Indiana National Bank v. Chapman

plied statutory mandate to cause necessary papers, documents and tran scripts to be filed. The responsibility for

preparation filing of the necessary pa

pers with the circuit court then fell city judge. judgment of the trial court is re-

versed and cause remanded for pro- further

ceedings opinion. consistent with this (sitting

SULLIVAN and MILLER by des- JJ., concurs.

ignation),

The INDIANA BANK, NATIONAL (Defendant

Appellant Below), CHAPMAN,

William Earl Appellee (Plaintiff Below).

No. 4-683A191.

Court of Appeals Indiana,

Fourth District.

Sept. 1985.

Rehearing Denied Oct. meaning they because were not an individual statute who has been sentenced to some judgment. incarcerated Reading after the period sub- regard incarceration without (c) section entirety of the statute in its it is stayed whether incarceration has been apparent "prisoner" the term is used to filing recognizance describe of a bond. Wicker, Valer,

Robert J. Van Wicker & Williams, Greenwood, appellant. Knowles, Raymond Faust,

William W. L. Knowles, Carmel, Baker Orbison Bales & Brenton, Brenton, Thomas G. Brenton & Danville, appellee. MILLER, Presiding Judge.

The Indiana National Bank is before us appealing the trial court's denial of -its mo- tion for a directed verdict which resulted in jury verdict favor of William Earl Chapman. complained of deed oc- when a loan officer with the Bank curred August 6, 1977, On wanted to car, sell the placed so he a "for sign sale" pertaining Chap- released information in the window automobile loan account to a state of the car and left it man's on the parking shopping lot of a conducting center near policeman who was an arson day, home. The next Sunday, Chapman investigation involving Chapman's car. subsequently charged gone. discovered the car was He called the County Marion Department Sheriff's arson; however, to re- degree charges fourth the port Monday the theft. On Chapman Chapman were later dismissed. then filed called his insurance carrier report to the alleging this action four alternative theo- (1) loss. recovery: privacy, ries of invasion of slander, (8) contract, breach of and Chapman then left town for a week and (4) negligence. jury Chap- The found upon his return was by Sergeant contacted theories, on awarding man's favor all him Police, Kenneth York of the State who $39,750.00 $50,000 damages pu- actual and advised him the car had been recovered and damages. carefully examining After nitive took his statement. York had in- become reviewing and evidence law with volved with Chapman's the case after car respect liability releasing to a bank's for had been found in a burned-out condition police conducting information to an investi- by an Indiana conservation officer. York gation, we find the trial court erred in not felt the crime did not fit normal vehicle granting the bank's motion for directed pattern theft and that the attempt arson

