Opinion
CA 7:04-CV-43-R.
March 31, 2005
AMENDED MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Herring National Bank's Motion for Summary Judgment, filed July 23, 2004. For the reasons detailed below, Defendant's Motion is GRANTED.
Introduction
Plaintiff seeks summary judgment as to all claims asserted by Plaintiff. Plaintiff alleges (1) negligence (pursuant to Oklahoma common law), (2) breach of duty of good faith and fair dealing (pursuant to Oklahoma common law), (3) constructive fraud, and (4) negligent supervisionFactual Background
Plaintiff opened two checking accounts with Defendants, Account #1 and Account #2. Plaintiff's father, Larry Cabelka, also had signatory authority to these accounts. On or about April 9, 2001, Defendant received for payment check number 5403 drawn on Account #1 and date, 1 April 4, 2001 ("the Southwest Check"). Plaintiff had written the check for the purchase of two tractors from Southwest Auction. Prior to Defendant's receipt, the Southwest Check had been encoded by the payee's bank, Bank of Texas, N.A., as being payable in the amount of $375.00, even though the check had apparently been written for the amount of $37,500 by its maker, Jared Cabelka. The Southwest check was then processed through the Federal Reserve System and forwarded to Defendant for payment.
Upon receiving the check, Defendant processed the check as it had been encoded by Bank of Texas, N.A. for $375.00 and marked the check "paid". After payment of $375.00 was posted to Account #1, the remaining balance in Account #1 was $28,303.36. Had the Southwest Check been properly encoded by Bank of Texas and received by Defendant on or about April 9, 2001, Defendant would have marked the check insufficient and returned the check.
On or about April 20, 2001, Carol Linthicum, then Vice President for Defendant, received communication from the Bank of Texas informing her of the misencoding of the Southwest Check. Bank of Texas requested that Defendant forward the difference ($37,125.00). Linthicum stated in her deposition that she attempted to contact Larry Cabelka about the problem that day and for several days thereafter without success. On June 4, 2001, the Bank of Texas again contacted Defendant to determine if sufficient funds were available in Account #1 to pay the balance on the Southwest Check. On that date, sufficient funds were unavailable. According to Linthicum, when the Bank of Texas discussed bringing legal action against larry Cabelka, Linthicum became concerned and put a "hold" on Account #1. Defendant asserts that no harm was caused by the hold, and that all checks were processed and paid. On June 6, 2001, at the request of Bank of Texas, Linthicum marked a copy of the Southwest Check "insufficient" and faxed the copy, along with a letter, to the Bank of Texas.
Analysis
A. Summary Judgment Standard
Under Rule 56 c of the Federal Rules of Civil Procedure, summary judgment is proper only when the movant demonstrates that there is no genuine issue as to any material fact, and the party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56©); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the initial burden of identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, that demonstrate the absence of a genuine issue of material fact. See Celotex Corp., 47 U.S. at 323.
Once the movant has discharged its initial burden under Rule 56, the nonmovant must set forth specific facts, by affidavits or otherwise, showing there is a genuine issue for trial. See Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). In weighing the evidence, the court must decide all reasonable doubts and inferences in the light most favorable to the nonmovant. See Walker v. Sears, Roebuck Co., 853 F.2d 355, 358 (5th Cir. 1988). As long as there appears to be some support for the disputed allegations such that "reasonable minds could differ as to the import of the evidence," the motion for summary judgment must be denied. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). However, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. Id. at 247.
B. Texas Law Governs
UCC § 4.102(b) provides, in relevant part:
The liability of a bank for action or non-action with respect to an item handled by it for purposes of presentment, payment, or collection is governed by the law of the place where the bank is located.
Okla. Stat. Ann. tit. 12A, § 4-102(b) (Westlaw 2004); Tex. Bus. Com Code Ann. § 4-102(b) (Vernon Supp. 2004). Because Defendant is located in Texas, Texas law applies.
Furthermore, choice of law principles require the application of Texas law to this dispute. Defendant is located only in Texas, and the Plaintiff maintains a business office in Texas. Also, the relationship between the parties is centered in Texas. Therefore, under the most significant relationship test Texas law applies. See Restatement (Second) Conflict of Laws § 145.
C. Plaintiff's Negligence Claim Fails
To prove negligence, Plaintiff must plead and prove (1) a duty, (2) a breach of that duty, and (3) damages proximately caused by breach of duty. Van Horn v. Chambers, 570 S.W.2d 542, 544 (Tex. 1998). The relationship between and bank and general depositor is contractual in nature. McCreary v. Bay Area Bank Trust, 68 S.W.3d 727, 723 (Tex.App.-Houston [14th Dist.] 2001, no pet.). The only duty owed to Plaintiff by Defendant arose from the checking account agreements, and Plaintiff has not established the existence of an additional legal duty for purposes of his negligence claim. Furthermore, even if Plaintiff could prove that Defendant breached a duty, Plaintiff has not specifically pled any facts to demonstrate any recoverable consequential or special damages as required by Federal Rule of Civil Procedure 9(g).
D. Plaintiff Breach of Duty of Good Faith and Fair Dealing Claim Fails
Texas law imposes a duty of good faith and fair dealing on a contractual relationship only when the contract expressly creates such a duty, or when a special relationship marked by shared trust or an imbalance in bargaining power exists between the parties. F.D.I.C. v. Coleman, 795 S.W.2d 706, 708-9 (Tex. 1990). Plaintiff has not alleged a special relationship or any other reason to establish a duty of good faith and fair dealing.
E. Plaintiff's Negligent Supervision Claim Fails
A negligent supervision claim requires that Plaintiff plead and prove (1) that the employer owed the plaintiff a legal duty to hire, supervise, retain, or train competent employees; (2) that the employer breached that duty; and (3) that the breach proximately caused the plaintiff to suffer damages. LaBella v. Charlie Thomas, Inc., 942 S.W.2d 127, 137 (Tex.App.-Amarillo 1997, writ denied). To establish that Defendant breached this duty, Plaintiff must plead and prove that Defendant was negligent, and that the employee in question committed a tort actionable under common law. Gonzales v. Willis, 995 S.W.2d 729, 739 (Tex.App.-San Antonio 1999, no pet.). As discussed above, Plaintiff has not proven any torts committed against him by the Defendant or Defendant's employees. Furthermore, Plaintiff has not provided sufficient evidence of damages.
F. Plaintiff's Constructive Fraud Claim Fails
Constructive fraud is the breach of a legal or equitable duty that violates a fiduciary relationship. Toles v. Toles, 113 S.W.3d 899, 916 (Tex.App.-Dallas 2003, no pet.). As discussed above, the relationship between a bank and a deposit account holder is contractual in nature. McCreary, 68 S.W.3d at 733. Plaintiff has no plead any facts to support the existence of a special or fiduciary relationship between himself and the Defendant.
G. Plaintiff's Punitive Damages Claims Fail
Plaintiff has not pled or otherwise raised any evidence that Defendant committed fraud or acted with malice. Therefore, under Texas law Plaintiff is not entitled to punitive damages. Tex. Civ. Prac. Rem. Code Ann. § 41.003 (Vernon 1997).
Conclusion
Finding that Plaintiff has not presented the requisite evidence to establish a legitimate fact question as to any of his claims, the Court grants summary judgment in favor of Defendant as to each and every claim of Plaintiff.