C-K Enterprises, Inc. v. Depositors Trust Co., C-K

• Decision Date: 18 December 1981
• Docket Number: C-K
• Citation: 438 A.2d 262
• Parties: ENTERPRISES, INC., et al. v. DEPOSITORS TRUST COMPANY.
• Court: Maine Supreme Court

Page 262

438 A.2d 262

C-K ENTERPRISES, INC., et al. v. DEPOSITORS TRUST COMPANY.

Supreme Judicial Court of Maine.

Argued Nov. 3, 1981.

Decided Dec. 18, 1981.

Berman, Simmons, Laskoff & Goldberg, P.A., William Robitzek (orally), and Robert A. Laskoff, Lewiston, for plaintiffs.

Locke, Campbell & Chapman, Frank G. Chapman (orally), Augusta, for defendant.

Before McKUSICK, C. J., and GODFREY, NICHOLS, CARTER, VIOLETTE and WATHEN, JJ.

WATHEN, J.

This appeal is taken from a judgment entered in Superior Court (Androscoggin County) on a jury verdict awarding compensatory and punitive damages to plaintiffs C-K Enterprises, Inc., and Christine Kyllonen for the closing of their bank accounts by defendant. The issues raised are (1) whether plaintiff Kyllonen has standing to sue; (2) whether the trial justice should have given defendant's requested instructions and (3) whether there was any credible evidence on which the presiding justice could have submitted the question of damages to the jury. We find no merit in any of defendant's arguments and deny the appeal.

For many years plaintiff Kyllonen owned two businesses in Mechanic Falls. In 1964 she opened a checking account for herself d/b/a Christie's Variety and in 1966 an account for herself d/b/a Christie's Restaurant. In 1973 Kyllonen conveyed all her interest in the two businesses to C-K Enterprises, Inc. and opened a checking account at Depositors Trust for the corporation d/b/a Christie's. Kyllonen was the person empowered to draw checks on the corporate account.

Despite the transfer of the businesses to the corporation, the two individual accounts remained active. All three accounts had an extensive history of overdrafts and returned items, and Mrs. Kyllonen often satisfied the businesses' obligations by buying back bad checks with her own funds or with cash generated by the businesses. Conflicting testimony was presented as to whether Kyllonen had been warned that the accounts would be closed if she did not manage them better.

The decision to close plaintiffs' accounts was made on Wednesday, January 21, 1976. On the morning of Friday, January 23, the accounts were closed. Tellers were told to refer anyone seeking to make deposits in the accounts to the manager, Mr. Rioux, and checks were made out for the closing balances and mailed with closing letters to Christie's. Rioux testified that he called Christie's Restaurant on Friday morning and left word for Kyllonen to call him. When one of plaintiff's employees tried to make a deposit about noon on Friday, it was refused, and he was told by the manager to have Kyllonen call the bank. The message was not delivered until between 4:00 and 5:45 p. m. Friday, and there was conflicting testimony as to whether Kyllonen was able to reach Rioux on Friday. On Monday, January 26, Kyllonen went to the bank and spoke to him about the accounts.

The jury returned verdicts for both plaintiffs. Three thousand dollars compensatory damages and $1500 exemplary damages were awarded to C-K Enterprises, and $5000 compensatory and $1000 exemplary damages were awarded to Christine Kyllonen.

Standing

Defendant argues that plaintiff Kyllonen had no standing to sue because she had conveyed all of her interests in the two businesses to C-K Enterprises, Inc. four years before the commencement of this action. We disagree. Although the names on the accounts did not accurately reflect the business status of plaintiff, she was the depositor and signer of the checks as well as the person regarded by the bank as its customer. Damages caused by any mishandling of the accounts by the bank would necessarily have redounded to Kyllonen. As she alleged and subsequently proved, her individual business reputation and peace of mind were damaged by defendant's actions. Without doubt plaintiff Kyllonen's "definite and personal legal rights" are sufficiently at stake in this action to establish her standing. Brown v. Manchester, Me., 384 A.2d 449, 451 (1978); Nichols v. City of Rockland, Me., 324 A.2d 295, 297 (1974).

Jury Instructions

Defendant proposed an instruction that

the relationship between a bank and its depositors is one that is voluntarily assumed by the parties; that either may arbitrarily decline to do business with the other ....

The Court deleted the word arbitrarily, instructing as follows:

The relationship in this case between a bank and a bank customer is a contractual relationship.... It is a voluntary relationship and that relationship may be terminated by either party. The bank may close out a customer's account at any time provided reasonable notice is given to the customer. The contract or the relationship does not prohibit the closing of the account by either party, the customer or by the bank, but the contract carries a requirement that a bank may close out a customer's account provided reasonable notice was given to the customer.

Defendant asserts that failure to give the instruction as requested was prejudicial because it left the jury with the impression "that the contract is binding and the bank had to observe some unstated formalities before the contract could be terminated." We disagree.

A party is not entitled to have a requested instruction given if it is misleading or confusing. Michaud v. Steckino, Me., 390 A.2d 524, 534 (1978); Towle v. Aube, Me., 310 A.2d 259, 266 (1973). The requested instruction, that either party may arbitrarily decline to do business with the other, has the potential for causing great confusion. From it the jury might infer correctly that the account could be closed for no reason. Elliott v. Capital City State Bank, 128 Iowa 275, 103 N.W. 777 (1905); Chicago Marine & Fire Insurance Co. v. Stanford, 28 Ill. 168, 81 Am.Dec. 270 (1862). The jury might also infer, however, that the means of termination may be arbitrary when in fact the Uniform Commercial Code imposes a duty of ordinary care and good faith on banks in their dealings with customers. 11 M.R.S.A. § 4-103.

As given, the charge clearly expressed terminability at will while importing the standard of reasonable conduct. The one requisite formality was explicitly set forth and it was unlikely that the jury would infer that more was required. Since a review of the entire charge shows that the jury was correctly informed on this issue, there was no error in the trial justice's...