Carl Kanowsky, Esq.
First, a disclaimer.
I am proud to say I am a founding director of the Bank of Santa Clarita and am fiercely loyal to it. You won’t hear any derogatory comments from me about the bank.
Don’t get me started on the megabanks, though. I, like many of you, feel overwhelmed by these huge institutions that can issue edicts that significantly impact my life without any input from me.
Sometimes it feels like they really aren’t interested in my opinion. “Bank with us or don’t; we’ve got plenty of people to take your place,” seems to be their motto. They would rather not see or hear from their customers. In fact, one bank now is charging $9 just to talk to a live body. (I guess there’s no charge if the person’s dead.)
And assume you do have a dispute with one of these worldwide conglomerates. There’s no way you have a prayer of winning, right? Well, hold the phone.
Israel Vilner, a restaurant owner in northern California, went to war with Crocker Bank, now part of Wells Fargo. Working in the restaurant business, Vilner has a lot of cash receipts. Working late hours, he didn’t feel comfortable carrying around that much money. So he opened an account with the Wells predecessor and talked to the bank about using its night drop. The bank signed him up.
Part of the agreement Vilner did not realize was that he agreed not to hold the bank liable for its own negligence.
A few years later, he dropped off $8,000, trusting the money would show up in his account. Crocker Bank failed to tell its customers that on six prior occasions, other bank patrons made night deposits that were never found or were found stuck in the vault. The bank did nothing to correct the problem.
When Vilner learned the bank acted as if the deposit never occurred, he complained. What did he get in return from the bank? Skepticism. He sued it for more than $8,000.
Crocker Bank put up a vigorous fight. It argued there was no case since Vilner agreed not to hold the bank responsible for its own negligence. Besides, Crocker Bank claimed it used ordinary care in its night-deposit operations, which was sufficient protection from liability.
Much to the bank’s surprise, the Court of Appeal disagreed. First, the court summarily tossed the agreement not to hold Crocker Bank liable for its negligence. It was a “contract of adhesion,” that is, a contract where one party had vastly superior bargaining power over the other, and the weaker party was given only a take-it-or-leave-it option on the language of the contract.
More importantly, the court said the banking relationship is “a matter of practical necessity.” As such, the liability waiver violated Civil Code section 1668, which prohibits such contracts.
The court also ruled the bank needed to do more than just say, “Oh, well, easy come, easy go.”
Once Vilner established he made the deposit, it was the bank’s burden to show it had been lost “due to some specific casualty such as fire or theft,” and not due to the bank’s negligence. Because it had failed to do this, Crocker Bank was ordered to credit the money to Vilner.
Chalk one up for the little guy.
Lest you think this is an exception to what happens in real life, I’ve been able to use the Vilner case to convince reluctant banks to do the right thing in situations similar to what Vilner experienced.
So, don’t give up hope. You just might be the next David against Goliath.
Carl Kanowsky of Kanowsky & Associates is an attorney in the Santa Clarita Valley. He may be reached by email at firstname.lastname@example.org. Nothing contained herein shall be or is intended to be construed as providing legal advice.