine issue of material fact as to whether IDS or Tolley fraudu-
    lently concealed or participated in a civil conspiracy relating to the
    investment accounts at issue.
    
       The district court had diversity jurisdiction pursuant to 28 U.S.C.
    § 1332 (2000), and we exercise jurisdiction over the district court’s
    final order under 28 U.S.C. § 1291. For the following reasons, we
    AFFIRM.
    
                                         I.
    
       This appeal involves three investment accounts: (1) a high-yield
    tax exempt account ("High-Yield Account"), (2) a mutual fund
    ("Mutual Fund"), and (3) an irrevocable trust ("Irrevocable Trust").
    Karen claims that IDS and Tolley deprived her of interests in each of
    these accounts. Specifically, Karen alleges, inter alia, (1) fraudulent
    concealment and civil conspiracy by IDS and Tolley with respect to
    the High-Yield Account, (2) fraudulent concealment by IDS and Tol-
    ley with respect to the Mutual Fund, and (3) breach of fiduciary duty
    and civil conspiracy by IDS and Tolley with respect to the Irrevocable
    Trust.1 The district court granted summary judgment for IDS and Tol-
    ley on September 14, 2000, finding no genuine issues of material fact.
        1
       Karen also brought actions against her mother, Maxey Tully, and two
    of her siblings, as trustees of the Irrevocable Trust. She has since settled
                               TULLY v. TOLLEY                            3
       On February 15, 2001, Karen filed a motion to set aside summary
    judgment, contending that newly discovered evidence contradicted
    key facts relied upon by the court. This evidence came from a sub-
    poena duces tecum against Tolley. Tolley’s deposition was taken after
    the grant of summary judgment for IDS and Tolley because Karen
    was proceeding with claims against her mother, Maxey Tully
    ("Maxey"), and two of her siblings ("Trustees"), as trustees of the
    Irrevocable Trust. The district court denied this motion to set aside
    summary judgment. This appeal follows.
    
                                      II.
    
       We begin with the district court’s grant of summary judgment for
    IDS and Tolley, which we review de novo. See NISH v. Cohen, 
    247 F.3d 197
    , 201 (4th Cir. 2001) (citation omitted). We will address in
    turn the accounts in which Karen claims misconduct by IDS and Tol-
    ley and the relevant facts applicable to each.
    
                           A. High-Yield Account
    
       Karen alleges that IDS and Tolley intentionally withheld informa-
    tion with respect to the High-Yield Account and delayed response to
    her inquiries regarding this account until redemption of the account
    had already occurred, thereby constituting fraudulent concealment
    and civil conspiracy with Maxey. This argument is without merit.
    
       On August 18, 1996, two days after the death of Karen’s father,
    John Tully ("John"), Karen sent Tolley a letter inquiring solely about
    her stake in her father’s investments. By letter dated October 29,
    1996, Tolley responded, providing a list of "accounts . . . in the name
    of Karen T. Wright as sole owner, joint tenant, or as beneficiary." J.A.
    at 444. Tolley’s letter accurately provided that Karen and Maxey were
    joint tenants of the High-Yield Account, valued at $57,472.32 as of
    October 29, 1996. Karen was not originally a joint tenant, but she had
    signed a Change of Ownership Form on January 28, 1995, at Maxey’s
    request, making Karen a joint tenant.
    
    with these parties, and these former defendants are not involved in this
    appeal.
    4                          TULLY v. TOLLEY
       Karen asserts that she was a joint owner with John in the High-
    Yield Account. However, John was not an owner or joint tenant of
    this account. Karen’s signature is evidence of her awareness since
    January 28, 1995, that she and Maxey were joint tenants of the High-
    Yield Account.
    
       To establish fraudulent concealment, Karen must demonstrate that
    IDS or Tolley took some affirmative action intended to prevent, and
    which did prevent, the discovery of the facts giving rise to the fraud
    claim. Kessel v. Leavitt, 
    511 S.E.2d 720
    , 753 (W. Va. 1998) (citation
    omitted). In addition, Karen must establish that IDS or Tolley owed
    her a fiduciary duty or other similar relation of trust and confidence
    that required disclosure. Id. at 752 (citation omitted).
    