verdict and reverse. might be "an job." insurance 15, 1977, August On learning after that there, car was financed York FACTS telephoned the Indiana National Bank. He judg- The facts most to the favorable spoke people with two in the automobile ment are as follows: department, loan Greg Mr. Lambert and 16, 1974, Chapman On October William Austin. York identified himself as a State entered into an installment loan note and Police and Officer stated that he was seek- security agreement with the Indiana Na- ing to learn the Chap- financial condition of provided tional Bank which for a 1973 Mer- possible man's account as a motive in the cury security agree- as for the loan. This In response ques- arson case. to York's provided payments ment per for of $199.67 tions, men, Austin, probably one of the told commencing month on November designated York that the account had been day and on the 15th of each month there- repossession Chapman but that had after for 35 months. payment August made a keep 1977 to being repossessed. it from Austin told Chapman very early testified that in the York, however, payments that were still period loan payment was "by lost July August due for 1977 and Thus, somebody." bank or he made what important York testified that it was himto though he payment. was a current Chapman just payment had made a Bank claimed he awas month behind. keep being repossessed the car from and Chapman representative, and the Bank particular day, August on that another Austin, Greg argued quite a bit about the payment was due. York felt fi- loan. Chapman stated that Austin would condition, along nancial with the other evi- him every call month to tell him he was had, he enough go dence to making over a month payment, late prosecutor screening probable for a but that Austin did not want to see his cause of arson. payment stamped book which was for each payment Finally, Chapman received. Chapman subsequently charged told that, degree fourth arson. At trial Robert Pur- Austin if get he wanted to come and car, fine, it was would due of the Bank testified as to the status of see him in witness, court. Chapman's account. Another Bob $39,750.00 Buis, Chap- damages punitive actual representative from a claim company, testified damages $50,000.00, man's insurance indicating on the report, damages he verdict form that the were Chapman had filed a loss based while point At this in on all four theories.1 never filed a claim. had Gantz, prosecutor, Charles the trial DECISION against of the case moved for dismissal that uh certain Chapman "for the reason A directed verdict favor of which the state was proper only defendant when there is [sic] absence of evidence or reasonable inferenc uh true and accurate believed be [sic] reason and for this we has not materialized plaintiff upon es favor of the the issue in justice and is in the interest of question. feel that it Large Gregory Ind. discharged, play that this matter be App., Here, fair jury 417 N.E.2d 1160. dismissed." returned a verdict for based on Therefore, liability. all four theories of we According Sergeant York's recollec- must address the trial court's denial of the tion, for dismissal was: the reason bank's motion for directed verdict with re 15th, 1978, reading "Okay, March the on spect theory. to each here, my report during Chap- Mr. from trial, Mr. Perdue of Indiana man's [sic] Privacy I. Invasion of with the account National Bank armed Optical In Continental Co. v. Reed gave entirely different view of history an 643, 306, Ind.App. 86 N.E.2d the stand, stating the account on the witness right privacy the twenty- more court defined of as: that it had never been than days past consulting appropriation three due. After "'The unwarranted or ex- attorney prosecutor, the defense ploitation personality, publi- of one's the myself, prosecutor and we decided the cizing private of one's affairs with which prejudice for would move dismissal with concern, public legitimate the has no charge." the wrongful private intrusion into one's activities, outrage in such manner as to prosecutor Charles Gantz was the shame, suffering, or cause mental or hu- against Chapman. arson Mr. case Gantz's ordinay person miliation to a of sensibili- of the reason for the dismissal recollection ~ charge Chapman's of criminal was that cer- ty.” LLE. pertaining Chap- tain information to Mr. Id. 86 N.E.2d at 308. See also 27 loan, man's car as it came out on the wit- Torts 8§ stand,

