Opinion ID: 1662213
Heading Depth: 1
Heading Rank: 7

Heading: disclosure theory

Text: Left for consideration, then, is whether First National had a separate duty not to disclose Schoneweis' financial position with it to third persons. The only legislative pronouncement on the matter is an interesting statutory provision found in Neb.Rev.Stat. § 8-1401 (Reissue 1987), under which, absent a court order to the contrary and subject to certain exceptions not relevant to the inquiry before us, a bank may refuse to disclose information it considers to be confidential. That statute obviously does not address the situation at hand. Although at least one court refused to find liability on the part of a bank which disclosed its depositor's financial condition to another bank, Irby et ux. v. Citizens Natl. Bk., 239 Miss. 64, 121 So.2d 118 (1960), at least two other courts have recognized an implied contractual duty of banks not to disclose financial information concerning their customers. In Peterson v. Idaho First National Bank, 83 Idaho 578, 367 P.2d 284 (1961), the bank, without its depositor's consent, disclosed the depositor's financial condition to his employer. Finding that the relationship between a bank and its depositor is one between principal and agent, the Idaho Supreme Court held: It is implicit in the contract of the bank with its customer or depositor that no information may be disclosed by the bank or its employees concerning the customer's or depositor's account, and that, unless authorized by law or by the customer or depositor, the bank must be held liable for breach of the implied contract. Id. at 588, 367 P.2d at 290. The court also declared: It is inconceivable that a bank would at any time consider itself at liberty to disclose the intimate details of its depositors' accounts. Inviolate secrecy is one of the inherent and fundamental precepts of the relationship of the bank and its customers or depositors. Id. Suburban Trust Co. v. Waller, 44 Md. App. 335, 408 A.2d 758 (1979), found liability on a warranty theory. Therein, a depositor who had been given sequentially numbered $50 and $100 bills when cashing an $800 check elsewhere deposited them in a new account at the defendant bank. Considering the deposit suspicious, the bank called the police, who arrested the depositor, thinking him to have been involved in a robbery. The court of appeals concluded that a bank depositor has a right to expect that a bank will, to the extent permitted by law, treat as confidential, all information regarding his account and any transaction relating thereto. Id. at 344, 408 A.2d at 764. Accordingly, the court held that absent compulsion by law, a bank may not make any disclosures concerning a depositor's account without the express or implied consent of the depositor. Id. At least three other cases have imposed liability on a tort or other theory. In Djowharzadeh v. City Nat. Bank & Trust Co., 646 P.2d 616 (Okla.App.1982), the plaintiff borrower alleged that he lost a valuable real estate investment opportunity because the bank's loan officer disclosed confidential investment information plaintiff had revealed, in applying for a loan, to the bank president's wife and the wife of the chairman of the bank's board of directors. In holding the plaintiff stated a cause of action, the court reasoned that although the relationship between the bank and its borrowers is not contractual or fiducial because a borrower is compelled to disclose information to the bank, [t]he precarious position of the borrower and the relatively superior position of the bank mandates there be a counterbalancing special duty imposed on the part of the bank. Id. at 619. In Milohnich v. First National Bank of Miami Springs, 224 So.2d 759 (Fla.App. 1969), the plaintiff alleged that the defendant bank negligently and intentionally divulged information concerning its accounts to third parties ... and that as a result, the third parties, on three separate occasions, sued the plaintiffs and enjoined the defendant bank from distributing any of its monies on deposit in the bank.... Id. at 760. The district court of appeal held that the complaint alleged a cause of action for violation of an implied duty on the part of a national bank not to disclose information negligently, wilfully or maliciously or intentionally to third parties, concerning the depositor's account. Id. at 762. That decision was later qualified in Barnett Bank of West Florida v. Hooper, 498 So.2d 923 (Fla.1986), wherein the Supreme Court of Florida held that when the bank defends its breach of duty to disclose facts material to a transaction with a customer on the ground that it owes a conflicting duty of confidentiality to a second customer, the jury is entitled to weigh the one duty against the other. Finally, Graney Development Corp. v. Taksen, 92 Misc.2d. 764, 400 N.Y.S.2d 717 (1978), judgment aff'd 66 A.D.2d 1008, 411 N.Y.S.2d 756, refused to imply an agreement of confidentiality as between a borrower and his bank by noting that while a depositor may have a cause of action against his bank for disclosure of his confidential financial information, a borrower did not. The plaintiff there alleged that the defendant told officers of another bank and an owner who intended to sell property on credit to the plaintiff that the plaintiff failed to repay a loan when due. The court held: As to [the] loan, the relation between the bank and the plaintiff was solely that of creditor and debtor. The information the bank imparted about the state of plaintiff's loan was not information it received in its capacity as agent for a depositor; it was information it obtained as a party to the loan agreement. It was not information that the borrower would normally expect would be kept confidential. One who defaults on his debts owed to a merchant cannot expect that his default will be kept a secret.... I see no basis, therefore, for implying an agreement of confidentiality to the relations of a bank with its borrowers. Graney, supra, 400 N.Y.S.2d at 720. Schoneweis' allegation that the offending statements were made in an effort to enhance First National's position as her creditor compels the conclusion that the statements related solely to that debtor-creditor relationship. We are not persuaded that under such circumstances First National owed Schoneweis any duty of confidentiality. AFFIRMED.