Grizzly Sec. Armored Express, Inc. v. Bancard Servs., Inc.
| Decision Date | 14 November 2016 |
| Docket Number | DA 16-0038 |
| Court | Montana Supreme Court |
| Parties | Grizzly Security Armored Express, Inc., a Montana corporation, Plaintiff and Appellant, v. Bancard Services, Inc., a Montana corporation, B&B Lounge, Inc., a South Dakota corporation, Leland Ruzicka, an individual resident of South Dakota, and Does 1–2, Defendants and Appellees. |
For Appellant: Bruce A. Fredrickson, Rocky Mountain Law Partners, PLLP, Kalispell, Montana.
For Appellees: Dean D. Chisholm, Chisholm & Chisholm, P.C., Columbia Falls, Montana, Doug Scotti, Morrison & Frampton, PLLP, Whitefish, Montana.
delivered the Opinion of the Court.
¶ 1 Grizzly Security Armored Express, Inc. (Grizzly Security), filed suit against Bancard Services, Inc. (Bancard), and Leland Ruzicka and B&B Lounge, Inc. (collectively Ruzicka) relating to circumstances surrounding a data entry error that resulted in a substantial sum of money being deposited into the wrong bank account. Bancard and Ruzicka filed motions for summary judgment against Grizzly Security on their respective issues. The District Court determined that the claim against Ruzicka was timed barred due to the applicable statute of limitations and that the claims against Bancard failed for various reasons which we discuss herein, and awarded attorney's fees to Bancard based on the language of the contract between the two parties. Grizzly Security appeals. We affirm.
¶ 2 Grizzly Security raises four issues on appeal, which we restate:
¶ 3 Grizzly Security owns a number of ATM machines at various locations in Montana. One of these ATMs is located at St. Mary's Lodge, outside of Glacier National Park. Bancard is a Montana corporation with operations involving owning, processing, and leasing automated teller machines. In 2004, Grizzly Security and Bancard entered into a Processing Service and Maintenance Agreement (PSMA). Under the terms of the PSMA, Bancard agreed to provide processing services for Grizzly Security's ATMs. Bancard agreed to provide these services “through its agreement with First Interstate Bancorp (First Interstate), or such other processing services as [Bancorp], in its sole discretion, may select.”
¶ 4 Pursuant to the language in the PSMA allowing Bancorp to delegate processing services to a third party, Grizzly Security entered into an ACH Authorization Agreement (ACH Agreement) with First Interstate in June of 2004. The ACH Agreement authorized First Interstate's electronic access into Grizzly Security's checking account in order to deposit funds relating to ATM settlement transactions. In terms of liability, the ACH Agreement provided that First Interstate would be responsible for the “loss of funds transferred into an account not designated in the ACH Authorization Agreement in force at the time of transfer.”
¶ 5 In June of 2008, Bancard exercised its right under the PSMA to change the third party payment processor utilized to assist in processing ATM transactions at Grizzly Security's ATM in St. Mary's () from First Interstate to Columbus Data Services (CDS).
As part of the changeover process, Grizzly Security's account information had to be transferred from First Interstate to CDS. This transfer required that First Interstate enter the numbers or digits of various ATM terminal IDs. During the transfer, a transposition error resulted in Grizzly Security's ATM located at St. Mary's becoming misidentified as an ATM located in South Dakota and owned by Ruzicka. As a result of the error, amounts belonging to Grizzly Security and totaling approximately $285,520 were deposited into Ruzicka's bank account between June 2008 and September 2009. Instead of notifying Bancard or CDS that he had received these funds in error, Ruzicka kept the money.
¶ 6 While the exact date is not apparent from the record in this case, Grizzly Security notified Bancard of the error in mid-2009. In turn, Bancard notified CDS of the error on September 9, 2009. Two days later, CDS notified Bancard that a technician had completed the modification Bancard had requested, updating and correcting the account file associated with Grizzly Security's St. Mary's ATM. After the error had been remedied, Bancard recovered approximately $250,000 of misplaced funds from Ruzicka between September 2010 and December 2010, subsequently returning the money to Grizzly Security.
