Friday, January 22, 2016

Wagner v. State of Maryland (Ct. of Appeals)

Filed:  December 17, 2015

Opinion by Watts, J.

Holding:  A party to a joint or multiple-party account may commit theft from that account.

Facts:  As of 2005, Father owned an IRA containing nearly $200,000 and a bank account containing a few thousand dollars.  Father added Daughter to the bank account after his wife died.  Between 2005 and 2009, $181,670 was transferred from the IRA to the bank account.  During that same time, $251,645 was taken from the bank account via withdrawals and wire transfers to Daughter’s accounts.  Father did not authorize such withdrawals and transfers. 

The trial court made the following additional factual findings:  (1) Daughter was added to the account to allow her to access the funds in the account if something happened to Father; (2) Daughter understood that the money in the account belonged to Father; and (3) Daughter withdrew funds from the account and used them for her own purposes. 

Section 1-204(f) of the Fin. Inst. Article provides: “unless the account agreement expressly provides otherwise, the funds in a multiple-party account may be withdrawn by any party or by a convenience person for any party or parties, whether or not any other party to the account is incapacitated or deceased.” 

Analysis:  Daughter argued that a person cannot be guilty of theft from a joint or multiple-party bank account if the person is a party to the bank account, because such person is an owner of the funds in the account.  The State argued that Daughter withdrew funds from the account without Father’s authorization and used them for her benefit.  The State asserted that FI §1-204(f) does not confer ownership of an account but instead provides authorization to withdraw funds from an account absent some other agreement between the bank and the parties to the account. 

The Court stated that having the ability to withdraw funds pursuant to FI §1-204(f) does not create an interest in or give ownership of the property to a party to the account.  While there is a rebuttable presumption of equal ownership of funds among parties to a multiple party account (see our summary of Morgan Stanley & Co. Inc. v. Andrews), the Court held that the evidence adduced at trial rebutted that presumption because the funds in the account were Father’s funds, Daughter was added for the sole purpose of accessing the funds if necessary and Daughter agreed to the arrangement.  A signature card that identifies Daughter as a “joint owner” is not dispositive of an ownership interest in the account.  The Court found nothing in FI §1-204(f) to prevent a conviction of theft and found the evidence sufficient to demonstrate the Daughter committed theft.

The Court also found the evidence supported a conviction for embezzlement (fraudulent misappropriation by fiduciary), which merged with the conviction for theft.  Because Father and Daughter knew the funds in the account were Father’s and Daughter was permitted to access funds in the account at Father’s direction and on his behalf, a fiduciary relationship “implying and necessitating great confidence and trust on the one part and a high degree of good faith on the other part” was created.  The Court noted that simply being a party to a joint or multiple-party account does not necessarily make that party a fiduciary.

The full opinion is available in PDF.