Tribby v. Northwestern Bank of Great Falls

Decision Date05 August 1985
Docket NumberNo. 84-99,84-99
Citation42 St.Rep. 1133,217 Mont. 196,704 P.2d 409
PartiesMorrell TRIBBY, Plaintiff and Respondent, v. NORTHWESTERN BANK OF GREAT FALLS, Defendant and Appellant.
CourtMontana Supreme Court

Church, Harris, Johnson & Williams, Charles C. Lovell, argued, Great Falls, for defendant and appellant.

Anderson & Strause, Howard Strause, argued, Sandra K. Watts, co-counsel, Great Falls, for plaintiff and respondent.


Morrell Tribby filed suit against Northwestern National Bank of Great Falls (hereinafter Norwest) on December 23, 1980, alleging that it wrongfully honored checks on a partnership account without Tribby's required approval and that Norwest retaliated for the initial suit by refusing to make automatic loan advances on a personal account. The jury verdict, following a trial in the fall of 1983, awarded Tribby $119,890 compensatory and $1,000,000 punitive damages on the first claim and found for Norwest on the second claim. Norwest appeals the trial court's ruling on its objections to the jury panel and jury selection process and the judgment and verdict on the first claim. We affirm in part, reverse in part and remand for a new trial.

On December 8, 1972, Tribby and his nephew Edward Anderson opened a checking account to deposit monies from their partnership and other joint business, in the name of "Tribby-Anderson Land Account" with Norwest. The signature card required both Tribby's and Anderson's signatures on a check before it would be honored by Norwest. The bank statements were to be sent to an address in Great Falls. Until 1979, Norwest occasionally honored checks that did not contain Tribby's signature. Tribby complained and as a result the signature card was annotated with "Two Signatures Required" in red.

Tribby was the only limited partner in a partnership with Anderson, the general partner. The business engaged in speculation, subdivision and sale of land in Montana. Tribby and Anderson executed a formal partnership agreement effective January 1, 1973. This agreement gave Anderson managerial control, provided that either party could sign checks on the partnership account and divided profits equally.

Norwest issued a new signature card at Anderson's request in January 1979. The new card authorized the bank to honor checks signed by either Anderson or his new wife, Candy, and to send the statements to an address in Spokane, Washington. Tribby's signature was not required according to the new card. Norwest did not notify Tribby or obtain his authorization to change the signature requirement or the address. Although the partnership agreement permitted one-party signatures on checks, the bank employees who issued the new card were not aware of the agreement or its contents.

In July 1979, when Tribby went to Norwest on another matter, a vice-president informed him his signature was not required to authorize withdrawals on the account but did not tell him about the new card. Tribby disagreed and told the vice-president that no check should be honored without his signature. Later in the fall of 1979, Tribby spoke with another vice-president about checks being honored without his signature and was informed that Norwest would not change its policy of honoring checks signed only by Anderson. In November 1979, Tribby's attorney wrote to Norwest and instructed them not to honor checks unless signed by Tribby. Norwest responded by stating the signature card required only one signature and that it would not be changed unless a change was requested in writing by both parties. Tribby and his wife went to the bank in January 1980 and requested a copy of the signature card. They were told the card was lost. When they returned later that same day a different vice-president produced both signature cards. This was Tribby's first notice that a new card had been issued. At this time Norwest stopped honoring checks containing only one signature.

Tribby sued Anderson in March 1980 alleging wrongful withdrawal of monies from partnership accounts, conversion of partnership property and fraud in withdrawing the funds and inducing Norwest to issue a new signature card. Tribby sued Norwest in December 1980 alleging Norwest failed to exercise ordinary care in issuing a new signature card, wrongfully honored checks without Tribby's signature and wrongfully failed to cease honoring checks after being notified to do so.

Following Tribby's suit, Norwest affected Tribby's credit status by placing an outstanding loan to him on a "watch list." The bank refused to renew a loan that had been renewed annually for several years. It also cancelled his ready reserve account which had permitted Tribby and his wife to write checks exceeding the balance in their account. The checks would then be covered by the bank as a loan. In a letter informing Tribby that the account was cancelled, Norwest stated the account was overextended although, at the time, the balance on the account had been paid off. In addition, Norwest refused to pay several items presented before Tribby was notified that the account had been restricted or cancelled.

