144 N.H. 308 | N.H. | 1999
The plaintiff, Ethel M. Ahrendt, appeals rulings of the Superior Court (Lynn, J.) granting summary judgment on one count and directed verdicts on the two remaining counts in favor of the defendant, Granite Bank. We affirm.
In July 1992, the plaintiff was eighty years old. One of her accounts with the defendant, which then operated as Peterborough Savings Bank, was a money market account. Through a series of withdrawals, the account balance fell from more than $52,000 to less than $200 in under five weeks. Four transactions, accounting for $50,500 of the withdrawals, were carried out by four handwritten
The first payment of $11,500 was made on July 29, 1992. On that day, the plaintiff telephoned Jessica Cheney, a bank employee, to ascertain the balance in her account. For security purposes, Cheney first asked the plaintiff to state her social security number and then reported the balance. The plaintiff asked Cheney to repeat the balance to a man she identified as George Ward. The plaintiff stated that she could not find her checkbook but wished to withdraw money from her account to pay Ward. Cheney explained that the bank would honor a written authorization signed by the plaintiff. Ward later presented Cheney a written authorization signed by the plaintiff. Cheney verified the plaintiff’s signature, asked Ward for identification, and made out a bank check payable to Ward. Before she processed the check, Cheney called the plaintiff to confirm her desire to make the transaction. The plaintiff confirmed that she wanted to pay Ward $11,500 from her account. Although Cheney felt “uncomfortable,” especially when the plaintiff asked her to repeat the balance to Ward, the plaintiff “sounded clear” each time Cheney spoke with her.
Similar scenarios followed. On July 31, August 3, and August 5, the plaintiff asked the bank to pay Ward $11,000, $14,000, and $14,000, respectively. Each time the plaintiff called the bank, and Ward presented the bank with a written authorization signed by the plaintiff. For all but the July 31 transaction, the plaintiff’s signature was verified, and the plaintiff was called to confirm her desire to make the transaction. After the account was overdrawn on August 13, a bank employee called the plaintiff to request that she cover the overdraft, and the plaintiff’s family discovered that Ward had cheated the plaintiff. Following a police investigation, Ward was prosecuted and convicted.
The plaintiff thereafter brought suit, alleging that by honoring the signed written authorizations, the defendant: (1) breached the duty it owed the plaintiff that arose from a fiduciary or confidential relationship; (2) breached its duty of care to the plaintiff; and (3) breached its contract with the plaintiff. The trial court granted the defendant’s motion for summary judgment on the fiduciary duty claim. At the close of the defendant’s case, the trial court granted the defendant’s motion for directed verdicts, ruling that as a matter of law, the defendant owed no “duty to [the plaintiff] that could be the basis for imposing liability.”
On appeal, the plaintiff first argues that the court erred in granting summary judgment on her claim that the bank violated a
As a general rule, the relationship between a bank and a customer is not a fiduciary one unless the law otherwise specifies. See Lash v. Cheshire County Savings Bank, 124 N.H. 435, 439, 474 A.2d 980, 982 (1984). The relationship between a bank and its depositor is a debtor-creditor relationship. See Pappalardo v. Bank of Boston, 133 N.H. 855, 859, 587 A.2d 251, 253 (1991). As such, the relationship between an ordinary depositor and the bank is contractual in nature. See Heath v. Savings Bank, 46 N.H. 78, 79 (1865).
A fiduciary relationship, however, can arise under certain facts if equity so requires. See Lash, 124 N.H. at 439, 474 A.2d at 982; 9 C.J.S. Banks and Banking § 248(b) (1996). We have found, for example, such a relationship between a mortgagee and a mortgagor in a foreclosure sale. See Murphy v. Financial Development Corp., 126 N.H. 536, 541, 495 A.2d 1245, 1249 (1985). That a fiduciary relationship exists between a bank and its customer/depositor in certain cases, however, does not mean that a fiduciary relationship always exists. See Lash, 124 N.H. at 439, 474 A.2d at 982.
Here, the plaintiff argues that the bank owed her a fiduciary duty as a matter of law. The plaintiff relies on cases, however, that are premised upon a savings bank’s obligation to invest depositors’ funds prudently because the bank’s investments inure wholly to the benefit of its depositors. See Appeal of Concerned Corporator of Portsmouth Sav. Bk., 129 N.H. 183, 203-06, 525 A.2d 671, 685-87 (1987) (plurality opinion); cf. Peterborough Savings Bank v. King, 103 N.H. 206, 208, 168 A.2d 116, 117 (1961). The plaintiff does not suggest that the bank’s payment of her signed written authorizations related in any way to investments made by the bank for its depositors’ benefit. Further, the plaintiff does not allege that the bank specifically contracted with her to act as a fiduciary.