       Karen’s claim fails because there is no evidence of an affirmative
    act by IDS and Tolley designed to prevent her from discovering her
    joint ownership of the High-Yield Account. In fact, Tolley’s October
    29, 1996, letter in response to Karen’s request for account information
    provided that Karen was a joint tenant on the High-Yield Account.
    We find no evidence of fraudulent concealment with regard to the
    High-Yield Account.
    
       To establish a civil conspiracy, Karen must prove that IDS and Tol-
    ley concerted with Maxey to either commit a wrongful act or commit
    a lawful act in an unlawful manner to the injury of Karen. Id. at 754
    (citation omitted). Karen’s civil conspiracy claim fails because there
    was no material evidence of any wrongful act or unlawful manner of
    action with regard to the High-Yield Account.
    
       A joint owner of an account may redeem the account in full. W.
    Va. Code § 31A-4.33(b) (2002) (providing that a joint tenant of a
    bank account has the right to withdraw any property from the joint
    account). Therefore, either Karen or Maxey could have redeemed the
    account. Maxey redeemed the account in full in November 1996. This
    redemption was a lawful act, and, as the district court pointed out,
    Karen presented no evidence that the act was performed in an unlaw-
    ful manner. Therefore, there can be no civil conspiracy.
    
       Karen failed to establish any evidence of fraudulent concealment
    or civil conspiracy by IDS and Tolley with respect to the High-Yield
                                 TULLY v. TOLLEY                               5
    Account, and therefore, we find that the district court properly granted
    summary judgment for IDS and Tolley as to this account.
    
                                B. Mutual Fund
    
       Karen claims that IDS and Tolley fraudulently concealed her joint
    tenancy in the Mutual Fund, thereby depriving her of her interests.
    Karen alleges that she was a joint owner with John in the Mutual
    Fund, as evidenced by a statement of accounts she claims to have
    seen at her parents’ home in July 1996 and her contemporaneous
    notes regarding this statement. This claim is without merit.
    
       The record reveals that Karen was listed only as a beneficiary, not
    a joint tenant, on the initial account application. However, on April
    13, 1994, more than two years before his death, John made a change
    of beneficiary, naming Maxey as the primary beneficiary and Karen
    as a contingent beneficiary. In Tolley’s letters in response to Karen’s
    request for information about John’s accounts, Tolley accurately
    reported that Karen was not a joint tenant of the Mutual Fund on
    August 16, 1996, the date of John’s death.
    
       As Karen has presented no evidence to create a genuine issue of
    material fact as to whether she was a joint tenant at the time of her
    father’s death,2 there is no evidence of fraudulent concealment by IDS
    or Tolley with respect to the Mutual Fund. Therefore, we find that the
    district court properly granted summary judgment for IDS and Tolley
    as to this account.
    
      2
       As the district court pointed out, even if Karen set forth sufficient evi-
    dence to establish a genuine issue of material fact with respect to her pre-
    vious ownership rights in the Mutual Fund, this issue is not material to
    the resolution of the motion for summary judgment, as it is undisputable
    that Karen was a contingent beneficiary, not a joint tenant, at the time of
    John’s death and at the time of her communications with IDS and Tolley
    regarding this account. See Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 248 (1986) (holding that only disputes over facts that might affect
    the outcome of the suit should be considered material).
    6                          TULLY v. TOLLEY
                            C. Irrevocable Trust
    
       Karen makes two arguments with respect to the Irrevocable Trust.
    First, she claims that IDS and Tolley fraudulently concealed from her
    the existence of the Irrevocable Trust and Maxey’s life insurance pol-
    icy that was the sole asset of this trust because she requested informa-
    tion on all of John’s accounts in which she had an interest. This
    argument is without merit.
    
