Welcome to our Supreme and Appellate Court summaries webpage. On this page, I provide abbreviated summaries of decisions from the Connecticut appellate courts which highlight important issues and developments in Connecticut law, and provide practical practice pointers to litigants. I have been summarizing these court decisions internally for our firm for more than 10 years, and providing relevant highlights to my municipal and insurance practice clients for almost as long. It was suggested that a wider audience might appreciate brief summaries of recent rulings that condense often long and confusing decisions down to their basic elements. These summaries are limited to the civil litigation decisions based on my own particular field of practice, so you will not find distillations of the many criminal and matrimonial law decisions on this page. I may from time to time add commentary, and may even criticize a decision’s reasoning. Such commentary is solely my opinion . . . and when mistakes of trial counsel are highlighted because they triggered a particular outcome, I will try to be mindful of the adage . . . “There but for the grace of God . . ..” I hope the reader finds these summaries helpful. – Edward P. McCreery
Posted July 31, 2014
Bank required plaintiff - School to execute a customer authorization form and signature cards before opening its account which forms stated which person had authority to interact with the defendant - Bank. An employee in the business office of the plaintiff, who did not have authorized access to the account, was allowed by the Bank’s branch manager to open a parallel account in the name of the school using the school’s tax ID number. The branch never required a new authorization form nor a new signature card. The employee later changed the mailing address of the new account to his home and over the next four years deposited over $800,000 worth of checks payable to the school by third parties and checks written out of the school’s legitimate account. Again, the Bank did not follow its own policies of requiring endorsements on those checks. The Bank apparently ignored its own policies by not questioning withdrawals from the fake account that at times exceeded $20,000 each. The Bank also failed to list the account in response to the School’s CPA’s annual audit questionnaire. The fake account was discovered by the School when the employee was let go and demanded the money back from the Bank, which refused. This lawsuit followed where the Bank raised three defenses: (1) the claim was not raised in the time period of the deposit agreement; (2) the claim was barred by the statute of limitations; and (3) the plaintiff was guilty of contributory negligence. The trial court struck the depository agreement defense on public policy grounds. After a jury verdict in favor of the School for less than $800,000, finding it only 5% contributorily negligent, the Bank appealed to the CT SCT. The jury had also concluded any SOL was tolled.
First the Court refused to reconsider the Bank’s claim that the depository agreement (which required all false checks to be reported within 60 days or lose the claim) did not violate public policy as established by the UCC. The Bank claimed the trial court should not have stricken this defense. The defendant failed to brief the added requirement of showing the alleged error was harmful! Simply stating in your brief that……. it was clearly harmful as the jury did not get to hear our special defense….isn’t enough. Further, the Bank put on no evidence to show how the School’s review of its real account statements, or its own returned checks, would have revealed the fake account.
Next the decision held that the relationship between a depositor and a bank is based upon contract. The school did not have to produce a signed contract to pursue its breach of contract claim. The customer authorization form was enough to show a contractual relationship existed.
The Court then turned to whether it was proper for the trial court to charge the jury on tolling of the SOL for the negligence and UCC claims. The trial court charged the jury that a tolling could be found if the Bank was a fiduciary to its customer or it engaged in a continuing course of conduct. First the decision states that the same damages were awarded under the contract claims (which were within the SOL) and the negligence claims….so the issue was irrelevant for the negligence claims. On the UCC claims the jury awarded only $5,000 more damages so it would be reviewed to that limited extent. Those UCC claims pertained only to checks drawn on the real account but deposited to the fake account. After reviewing when a fiduciary relationship arises, the decision says normally there is not one between a customer and a bank. And that was the same result here. It did not matter that this customer was that branch’s biggest depositor. Nor was a tolling of the SOL justified under a “continuing course of (wrongful act) conduct” doctrine because each check deposited to the fake account was a separate distinct (wrongful act) violation of the UCC. The UCC claims should have been subject to a three year SOL and so the Bank was entitled to $5,000 being knocked off the verdict.
Finally the Court refused to even consider the defendant-Bank’s request for a set-off of the $100,000 insurance proceeds received by the plaintiff. For over 100 years it has been the law of CT that a tortfeasor is not entitled to claim a benefit from the victims receipt of insurance proceeds from a policy they paid premiums for. CGS 52-225a abrogated this common law rule on collateral source payments only for personal injury actions.
The facts and holdings of any case may be redacted, paraphrased or condensed for ease of reading. No summary can be an exact rendering of any decision, however, so interested readers are referred to the full decisions. The docket number of each case is a hyperlink to the Connecticut Judicial Department online slip opinion. ©2014 Pullman & Comley, LLC. All Rights Reserved.Back to Top