Opinion
No. CV 03-0564496 S
November 16, 2005
MEMORANDUM OF DECISION
Procedural Background
This vigorously disputed action began by writ, summons and complaint dated December 20, 2002, wherein the plaintiff, Rosemary Rheaume, Administrator CTA of the Estate of Charles V. DelPriore (plaintiff), claimed in three separate counts that the defendant, Fleet National Bank (Fleet or defendant), (1) was negligent, (2) breached a contract, and (3) violated a fiduciary relationship. After various pleadings, the complaint was amended on October 29, 2004, and the defendant filed its Answer on May 23, 2005. Trial was had in this court at New London on September 13, 2005 and subsequent days. Both parties were well represented by counsel, presented evidence, and thereafter submitted excellent briefs containing their claims relating to facts proven and applicable law.
Findings of Facts
Based upon the evidence presented and the reasonable inferences from the same, as well as an evaluation of the credibility of the witnesses, the court makes the following finding of facts.
On August 30, 2001, the plaintiff was appointed conservatrix of the Estate of Charles DelPriore and, upon his death, thereafter was appointed Administratrix of his estate on March 27, 2003, and has been acting as such at all times herein relevant.
The plaintiff is also a great niece of Charles DelPriore.
During the period from 1995 until his death in 2003, at the age of 93, Charles V. DelPriore (DelPriore) had been a customer of the defendant, where he maintained a checking and savings account, as well as a safe deposit box.
At all times pertinent to this case Fleet has been and is a bank doing business in Connecticut with a branch in Waterford, Connecticut.
Prior to her death in 1995, DelPriore's wife had been primarily responsible for the couple's finances.
After his wife's death, DelPriore was unwilling to involve his family in his financial affairs. He preferred to have a stranger help him. This was, in part, because he was not pleased with the arrangement which transferred the title to his house to his family on his wife's death leaving him with only a life use.
DelPriore's family, including the plaintiff, rarely visited him at his home. They saw him on visits at other relatives' homes.
After 1999, DelPriore no longer employed a housekeeper, and the condition of his house deteriorated over the course of the next two years to the point where, by 2001, it was unclean and stank of stale urine.
DelPiore was an individual who valued his independence and, despite his physical infirmity and advanced age, was sharp mentally until a decline in his mental state when he entered his 90s.
DelPriore was a person who enjoyed the routines of grocery shopping, preparing his own meals and retrieving his mail daily from the mailbox at the curb. DelPriore had a Jeep and another car. He drove until November of 2000.
Following his wife's death in 1995, DelPriore prevailed upon Sarah Perkins (Perkins), who worked at the defendant Fleet's Waterford branch, to assist him with his financial affairs.
Perkins worked for the defendant (or one of its predecessors) for about 26 years, 15 years of which were as an Assistant Branch Manager.
DelPriore would visit the Waterford branch anywhere from twice to several times a month between 1995 and 1999, and would typically approach Perkins to assist him with his finances.
During this period, Perkins worked at a desk in the lobby of the Fleet's Waterford branch, which area is known as the "platform."
Over the course of this period, DelPriore became increasingly reliant upon Perkins to assist him with a variety of his financial affairs, including the withdrawal of funds, the balancing of his checkbook and the interpretation of his monthly bank statement.
During this period Perkins became familiar with DelPriore's monthly finances including income and expenses.
To facilitate having cash on hand for expenses, DelPriore typically made out a check to cash or to himself for $100 at intervals and cashed them at the defendant bank.
From 1995 to 2001, Perkins made savings withdrawals for DelPriore by filling out the forms at her desk. After he signed them she presented them to a teller for the cash.
Because of the location of her desk in the bank other bank employees, including her supervisor, were aware of the time Perkins was spending with DelPriore when he came to the bank.
Perkins also began providing assistance to DelPriore at his home on her own time, during non-business hours, in part because the bank's management discouraged her from spending so much time with customers like DelPriore, on tasks such as balancing their checkbooks.
DelPriore confided to Perkins that he did not want to involve his family in his financial affairs.
