                                        In The

                                 Court of Appeals
                     Ninth District of Texas at Beaumont
                              _________________
                                NO. 09-12-00113-CV
                              _________________

            CAREN J. COFFEY, INDEPENDENT EXECUTRIX OF THE
                    ESTATE OF ELTON BOVEY, Appellant

                                          V.

                          BANK OF AMERICA, Appellee

________________________________________________________________________

                On Appeal from the County Court at Law No. 2
                        Montgomery County, Texas
                      Trial Cause No. 11-02-01592-CV
________________________________________________________________________

                            MEMORANDUM OPINION

      Appellant, Caren J. Coffey, Independent Executrix of the Estate of Elton Bovey,

appeals the trial court‟s final summary judgment in favor of appellee, Bank of America.

In two issues, Coffey challenges the summary judgment. We affirm the trial court‟s

judgment.

                                 I. BACKGROUND

      Elton Bovey married Edna Gayle Bovey and moved to Texas in the summer of

2007. In August 2007, Elton opened two deposit accounts at Bank of America. He signed

                                          1
the Bank‟s personal signature card forms to open a checking account and a money market

account. Both signature cards expressly incorporate Bank of America‟s Deposit

Agreement and Disclosures. Both signature cards designate Edna as the payable on death

(“POD”) beneficiary for each respective account. While Elton was still alive, 73 of the 75

contested checks in this case were drawn against his accounts. During this time, Bank of

America regularly provided statements of the accounts to Elton‟s address of record.

There is no evidence that Elton ever notified Bank of America that it had paid a check

without his authorization.

       Elton died on June 19, 2008. The day after his death, Edna signed new signature

cards for each account and wrote a check from one of the accounts, signing the check,

“Edna G. Bovey P.O.A. Elton Bovey.” On August 5, 2008, she wrote a second check

from one of the accounts and signed it, “Edna Gayle Bovey.” On September 30, 2008,

Edna was appointed Independent Executrix of Elton‟s estate pursuant to a will signed by

Elton in May 2008. Elton was survived by Edna, his widow; his two adult children, Caren

Coffey and Ron Bovey; and his two adult stepchildren, Patricia Cellar and Larry Allred.

       Coffey, Allred, and Cellar contested the issuance of Letters Testamentary to Edna

and contested the validity of the will submitted to probate. During the will contest,

Coffey, as an heir and person interested in Elton‟s estate, subpoenaed bank records

relating to Elton‟s accounts with Bank of America. In December 2008, Bank of America

responded to the subpoena and produced records to Coffey, including copies of all the

checks underlying Coffey‟s claims in this case. Coffey testified that she received copies

                                            2
of the account records in December 2008, and that she personally reviewed the records

by May 29, 2009. Coffey testified that Elton was found to have been incompetent for

purposes of executing the May 2008 will. Ultimately, Coffey replaced Edna as executor

of Elton‟s Estate. She was qualified as executor on July 19, 2010.

       Coffey filed suit against Bank of America Corporation on July 28, 2010, on behalf

of Elton‟s estate. She ultimately non-suited Bank of America Corporation and filed an

amended petition against Bank of America, N.A. on September 1, 2010. Coffey alleged

that in the period before Elton‟s death, the bank wrongfully paid items drawn on the

account because they were not signed by the account holder, Elton. She sought payment

for all items charged to Elton‟s account that were not signed by Elton or otherwise not

properly payable under section 4.402 of the Texas Business and Commerce Code. Bank

of America answered the suit and served written discovery requests. Coffey responded to

the requests on October 5, 2010, and identified by number, date, and amount, the

individual transactions allegedly paid without Elton‟s authorization.

       Bank of America filed a motion for summary judgment asserting that Coffey‟s

claims were “statutorily and contractually [precluded] as a matter of settled law on

application of Texas UCC § 4.406(f)‟s one-year condition precedent as contractually

shortened in the Deposit Agreement‟s 60-day notice period.” Bank of America claimed

that Elton and Coffey failed to timely discover and report any alleged unauthorized

checks and debit to Bank of America, thereby precluding any claims. The trial court

granted summary judgment in favor of Bank of America. This appeal followed.

