Charles Schwab & Co., Inc. v. Marilley

Summary

The North Carolina Business Court grants Lauren Marilley’s motion for summary judgment, concluding that she solely owns the restrained brokerage-account assets originally funded through an irrevocable Uniform Transfers to Minors Act gift. The court denies Peter Marilley’s motion for leave to amend as futile and untimely. It grants Charles Schwab’s motion for interpleader in part to resolve ownership of the assets but denies discharge concerning potential responsibility for matters subject to arbitration.

Holdings

1. Admissions deemed admitted under North Carolina Rule of Civil Procedure 36 have the same conclusive effect as other admissions and may support summary judgment, including when they concern mixed questions of law and fact or ultimate issues.
2. Statute-of-limitations and laches defenses are affirmative defenses that must generally be pleaded under Rule 8(c); Peter waived them by failing to plead them in his responsive pleading. Independently, neither defense barred Lauren's declaratory-judgment claim because the claim concerned continuing adverse claims to ownership of personal property and the undisputed facts did not establish laches.
3. The restrained assets belonged solely to Lauren Marilley. UTMA custodial property is irrevocably and indefeasibly vested in the minor beneficiary, and a minor beneficiary who has not reached the statutory UTMA age of majority cannot convey ownership of the custodial funds to the custodian or another person.
4. Leave to amend was properly denied because the proposed statute-of-limitations and laches defenses and unjust-enrichment crossclaim were futile, and the motion was filed too late.
5. Interpleader was appropriate because Schwab faced competing claims to the restrained assets. After determining that Lauren owned the assets, the court ordered Schwab to remove the restrictions and disburse the assets to Lauren, discharged Schwab from liability concerning ownership, and dismissed Schwab from the action. The court denied relief insofar as Schwab sought a ruling that it bore no responsibility for the circumstances leading to the transfer.

Questions Presented

1. Whether Lauren Marilley was entitled to summary judgment declaring that she was the sole owner of the restrained assets.
2. Whether Peter Marilley's unpleaded statute-of-limitations and laches defenses were waived and, in any event, barred the declaratory-judgment claim.
3. Whether Lauren's signature on the purported conversion of the UTMA account could convey an ownership interest in the custodial funds to Peter before she reached the UTMA age of majority.
4. Whether Peter should be granted leave to amend his answer to add statute-of-limitations and laches defenses and an unjust-enrichment crossclaim.
5. Whether Schwab was entitled to interpleader, discharge from liability concerning ownership of the restrained assets, and dismissal.

Disposition

other