Perkins assisted DelPriore in obtaining an ATM card.
At the defendant bank only a bank customer can request an ATM card. The defendant bank would mail the card directly to the customer's home. The PIN (Personal Identification Number), is normally known only to the customer, and the defendant bank's employees would ordinarily have no access to that number.
DelPriore permitted Perkins to have custody of both his ATM card and his PIN number and to use the same. The Waterford police confirmed later that at least several of the charges to the card were for the benefit of DelPriore.
Perkins was the only person to have used the ATM card assigned to DelPriore.
Perkins never apprised anyone at the bank that she was in possession of DelPriore's ATM card and pin number.
It is impracticable for the defendant bank to monitor the use of ATM cards to determine if any employee is using a customer's ATM card.
The Fleet's mechanism for protecting its customers is the monthly account statement which lists all ATM transactions, thereby affording the customer the opportunity to review all account activity and notify the bank in the event of an unauthorized withdrawal.
Had the bank's management known that Perkins was in possession of a customer's ATM card, it would have taken disciplinary measures against her.
Perkins never apprised her supervisors at the Waterford branch that she was assisting DelPriore with his finances outside of banking hours.
The defendant's management, including her supervisors, did not know that Perkins was engaged in providing such services to DelPriore.
Perkins had worked at the Waterford branch, serving as the Assistant Branch Manager for 15 years until 1998, when the institution for which she was then working (Shawmut Bank) merged with Fleet.
In those days, it was not at all uncommon for bank employees to spend a lot of time with individual customers, even on relatively trivial tasks such as helping them decipher their bank statements.
During the last two years of her tenure, Perkins had been employed as a Portfolio Manager at the Waterford branch, a position in which she had substantial extra duties involving assisting customers of "high net worth." She was expected to meet certain sales objectives with respect to the marketing of the bank's products and services to such individuals.
Perkins did not meet her sales objectives, attributable in part to the extra time she spent with other customers like DelPriore, who needed personal assistance.
The bank's management discouraged Perkins from spending so much time on her non-portfolio customers. She was eventually placed on a probationary status in 1998 to monitor her sales.
Perkins was not placed on probationary status because she was spending too much time with non-portfolio customers. She was placed there because she was not meeting her sales objectives. As a result of being placed on the probationary status, Perkins was directed to account for the time that she spent each week trying to meet her sales goals.
The bank's management never had reason to know that Perkins was doing anything inappropriate.
There was no credible evidence as to the contents of DelPriore's safe deposit box at any time during his relationship with Perkins while she worked at the defendant bank. Nor was there credible evidence as to anything specific missing from the box.
Perkins retired from employment with the defendant bank in November of 1999. She informed DelPriore of her retirement plans on several occasions prior to her actual retirement
While employed by the defendant bank, Perkins had been furnished with copies of the bank's employee manual and its code of ethics.
The code of ethics prohibits employees from discussing customer's confidential information.
The employee manual includes provisions which discuss the prohibitions against employees engaging in acts that could constitute conflicts of interest.
The employee manual identifies "unacceptable behavior" as "receiving or giving of merchandise, money, services, travel, accommodations, or lavish entertainment that might appear to be given to influence a business decision." It sets forth a series of examples of prohibited activities, including "personal, business, or financial relationships with a customer or vendor where the Fleet employee has control or influence over our relationship with that customer or supplier."
The employee manual also prohibits employees from engaging in outside employment, without management's consent, and under no circumstances is outside employment allowed when a conflict of interest would result.
Perkins was a meticulous employee who maintained her workstation in such a manner that she had easy access to the code of ethics and employee manuals. She was familiar with their contents. Her testimony to the contrary is not found credible.
The defendant trained its employees on matters of internal security and provided monthly briefings on that topic.
There was no evidence presented as to any other level of training as would have been appropriate or acceptable in the banking community.
Perkins made withdrawals of cash from DelPriore's bank account by using his ATM card and made various purchases using the ATM card as a Debit card. An undetermined amount of these withdrawals were for her own benefit. Some of the ATM withdrawals were in cash for Perkins.