ness was not as the state had be; aspect legitimate public con of expectation lieved it to be. The as what particularly important to the case at cern is be, testimony the Bank's would Gantz re- enforcement ef bar which involves law called, through arose conversations be- surrounding the Bank's forts. The facts tween York and the Bank. Gantz further Chapman's communication of the status of change testimony stated the in the Bank's dispute. are not At loan account destroyed "completely the state's case." communication, Sergeant York time of the action, conducting despite In officer this civil motions for was state investigation in which against Chap directed verdicts all four of arson suspect. identified to the theory, jury man's returned a verdict of York himself jury following 1. The returned the verdict form: DATED: March 1983" for the Plaintiff and "We, find "We, Jury, Jury, plaintiff find for the and against the defendant and assess actual dam- against following the defendant on the theo- $39,750.00. ages in the amount of ries of law: DATED: March 1983" CHECK AS APPROPRIATE the Plaintiff and "We, find Implied "X" 1. Breach of Contract Jury, punitive against and assess the defendant Privacy "X" 2. Invasion of $50,000.00. damages in the amount Negligence "X" 3. March 1983" DATED: "X" 4. Slander questions sought loan officer. and asked without a search warrant. Cox Bank's suppress the bank documents under the the status of automobile about in re The Bank's answers were loan. fourth amendment as the fruits of an il legitimate law enforcement in sponse to a court, legal citing search. The U.S. v. Mil legitimate pub quiry and thus a matter of ler, supra, legitimate held that there is no expectation privacy in such records dispute lic concern. does not consequently protec no fourth amendment point. a communication is not an Such Cox, tion. 392 N.E.2d at 497. Op privacy invasion of under Continental tical. subject Further comment on a related by was offered our court in In re legitimate inquiry decision that Our Order Telephone Bell etc. by law enforcement offi into Bank records 274 Ind. 409 N.E.2d 1089 which private right give cials does not rise to a long involved distance collect calls made is buttressed action for invasion escaped prisoners parents. two to their inquiry addressed such cases that have prosecutor The sheriff and filed motions to fourth amendment connection with produce long telephone distance claims. escapees' parents. records of the The trial 249 Ind. Leonard v. State granted judge the motion and issued a sub- supreme court our noted poena duces tecum. Indiana Bell refused possession bank has lawful bank comply arguing such an intrusion law records, person and a cannot claim an il impermissibly infringes legal by police search and seizure since rights first amendment of freedom of rights personal fourth amendment are speech assembly. But the court held rights.2 legitimate expectation pri- there was no of (1976), 435, In U.S. v. Miller 425 U.S. 96 vacy telephone company billing toll 1619, checks, copies S.Ct. 48 LEd.2d 71 telephone records of numbers a dialed deposit slips, and other bank records were stating: through subpoena obtained a duces tecum "Further, Supreme the United States which the defendant claimed was defective. consistently person Court has held that a Supreme The United States Court reversed legitimate expectation privacy has no ruling a that lower court such bank records voluntarily he turns over privacy" protected by were in a "zone of parties." to third the fourth amendment. The court said the Citing, Id. 409 N.E.2d at 1090. Smith v. deposit slips checks and were the business (1979), 735, 442 Maryland U.S. 99 S.Ct. records private of the bank and not the 220; 2577, (1976), 61 L.Ed.2d v. Miller U.S. papers respondent. 