Murphy v. T. Rowe Price Prime Reserve Fund, Inc.

Robert Brownlee, now deceased, held a check closing out his mutual fund account for three years. Now the question is, who is entitled to the interest accrued on the funds evidenced by the uncashed check? The district court granted summary judgment for the defendants (hereinafter “Price”). We affirm in part and reverse and remand in part.

I

Brownlee’s financial consultant requested that Price close out Brownlee’s account at Price. Price transferred the funds evidencing the redemption proceeds of Brownlee’s mutual fund account into a checking account at a bank. Under an agreement between Price and the bank, Price was not paid interest on the checking account balance. Rather, the bank reduced the service charges that Price would normally have to pay on the account. (Murphy’s claim, then, technically concerns the right to imputed interest.)

Price mailed a check for $407,051.04, the liquidated value of the mutual fund account, directly to Brownlee, who did not open the envelope for three years. By that time, the check was stale. Price reissued the check to Brownlee. Brownlee’s financial consultant demanded that accrued interest be paid, which demand was denied. Brownlee then…