Given the corporate culture of the defendant bank Perkins knew that her involvement in DelPriore's financial affairs at his home and with his ATM card during her employment at the bank was inappropriate.
The defendant had a system of "dual controls" in place that would not permit a single employee to withdraw funds from a customer's account unilaterally, but would rather necessitate the involvement of a second (and sometimes third) employee to cross-check the transaction and verify its accuracy and legitimacy.
Transaction records at the bank were reviewed on a daily basis and were also subject to rigorous internal and external audit procedures.
There was no evidence of any other level of controls which would have been appropriate in the banking community.
Had the bank's management known when she was an employee that Perkins had been engaged in performing services for DelPriore on her own time, during non-business hours, they would have insisted that she put a stop to it.
When Perkins retired from the defendant bank in November 1999, she had no records or receipts for the purchases she made for DelPriore.
Following her retirement in November of 1999, Perkins became more involved in assisting DelPriore with managing his personal affairs, visiting his home on an average of two to three times each week, staying at least a half hour at each visit.
During the period between November of 1999 and April of 2001, Perkins encountered one of DelPriore's family members at his home on only one or two occasions while she was visiting DelPriore.
Following her retirement, Perkins had more time to spend at DelPriore's home, gradually expanding the scope of her activities to include doing his laundry, picking up his prescriptions, buying clothing for him, purchasing adult diapers for him and providing him with assistance in managing his securities and other assets.
While Perkins was not literally paid for her efforts, she received gifts of cash and checks from DelPriore's accounts on at least 20 occasions despite the fact that he was, generally, a very frugal person.
Between August of 1997 and November of 2000, DelPriore signed checks, payable to Perkins, totaling $2,200.
Some of these checks were made out by Perkins and only signed by DelPriore.
The checks payable to Perkins were for the following amounts on the indicated dates:
Amount Date
$100 August 28, 1997 $100 November 18, 1997 $100 March 10, 1998 $100 April 9, 1998 $100 August 2, 1998 $100 November 20, 1998 $100 December 16, 1998 $100 March 26, 1999 $100 September 13, 1999 $100 October 25, 1999 $200 December 13, 1999 $100 April 10, 2000 $100 June 9, 2000 $100 August 13, 2000 $500 November 13, 2000
At least some of these checks were intended as gifts to Perkins and some were to provide cash to make purchases for DelPriore, the amounts of which were not possible to determine from the evidence.
There were withdrawals totaling $49,326.41 and $4,700 from DelPriore's savings and checking accounts respectively, occurring over the course of six years.
Two certificates of deposit in DelPriore's name were cashed in on June 22, 2000, but the proceeds of these certificates were deposited directly into DelPriore's savings account.
DelPriore also maintained a safe deposit box with the defendant bank, accessible only with a key which he possessed, used in tandem with a second key kept by the defendant bank at the Waterford branch.
DelPriore, along with his brother, William, were the only parties to the safe deposit box contract with the defendant.
After Perkins retired from the bank, DelPriore had occasion to come to the Waterford branch to access his safe deposit box.
Kimberly Barry (Barry), the Assistant Manager of the Waterford branch, assisted DelPriore on such occasions.
During these occasions, DelPriore never told Barry that anything was missing from his safe deposit box.
DelPriore was aware that Perkins had retired from the bank. He knew she was not associated with the bank when she was helping with his finances after November 1999.
DelPriore began using a walker to get around sometime in 1999.
DelPriore grew increasingly infirm during the period from 1999 to early 2001. He became less ambulatory during this period, confining himself to only three rooms on the first floor of the two-story residence in which he had a life use.
DelPriore was fully competent and "had his wits about him" though October 2001.
By the spring of 2001, at the age of 91, it became necessary for DelPriore to have supervised custodial care at a nursing home facility.
By the time he had reached his 92nd birthday in 2002, DelPriore was using a wheelchair.
After DelPriore moved into the nursing home, the plaintiff and other family members began examining his personal papers, including his banking records. They found he did not have as many assets as they thought he should have.
The plaintiff and other family members suspected that Perkins had stolen money from DelPriore, and contacted the Waterford Police Department to investigate their suspicion.