                                             3
                              II. STANDARD OF REVIEW

       In a traditional motion for summary judgment, the movant has the burden to show

that there are no genuine issues of material fact, and that it is entitled to judgment as a

matter of law. Tex. R. Civ. P. 166a(c). “We review the evidence presented in the motion

and response in the light most favorable to the party against whom the summary

judgment was rendered, crediting evidence favorable to that party if reasonable jurors

could, and disregarding contrary evidence unless reasonable jurors could not.” Mann

Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We

resolve every doubt in favor of the non-movant and we take all evidence favorable to the

non-movant as true. Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99

(Tex. 2004).

       When a defendant moves for summary judgment, it must either disprove at least

one essential element of the plaintiff‟s cause of action, or plead and conclusively

establish each essential element of its affirmative defense. Cathey v. Booth, 900 S.W.2d

339, 341 (Tex. 1995). If the defendant produces sufficient evidence to establish its right

to summary judgment, then the burden shifts to the plaintiff to come forward with

competent controverting evidence raising a genuine issue of material fact. Centeq Realty,

Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). “Because the trial court‟s order does

not specify the grounds for its summary judgment, we must affirm the summary

judgment if any of the theories presented to the trial court and preserved for appellate

review are meritorious.” Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211,

                                            4
216 (Tex. 2003); see also Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex.

1996).

                      III. GROUNDS FOR SUMMARY JUDGMENT

         In its motion for summary judgment, the Bank asserted that the Texas Uniform

Commercial Code (the U.C.C.) precluded Coffey from asserting her claims in this case

because she failed to provide timely and adequate notice to the Bank regarding the

unauthorized transactions. Section 4.406(f) of the U.C.C. states in part,

         Without regard to care or lack of care of either the customer or the bank, a
         customer who does not within one year after the statement or items are
         made available to the customer…discover and report the customer‟s
         unauthorized signature on or any alteration on the item is precluded from
         asserting against the bank the unauthorized signature or alteration. . . .

Tex. Bus. & Com. Code Ann. § 4.406(f) (West 2002).1 “[T]he purpose of section 4.406

is to place the burden on those best able to detect unauthorized transactions so that further

unauthorized transactions can be prevented[.]” Am. Airlines Emps. Fed. Credit Union v.

Martin, 29 S.W.3d 86, 94 (Tex. 2000) (footnote omitted). The Texas Supreme Court has

determined that this burden should be on the customer because the customer is most

familiar with the underlying transaction. Id.

A. The Bank‟s Obligation

         A customer‟s burden to detect and report an unauthorized signature or altercation

is triggered only after the bank has provided its customer with sufficient information for


         1
      Title 1 of the Texas Business and Commerce Code may be cited as the Uniform
Commercial Code. Tex. Bus. & Com. Code Ann. § 1.101(a) (West 2009).
                                                5
the customer to detect the unauthorized transaction. Id. Section 4.406 explains how the

Bank meets this obligation to give the customer sufficient information:

      A bank that sends or makes available to a customer a statement of account
      showing payment of items for the account shall either return or make
      available to the customer the items paid or provide information in the
      statement of account sufficient to allow the customer reasonably to identify
      the items paid. The statement of account provides sufficient information if
      the item is described by item number, amount, and date of payment. . . .

Tex. Bus. & Com. Code Ann. § 4.406(a).

      In this case, summary judgment evidence established that it is the Bank‟s regular

practice to mail monthly statements of account to its account holders. Copies of monthly

statements for the accounts at issue in this case, dating from August 24, 2007 to August

21, 2008, were made a part of the summary judgment record before the trial court. 2 These

statements of account identify each debit by date, amount, and item number. The

statements reflect that the Bank mailed the statements to Elton‟s address, as indicated on

his signature card. The statements further reflect that the Bank mailed the statements to

Edna, as the POD beneficiary, after Elton‟s death. We conclude these statements and the

regular provision of same would have provided Elton, and later Edna, sufficient

information to detect any alleged unauthorized transaction that may have occurred within

that time frame. See Am. Airlines Emps., 29 S.W.3d at 94; see also Tex. Bus. & Com.