435, 1619, 96 S.Ct. 48 L.Ed.2d 425 U.S. The court also stated that all documents went Our on to discuss the by only obtained contained infor- expectation privacy in reasonable such mation voluntarily conveyed banks situations: exposed employees to their in the ordi- agree Appeals "We with the Court of nary course of business. The court con- the District of Columbia in its statement: legitimate cluded there expectation is no general person rule that a has no '[tlhe privacy in documents. Miller 425 challenging Fourth Amendment basis for 442, U.S. at 96 S.Ct. at 1624. subpoenas directed at business A similar situation parties directly was addressed records of third Cox has been (1979), 476, v. Ind.App. applied billing State 181 392 to toll records maintained 496, N.E.2d deposit slip companies. where a check and telephone telephone A by police were obtained from Cox's bank fully places subscriber is he aware when (1978), legality 2. See suppress Rakas v. Illinois U.S. 439 99 of a search as a basis for ing S.Ct. 58 LEd.2d 387 which focused on the evidence was himself the victim of the person seeking challenge issue of whether the search or seizure.

479 long telephone a distance call that the which he has public either or call, company will make record of the private, legal, moral, either social, or if company's proper- record person made to a that is the having a corresponding ty, ready and that Government has duty, interest or privileged." is access to the record for law enforcement quoted (1980), in Elliott v. Roach Ind. basis, purposes. On this the courts have App., 409 N.E.2d at 672. See also uniformly held that subscribers have no Indianapolis Horse Inc. v. Ward Patrol, Fourth challenging Amendment basis for 626; 247 Ind. Ween inspection Government their toll ig Wood Ind.App. 169 349 records, subscribers, since like bank de- 235; N.E.2d 50 Am.Jur.2d Libel and Slan positors, have taken the risk in reveal- (1970) (SEC der § RESTATEMENT ing their to third offairs OND) (1977). OF TORTS The under § conveyed by information will be lying idea is that public reason of a person officials, to law enforcement ei- social interest protection, is entitled to voluntarily ther inor to com- immunity granted liability from for def pulsory process.'" (Emphasis supplied.) amation that would otherwise be action Tel, In re Order Indiana Bell able. 50 Am.Jur.2d Libel and Slander N.E.2d at 1090. Roach, In Elliott v. supra, § although aforementioned cases they recognized the court privilege that the involve a right priva- fourth amendment protect communications made to one enti cy, are in line with the definition of inva- public tled to act in the interest such as sion of found in Opti- Continental prosecuting attorneys and law enforcement Reed, supra, cal Co. v. and 27 TLE. Torts also, officers. See Hartsock v. Reddick reiterate, 8. To the Bank's communica- 255; 6 Blackf. 50 Am.Jur.2d Libel tion legitimate answer to a investi- (1970). Later, and Slander in Conn § 214 gation by law enforcement and not a v. Paul Harris Ind.App., Stores "publicizing of private one's affairs with N.E.2d our court held that communica public which the legitimate has no concern tions made employee a store to a law . in such a manner outrage as to cause concerning possible officer or cause suffering, mental shame or humili- shoplifter subject qualified were to a privi person ation to a of ordinary sensibilities." lege. The court stated: "statements made Optical, Continental 86 N.E.2d at 308. good in pursuant faith investigation by The Bank's motion for directed verdict perform of a crime are made in the should granted have been on the invasion public duty ance of privileged." and are theory. 200, Conn. 439 N.E.2d at quoting Zakas v. (1978), Ga.App. Mills 148 251 S.E.2d II. Slander 135. Next, argues the Bank the trial court undisputed The facts indicate that failing erred in grant its motion for the Bank's communication was made to directed verdict on the theory slander be- Sergeant during York legit the course of a cause the communication was made under imate law qualified privilege. investigation. Con sequently, the quali Bank is entitled to the principle The qualified of a privilege fied privilege Conn, Elliott, defined in and firmly entrenched in Indiana defamation 18 LLE. Libel and Slander § law and is summarized in 18 LLE. Libel Our discussion does not end here. The (1959); and Slander 52 § concept qualified privilege explained "The concerning rule qualified privi- by Elliott, the supra: lege is that a communication made in phrase 'qualified "As the good or conditional any faith on subject matter which party making the privilege' suggests, privilege communica- such does tion has an interest or in reference to change not quality actionable of the