       After John’s death, Karen requested that IDS and Tolley provide
    information regarding the accounts "Daddy set up . . . with you for
    me and my family." J.A. at 26. However, the Irrevocable Trust was
    set up by Maxey. Karen did not request information regarding her
    mother’s accounts. The district court correctly found that Tolley had
    no reason to believe Karen sought information regarding Maxey’s
    accounts. Therefore, there is no evidence of an affirmative act
    designed to prevent Karen’s discovery of the insurance policy or the
    Irrevocable Trust.
    
       Second, Karen claims that IDS and Tolley owed her a duty, as ben-
    eficiary of the insurance policy, to inform her of its existence. This
    argument too is without merit.
    
       Tolley sold the life insurance policy to Maxey, and this policy was
    written and administered by IDS. Neither IDS nor Tolley set up the
    Trust; Tolley testified that the Trust was set up by Maxey and her
    legal counsel. Further, neither IDS nor Tolley was a Trustee; Karen’s
    sisters were the Trustees.
    
       An insurer owes a fiduciary duty to the insured. Weese v. Nation-
    wide Ins. Co., 
    879 F.2d 115
    , 119 (4th Cir. 1989). Therefore, IDS and
    Tolley, as insurers, owed a fiduciary to Maxey, the insured. In addi-
    tion, a trustee owes a fiduciary duty to beneficiaries to provide, upon
    request, "complete and accurate information as to the nature and
    amount of the trust property." Faircloth v. Lundy Packing Co., 
    91 F.3d 648
    , 656 (4th Cir. 1996) (citation omitted). Therefore, Karen’s
    siblings, as Trustees, owed a duty to Karen, as a beneficiary, to pro-
    vide information about the trust property upon request. However, nei-
    ther IDS nor Tolley, as insurers, owed a duty to Karen, as beneficiary.
                               TULLY v. TOLLEY                             7
       Because IDS and Tolley did not fraudulently conceal the existence
    of the life insurance policy or the Irrevocable Trust, and because they
    owed Karen no duty to inform her of the existence of either, the dis-
    trict court properly granted summary judgment for IDS and Tolley
    with regard to the Irrevocable Trust.
    
                                      III.
    
       Karen filed a motion to set aside summary judgment approximately
    six months after summary judgment was entered for IDS and Tolley,
    citing Federal Rules of Civil Procedure 59 and 60(b). However, these
    rules apply only to final judgments. See Fed. R. Civ. P. 59, 60(b)
    (2003). Because the district court did not expressly provide for the
    entry of judgment for IDS and Tolley with the grant of summary
    judgment, the order was not final. Therefore, the district court prop-
    erly found that Rule 54(b), not Rules 59 or 60(b), provided the author-
    ity for it to review the motion to set aside summary judgment. See
    Fed. R. Civ. P. 54(b). The district court subsequently denied the
    motion to set aside summary judgment. We review a district court’s
    decision under Rule 54(b) for abuse of discretion. Braswell Ship-
    yards, Inc. v. Beazer East, Inc., 
    2 F.3d 1331
    , 1336 (4th Cir. 1993)
    (citations omitted).
    
       Karen argues that the district court abused its discretion in denying
    the motion to set aside summary judgment because IDS and Tolley
    withheld evidence that was material to the court’s determination of
    the motion for summary judgment. These allegations are based on
    twenty-nine documents Tolley brought to his deposition, per a sub-
    poena duces tecum.
    
       After thoroughly reviewing these documents, we agree with the
    district court that all of the new evidence (1) was cumulative to the
    materials disclosed by IDS and Tolley in their production of docu-
    ments or (2) could have been discovered with due diligence and
    proper discovery requests. In addition, we agree with the district
    court’s holding that Karen failed to show that her failure to obtain this
    evidence was the result of any affirmative misconduct or concealment
    by IDS and Tolley. Accordingly, we find no abuse of discretion.
    8                        TULLY v. TOLLEY
                                   IV.
    
        For the aforementioned reasons, we AFFIRM.
    
                                                     AFFIRMED