Code Ann. § 4.406(a). Since the Bank provided uncontroverted summary judgment



      2
       Coffey complains of numerous check transactions drawn on the account between
August 28, 2007 and August 5, 2008, and one-debit transaction conducted in June 2008.
                                            6
evidence that it sent and made available monthly account statements to Elton, and then to

his POD, Edna, we conclude that Elton and subsequently Edna had a duty to discover and

report unauthorized transactions to the Bank in a timely fashion.

B. The Customer‟s Duty

       After the Bank has given its customer sufficient information to discover any

unauthorized transactions, the customer has a duty to promptly examine his bank

statement and report to the bank the discovery of any unauthorized signature or alteration.

La Sara Grain Co. v. First Nat’l Bank of Mercedes, 673 S.W.2d 558, 561-62 (Tex. 1984)

(citing Tex. Bus. & Com. Code Ann. §4.406(a)). The customer generally has one year to

discover and report any unauthorized transactions to the bank. Tex. Bus. & Com. Code

Ann. § 4.406(f). If the customer fails to timely discover and notify the bank, then the

customer is precluded from asserting any claims against the bank for the unauthorized

signature or alteration. Id.

       Coffey argues that she timely notified the Bank of the unauthorized items. She

contends that the one-year repose period to contest the items started running July 19,

2010, the day she was vested with authority to act as executor of Elton‟s estate. In

support of her argument, Coffey relies on Jefferson State Bank v. Lenk, 323 S.W.3d 146

(Tex. 2010). In Jefferson State Bank, the transactions at issue occurred after the death of

the customer, and the transactions were not included on any statement of account sent to

the customer. Id. at 147-48. A man, pretending to be the administrator of the estate of the

deceased customer, presented the bank with fraudulent letters of administration. Id. at

                                            7
148. The bank believed the letters valid and gave the purported administrator access to

the account, thereby also allowing a number of unauthorized transactions to occur. Id.

The account holder died in March 2000 and during the time that the fraud occurred, no

estate administration was pending. Id. In September 2003, an executor was appointed. At

the time of the appointment, the executor had been made aware of the fraud on the estate.

Id. The bank, presumably unaware of the executor‟s appointment, did not inform the

executor about the account or send statements to the executor, but the bank did retain

statements at its office for the estate representative. Id. It was unclear when the executor

learned of the account at the bank, but she knew of the account by February 2004 at the

latest. Id. at 148 n.4. The Court concluded that because the executor was appointed in

2003, but did not demand payment from the bank until June 2005, the executor‟s claims

were precluded pursuant to section 4.406 as the bank made the statements available by

retaining them for the estate representative. Id. at 149-50. The Court explained,

       [w]hen a bank is aware of a customer‟s death, it has no means of satisfying
       its section 4.406 burden other than by retaining the statements. Yet a bank
       should not be allowed to satisfy its burden until there is an appointed
       representative. Otherwise, the repose period could run without the
       opportunity for a customer to review the statements and discover the fraud.

Id. at 149. The Court held that in the context of a deceased customer, a bank satisfies its

burden to send or make available to a customer a statement of account by retaining the

account statement for retrieval by the estate administrator; however the burden to report

the unauthorized signatures does not arise until an estate representative is appointed. Id.

at 149-50

                                             8
       Unlike Jefferson State Bank, in this case, all but two of the transactions at issue

occurred before Elton‟s death, and all the contested transactions were included on

statements of account that were sent to Elton, and then to his POD beneficiary, Edna,

without interruption. As the POD beneficiary, the accounts passed to Edna on Elton‟s

death, not to the estate. The day after Elton‟s death, Edna signed new signature cards for

the accounts. The Bank then sent the next monthly account addressed to “Elton Bovey

POD/POA Edna Gayle Bovey.”