480 cloge has been published, merely jurisdic- decided in other

words but rebuts imputed tions. The first case to address a bank's inference of malice that is in the privilege. absence of 50 Am.Jur.2d Libel obligation of confidence was Tournier v. at Slander 195 698 In an National Provincial & Union Bank of case, appropriate a trier of fact de England (1923), 1 K.B. 461. In that case privilege by termine the was abused ex plaintiff good failed to make on an publication, by cessive use of the occa overdraft of his account. The Bank called sion improper purpose, by for an lack employer and disclosed that one of grounds of belief or for belief in the Tournier's checks had been made out to a Prosser, truth of what is said. W. su bookmaker's account. consequence As a pra, although at 792-96. And the term disclosure, the Bank's Tournier was fired. frequently applied viewing 'malice' is The Tournier court held that the Bank acts, appears such it 'the essence of the had breached implied contract not to concept speaker's spite is not the but his disclose information, Lord Justice privileged by going abuse of the occasion stating: Serutton beyond scope purposes of the "'The Court only imply will terms privilege which which the exists. Weenig v. necessarily must Wood, have supra Ind.App.] been in the at con- 349 [169 N.E.2d at 249." templation of the making Applying contract. principle to such Elliott, 409 N.E.2d at 678. knowledge of judge life as a is allowed to evidence sole offered have, I have no doubt that it is an testimony to show malice is his term of a banker's contract with his cus- "argued" regular monthly he at inter tomer that the bank shall not disclose the officer, Austin, vals with the loan about his or, account relating thereto, transactions single account. This assertion is evi of his customer...." dence that there was "abuse of the Td. at 480. privileged by going beyond occasion scope purposes privi for which the That a Bank has an contract not lege Wood, Weenig supra. exists." v. On to disclose certain financial contrary, the facts indicate no abuse of pertaining to depositors its has been ac privilege. The communication between the cepted by American courts and authorities. Sergeant loan officer and York was not (1979), See Suburban Trust Co. v. Waller initiated the Bank. Rather it was in 44 Md.App. 758; 408 A.2d Graney inquiry by York. This is not Development Corp. v. Taksen 92 an indication of malice. Weenig, supra. 717; Misc.2d People N.Y.S.2d v. Cal.App.3d Muchmore We find the communication the Bank 488; Cal.Rptr. Bank & Trust Co. subject qualified to be privilege to a Richfield further find no evidence of malice. Conse- Sjogren Minn. 648; quently we find the N.W.2d Superior trial court erred in Burrows v. Court denying the Bank's motion for directed ver- San County Bernardino 13 of theory dict on the Cal.Rptr. 590; of slander. Cal.3d 118 529 P.2d Milohnich v. First National Bank Mi of III. Implied Breach of Contract Springs Fla.Dist.Ct.App., ami 224 759; So.2d The Peterson argues Bank it v. Idaho First Na public duty had a to disclose information to law enforcement of- tional Bank 83 Idaho 367 P.2d 284; Mitchie Banking Banks and acting ficials § in their official capacity and (1978); 10 Am.Jur.2d Banks duty § is evidenced on the face of Chapman's complaint. point of dissension is under what Although the issue has not been ad- particular cireumstances will a bank be re- by courts, dressed question the implied duty of leased from its not to disclose what a bank implicitly warrants not to dis- financial information about its customers. Tournier, supra, will, Lord Justice Atkins to permitted the extent by law, treat delineated four situations: confidential, as all information regarding "(a) compul- Where disclosure is under his account any transaction relating law; (b) by sion where there duty is a to Accordingly, thereto. that, we hold ab- public disclose; (c) the sent compulsion to law, where the inter- by a bank may not require disclosure; (d) ests of the bank any make disclosures concerning depos- where the by disclosure is made the ex- itor's account without express the or im- press implied or consent of the custom- plied consent of the depositor." er." also, Id. See Superior Burrows v. Court 1 K.B. at 478. The statement in 10 Am. San Bernardino County, supra; Peter- of Jur.2d agreement Banks is in § son v. Idaho First Bank, National supra. with Tournier: The Suburban Trust Court was further "Indeed, it is implied term of the by influenced a statute recently enacted contract between a banker and his cus- Maryland legislature that declared a tomer that the banker will not divulge to may bank not disclose a customer's finan persons third without the consent of the (a) cial records unless it has the customer's customer, express or implied, either the (b) authorization or the financial records state of the customer's any account or are disclosed in to a lawful sub bank, transactions with the or any poena, summons, warrant or court order.3 relating information to the customer ac- Although this statute did go into effect quired through keeping of his ac- days until 120 after the onset of events in count, unless the compelled banker case, Suburban Trust the court stated: order, do so the circumstances "By the enactment of Laws ch. give public rise to a disclosure, or people Maryland, through their protection of the banker's own inter- duly representatives, elected made ex- requires ests it." plicit what had theretofore been implic- Notwithstanding authorities, above not, may it-banks legal absent compul- some courts have been more restrictive of express sion or or authorization the circumstances under which a bank is from depositor concerned, any reveal relieved of its duty not to disclose. one, any including police representative Most of these is Suburban government other agencies, about Waller, Trust Co. v. supra. depositor's dealings with the bank." specifically "We reject both the Tour- Trust, Suburban supra, 408 A.2d at 765. mnier fourfold qualifica- classification of Finally the court noted reasoning its inwas tions to the implied contractual obli- line Right Privacy Financial gation of confidentiality owed a bank Act, 12 U.S.C. seq. 3401 et which § outlines depositors to its and the 10 Am.Jur.2d the situations under govern- which federal Banks 882 grouping. We so § do be- ment may authorities have access to an cause we believe that those two authori- individual's financial reasons. Section ties confer entirely bank too provides the Act as follows: much discretion. Were we to follow Tournier or 10 Am.Jur.2d Banks authority Government "[Nlo have permit we would a bank to decide what is of, access to or copies obtain or the infor- public is not in the disclose, interest mation contained in the financial records and what is or is not in the best interest customer from a financial institu- of the bank to disclose." tion unless the financial records are rea- sonably 408 A.2d at 764. described and- The court went on to conclude: (1) such customer has authorized "We think that a depositor bank in this disclosure in accordance with 3404 of § State right has a expect to that the bank title; 3. See Md.Ann.Code art. § 225 (2) divulge such financial records are disclosed in a customer's financial affairs to