As part of its investigation, Jeremiah Shea ("Shea"), a detective with the Waterford Police Department conducted an interview with DelPriore in October of 2001 at his nursing home.
During the interview, after his family had become involved with his affairs, DelPriore said that he had never authorized Perkins to use his ATM card.
Shea looked into the charges that had been made to DelPriore's ATM card at various merchant locations and, of those that he was able to investigate, the charges incurred appeared to him to have been for DelPriore's benefit. The Waterford police did not pursue the investigation further.
Law and Analysis CT Page 14360
The first count of the complaint alleges that the plaintiff suffered losses due to the negligence of the defendant bank, its agents or servants and/or its employees. The losses alleged are both financial and emotional distress. The second count alleges the same losses caused by an alleged breach of contract. The third count alleges essentially the same losses caused by an alleged breach of a fiduciary duty.
Negligence
The claims of negligence in the first count (at paragraph 7) concerning which evidence was offered, break down into two areas: (1) failure to train, supervise or monitor its employees or agents, and (2) failure to warn or inform DelPriore of the "actions" of its employees or their termination of employment.
The burden of proof is on the plaintiff to establish these claims by a preponderance of the evidence. Lukas v. New Haven, 184 Conn. 205, 207 (1981).
The plaintiff has not cited any case relating to the duty of a bank with respect to training, supervising or monitoring its employees, nor was there evidence of any standard by which such action should be judged. However, the defendant bank offered considerable evidence as to the manuals, books, audits, controls and meetings by which their employees received training and supervision. The testimony that Perkins was unaware of the Fleet policies, procedures and ethical standards was not found creditable.
While no doubt the defendant owed its depositors a duty with respect to its activities, the plaintiff has not sustained the burden of proof with respect to what that duty was and how it may have been broken. In that regard the plaintiff has failed to meet her burden of proof.
The pleadings are not entirely clear as to the role of the employee Perkins in respect to those duties, The plaintiff in the brief, however, clearly asks the court to find, first that Perkins was negligent in some undisclosed way and then (by the application of the doctrine of respondeat superior) that the defendant bank is responsible for damages flowing therefrom. The citation to the case of Matthiessen v. Vanech, 266 Conn. 822 (2003) by the plaintiff does generally set forth the legal proposition of respondeat superior. But the plaintiff's reference omits mentioning that the employee's tortious conduct must be during the course of the employee's employment. This, the court said in a footnote, means while engaged in the service of the master, and is not synonymous with the phrase "during the period covered by his employment." Id., 839 n. 15. It is difficult to see how the theft of the customer's money, even if it had been established by the evidence (which it was not) could be found to be done "in the service of the master."
The next claim of the plaintiff in her brief seems to suggest that Perkins was given "apparent authority" by the conduct of the defendant bank and should be bound by what the agent did as that agent. Here, the argument breaks down because it is claimed that Perkins acted with apparent authority in assisting DelPriore to balance his account, make withdrawals, opening an ATM card and disposing of his stock, but no damages are shown to have come from this activity. The claimed damages, even if proven, were alleged to have been from the theft of his funds for her use. It is not possible to think that Perkins had the apparent authority to steal his funds even if there was any proof that she had done so. See Reider v. Arthur Anderson, LLP, 47 Conn.Sup. 202, 211 (2001).
With regard to the alleged failure to warn or notify DelPriore, the court simply did not give credit to the evidence offered by the plaintiff.
The plaintiff has failed to sustain the burden of proof with respect to the liability aspect of the first count of the complaint.
Breach of Contract
In the second count of the complaint the plaintiff alleges losses by reason of a breach of the contract between DelPriore and the defendant bank. The plaintiff did not brief her claim of breach of contract. Nor was evidence found as to the alleged terms of a contract between DelPriore and Fleet unless one is inferred from their relationship.
For the defendant to be held liable for breach of contract, the plaintiff must necessarily attribute the allegedly actionable behavior of Perkins to the defendant under the common-law principle of respondeat superior. In Connecticut, this principle has been recently analyzed by our state's Supreme Court.