The plaintiff also argues that even if a bank does not always owe a customer a fiduciary duty, under the facts of this case, such a duty arose. According to the plaintiff, a fiduciary relationship arose because of the personal relationship between the plaintiff and the bank which justified the plaintiff in believing that the bank would
We next review the directed verdicts granted on the two remaining counts. “A motion for directed verdict may be granted only if the trial court determines, after considering the evidence and construing all inferences therefrom most favorably to the non-moving party, that no rational juror could conclude that the non-moving party is entitled to any relief.” Goodwin v. James, 134 N.H. 579, 582, 595 A.2d 504, 506 (1991).
The plaintiff argues that the bank failed to follow its own rules limiting the manner in which withdrawals may be made, and that from the evidence of the bank’s failure to follow such rules and “sound, customary banking practice,” the jury could have found that the bank breached an implied covenant of good faith and fair dealing. Upon opening the account, the plaintiff agreed that withdrawals would conform with both the bank’s by-laws as well as the specific rules that applied to the money market account. The bank’s by-laws specifically permit withdrawals by ‘“written instrument,” although withdrawals by written instrument other than by check are not specifically addressed. The bank’s by-laws further state that “[t]he manner of withdrawal for any type of account shall be more specifically governed by the regulations of the Corporation and the agreement of deposit applicable to that type of account.”
The bank’s regulations of withdrawals from money market accounts, state that “[y]ou may make an unlimited number of withdrawals from this Account in person, through the mail or at our Automatic Teller Machines (ATMs).” The plaintiff contends that the bank violated this regulation by permitting withdrawals from the money market account by the written authorizations, thereby breaching an implied covenant of good faith and fair dealing.
We have recognized an implied covenant of good faith performance where a contract “by word or silence . . . invest[s] one party with a degree of discretion in performance sufficient to deprive
The parties do not dispute that they intended to enter into an enforceable contract. Assuming, without deciding, that the agreement granted the bank unfettered discretion, we conclude that no rational juror could have found that the bank’s exercise of discretion exceeded the limits of reasonableness. In analyzing whether the bank exceeded the limits of reasonableness in allowing the withdrawals by written instructions, we look to the purpose of the agreement “against which the reasonableness of the complaining party’s expectations may be measured, and in furtherance of which community standards of honesty, decency and reasonableness can be applied.” Id.
The regulation allowing for unlimited withdrawals from a money market account neither forbids withdrawals by written instruction nor states that withdrawals can only be made in person, through the mail, or at ATMs. The regulation only describes which types of withdrawals may be made on an unlimited basis and does not negate the by-laws’ allowance of withdrawals by written instrument.
In accepting written instructions from the plaintiff, the bank reasonably exercised its discretion. The purpose of the contract between the plaintiff and the bank was for the bank to hold her funds and to return them or to pay them upon her request. When Ward presented written instructions to pay him certain amounts of money, the bank contacted the plaintiff to verify the instructions, which she did. We decline to hold that after taking such measures, good faith required the bank to deny the plaintiff’s requests simply because the requests under the facts of this case did not appear to be wise. Therefore, we conclude that no rational juror could have found that the bank breached an implied duty of good faith in its exercise of discretion.
The plaintiff further contends that the bank assumed a duty because after Cheney became suspicious, she called the plaintiff to confirm that the plaintiff wanted the transaction to occur. According to the plaintiff, once the bank undertook this investigation, it had a duty to exercise reasonable care in carrying it out. The plaintiff argues a reasonable investigation means that the bank was required to insist that she personally appear before a bank representative to acknowledge the voluntary nature of the transaction. We hold as a matter of law that the bank did not undertake a duty to protect the plaintiff by merely inquiring whether she wanted to make the transaction. The fact that the bank employee did not believe under the facts of this case that the depositor’s actions were wise did not impose a duty on the bank to try and stop the depositor by making the process more difficult or lengthy. Cf. Robinson v. Colebrook Savings Bank, 109 N.H. 382, 385-86, 254 A.2d 837, 839-40 (1969).
Affirmed.