Brown v. Oaklawn Bank

• Citation: 718 S.W.2d 678
• Decision Date: 16 July 1986
• Docket Number: No. C-5323,C-5323
• Parties: Herman BROWN and Thelma Jean Brown: Harry B. Friedman and Sherman A. Kusin, Sureties, Petitioners, v. OAKLAWN BANK, Respondent.
• Court: Supreme Court of Texas

Page 678

718 S.W.2d 678

Herman BROWN and Thelma Jean Brown: Harry B. Friedman and Sherman A. Kusin, Sureties, Petitioners, v. OAKLAWN BANK, Respondent.

No. C-5323.

Supreme Court of Texas.

July 16, 1986.

Rehearing Denied Nov. 26, 1986.

Harry B. Friedman, Harkness, Friedman & Kusin, Rick Rogers, Hall & Rogers, Texarkana, for petitioners.

John R. Morriss, Atchley, Russell, Waldrop & Hlavinka, Texarkana, for respondent.

WALLACE, Justice.

This case arises out of a bank error resulting in an overpayment of a closed account. The primary question presented is the extent to which a creditor may use the threat of criminal prosecution to procure payment of a debt under the Texas Debt Collection Act. TEX.REV.CIV.STAT.ANN. art. 5069-11.02 (Vernon 1986). In an unpublished opinion, the court of appeals affirmed the trial court's judgment that Oaklawn Bank did not violate the Texas Debt Collection Act by making threats of criminal prosecution. We affirm the judgment of the court of appeals in part, reverse in part, and remand to the trial court for further proceedings.

The Browns maintained a savings account at Oaklawn. On October 8, 1982, Oaklawn withdrew $7,150 from the account pursuant to a court order of garnishment in a separate proceeding involving the Browns. They sent a letter to Brown informing him that the remaining balance was approximately $2,198. However, the withdrawal of $7,150 was never posted to the Browns' account. On October 12, Brown went to Oaklawn to close his account. The teller attempted to tender to Brown the balance of $9,348.

Brown informed the teller that the amount was too much. The clerk checked with her immediate supervisor who in turn checked with the senior vice president of Oaklawn, a Mr. Turner, and both confirmed the transaction. One of Oaklawn's employees represented to Brown that the discrepancy was due to the accumulated interest in the account. Accordingly, Brown was given a check for $9,348. Shortly after leaving the bank Brown deposited the money into accounts for his four children at Texarkana Terminal Employee's Federal Credit Union.

That afternoon, Oaklawn became aware of their mistake and called Brown to inform him that he had received too much money. Brown told them that he did not know what was going on, that he thought everything had been cleared up when he was at the bank, and told the Oaklawn representative to contact his attorney to work out the dispute.

The next day, Turner wrote Brown a letter advising him that Oaklawn and the local district attorney were prepared to bring criminal charges against him. In addition, the local district attorney, Mr. Raffaelli, wrote Brown a similar letter, stating that he would issue a warrant for his arrest on October 18, if the money was not returned. At the time of the incident, Mr. Raffaelli was an associate director of the bank.

On October 27, Oaklawn filed a Writ of Attachment on the funds deposited at Texarkana Employees Federal Credit Union based on an affidavit wherein a senior vice president of Oaklawn swore that Brown had obtained the property under false pretenses. Shortly thereafter, the Browns filed a replevy bond for the funds, listing Friedman and Kusin as sureties. The sureties were not made parties to the suit and were not served with notice of the pending trial and consequently were not represented at the trial.

In its findings of fact, the trial court held that Oaklawn did not falsely accuse Brown of fraud or any other crime; did not threaten a debtor with arrest for nonpayment of the debt without proper court proceedings; and did not threaten to file charges, complaints, or criminal action against a debtor who had not violated any criminal laws. Additionally, the court found that Oaklawn had no desire or intent to harm or injure the Browns and that they suffered no damages as a result of the actions of Oaklawn.

Nonjury findings of fact are reviewed by an appellate court in the same manner as a jury verdict. When considering a no evidence point, we must examine the record to determine if there is at least some evidence of probative force to support the findings of the trier of fact. Akin v. Dahl, 661 S.W.2d 917, 921 (Tex.1983). If there is any evidence of a probative nature to support the finding, the judgment of the trial court will not be set aside. Ray v. Farmer's State Bank of Hart, 576 S.W.2d 607, 609 (Tex.1979).

We hold there is no evidence to support the trial court's finding that Oaklawn did not violate the Texas Debt Collection Act. The relevant portions of Article 5069-11.02 provide:

Threats or Coercion.

No debt collector may collect or attempt to collect any debt alleged to be due and owing by any threats, coercion, or attempts to coerce which employ any of the following practices:

* * *

(b) accusing falsely or threatening to accuse falsely any person of fraud or any other crime;

* * *

(e) threatening that the debtor will be arrested for nonpayment of an alleged debt without proper court proceedings; ...

(f) threatening to file charges, complaints, or criminal action against a debtor when in fact the debtor has not violated any criminal laws; ...

A review of its history indicates that the Legislature passed the Debt Collection Act to prevent creditors from preying upon a consumer's fears and ignorance of the law to pursue allegedly delinquent debts. See Comments of Senator Gammage, Hearings on S.B. 252 before the Senate Jurisprudence Committee, 63rd Leg. (April 6, 1973). Unquestionably, the threat of criminal prosecution is one of the most frightening and embarrassing ordeals to which an individual can be subjected. The fact that the Legislature specifically referenced criminal prosecution or threats of criminal prosecution at least three times in this section of the Act acknowledges the extent of the problem as it existed in the creditor-debtor relationship at the time the Act was passed and the magnitude of potential harm to the debtor.

In the present case, Oaklawn does not...