       The Bank contends that in this case the repose period was contractually shortened

from one-year to 60 days. Therefore, even if the repose period did not begin to run until

Coffey was appointed executor of Elton‟s estate, that period had expired by the time

Coffey notified the Bank of the unauthorized transactions. Section 4.103(a) allows parties

to vary the effect of Article 4‟s provisions by agreement, provided, however, that the

agreement “cannot disclaim a bank‟s responsibility for its lack of good faith or failure to

exercise ordinary care or limit the measure of damages for the lack or failure.” Tex. Bus.

& Com. Code Ann. § 4.103(a) (West 2002). This section gives parties the power

essentially to alter all provisions of the Article by agreement. See id. at cmt. 2.

       When Elton opened his accounts at the Bank, he signed the Bank‟s personal

signature cards for the accounts, which reflect Elton‟s express agreement that his

accounts would be governed by the terms and conditions set forth in the Deposit

Agreement and Disclosures. The Deposit Agreement provided in part:



                                               9
      Protecting Your Account

             Your role is extremely important in the prevention of wrongful use
      of your account. If you find that your records and ours disagree or if you
      suspect any problem or unauthorized activity on your account (such as a
      missing deposit or a forged or altered check or other withdrawal order), call
      us immediately at the number for Customer Service on your statement. If
      you fail to notify us in a timely manner, your rights may be limited. We
      may require written confirmation of your claim, including an affidavit
      signed by you on a form acceptable to us.

             ….

      Examining Statements and Reporting Problems

             This section applies to any problem or unauthorized transaction on
      your account, except electronic transactions….

             You agree to promptly and carefully review your account statement
      and any accompanying items. You must report problems or unauthorized
      transactions to us immediately, by calling the number for Customer Service
      on your statement. We may require written confirmation of your claim,
      including an affidavit signed by you on a form acceptable to us. Problems
      or unauthorized transactions include: suspected fraud; missing deposits,
      unauthorized electronic transfers; missing, stolen, or unauthorized checks
      or other withdrawal orders; checks or other withdrawal orders bearing an
      unauthorized signature, endorsement or alteration; illegible images;
      encoding errors made by you or us; and counterfeit checks. You agree that
      60 days after we send a statement and items (or otherwise make them
      available) is the maximum reasonable amount of time for you to review
      your statement or items and report any problem or unauthorized transaction
      related to a matter shown on the statement or items. In addition, if you do
      not notify us in writing of suspected problems or unauthorized transactions
      within 60 days after we send your statement or items, or otherwise make
      them available, you agree that you cannot make a claim against us relating
      to the unreported problems or unauthorized transactions, regardless of the
      care or lack of care we may have exercised in handling your account.

Coffey argues that the deposit agreement does not apply because it does not contemplate

a deceased customer. Coffey states that the word “you” in the Deposit Agreement could

                                           10
have been defined expressly to include “executors, administrators, heirs, assignees,

agents, attorneys, etc.” Coffey argues that the Bank‟s definition of “you” limits the

application of the Deposit Agreement solely to the account holder, and therefore is

inapplicable when an executor brings suit on behalf of the deceased account holder‟s

estate.

          The Deposit Agreement provides that “the words „you,‟ „your‟ and „yours‟ refer to

each account owner.” The Deposit Agreement further describes a “„Payable on Death‟”

account in detail. It states, “You may designate an account to be payable on your death

to a designated payable on death („POD‟) . . . payee or payees. Regardless of how it is

designated, an account which is payable on your death . . . to one or more named payees

is a POD . . . account.” The Deposit Agreement further provides that on the death of the

account owner, “any sums remaining on deposit belong to the then-surviving (if any)

payee(s), subject to [the Bank‟s] right to charge the account for any amount the deceased

owner . . . owes us.” Elton designated Edna as the POD beneficiary of both accounts.

Thus, the Deposit Agreement clearly contemplates Elton‟s death, and Elton contractually

designated Edna as the beneficiary of the accounts upon his death.

          Coffey further argues that 60 days is unreasonable when applied to an executor.