¶ 7 At this point in the saga, the viewpoints of the parties regarding the subsequent series of events and circumstances vary dramatically. Bancard states that Grizzly Security contacted it in December 2011 regarding the remaining funds, totaling $35,520, which had not been recovered from Ruzicka. During this conversation, Bancard maintains that it informed Grizzly Security that it was under no obligation to recover the remaining funds from Ruzicka, that it had previously repeatedly informed Grizzly Security that sole liability for the missing funds lay with Ruzicka, and that Grizzly Security should seek the remainder of the funds from Ruzicka. Conspicuously absent from Bancard's version of the facts is any reference to events during, or circumstances surrounding, the time period between December 2010, when Bancard states it ceased recovery efforts from Ruzicka, and December 2011, when Bancard states it informed Grizzly Security it should seek recovery from Ruzicka directly.
¶ 8 Grizzly Security's recitation of the circumstances and events surrounding the twelve-month period between December 2010 and December 2011 is strikingly different. Grizzly Security states that the missing funds were recovered on the following timeline: September 29, 2010–$50,000; October 9, 2010–$50,000; and, December 2, 2010–$150,000. Following the December 2010 payout, Grizzly Security alleges that Bancard instructed the employees it had tasked with recovery of the funds from Ruzicka to “keep quiet” about the $35,520 still outstanding, presumably hoping that Grizzly Security would not notice that these funds were still missing. In support of this allegation, Grizzly Security presented affidavits tending to show that this directive was the primary reason the two Bancard employees tasked with recovering the funds from Ruzicka, Vincent Sarff and Wendy Sarff, subsequently terminated their employment with Bancard, and that those employees believed Grizzly Security was entitled to know of the outstanding balance at that time. Grizzly Security alleges that it was only after Vincent and Wendy Sarff left Bancard's employ and informed Grizzly Security of the outstanding funds that Grizzly Security was notified not only that $35,520 had not been collected but that Bancard had ceased collection efforts against Ruzicka.
¶ 9 The factual timelines presented by the parties re-converge following December 2011. Shortly after the December 2011 conversation between Bancard and Grizzly Security, Bancard states that Grizzly Security terminated all its arrangements and contracts with Bancard. In response to the cessation of the business relationship, Bancard notes that it filed two pending lawsuits against Grizzly Security, alleging that Grizzly Security breached the contract contained in the PSMA and tortiously interfered with PSMAs between Bancard and other entities.1
¶ 10 As noted above, there is a clear difference between both parties' recitation of the factual narrative in this case. The District Court apparently noticed this discrepancy, stating,
¶ 11 In August of 2013, Grizzly Security filed a Complaint and Demand for Jury Trial in the Eleventh Judicial District Court, Flathead County, alleging that Bancard breached a contractual duty owed to Grizzly Security, that Bancard had engaged in actual or constructive fraud and/or had made negligent or intentional misrepresentations, that Bancard was negligent in its handling of Grizzly Security's account, and that Ruzicka and B&B Lounge were unjustly enriched by the erroneous deposits.
¶ 12 Bancard and Ruzicka filed motions for summary judgment against Grizzly Security, addressed in more detail below. The District Court granted both motions and awarded Bancard attorney's fees under the PSMA.
¶ 13 We review de novo a district court's grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56
as a district court. Pilgeram v. GreenPoint Mortg. Funding, Inc. , 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839 (citation omitted). Under Rule 56(c), judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Roe v. City of Missoula , 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200 (citation omitted). “A material fact is a fact that involves the elements of the cause of action or defenses at issue to an extent that necessitates resolution of the issue by a trier of fact.” Roe , ¶ 14 (citation omitted). “The party moving for summary judgment has the initial burden of establishing both the absence of genuine issues of material fact and entitlement to judgment as a matter of law.” Roe , ¶ 14 (citation omitted). If the moving party meets this burden, then the burden “shifts to the nonmoving party to establish that a...
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