response subpoena to an administrative only upon law enforcement the service of a require- or summons which meets the subpoena or Consequently, warrant. we title; ments of 3405 of this adopt § decline to the Suburban Trust rule in the of contrary face (3) Indiana law. Such a such financial records are disclosed in response to a search warrant which change province would legis be the requirements meets the of 3406 of this lature. We impliedly hold a bank contracts § only title; that it will not reveal a customer's or public financial status a duty unless arises. (4) in such financial records are disclosed legitimate Communication to law response judicial subpoena to a which enforce requirements inquiry meets the of 3407 of this ment public duty meets test. § We title; hold the trial court in denying erred Bank's motion for directed verdict on the (5) such financial records are disclosed in theory of breach of contract. response request to a formal written requirements which meets the of this title." Negligence Although impressed we are complaint alleged the Bank reasoning and Suburban Trust above stat- "improperly, carelessly, negligently, and utory authority, we note the absence of erroneously" Sergeant informed York that Further, statutory similar law in Indiana. Chapman was behind payments several impose liability on a bank for breach of his car loan argues account. The Bank in contract a situation a where there is no negligence evidence of and that gives bank officer information to law en- it granted should have been a directed ver- subpoena forcement without or search negligence theory. dict on the warrant seems to conflict with the afore- Indiana, negligence In the tort of mentioned Indiana law in the areas of inva- (1) duty plaintiff consists of owed to the privacy sion of and slander. defendant, (2) by the a failure of the de privacy recognizes Indiana law an fendant to conform his conduct to the stan only invasion if the public matter is not of required by dard of relationship, care concern, and case law in our state indicates injury plaintiff an resulting to the person that a does legitimately expect not from the defendant's failure. Miller v. his affairs parties kept with third to be Griesel Ind. private from law enforcement officers con ducting See, investigation. Cox v. State, supra; In re Order Indiana duty A negligence Bank's under a Telephone Bell supra.4 etc. theory closely duty related to the im posed by Indiana slander and invasion of Likewise, the law of slander privacy law. provides Consequently, we define the statements made to a duty along Bank's law the lines of these legit enforcement officer two involved investigation A imate theories. Bank has a quali are made under to dis privilege. fied v. Conn Paul Harris close concerning one of.its cus Stores, supra. It incongruous would be tomers unless it is to someone who has a legitimate public for Indiana law to hold expecta one has no interest. Continental tion of bank affairs communicat Optical Reed, Further, supra. when ed to and for imply making the same law to a communication having to one le into a contract a term which gitimate public interest, allows a bank operated the Bank officials, 4. We reiterate our court's statement voluntarily either or in Telephone: Indiana Bell compulsory process." (Emphasis added.) depositors, "bank have taken the risk in reveal- ing Telephone their re Order Indiana Bell third that the infor- affairs conveyed by mation person will be N.E.2d at 1090. to law and there had attempt been an qualified privilege, to burn it under a as was the case uh, part that as my investigation, Sergeant conducting here with York a le gitimate See, inquiry. law enforcement El I would like to know the financial condi- tion of that account. particular Roach, Thus, At that supra. liott v. the Bank did uh, duty time. And breach a of non-disclosure in re I anything unusual about showing fact there was no of malice on the late, particular payment was part. Bank's The status of Indiana law on there? foregoing requires theories reject us to implication that a Bank contracts not to A. Not unusual. divulge a customer's financial status to law Q. It kind of a habit with him enforcement without authority. In- be late? imply only stead we that a Bank not Evidently. A. divulge public duty unless it has a to do so. Q. Okay. And he was never farther legitimate Communications to law enforce- any period behind in of time ment investigation public duty meet the payment, than one was he? In oth- Finally, test. we hold there was no evi- words, you er he's never owed two dence adduced at trial that the Bank acted payments, or three at one time? negligently in its communication with Ser- No, say I A. wouldn't that." geant York. Thus, disagreed Purdue with the statement Reversed. Chapman was never more than one payment behind, and York's character- CONOVER, J., concurs. ization of the Bank's statements as contra- dictory was in error. YOUNG, P.J., separate dissents with (attached). opinion police prose

