MAY 10, 2004 VOLUME 11, NUMBER 45
Carmen DiCesare, age 82, may have been a little confused when he visited the local branch of Prudential Savings Bank in south Philadelphia that day in August, 2000. By the time he left the bank he had made major changes in his estate plan, and the bank’s branch manager and assistant branch manager had benefited from Mr. DiCesare’s situation.
What Mr. DiCesare apparently wanted to accomplish was to arrange for direct deposit of his Social Security checks into a passbook savings account at Prudential. Frances Mazzei, the branch manager, told him that he would need to have his original passbook with him to set up the direct deposit account, and he told her that he had lost the book. She then helped him to open a new account, and to transfer his existing Prudential account balances.
One of the documents Mr. DiCesare signed that day was a note prepared by Ms. Mazzei that said “I want to put the account in trust to Frances Mazzei and Lucia Sqiieri.” Ms. Squitieri (the note misspelled her name) was the assistant branch manager. The two women even called bank President Thomas Vento to check on whether the account titling was permissible; Mr. Vento did not advise them not to set up the account. The two women then held on to Mr. DiCesare’s passbook, giving him only a copy.
The “in trust for” language, of course, meant that the two women would receive Mr. DiCesare’s account upon his death. They assisted him in transferring almost $250,000 into the new account, and then moved $430,000 from another bank into the account. The balance was then $680,454.63, with another $709 deposited each month by Social Security.
When Mr. DiCesare did die ten months later Ms. Mazzei and Ms. Squitieri removed and spent the account balance. Mr. DiCesare’s estate then brought suit against Ms. Mazzei, Ms. Squitieri and Prudential Savings Bank itself.
After recovering $156,000 from Ms. Mazzei and Ms. Squitieri, the estate obtained a judgment against them and the bank for the remaining balance. Prudential and the two women appealed.
The Pennsylvania Superior Court upheld the judgment against all three defendants. The court quickly determined that Mr. DiCesare was vulnerable, and that Ms. Mazzei and Ms. Squitieri had developed a relationship of trust with him that made them liable for the loss.
As for the bank’s liability, the court ruled that Mr. DiCesare’s estate did not have to show that Prudential had violated any law or regulation. The fact that senior management knew what the two branch officers were doing, and did nothing to stop their actions or even inquire, was enough to make Prudential liable for the entire $563,767.40 judgment. Owens v. Mazzei, April 7, 2004.