Under the doctrine of respondeat superior, as indicated above, a master is liable for the willful torts of his servant committed within the scope of the servant's employment and in furtherance of his master's business. Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 500 (1995). "It refers to those acts which are so closely connected with what the servant is employed to do, and so fairly and reasonably incidental to it, that they may be regarded as methods, even though quite improper ones, of carrying out the objectives of the employment." Id., 505. Thus, proof of negligent, disobedient, or unfaithful conduct by the agent is insufficient as a defense to a respondeat superior claim. The "vital inquiry" is whether the act was done to further the principal's, or master's, business, or whether it was "actuated" or "motivated at least in part by a purpose to serve the bank." Millennium Guild, Inc. v. Salisbury Bank and Trust Co., 1999 WL 989604, *6 (Conn.Super. 1999) (emphasis supplied).
In Millennium, a bank employee stole from the corporate plaintiff, for whom she served as a bookkeeper independently of her job at the bank, by effecting unauthorized withdrawals and appropriating the money withdrawn. The employee pleaded guilty to the theft, and the plaintiff later sued the bank on a theory of respondeat superior. The court held that, to find the bank liable, the plaintiff would have to show that the employee's acts in taking money from the plaintiff's bank account somehow furthered or were motivated in part by a purpose to further the bank's interest. In the present case, there has never been any suggestion by the evidence that Perkins was acting to further the defendant bank's business interests by stealing DelPriore's money and property even if that were proved.
The plaintiff has not sustained her burden of proof with regard to the liability aspect of the second count of the complaint.
Breach of Fiduciary Relationship
In the third count of the complaint the plaintiff alleges that the losses sustained were the result of the breach of a fiduciary relationship between Fleet and DelPriore.
"A fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other. Harper v. Adametz, [ 142 Conn. 218, 225 (1955)]; Worobey v. Sibieth, [ 136 Conn. 352, 359 (1949)]; Hemingway v. Coleman, 49 Conn. 390, 392 (1881). The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him. D. Dobbs, Remedies (1973) 10.4, p. 682." Dunham v. Dunham, 204 Conn. 303, 322 (1987); See also Martinelli v. Bridgeport Roman Catholic Dio., 196 F.3d 409, 429 (2d Cir. 1999).
The Connecticut Supreme Court has, however, "specifically refused to define a fiduciary relationship in precise detail and in such a manner as to exclude new situations choosing instead to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other." (Internal quotation marks omitted) Alaimo v. Royer, 188 Conn. 36, 41 (1982). Essentially, a "fiduciary is a person holding the character of a trustee, or a character analogous to that of a trustee . . ." Albom v. Katz Corp., 39 Conn.Sup. 533, 535 (1983).
As a general matter a bank does not act in a fiduciary capacity on behalf of its customers. "The fact that a bank is indebted to its account holders . . . imposes no special duty of care for the safe keeping of the funds on deposit." Frigon v. Enfield Savings Loan Ass'n, 195 Conn. 82, 87 (1985). There is an exception to this general rule. "Connecticut has adopted the view that a bank can be in a fiduciary capacity to a borrower if upon being presented with a transaction by a prospective borrower seeking a loan, the bank usurps the transaction as its own." Willow Funding Co., L.P. v. Grencom Associates, Superior Court, Judicial district of Stamford, CV950146003 (January 19, 2000, Tierney, J.).
In this case, the court has found no evidence of the existence of a special relationship between DelPriore and the defendant bank marked by the incidences of confidence or trust that would give rise to an exceptional fiduciary duty.
"Deposits . . . create the relation of debtor and creditor between the bank and the depositor." Ferrato v. Webster Bank, 67 Conn.App. 588, 593 (2002), quoting Alexiou v. Bridgeport-People's Savings Bank, 110 Conn. 397, 399 (1930). See also Grenwoods Scholarship Foundation, Inc. v. Northwest Community Bank, Superior Court, judicial district of Hartford, CV 960558956 (June 4, 1999, Teller, J.). As such, deposit accounts do not produce fiduciary relationships between banks and their depositors. Frigon v. Enfield Savings Loan Assn, Supra, 195 Conn. 87. Rather, the bank's obligation is limited to its requirement to pay on the depositor's demand. Lenox Realty Co. v. Hackett, 122 Conn. 143, 146-47 (1936).