The fact that the cution in arson case were con YOUNG, Presiding Judge, dissenting. fused or misunderstood the Bank's I dissent. phone subsequent communication and testi law, Under banking Indiana customer mony and dismissed the charges arson does has right privacy no Fourth Amendment not raise an inference that the Bank's com in a bank's of his account. The munication was inaccurate as a result of records right of a privacy, absence constitutional negligence. however, scope does not define or limit the Also, the burden was on of a bank's contractual to show the Bank's communication was in confidentiality toward its customer. The accurate. Other than his own statement scope duty depends, upon of the bank's not disagreed that he figures, with the Bank's rights, questions constitutional but as in all evidence, failed to introduce terms, contractual the in- payment receipts as a book or to show tention of the to the contract. that the Bank communicated in inaccurate expecta "A bank customer's reasonable formation. As we find no evidence that the that, compulsion by legal tion is absent Bank acted unreasonably communicating process, he the matters reveals to the bank acting information to York who was in a only will be utilized the bank for inter legitimate law capacity, we banking purposes." nal Supe Burrows v. must conclude that the trial court erred in rior County Court San Bernardino overruling the Bank's motion for directed Cal.Rptr. Cal.3d verdict. case, provided P.2d 590. In this INB finan concerning Chapman pur cial information Conclusion suant to a officer's informal oral In summary, we hold the Bank should request. This action breached the bank's have received a directed verdict on all four implied duty confidentiality. Chapman's privacy theories. was not in- vaded because the Bank's communication A review of Indiana cases on invasion of legitimate investigation answer to a incongruity reveals no in a determi by law enforcement. As it such was sub- nation that a bank's disclosure of informa ject qualified privilege to a under legal compulsion tion without constitutes a slander privilege law. This was not lost as duty although breach of contractual it does charged Amendment tomer that the compliance bank's violate customer's Fourth rig In Leonard v. State subpoenaes duces tecum violated his hts.1 249 Ind. our Fourth rights. Amendment The court rea court addressed the issue of whether the depositor soned that a takes the risk that introduction into evidence of a bank's his bank divulge will account information in records a criminal case violated a defend since the transfer of information to a third ant's rights constitutional under party the Fourth extinguishes the customer's Fourth and Fifth Amendments. The court rights. con Amendment only Not did the court fined inquiry "question its to the of inquiry wheth limit its to Fourth Amendment er the lawfully possession bank had rights, of the but it distinguished cases, also records," present one, as the since the defendant involving "statements could claim illegal search police and seizure if the in response to an informal oral records possession. were not in his request Id. 232 for information." Id. 96 at S.Ct. N.E.2d at 885.2 The court did not address 1625 n. 7. The Court noted that "the court scope the existence implied of a bank's in 'significant Burrows found it ... confidentiality. contract of the bank provided the state [in case] police ments to the to an infor Similarly, in In re Indiana Order for request mal oral for information'." Id. In (1980), Telephone 131, Bell 274 Ind. 409 contrast, government in Miller "exer 1089, N.E.2d our only court asked powers through cised its narrowly directed telephone whether release of records in- subpoenaes subject duces teeum to the le fringed upon a customer's freedom of gal restraints process." attendant to such speech and guaranteed association by the State and Federal Constitutions. The court Neither does Indiana slander law define concluded "expectation that the of liability the contractual of a bank toward protected by the Fourth Amendment at- its customer. though Even a communica- taches to the content of telephone con- tion made to law enforcement officers in versation and not to the fact that a good conver- support faith will not charge a place." sation took slander, 409 Id. N.E.2d at 1090. may communication neverthe- The dicta in Indiana fairly Bell cannot be less breach the contract between imply held to that a bank has no contractu- if it contravenes their inten- duty al keep account information confi- tions. dential legal compulsion absent since the persuasive reasoning Given the issue before the court was not the contrac- court Suburban Trust Co. v. Waller rights but, tual parties, rather, (1979), 335, 758, 44 Md.App. 408 A.2d scope of the customer's constitutional example Privacy Act, of the Financial rights. Moreover, the compliance issue of 3401, 12 seq., together U.S.C. et with request an informal for information any absence of statutory or case was not before the court request since the contrary, law to the recognize we should presented subpoena as a duces tecum. duty that a confidentiality bank's to its Neither does U.S. v. Miller3 425 policeman's customers does not end a 435, U.S. 96 S.Ct. informal, 48 L.Ed.2d limit request oral information. scope of a bank's permit contract of "'To officer access to these confidentiality. Miller, banking cus merely upon records request, without which, 1. Fourth way imply Amendment rights cases in no like some other constitutional duty that a comply bank has a rights, an infor- vicariously not be asserted." Id. 392 Indeed, police request. mal a bank has a con- quoting N.E.2d at Rakas v. Illinois tractual comply to its customers mot to 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed.2d 387. request. with such a 2. See also stated, dressing a similar Fourth Amendment "Fourth Cox v. State Amendment where the first rights district, Ind.App. are personal in ad- claim 3. The holding F.R.D. U.S.C. §§ Right in Miller Hancock v. 3401-3421, (D.D.C.1980). to Financial Privacy designed Act of Marshall, to limit the relevancy any judicial control as to or other requirements legal process,

traditional

and to allow evidence be used subsequent prosecution against criminal

defendant, opens the door to a vast and range very po-

unlimited real abuses of Burrows, power."

lice 529 P.2d at 596.