Norwest answered the complaint and filed a third party complaint against Anderson and his wife on June 16, 1981. This complaint alleged that Anderson had directed Norwest to accept a new signature card in accordance with his authority contained in the partnership agreement and that the Andersons were primarily liable for any loss sustained by Tribby. Norwest also made a motion to dismiss Tribby's complaint and to consolidate Tribby's suit against Anderson with the suit against Norwest. Tribby filed a motion to dismiss the third party claim. Following the submission of briefs and a hearing, the District Court granted Tribby's motion to dismiss the third party claim and denied Norwest's motions to dismiss and consolidate the claims on October 7, 1982.

The case first came to trial on September 26, 1983. The District Court agreed to Tribby's request to disqualify for cause any prospective juror who had an account with Norwest pursuant to section 25-7-224(3), MCA (1981). When the judge asked how many of the potential jurors were customers of the bank, most panel members raised their hands. He then concluded that a new panel would be required in order to get a jury and commented that "as the clerks calls the jurors, I will have to ask them that question, because it looks like three-quarters of the jurors in this case are customers of that bank." Later that day the attorneys for Norwest discovered that effective October 1, 1983, the statute had been amended so that the debtor-creditor relationship could no longer be invoked as a challenge for cause solely because a prospective juror is a depositor of funds with a bank. The court and opposing counsel were both notified but the court and the parties had no further discussions on questioning the jurors.

After the trial had been reset for November 14, 1983, Tribby's attorney advised a deputy clerk that she was to ask prospective jurors whether they had any business with Norwest other than a savings or checking account. The clerk checked with the judge, who told her to follow the procedure set out in the statute concerning excusing jurors for cause. When the deputy clerks telephoned prospective jurors they identified Norwest as a party; asked each prospective juror whether they had transactions or business other than savings or checking accounts with Norwest; excused those who said they had transactions or business with Norwest other than deposits; excused prospective jurors who claimed to be ill, infirm or going on vacation; and excused one person who did not have an account at Norwest but said she was a friend of the bank president's wife. This was done without notice to or participation by counsel for Norwest. The judge denied Norwest's objections to the jury panel and jury selection process and the case proceeded to trial on November 14, 1983.

The seven issues presented by Norwest on appeal are:

(1) Was the jury panel selected contrary to law and in violation of Norwest's right to trial by a representative, fair and impartial jury?

(2) Did the District Court err in denying Norwest the opportunity to present evidence on the cause and extent of Tribby's claimed damages?

(3) Did the District Court err in failing to give effect to the Tribby-Anderson partnership relationship which would require dismissal of this action?

(4) Did the trial court err in permitting the jury to consider recovery under "bad faith" tort principles?

(5) Did the District Court improperly allow Tribby to amend his theory of the case and damages on the eve of trial to the prejudice of Norwest?

(6) Were the damages erroneous, excessive and the result of passion and prejudice?

(7) Was the preparation of a "Certified Supplemental Record" by the District Court an abuse of discretion?

The jury panel selection is subject to two separate inquiries. The first, a procedural inquiry, is whether there was a material deviation or departure from the statutes on jury selection. The second, a substantive inquiry, is whether the parties had a trial before a fair and impartial jury. Reversible error can occur on either question.

Norwest contends that the jury panel selection process used in this case materially deviated from three statutes or rules. Rule 47(a) M.R.Civ.P. requires the court to try challenges for cause and to permit examination of prospective jurors. Subdivision (b) of that rule requires an initial panel be drawn before any voir dire examination of the jury. Here, the clerks examined the prospective jurors using questions given to them by Tribby's counsel without any notice to counsel for Norwest. The clerks released prospective jurors from jury duty based on answers to the questions, thus excusing them for cause without notice to opposing counsel or a ruling by the court. Finally, this questioning took place before...

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