Gulf Coast Hous. & Dev. Corp. v. Capital One

• Decision Date: 05 October 2016
• Docket Number: NO. 2016-CA-0296,2016-CA-0296
• Citation: 203 So.3d 366
• Parties: Gulf Coast Housing & Development Corporation v. Capital One, et al
• Court: Court of Appeal of Louisiana — District of US

203 So.3d 366

Gulf Coast Housing & Development Corporation

v.Capital One, et al

NO. 2016-CA-0296

Court of Appeal of Louisiana, Fourth Circuit.

OCTOBER 5, 2016

VERNON PALMER THOMAS, ATTORNEY AT LAW, 1524 North Claiborne Avenue, New Orleans, Louisiana 70116, Counsel for Plaintiff/Appellant

J. PARICK GAFFNEY, DOMINICK J. CVITANOVIC, CARVER, DARDEN, KORETZKY, TESSIER, FINN, BLOSSMAN & AREAUX, LLC, 1100 Poydras Street, Suite 3100, New Orleans, Louisiana 70163, Counsel for Defendant/Appellee

(Court composed of Chief Judge James F. McKay III, Judge Max N. Tobias, Jr., Judge Daniel L. Dysart )

JAMES F. McKAY III, CHIEF JUDGE

Plaintiff, Gulf Coast Housing & Development Corporation ("Gulf Coast"), appeals the trial court judgment granting an exception of no cause of action in favor of defendants, Capital One, National Association ("Capital One"), Tiffany Lucas and Chazmin Martin, dismissing some of plaintiff's claims. For the reasons that follow, we affirm.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

Gulf Coast, through its board president, Eric Cager, opened a business checking account at Capital One. The account required two signatures. Mr. Cager claims that he gave the bank employees who assisted him in setting up the account, Ms. Lucas and Ms. Martin, repeated oral instructions that no debit card was to be issued on the account under any circumstances. Later that day, Glen Metz (a board member of Gulf Coast) came into the same Capital One branch, along with Gregory Swafford (an attorney/consultant for Gulf Coast), and obtained a debit card on the account. Thereafter, over $15,000.00 was withdrawn on the debit card, allegedly by Mr. Metz and/or Mr. Swafford. Also, a check issued to Mr. Swafford in the amount of $6,000.00, allegedly containing the forged signature of Mr. Cager, was cashed at the bank.

Gulf Coast filed suit against Capital One and individually named Ms. Lucas and Ms. Martin as defendants. The petition alleges negligence, breach of fiduciary duty, violations of the Louisiana Unfair Trade Practices Act ("LUTPA"), and punitive damages.

Before filing an answer to the petition, Capital One, Ms. Lucas, and Ms. Martin filed an exception of no cause of action.¹ The trial court granted the exception as it related to: 1). breach of fiduciary duty; 2). LUTPA claims; and 3). punitive damages. (The claim for punitive damages has since been dropped). The judgment specifically sustained the exception as to Ms. Lucas and Ms. Martin, and granted Gulf Coast forty-five (45) days to amend its petition in order to state a cause of action against the two employees. No amendment was filed. Finally, the judgment provides that all of Gulf Coast's remaining claims against Capital One are maintained.² Gulf Coast's timely appeal followed.

LAW AND ANAYLSIS

MOTION TO STRIKE

As a preliminary matter, we must address Capital One's motion to strike certain portions of Gulf Coast's appeal brief, which was referred to the merits. Capital One asserts that Gulf Coast's brief improperly contains: 1). Exhibits 1, 2, and 3, which were not introduced at trial and Exhibit 5 (Capital One's memorandum in support of the exception), which contains handwritten notes in the margins that were not a part of the trial court record; 2). Impertinent and baseless accusations toward Capital One; and 3). Reference to confidential settlement negotiations.