The trial correctly this case re- grant

fused to a directed verdict on the

breach of contract issue. WILSON, Individually,

Pat and as Attor ney-in-Fact Wilson, Gary for R. (Added

Appellant Below), Defendant HAIMBAUGH, Appellee

John (Defendant Below),

Dugan Inc.; Realty, Realty; Mark Wilson Wilson, Individually; Gary

Mark R. (Defendants Wilson; Wilson, Sandra K. Below),

Wainright Company, Bank & Trust (Plaintiff Below). Frosch, F. Gray, Frederick Mark S. No. 2-185A19. Frosch, Frosch Indianapolis, appel- & Appeals Indiana,

Court of lant. Third District. Hittle, Church, Jack G. Roberts & Beer- bower, Noblesville, appellee. Sept.

HOFFMAN, Judge. Appellee Haimbaugh John was awarded judgment against appellant Pat Wilson on the cross-claims he filed in Wainwright Company's Bank & Trust foreclosure ac- appeals tion. judgment. Pat facts appeal relevant to this are as follows. Gary Wilson property owned certain real in Indianapolis. Gary When left Indiana to Florida, relocate he asked Pat to contact notes have here and leasing 15th, this would Sergeant August '77, information to York. have been the, was party that that told me that the however, Chapman argues, also that the 8-15, account was due for 7-15 and indi- Bank has a to use reasonable mea- cating July to me August 15th." sures to insure that a disclosure of custom- trial, At accurate, er financial is arson Robert status that Indiana gave Purdue of the Bank following so, National failed to do and that the infor- testimony: given Sergeant mation York was inaceu- rate. "Q. you Do know the condition of the during August account of '77? applicable There is no case law in Indiana on the release of inaccurate Factually, financial infor A. yes. mation agency. bank or credit Relat Q. Alright. What was the condition of authority ed in other states holds that the during account that month? release of credit party Well, August A. on the 7th uh of having legitimate protected interest is as far delinquent as uh the status qualified privilege. Rodrigues See v. R.H. account, of the the account was due Macy & Co. 88 Misc.2d July 15th of 1977. 44; N.Y.S.2d Petition Retailers Com Q. mean, What does that sir? Agency, mercial Inc. 342 Mass. Well, A. that means uh that the ac- majority N.E.2d 376. The rule is that well, count ... payment was negligence mere resulting in inaccurate in past days." due uh 28 formation requisite does not meet the level Contrary assertion, of malice needed to to York's qualified overcome a Purdue's privilege. Rodrigues, supra; Petition of statements do not conflict with the infor- given phone. mation over the Purdue stat- Retailers Commercial Agency, supra. 7, 1977, August ed that on Chapman However, owed courts agen have held if a credit payment one July which had been due since cy asserted information to be true without 15, 1977. York talked to the Bank on Au- grounds probable reasonable or cause for gust day payment 1977the a second fell so, doing it could be found to have acted due and was informed that was equivalent of malice which is suffi payments. behind two These two state- cient to qualified overcome the privilege. See, e.g., agreement ments are and do not raise an v. Retail Credit Bloomfield negligence part inference of on the Ill.App.3d 302 N.E.2d 88. Bank. case, In this we find no evidence that the Further, not, asserts, did Purdue as York Bank acted in a reckless negligent man- testify that was never more than ner. The sole testimony by Chap- offered days payment. behind on a On cross-ex- support man to an negligence inference of amination, disagreed Purdue with a similar Sergeant York's characterization of the by Chapman's characterization attorney: Bank's testimony at the arson trial as con- "Q. words, [Chapman] other tradictory to what he was told over the customarily making a little late in phone. An examination of the record re- payment, wasn't he? veals, however, that the Bank did not change position. appears way, yes. its A. It York testified as fol- lows: Q. anything There isn't particularly the, "I asked for I person told the payment unusual about uh, I working investigation August period was due for the 7th where the car allegedly had been stolen of time was late there ... isn't

Case Details

Case Name: Indiana National Bank v. Chapman

Court Name: Indiana Court of Appeals

Date Published: Sep 4, 1985

Citation: 482 N.E.2d 474

Docket Number: 4-683A191

Court Abbreviation: Ind. Ct. App.