Opinion
No. 26311-8-III.
April 24, 2008.
Appeal from a judgment of the Superior Court for Spo-kane County, No. 06-2-02944-0, Robert D. Austin, J., entered June 29, 2007.
Affirmed by unpublished opinion per Sweeney, J., concurred in by Brown and Korsmo, JJ.
The defendant bank here required a depositor to close two accounts after the bank became concerned about a number of transactions. The depositor deposited a large check payable to a third party using a power of attorney from a business partner who had died. The depositor sued the bank for damages. But the deposit agreement with the customer authorized the bank to close the account for any reason or no reason at all. And we conclude there is no reason in equity why we should not enforce the terms of that agreement. We therefore affirm the summary dismissal of the suit.
FACTS
Reese Tulk opened two accounts at U.S. Bank. The bank's depositor agreement provided that the bank could close the accounts for any reason or no reason at all. Mr. Tulk opened the first account under the name "Greenacres Branch Tulk Insurance Office Inc." on May 12, 1986. Clerk's Papers (CP) at 15, 87. There is no such corporation. He opened a second account under the name "Greenacres Branch" on August 18, 2004, and represented that it was a Washington corporation. CP at 87. Whether it was a valid corporation at the time is unclear from the record here. The bank became concerned about these accounts and began to monitor them after November 2005. Mr. Tulk deposited a check payable to a former partner, Doug McLean, for $188,844 in November 2005. CP at 47. He could not produce a power of attorney showing his authority to endorse the check. CP at 47-48.
The deposit was followed by cash withdrawals from that account ranging from $10,000 to $116,000. Federal regulations apparently require scrutiny of cash withdrawals over $5,000. CP at 48. And such transactions are unusual and prompted the bank to revisit its relationship with Mr. Tulk.
Mr. Tulk then used a power of attorney for his business partner, Mr. McLean, who had died on December 8, 2005. CP at 106. The power of attorney became invalid after the death of Mr. McLean. See RCW 11.94.020.
Mr. Tulk deposited another large check using the power of attorney in 2006 after the death of his business partner. CP at 106.
U.S. Bank wrote to Mr. Tulk on February 16, 2006, and told him that he had to close the accounts within 10 business days or the bank would close them. Mr. Tulk closed one account on March 1, 2006. The other account was automatically closed on February 21, 2006, when Mr. Tulk withdrew all of its funds.
Apparently after the accounts were closed, automatic withdrawals were denied, scheduled direct deposit checks were rejected, and fees were charged on bounced checks. Mr. Tulk sued U.S. Bank for costs, fees, and damages he incurred after the accounts closed.
U.S. Bank moved for summary dismissal. The trial court dismissed the case.
DISCUSSION
Equitable Estoppel
Mr. Tulk argues that he has made a case for equitable estoppel. He argues that U.S. Bank should not have forced him to close the accounts. He argues that the elements of equitable estoppel are met here. He contends that he detrimentally relied on U.S. Bank to continue its services. And the bank's action caused him damages by leaving checks "floating." Those checks bounced. The bank responds that its agreement with Mr. Tulk gave the bank legal authority to close the accounts.
We review the trial court's grant of summary judgment de novo. Bank of Am. v. Hubert, 153 Wn.2d 102, 111, 101 P.3d 409 (2004). We view facts and any reasonable inferences from those facts in the light most favorable to the nonmoving party. Ruff v. County of King, 125 Wn.2d 697, 703, 887 P.2d 886 (1995); Blumenshein v. Voelker, 124 Wn. App. 129, 133, 100 P.3d 344 (2004).
Parties to a contract are, of course, bound by the terms of their agreement. Adler v. Fred Lind Manor, 153 Wn.2d 331, 344, 103 P.3d 773 (2004) (citing Nat'l Bank of Wash. v. Equity Investors, 81 Wn.2d 886, 912-13, 506 P.2d 20 (1973)). And "`specific terms and exact terms'" are given great weight in contract interpretation. Id. at 354-55 (citing 2 Restatement (Second) of Contracts § 203(c) (1981)).
Here, the provisions of the deposit account agreement explicitly state:
We [U.S. Bank] can close your account for any reason or for no reason at all. If we close your account, we will send you notice within ten days after closing, and send the collected account balance to you at your last known address as reflected on our account records, after withholding a sufficient sum to cover any outstanding items and likely fees.
CP at 70 (emphasis added).
So while the bank could have closed the accounts here for no reason at all, it closed them because it questioned the propriety of Mr. Tulk's transactions. These concerns included his questionable authority to endorse a substantial check, followed by large withdrawals, and the fact that he opened accounts in the name of a nonexistent corporation. U.S. Bank had legal authority to close these accounts.
Mr. Tulk argues, nonetheless, that the bank should be equitably estopped from forcing him to close the accounts. Equitable estoppel requires "(1) an admission, statement or act inconsistent with a claim afterwards asserted, (2) action by another in reliance upon that act, statement or admission, and (3) injury to the relying party from allowing the first party to contradict or repudiate the prior act, statement or admission." Bd. of Regents v. City of Seattle, 108 Wn.2d 545, 551, 741 P.2d 11 (1987).
Detrimental reliance is necessary. Nichols Hills Bank v. McCool, 104 Wn.2d 78, 85, 701 P.2d 1114 (1985). The reliance must, however, be reasonable. Landreville v. Shoreline Cmty. Coll. Dist. 7, 53 Wn. App. 330, 332, 766 P.2d 1107 (1988). Here, the bank opened an account subject to a clear contract that the account could be closed for any reason or no reason at all. We conclude then that it would be unreasonable for Mr. Tulk to conclude that the bank agreed to open the account and leave it open regardless of his transactions. That is not reasonable reliance. Schoneman v. Wilson, 56 Wn. App. 776, 784, 785 P.2d 845 (1990); Landreville, 53 Wn. App. at 332.
The bank had the legal authority to close the account and on this record it should not be equitably estopped from doing so. Attorney Fees
The deposit agreement here provided for attorney fees: "You [depositor/account owner] agree to reimburse us [U.S. Bank] for our expenses, including attorney's fees and expenses, arising out of any dispute." CP at 72, 62. The bank asks us to award fees pursuant to that agreement. The bank then is entitled to fees and we award them. RCW 4.84.330; Belfor USA Group, Inc. v. Thiel, 160 Wn.2d 669, 670-71, 160 P.3d 39 (2007).
RCW 4.84.330 states: "In any action on a contract or lease entered into after September 21, 1977, where such contract or lease specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of such contract or lease, shall be awarded to one of the parties, the prevailing party, whether he is the party specified in the contract or lease or not, shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements."
We affirm the summary dismissal of the suit.
A majority of the panel has determined that this opinion will not be printed in the Washington Appellate Reports but it will be filed for public record pursuant to RCW 2.06.040.
Brown, J., Korsmo, J., concur.