Saint Bernard School of Montville, Inc. v. Bank of America, 312 Conn. 811

Background

Saint Bernard School (plaintiff) banked at the Montville branch of Bank of America’s predecessors since 1985; it maintained certificates of authority and signature cards for authorized signatories.
An employee, Salvatore Licitra, who was not an authorized signer, had access to school checks and, from 2002–2006, directed deposits of $823,776.96 into a bank account opened in his name (the "Camp Sunshine" account) and withdrew nearly all funds.
Montville branch employees opened the Camp Sunshine account using the plaintiff’s tax ID and the school’s name, failed to obtain certificates or proper signature cards, and mailed statements to Licitra; branch management knew Licitra was not authorized but nevertheless approved large cash withdrawals.
The plaintiff discovered the scheme in 2006 and sued Bank of America on five counts: breach of contract; UCC violations (art. 3 and art. 4); negligence; and common-law conversion.
At trial the court excluded the bank’s deposit account agreements as unenforceable; the jury found for the plaintiff on all counts and awarded roughly $823,777. The jury also found tolling (continuous course of conduct and special relationship) and 5% plaintiff contributory negligence.
On appeal the bank challenged (1) exclusion of the deposit account agreements, (2) sufficiency of contract proof, (3) jury findings on tolling/statute of limitations, and (4) denial of remittitur; the Supreme Court affirmed in part, reversed in part, and ordered a modest reduction in damages ($5,156.42) and proportionate prejudgment interest.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether excluding the bank’s deposit account agreements was improper	Bank agreements are void or unenforceable; exclusion did not harm plaintiff	Exclusion was legally wrong and deprived the jury of contract terms and notice defenses	Review of merits denied for inadequate briefing on harmfulness; claim not considered on merits
Whether plaintiff proved existence of a contract with the bank	Plaintiff relied on certificates of authority, signature cards, long-standing banking relationship to show a depositor–bank contract	Bank argued certificates lacked essential terms and therefore no enforceable contract	Sufficient evidence supported the jury’s finding that a contract existed
Whether the statute of limitations for UCC claims was tolled by continuous course of conduct or a special relationship	Plaintiff argued bank’s conduct (branch manager’s actions, concealment) tolled limitations via continuing duty/special relationship	Bank argued each wrongful deposit/payment was a discrete UCC violation with its own limitations period; no tolling evidence	Jury findings on tolling unsupported as to UCC counts; tolling requires a continuing duty or later related wrongful conduct, absent here; damages reduced by $5,156.42 (time-barred items)
Whether remittitur was required (insurance offset; prejudgment interest start date)	Plaintiff: insurance proceeds are collateral and do not reduce defendant’s liability; interest calculated per-check from each deposit date	Bank sought reduction for $100,000 insurance recovery and challenged interest accrual date	Remittitur denied; collateral source rule applies (no reduction for insurance); prejudgment interest award proper (interest computed per check); only reduction ordered tied to statute-of-limitations ruling

Key Cases Cited

Hanks v. Powder Ridge Restaurant Corp., 276 Conn. 314 (Conn. 2005) (public-policy factors for invalidating exculpatory clauses)
Wiseman v. Armstrong, 295 Conn. 94 (Conn. 2010) (harmful-error requirement for post-trial relief)
Santopietro v. New Haven, 239 Conn. 207 (Conn. 1996) (plenary review and harmless-error analysis)
Leonetti v. MacDermid, Inc., 310 Conn. 195 (Conn. 2013) (burden on defendant asserting contract terms as defense)
Bednarz v. Eye Physicians of Central Connecticut, P.C., 287 Conn. 158 (Conn. 2008) (elements for tolling via continuing duty or related later wrongful conduct)
Sherwood v. Danbury Hospital, 252 Conn. 193 (Conn. 2000) (continuing-course doctrine discussion)
Frigon v. Enfield Savings & Loan Assn., 195 Conn. 82 (Conn. 1985) (no special fiduciary duty merely from bank–customer relationship)
Martinelli v. Fusi, 290 Conn. 347 (Conn. 2009) (continuous course of conduct tolling framework)
Chase v. Waterbury Savings Bank, 77 Conn. 295 (Conn. 1904) (bank–depositor contract principles)