Sayan v. Riggs Nat. Bk of Washington

• Decision Date: 29 April 1988
• Docket Number: No. 87-139.,87-139.
• Citation: 544 A.2d 267
• Parties: Maria SAYAN, et al., Appellants, v. RIGGS NATIONAL BANK OF WASHINGTON, D.C., Appellee.
• Court: D.C. Court of Appeals

Page 267

544 A.2d 267

Maria SAYAN, et al., Appellants, v. RIGGS NATIONAL BANK OF WASHINGTON, D.C., Appellee.

No. 87-139.

District of Columbia Court of Appeals.

Argued April 5, 1988.

Decided April 29, 1988^*.

Kurt Berlin, Washington, D.C., with whom Jeffrey C. Tuckfelt was on the brief, for appellants.

Nancy F. Preiss, with whom Paul Martin Wolff, F. Lane Heard III, and Jefferson M. Gray, Washington, D.C., were on the brief, for appellee.

Before MACK, FERREN, and STEADMAN, Associate Judges.

FERREN, Associate Judge:

This case primarily concerns the application of § 4-401 of the Uniform Commercial Code. The trial court granted appellee Riggs National Bank of Washington, D.C.'s motion for summary judgment against appellants National Auto Broker Wholesalers, Inc. (NABW), International Auto Brokers Wholesalers, Inc. (IABW), SDF, Ltd., and the owner of those companies, appellant Maria Sayan. The court awarded Riggs $1,024,223.12 in damages plus $224,823.97 in prejudgment interest. Sayan now appeals, contending that summary judgment was improperly granted because genuine issues of material fact remain in dispute and can only be resolved by reference to an auditor-master or at a trial. Finding no error in the trial court's rulings, we affirm.

I.

Maria Sayan is the sole owner of NABW, IABW, and SDF. NABW had had two commercial accounts at Riggs Bank since August 1979. One was a general account; the second was a "zero balance" account. The purpose of the "zero balance" account was to debit drafts written by NABW. The drafts, once approved by NABW for payment, could then be covered by funds drawn from the general account. NABW later opened two additional commercial accounts: a special account and an auto/office expense account. IABW, SDF, and Sayan personally also had accounts at the bank.

Riggs alleges, and appellants do not dispute, that by March of 1984, the NABW accounts were significantly overdrawn.¹ Riggs eventually demanded immediate repayment of the overdraft in an amount over $1 million. The overdraft was not repaid, and the present litigation ensued.

II.

Super.Ct.Civ.R. 56(c) provides that summary judgment shall be granted when "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." This court, in reviewing a grant of summary judgment, is obliged to view the facts in the light most favorable to the non-moving party. McCoy v. Quadrangle Development Corp., 470 A.2d 1256, 1258 n. 3 (D.C. 1983); Truitt v. Miller, 407 A.2d 1073, 1077 (D.C. 1979). We are not bound by the rulings of the trial court, Franklin Investment Co., Inc. v. Huffman, 393 A.2d 119, 121 (D.C. 1978) (citing Owens v. Tiber Island Condominium Association, 373 A.2d 890, 894 (D.C. 1977)), and are required to conduct an independent review of the record, Scrimgeour v. Magazine, 429 A.2d 187, 188 (D.C. 1981). The party opposing summary judgment, however, must show that a fact alleged to be in dispute is material, and that "`there is sufficient evidence supporting the claimed factual dispute to require a jury or judge to resolve the parties' differing versions of the truth at trial.'" Nader v. de Toledano, 408 A.2d 31, 42 (D.C. 1979), cert. denied, 444 U.S. 1078, 100 S.Ct. 1028, 62 L.Ed.2d 761 (1980) (quoting International Underwriter, Inc. v. Boyle, 365 A.2d 779, 782 (D.C. 1976)). We conclude that appellants have not made the necessary showing here.

A.

Rule 56(e) specifically requires that when a motion for summary judgment is made and is supported by affidavits, depositions, or answers to interrogatories, "an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." Super.Ct.Civ.R. 56(e). Riggs moved for summary judgment on Count II of its complaint only, alleging breach of appellants' obligations under the terms of its various accounts with the bank. Riggs contended that: (1) NABW's account was overdrawn in the amount of 81,024,223.12; (2) the overdraft constituted a loan immediately due and repayable to the bank; and (3) the loan was outstanding and had not been repaid. In support of its motion for summary judgment, Riggs filed the affidavit of Ms. Mary Parsons, Senior Operations Officer in the Adjustments Department of the bank, setting forth the source and amount of the overdraft outstanding on appellants' account.

In response, appellants filed a Statement of Material Facts as to Which There is a Genuine Factual Dispute and attached the affidavit of appellant Maria Sayan. The statement of facts in dispute, however, did not contest the material allegations set forth in Riggs' pleadings and in the Parsons affidavit. Indeed, Sayan admitted in her affidavit that Riggs had honored overdrafts against NABW's account and had debited an interest charge against the account for their payment. Appellants, in their Memorandum of Points and Authorities in opposition to Riggs' summary judgment motion, also admitted that "Riggs loaned [NABW] the funds to cover overdrafts and charged regular interest at a fluctuating rate on the credit extended to [NABW]." Nowhere did appellants dispute Riggs' allegation that the current outstanding overdraft remained unpaid. Nor did appellants challenge Parsons' calculation of the amount of the deficit. In short, appellants set forth no "specific facts showing that there is a genuine issue for trial." Super.Ct.Civ.R. 56(e).

B.

We next address the second part of the summary judgment inquiry: whether, on the undisputed facts, Riggs was "entitled to a judgment as a matter of law." Super.Ct.Civ.R. 56(c). D.C.Code § 28:4-401(1) (1981), which codifies § 4-401(1) of the Uniform Commercial Code, states:

As against its customer, a bank may charge against his [or her] account any item which is otherwise properly payable from that account even though the charge creates an overdraft.

The proper payment of an overdraft by the bank carries with it an implicit agreement by the customer to repay the loan. The official comment to U.C.C. § 4-401 states:

It is fundamental that upon proper payment of a draft the drawee may charge the account of the drawer. This is true even though the draft is an overdraft since the draft itself authorizes the payment for the drawer's account and carriers an implied promise to reimburse the drawee.

7 ANDERSON ON THE UNIFORM COMMERCIAL CODE 134 (1985) (emphasis added); see United States v. Christo, 614 F.2d 486, 493, reh. denied, 618 F.2d 1390 (5th Cir. 1980) (overdraft carries implied promise to repay); First National Bank of Evergreen Park v. Lambert, 109 Ill.App.3d 177, 181, 64 Ill.Dec. 754, 758, 440 N.E.2d 306, 310 (1982) (affirming grant of summary judgment to bank in action to collect overdraft); First-Citizen Bank & Trust Co. v. Perry, 40 N.C.App. 272, 274, 252 S.E.2d 288, 290 (1979) (affirming grant of summary judgment to bank in action to collect overdraft). Accordingly, when Riggs honored the overdraft against NABW's account, a duty arose on appellants' part to repay that amount. Moreover, the course of conduct between the parties suggests that an implicit overdraft/loan arrangement had been reached. Sayan stated in her affidavit:

[S]ome time after the Riggs and [NABW] entered into their agreement, Riggs changed the terms thereof so that [NABW]...