Grizzly Security Armored Express, Inc. v. Bancard Services, Inc.
385 Mont. 307
| Mont. | 2016Background
- Grizzly Security operated ATMs and contracted with Bancard under a Processing Service and Maintenance Agreement (PSMA); Bancard could delegate processing to third parties.
- Grizzly signed ACH authorizations with First Interstate; Bancard later switched processing to Columbus Data Services (CDS) in 2008, requiring data transfer.
- A transposition error during the transfer misidentified Grizzly’s St. Mary’s ATM as belonging to Ruzicka, causing about $285,520 to be deposited into Ruzicka’s account between 2008–2009; Bancard recovered ~$250,000 in 2010 but $35,520 remained unpaid.
- Grizzly sued Bancard and Ruzicka in 2013 for breach, fraud, negligence, negligent/intentional misrepresentation, and unjust enrichment; Bancard and Ruzicka moved for summary judgment.
- The District Court granted summary judgment for Ruzicka (statute of limitations) and for Bancard on all claims; it awarded Bancard attorney’s fees under the PSMA; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Unjust enrichment against Ruzicka (statute of limitations) | Claim tolled by equitable doctrine (relationship of trust) or discovery; otherwise timely | Claim accrued by latest erroneous deposit (Sept 2009); 3‑year limitation expired | Dismissed: claim time‑barred; no trust/confidence relationship to toll limitations |
| 2. Breach of PSMA / contractual duty by Bancard | PSMA and conduct (employee verification) created an implied duty to ensure proper transition and recover funds | PSMA disclaims liability (§17); Bancard had discretion to change processors and no written duty to monitor or guarantee recovery; First Interstate/CDS agreements placed recovery responsibility on processors/Grizzly | Summary judgment for Bancard: no contractual duty that contradicts written PSMA; §17 precludes imposing such liability |
| 3. Oral modification (promise to recover/pay remaining funds) | Oral promise/collection conduct created an enforceable modification | §28‑2‑1602 requires executed oral agreement (fully performed by both); obligations here not fully performed | Summary judgment for Bancard: alleged oral agreement unexecuted under statute, so written PSMA controls |
| 4. Fraud / constructive fraud / misrepresentation / breach of implied covenant / negligence | Bancard concealed cessation of recovery, acted in bad faith, misrepresented it would recover funds, and owed a general duty to complete recovery | No actionable misrepresentation or causation; no duty to guarantee recovery; constructive fraud requires a duty or special circumstances and a benefit gained; implied covenant cannot create an obligation contradicting PSMA | Summary judgment for Bancard on all tort and covenant claims: plaintiff failed to show required elements (duty, reliance, causation, damages); no special circumstances for constructive fraud; no deprivation of a contract benefit |
Key Cases Cited
- Pilgeram v. GreenPoint Mortg. Funding, Inc., 373 Mont. 1, 313 P.3d 839 (Mont. 2013) (standard of review for summary judgment)
- Christian v. Atl. Richfield Co., 380 Mont. 495, 358 P.3d 131 (Mont. 2015) (statute of limitations accrual rule)
- N. Cheyenne Tribe v. Roman Catholic Church, 368 Mont. 330, 296 P.3d 450 (Mont. 2013) (relationship of trust and confidence can toll limitations in narrow circumstances)
- Morrow v. Bank of America, N.A., 375 Mont. 38, 324 P.3d 1167 (Mont. 2014) (standards for negligent misrepresentation and constructive fraud; duty analysis)
- Mattingly v. First Bank of Lincoln, 285 Mont. 209, 947 P.2d 66 (Mont. 1997) (constructive fraud and duties created by misleading conduct)