Twin City Bank v. Isaacs
| Decision Date | 02 July 1984 |
| Docket Number | No. 84-75,84-75 |
| Citation | 672 S.W.2d 651,283 Ark. 127 |
| Parties | , 39 UCC Rep.Serv. 35 The TWIN CITY BANK, Appellant, v. Kenneth ISAACS, et ux., Appellees |
| Court | Arkansas Supreme Court |
Bob Scott by Bob Scott and Thomas Hinds, North Little Rock, for appellees.
Twin City Bank has appealed from a judgment entered on a jury verdict against it in favor of Kenneth and Vicki Isaacs for damages sustained from the bank's wrongful dishonor of the Isaacs' checks resulting in a hold order against their account for a period of approximately four years.
On Sunday, May 13, 1979, the Isaacs discovered that their checkbook was missing. They reported the loss to Twin City promptly on Monday, May 14, and later learned that two forged checks totalling $2,050 had been written on their account and honored by the bank on May 11 and 12. The sequence of events that followed is disputed, but the end result was a decision by the bank to freeze the Isaacs' checking account which had contained approximately $2,500 before the forgeries occurred. A few checks cleared Monday morning before a hold order was issued leaving the balance at approximately $2,000. Mr. Isaacs had been convicted of burglary and the initial hold on the account was attributable to the bank's concern that the Isaacs were somehow involved with the two forged checks. The individual responsible for the forgeries was charged and convicted soon after the forgeries occurred and on May 30, 1979 the police told the bank there was nothing to connect the Isaacs with the person arrested. Two weeks later the police notified the bank a second time they could not connect the Isaacs to the forgeries. The bank maintains it continued to keep the account frozen on the advice of its attorneys. However that may be, the Isaacs were denied their funds for some four years. The Isaacs filed suit in mid-June of 1979 for wrongful dishonor of their checks and wrongful withholding of their funds.
The jury awarded the Isaacs $18,500 in compensatory damages and $45,000 in punitive damages. The bank made a motion for a new trial pursuant to ARCP Rule 59, which was denied. From that denial the bank brings this appeal contending error on three grounds: 1) Misconduct of a juror at trial, 2) the trial court's refusal to give two requested instructions, and 3) jury error in assessing excessive damages contrary to the evidence and the law.
The bank's arguments with respect to juror misconduct and the refusal of two instructions requested by it are readily answerable. It is urged that one of the jurors, who had indicated on voir dire that she was not acquainted with the Isaacs, was seen in conversation with them during a break in the trial. At the suggestion of the bank's attorneys the Isaacs were questioned in chambers and it was learned the juror had asked Kenneth Isaacs (who had testified earlier he lived on Sheila Drive) if he knew the Whitehead family. He answered that he thought he knew the family, but wasn't sure. The bank cites us to Zimmerman v. Ashcraft, Admn., 268 Ark. 835, 597 S.W.2d 99 (Ark.App.1980), but the two cases have little in common. In Zimmerman, two jurors had failed to answer on voir dire whether they were involved in litigation in which counsel for either side were participants, when in fact they were involved. Here, there is no suggestion that the juror did not respond truthfully to questions asked on voir dire. The bank insists the trial judge should have questioned the juror about the incident, rather than simply offering that opportunity to counsel for the bank, who demurred for fear of incurring resentment by the juror. But decisions of this sort must rest largely with the discretion of the trial court and there was no error in the refusal to grant a mistrial. Mistrial is an extreme remedy to be resorted to only where the error is so prejudicial that justice cannot be served by continuing. Back v. Duncan, 246 Ark. 494, 438 S.W.2d 690 (1969).
The bank submits the jury should have been instructed in accordance with tendered instruction No. 15 and AMI No. 2229, both of which were properly refused by the trial court. The first would have told the jury that the Isaacs had the burden of proving their damages, and if they failed in that burden its verdict should be for the bank. But the burden of proof was covered by AMI 202 and 203 and the instruction offered was plainly slanted toward the bank, and was not in compliance with our Per Curiam Order dated April 19, 1965, that when instructions are used which do not appear in AMI, they shall be "simple, brief, impartial, and free from argument." See Arkansas Model Jury Instructions, 2d Ed., p. xxxi.
With respect to AMI 2229, we find no error in the refusal of the instruction. Whether the bank was entitled to any instruction on mitigation based on the evidence is arguable, but in any event the instruction presented was not appropriate to the proof. AMI 2229 deals with physical damage to real or personal property and is intended to follow AMI 2221, which must include the appropriate property damage claim covered by AMI 2222 through 2228. None of these was used by the court and the damage instruction given the jury (AMI 2201) included only losses pertaining to money wrongfully withheld, mental anguish and financial loss. See Reynolds v. Ashabranner, 212 Ark. 718, 207 S.W.2d 304 (1948); Bovay v. McGahhey, 143 Ark. 135, 219 S.W. 1026 (1920).
On the issue of damages, the bank maintains there was insufficient evidence to support the $18,500 award for mental anguish, for loss of credit and loss of the bargain on a house, that the award of punitive damages should not have been given at all as there was not only insufficient proof of actual damages but insufficient evidence of malice or intent to oppress on the part of the bank. The bank does not challenge the sufficiency of the evidence of its wrongful dishonor, but contends only that there was no evidence to support an award of damages. These arguments cannot be sustained.
The statute upon which this suit was based is Ark.Stat.Ann. § 85-4-402.
Bank's liability to customer for wrongful dishonor--A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. When the dishonor occurs through mistake liability is limited to actual damages proved. If so proximately caused and proved damages may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.
The jury was instructed that if they found the bank liable they were to fix the amount of money which would compensate the Isaacs "for any of the following elements of damage sustained which were proximately caused by the conduct of Twin City Bank: 1) Any amounts of money wrongfully held by the defendant and remaining unpaid 2) any mental anguish and embarrassment suffered by the plaintiffs 3) any financial losses sustained by the [Isaacs]."
Initially, there can be no serious question as to certain losses: the $2,000 wrongfully withheld by the bank for four years, and the value of two vehicles repossessed because the Isaacs did not have access to their funds, resulting in a loss of approximately $2,200. Additionally, after the account was frozen the bank continued to charge the account a service charge and overdraft fees on checks written before the forgeries but presented after the account was frozen. The bank does not refute these damages but argues there is no showing of any financial deprivation from loss of credit or loss of the bargain on a house the Isaacs wanted to buy, and insufficient proof of mental anguish. We find, however, that in addition to the losses previously mentioned, there was sufficient evidence to sustain damages for mental suffering, loss of credit, and sufficient demonstration of some loss attributable to the inability to pursue the purchase of a home.
Mental suffering under § 4-402 of the Uniform Commercial Code is relatively new and has...
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