Stern v. Great Western Bank, 96 C 1290.

• Decision Date: 10 March 1997
• Docket Number: No. 96 C 1290.,96 C 1290.
• Citation: 959 F.Supp. 478
• Parties: Catherine A. STERN and Thomas H. Stern, Plaintiffs, v. GREAT WESTERN BANK, a Federal Savings Bank, Defendant.
• Court: U.S. District Court — Northern District of Illinois

Page 478

959 F.Supp. 478

Catherine A. STERN and Thomas H. Stern, Plaintiffs, v. GREAT WESTERN BANK, a Federal Savings Bank, Defendant.

No. 96 C 1290.

United States District Court, N.D. Illinois, Eastern Division.

March 10, 1997.

COPYRIGHT MATERIAL OMITTED

Thomas H. Stern, Dawn Marie Maxwell, Thomas H. Stern, P.C., Chicago, IL, for Catherine A. Stern, Thomas H. Stern.

Steven B. Varick, Francis L. Keldermans, McBride, Baker & Coles, Chicago, IL, for Great Western Bank.

OPINION AND ORDER

GETTLEMAN, District Judge.

Plaintiffs, Catherine A. Stern and Thomas H. Stern have filed a five count complaint against defendant, Great Western Bank, arising from defendant's compliance with a subpoena of records relating to a mortgage that plaintiffs have with defendant. Plaintiffs allege: (1) invasion of privacy; (2) violation of the Consumer Financial Records Act, 205 Ill. Comp. Stat. 5/48.1 (West 1992); (3) violation of the Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1 et seq. (West 1992); (4) breach of fiduciary duty; and (5) breach of the covenant of good faith and fair dealing. Defendant has moved to dismiss all counts of the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted. For the reasons set forth below, this court grants defendant's motion.

FACTS¹

Plaintiffs, a married couple, borrowed money from defendant bank, which obtained a mortgage on plaintiffs' real property in California. Defendant is located in California and has no branch in Illinois.

During the application period for the loan, plaintiffs disclosed financial information to defendant. In addition, plaintiffs and an agent of defendant signed an "Authorization to Disclose" (the "Authorization") which granted defendant permission to acquire information regarding plaintiffs from third parties. Through the Authorization, defendant had the right to obtain information regarding plaintiffs' bank accounts, loan status and payment histories, employment histories, and credit reports. To insure confidentiality, defendant agreed that the information would be used only to evaluate plaintiffs' loan request, and that "the information [would] not be disclosed to any third party, except as required by law or permitted by federal regulation."

On May 31, 1995, attorney Ellen Sidney Weisz sent a subpoena duces tecum stamped by the Clerk of the Circuit Court of Cook County (the "Subpoena") to defendant. Ms. Weisz represented Thomas Stern's former wife, Myrna S. Stern, in a petition for contribution of college expenses for Myrna and Thomas Sterns' seventeen year old son. Mr. Stern's defense was largely based on his claim that he was financially unable to pay the college expenses.

The Subpoena requested that defendant produce before Judge Grace Dickler in the Daley Center in Chicago information relating to the following: (1) the loan involving the California property; (2) Thomas S. Stern in his individual capacity and (3) Thomas Stern, P.C., a professional corporation. A preprinted portion of the form asked that defendant "bring" the documents to the court on June 7, 1995, and that failure to appear in response to the subpoena would subject defendant to punishment for contempt of court. The issuing attorney typed in the upper right corner of the Subpoena, in capital letters and underlined, the words "SUBPOENA FOR DOCUMENTS ONLY."

Upon receipt of the Subpoena, an employee of defendant mailed the requested information to Ms. Weisz in a sealed envelope. Defendant also sent instructions to Ms. Weisz that described the appropriate manner in which to open the sealed envelope, according to California law. Ms. Weisz brought the sealed envelope to a hearing on June 21, 1995, and Judge Dickler granted Ms. Weisz the court's authorization to open the envelope. Both Thomas Stern and his attorney in the contribution matter were present at the June 21 hearing but raised no objection to opening the envelope or disclosing its contents. Defendant did not itself notify plaintiffs of the Subpoena. Based on the report of proceedings, however, it is apparent that Thomas Stern was aware of the Subpoena by June 21, 1995, when he attended the hearing. Plaintiffs allege that they were somehow damaged by the disclosure of the documents pursuant to Judge Dickler's order.

STANDARD

Dismissal of the claim is appropriate only if it is clear that there could be no relief under any set of facts that could be proved consistent with the allegations. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232-33, 81 L.Ed.2d 59 (1984), citing, Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). All well-pled facts will be taken as true, and all inferences will be made in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Chisholm v. Foothill Capital Corporation, 940 F.Supp. 1273, 1280 (1996). Courts are not to assume that a plaintiff can prove facts that it has not alleged, nor that a defendant has violated laws in ways that the plaintiff has not alleged. Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 902, 74 L.Ed.2d 723 (1983).