The plaintiff has argued that the existence of a safety deposit box by DelPriore created a special relationship for which the defendant Fleet should be responsible.
Unlike deposit accounts, safe deposit boxes do create a relationship between the customer, as bailor, and the bank, as bailee "even though the bank has no knowledge as to the property deposited." Farnum v. Conn. Bank Trust Co., 22 Conn.Sup. 257, 261 (1960). Use of a safety deposit box is generally governed by a rental agreement. Ordinarily, the "failure of a bailee to return goods . . . raises a presumption that their nonproduction is due to [the bailee's] negligence." Griffin v. Nationwide Moving Storage Co., 187 Conn. 405, 408-09 (1982).
This, however, does not avail the plaintiff since, as discussed below, the plaintiff has shown no credible evidence of loss connected with the safety deposit box.
The plaintiff has not sustained the burden of proof with respect to the liability aspect of the third count of the complaint.
Damages
The plaintiff has the burden of proof with respect to all the essential elements of the complaint. Lukas v. New Haven, 184 Conn. 205, 211 (1981). This applies to damages which must be proved with reasonable certainty. Beverly Hills Concepts, Inc. v. Schatz Schatz, Ribicoff Kotkin, 247 Conn. 48, 69 (1998).
The standard the plaintiff must meet is to prove those elements by a preponderance of the evidence, that is, that the better or weightier evidence must establish that, more probably than not, the assertion is true. Tianti v. William Raveis Real Estate, Inc., 231 Conn. 690, 702 (1995).
It must be taken out of the area of guess, speculation or conjecture. See Bertozzi v. McCarthy, 164 Conn. 463, 468 (1973).
"We recognize that `[t]here is no unbending rule as to the evidence by which such compensation is to be determined . . . and the damages may be based on `reasonable and probable estimates' but it is equally clear that damages must be based on evidence . . ." Id.
While, as the plaintiff asserts, the courts are given some discretion, damages are recoverable only to the extent that the evidence affords a sufficient basis for estimating their amount with reasonable certainty.
The plaintiff has not met the burden with respect to damages in any of the categories claimed.
There was simply no credible evidence as to the claim of emotional distress and the court will not discuss that further.
The other claims alleged and claimed relate to the safety deposit box, stocks, bonds, mutual funds, and checking and savings account deposits.
The plaintiff's effort to claim damages of $45,000 for the state lien relating to the benefits received while at the convelesant home are simply not supported by the evidence. To do so would require the court to find that had it not been for some liability of Fleet DelPriore would have had enough funds to pay for home health care. The evidence simply does not support such a claim even if any liability had in law been established.
The plaintiff offered volumes of exhibits and considerable testimony relating to the various transactions involving DelPriore's assets. But none has made it possible to determine if DelPriore's estate has lost anything. There was no evidence that anything was missing from the safety deposit box whatever might be said of the defendant's record keeping ability. The claim relating to the delay in the sale of some stock is so speculative on its face as to not require discussion.
The principal claim of the plaintiff (if gauged by the volume of the evidence offered) is related to the handling of withdrawals from DelPriore's accounts at the bank and with the use of the ATM card. The plaintiff has not provided credible evidence with which the court can distinguish which withdrawals constituted gifts to Perkins, purchases for DelPriore, or cash for purchases for his benefit.
Conclusion
Applying the law to the facts found, the court concludes that the plaintiff has not sustained her burden of proof with respect to the liability of the defendant Fleet on any one of the three counts alleged in the complaint. Even if it were to be found, however, that liability was established on any of those counts, the plaintiff has not sustained the burden of proof with respect to any of the damages claimed. Under these circumstances, whatever the plaintiff's rights might be vis a vis Perkins (if any), judgment may enter for the defendant Fleet on each count in the plaintiff's complaint, with costs.