However, courts have found shortened time periods enforceable. See Am. Airlines, 29

S.W.3d at 97 (noting that other jurisdictions have enforced shortened notice periods from

14-60 days); Schiro v. Tex. Cmty. Bank, N.A., 68 S.W.3d 55, 57-58 (Tex. App.—Dallas

2001, no pet.) (affirming summary judgment for bank when account holder failed to give

                                             11
timely notice under section 4.406 or the deposit agreement that shortened the time period

to 60-days). In this case, there is no contention that Elton did not sign the Deposit

Agreement, nor is there a contention that he was incompetent at the time he signed the

agreement. Coffey admits that she had received and reviewed Elton‟s bank records by

May 29, 2009. We conclude the parties contractually agreed to shorten the one-year term

prescribed by section 4.406 to 60 days by the terms of the Deposit Agreement. Coffey

qualified as representative of Elton‟s estate on July 19, 2010, and filed suit on September

1, 2010. It is undisputed that Coffey did not provide the Bank any notice prior to filing

the lawsuit.

       However, though Coffey filed suit within 60-days of her qualification, we

conclude the filing of her lawsuit was inadequate to provide notice to the Bank. Coffey

contends that there is a distinction between reporting a specific “item” as required by

section 4.406(f) and reporting a “problem” under the Deposit Agreement. She argues that

under the terms of the Deposit Agreement it is sufficient for the account owner “to report

„suspected problems or unauthorized transactions‟ within sixty (60) days.” Coffey argues

that the Bank “received written notification of „suspected problems‟ when [the Bank] was

served with a lawsuit . . . .”

       The Deposit Agreement specifically provides:

       Problems or unauthorized transactions include: suspected fraud; missing
       deposits; unauthorized electronic transfers; missing, stolen, or unauthorized
       checks or other withdrawal orders; checks or other withdrawal orders



                                            12
       bearing an unauthorized signature, endorsement or alteration; illegible
       images; encoding errors made by you or us; and counterfeit checks.

(Emphasis added). The Deposit Agreement further requires that customers report

problems or unauthorized transactions by calling the customer service number on the

account statement. Coffey did not allege, nor does the record indicate that Coffey

properly reported the unauthorized transactions to the Banks‟ customer service

department. Coffey contends, “[a] lawsuit is the quintessential example of written

notification that „suspected problems‟ exist.” Coffey‟s petition states, “In the period

leading up to his death, instruments drawn upon [Elton‟s] account(s) with Bank of

America, but that were not signed by [Elton], were charged against [Elton‟s] account(s).”

The petition did not identify anything specific about the transactions in issue. There is no

identification of specific checks, no specific dates, no specific amounts. However, Coffey

contends this was sufficient to notify the Bank of “suspected problems,” as required by

the Deposit Agreement. The Bank argues that Coffey‟s general reference in the pleading

is inadequate and fails to specifically identify the checks at issue. We agree. In her

petition, Coffey failed to inform the Bank of the specific items she questioned. We

conclude her general reference in her pleading was inadequate. Coffey also contends that

she timely notified the Bank of the contested matters in detail on October 5, 2010, when

she responded to the Bank‟s written discovery requests. However, this would have fallen

outside the shortened 60-day time period that the parties agreed to in the Deposit

Agreement. We hold that the summary judgment evidence leaves no issues of material


                                            13
fact as to whether Coffey‟s petition was sufficient to give the Bank notice. See Schiro, 68

S.W.3d at 58 (concluding notice was inadequate “even though the Bank may have been

aware of the possibility of other unauthorized checks” when Schiro “did not provide

notice of his unauthorized signature on the specific items in question.”); see also Hatcher

Cleaning Co. v. Comerica Bank—Tex., 995 S.W.2d 933, 938 (Tex. App.—Fort Worth

1999, no pet.) (concluding the legislature intended the customer notify the bank of “the

specific item, or in this case, check, on which the authorized signature appears.”). After

having found that Coffey did not timely or adequately notify Bank of America of the

unauthorized transactions according to the terms in the Deposit Agreement, we affirm the

summary judgment.

       AFFIRMED.


                                                        ___________________________
                                                              CHARLES KREGER
                                                                    Justice

Submitted on October 25, 2012
Opinion Delivered January 24, 2013

Before McKeithen, C.J., Gaultney and Kreger, JJ.




                                            14