Pursuant to La. C.C.P. art. 2164, an appellate court must render a decision upon the record on appeal. Regarding Exhibits 1, 2 and 3, which are attached to Gulf Coast's appeal brief but not introduced at trial, as well as the handwritten notes made on Exhibit 5, we find that Capital One's motion to strike has merit. Appellate briefs are not a part of the record on appeal, and this Court has no authority to consider facts referred to in appellate briefs, or in exhibits attached thereto, if those facts are not in the record on appeal. Board of Directors of the Industrial Development Board of the City of New Orleans v. All Taxpayers, Property Owners, Citizens of the City of New Orleans , 03–0827, p. 4 (La.App. 4 Cir. 5/29/03), 848 So.2d 733, 737. Regarding the alleged impertinent statements and the reference to settlement negotiations, we give them no consideration as these contentions are not part of the record. For the reasons outlined herein, we grant the motion to strike portions of Gulf Coast's appeal brief referencing facts and comments that are not contained in the record.

EXCEPTION OF NO CAUSE OF ACTION

As the Supreme Court explained in Jackson v. City of New Orleans , 12–2742, p. 24 (La. 1/28/14), 144 So.3d 876, 895 :

The peremptory exception of no cause of action is designed to test the legal sufficiency of a petition by determining whether a party is afforded a remedy in law based on the facts alleged in the pleading. All well-pleaded allegations of fact are accepted as true and correct, and all doubts are resolved in favor of sufficiency of the petition so as to afford litigants their day in court. The burden of demonstrating that a petition fails to state a cause of action is upon the mover. The sufficiency of a petition subject to an exception of no cause of action is a question of law, and a de novo standard is applied to the review of legal questions; this court renders a judgment based on the record without deference to the legal conclusions of the lower courts. See Foti v. Holliday , 2009–0093 (La. 10/30/09), 27 So.3d 813, 817.

1). Regarding the breach of fiduciary duty claim

Capital One asserted in its exception, and the trial court agreed, that Gulf Coast has no cause of action against Capital One and the two employees for breach of fiduciary duty. We find no error in that ruling.

Gulf Coast's relationship with Capital One was that of a depositor. Although Capital One, as a bank, owes certain legal duties to its depositors (which cause of action the trial court specifically maintained), the law is clear that for a fiduciary duty relationship to exist between a bank and its customer, there must be a written agency or trust agreement. See La. R.S. 6:1124, which provides:

No financial institution or officer or employee thereof shall be deemed or implied to be acting as a fiduciary, or have a fiduciary obligation or responsibility to its customers or to third parties other than shareholders of the institution, unless there is a written agency or trust agreement under which the financial institution specifically agrees to act and perform in the capacity of a fiduciary. The fiduciary responsibility and liability of a financial institution or any officer or employee thereof shall be limited solely to performance under such a contract and shall not extend beyond the scope thereof. Any claim for breach of a fiduciary responsibility of a financial institution or any officer or employee thereof may only be asserted within one year of the first occurrence thereof. This Section is not limited to credit agreements and shall apply to all types of relationships to which a financial institution may be a party.

The legislative history of La. R.S. 6:1124 states:

... [T]he bill concretely states that there is no fiduciary relationship between a bank and its customer just because the customer has an account at the bank or another relationship with the bank. An agreement would be required in order to establish a fiduciary relationship between a financial institution and a customer. This would not eliminate the obligation of good faith and fair dealing under the Civil Code ....

... [T]his bill simply clarifies that a bank has no implied fiduciary duty to its customers absent a specific trust or written agreement. This bill would say that there is no trust relationship or a fiduciary relationship with your customer unless there is a trust agreement to that respect.

Minutes, House Commerce Committee, 1991 Reg. Sess., May 15, 1991, at 12-13; Minutes, June 6, 1991, at 3; See also BizCapital Business & Industrial Development Corp. v. Union Planters Corp. , 03–2208, p. 5 (La.App. 4 Cir. 9/8/04), 884 So.2d 623, 626.

In BizCapital , this Court recognized that pursuant to La. R.S. 6:1124, there are no implied fiduciary obligations on the part of a financial institution unless there is a written agreement under which the institution specifically agrees to act as a fiduciary. The Court further acknowledged that a bank nevertheless retains a duty of good faith and fair dealing to their customers. Specifically, the Court in BizCapital noted that in drafting La. R.S. 6:1124, the "legislature did not intend to totally immunize banks from all legal duties in their relationship with customers and third parties." Id. , p. 5, 884 So.2d at 627.

Applying these precepts in the present case, it is evident that there is no writing that would establish a fiduciary relationship between Gulf Coast and Capital One. Thus, the trial court correctly sustained the exception of no cause of action as to Gulf...