Count I: INVASION OF PRIVACY

Plaintiffs allege in Count I that defendant violated their right to privacy when it complied with the Subpoena. Plaintiffs' claims are based on both the Illinois Constitution and Illinois common law.

(A) The Illinois Constitution

Plaintiffs seek to hold defendant liable for violation of Article 1, § 6 of the Illinois Constitution, which provides in part: "The People shall have the right to be secure in their persons, houses, papers and other possessions against unreasonable searches, seizures, [and] invasions of privacy ..." Ill. Const.1970, art. I, § 6.

Section six of the Illinois Constitution was not intended to deal with the relationship between individuals and individuals: it provides individuals protection from invasions of privacy by government or public officials only. Kelly v. Franco, 72 Ill.App.3d 642, 645, 391 N.E.2d 54, 56-57, 28 Ill.Dec. 855, 857-858 (1st Dist.1979); Kelly v. Mercoid Corp., 776 F.Supp. 1246, 1256 (N.D.Ill. 1991). Section Twelve of Article I of the Illinois constitution provides: "Every person shall find a certain remedy in the laws for all injuries and wrongs which he receives to his person, privacy, property or reputation ..." Section Twelve does not work to transform Section Six into providing a cause of action against private defendants. (See Id., citing, Angelini v. Snow, 58 Ill.App.3d 116, 119, 15 Ill.Dec. 780, 783, 374 N.E.2d 215, 218 (1978)).

Defendant is not a government entity, but a privately owned bank. Its actions are not those of a public official. Accordingly, plaintiffs can state no claim under the Illinois Constitution.

(B) Illinois Common Law

Plaintiffs assert that defendant's actions constitute a public disclosure of private facts. To state a claim for public disclosure of private facts, plaintiffs must allege that: (1) publicity was given to the disclosure of private facts; (2) the facts were private, not public; and (3) the matter made public was such as to be highly offensive to a reasonable person. Miller v. Motorola Inc., 202 Ill. App.3d 976, 148 Ill.Dec. 303, 305, 560 N.E.2d 900, 902 (1st Dist.1990); Restatement (Second) of Torts § 652D at 383 (1977). Defendant asserts that plaintiffs fail to allege the first and third elements.

In pleading the first element (the "publicity requirement") plaintiffs allege that "the defendant ... sent 90 pages of confidential financial records and information concerning the plaintiffs ... to a third person, who held no position with the Circuit Court of Cook County, Illinois." Although the complaint does not specify to whom the information was sent, it is clear from the June 21, 1995, hearing transcript that defendant sent the information to Ms. Weisz in a sealed envelope. Plaintiffs also admit in their brief that the information was sent to Ms. Weisz.

Generally, to adequately plead the publicity requirement for this tort, a plaintiff must allege that the matter was communicated to the public at large, or to so many persons that the matter must be regarded as one of general knowledge, rather than merely being communicated to a small group. Restatement (Second) of Torts, § 652D, comment a, at 384 (1977); Miller v. Motorola Inc., 202 Ill.App.3d 976, 980, 560 N.E.2d 900, 903, 148 Ill.Dec. 303, 306; Roehrborn v. Lambert, 277 Ill.App.3d 181, 184, 660 N.E.2d 180, 182, 213 Ill.Dec. 923, 925. Plaintiffs do not attempt to allege that the information was communicated to the public at large. Rather, they rely on an exception to the general rule which provides that the publicity requirement may be satisfied by disclosing the matter to a small number of people who have a special relationship with the plaintiff. Miller, 202 Ill.App.3d at 980, 560 N.E.2d at 903, 148 Ill.Dec. at 306; Roehrborn, 277 Ill. App.3d at 184, 660 N.E.2d 180 at 182, 213 Ill.Dec. at 925. In defining a "special relationship," the Miller court stated:

An invasion of a plaintiff's right to privacy is important if it exposes private facts to a public whose knowledge of those facts would be embarrassing to the plaintiff. Such a public might be the general public, if the person were a public figure, or a particular public such as fellow employees, club members, church members, family or neighbors, if the person were not a public figure.

The special relationship exception, however, does not apply in circumstances where the recipient of the information had a "natural and proper interest" in the information. Roehrborn v. Lambert, 277 Ill.App.3d 181, 184, 660 N.E.2d 180, 182, 213 Ill.Dec. 923, 925. In Roehrborn the plaintiff started out working as a probationary officer. He arranged to attend a police training school, but the Board of Fire and Police Commissioners...