Opinion ID: 1125005
Heading Depth: 3
Heading Rank: 2

Heading: NCC v. NBA

Text: NCC opened its operating account at NBA. The Browns signed a signature card. The bank was provided with copies of NCC's Articles of Incorporation and Bylaws, as well as NCC's taxpayer identification number. In 1989 the Browns signed a second signature card, adding the Higashis as signators to the account. On July 28, 1992, the Higashis signed a third signature card, removing the Browns as signators, and adding their son. NBA did not notify the Browns of this change. NBA deleted NCC's taxpayer identification number on the account, and replaced it with the Higashis' personal number. Mrs. Higashi signed the card as secretary/certifying officer. NBA did not ask for corporate records or minutes. The Higashis' taxpayer identification number is crossed out on the card, but the previous number is not reinstated. Mr. Brown affied that he would not have permitted this change to occur if NBA had informed him at that time. However, he did not discover the change until Mr. Higashi's death. He returned to Nome to help manage the business while Mrs. Higashi was attending her husband's funeral; he inquired about the balance in his account. An account clerk informed him he was no longer on the account. When Mrs. Higashi returned to Nome, she and Mr. Brown went to NBA and filled out a fourth signature card, eliminating the Higashis' son (although Mr. Brown still did not know he was on the account), and adding Mr. Brown. Mr. Brown instructed a bank clerk that Mrs. Higashi did not have authority to change the account, and that the bank should not permit any more changes without Mr. Brown's approval. Corporate documentation was neither provided by Mr. Brown, nor requested by the bank. When Mr. Brown found out that Mrs. Higashi was transferring inventory to another store, he called the bank and requested that the account be frozen. The bank agreed to do so if a confirming letter was received. Mr. Brown provided the letter. Mrs. Higashi also called the bank the same day, asking to remove the funds from the account, and to open a new account with those funds. The bank refused. Three days later, Mr. Brown attempted to unfreeze the account. The bank refused, requesting documents to show why Mrs. Higashi should not retain authority over the account. NBA's Anchorage office told the Nome branch to ask for corporate documentation which could give NBA the authority to unfreeze the NCC account. Mr. Brown provided NBA with a corporate resolution; Mrs. Brown provided corporate Bylaws. The Browns were then requested to provide a corporate seal. The account was never unfrozen. The Browns were unable to deposit large amounts of cash that accumulated as a result of the operation of the liquor store. The cash on hand approached $60,000. NBA dishonored a check written by Mr. Brown to cover NCC expenses after November 6, 1992. Mr. Brown did not write another check because he felt that to do so would be useless. On November 18, 1992, a bank manager wrote in a memorandum that he had heard many rumours of the working agreement between the Higashis and the Browns as the Higashis were the working managers. On November 18, 1992, Mrs. Higashi's attorney sent NBA the following letter: The Nome Liquor Store bank account is owned by my clients, Mr. and Mrs. Higashi. I am hereby notifying the Bank that if any money is disbursed from the account without my clients' written consent or a court order directing its disbursement, my clients and I will be looking to recover all losses they incur as a result of such disbursement from the National Bank of Alaska. I will be glad to discuss this matter with the Bank's attorney. If you wish to avoid any problems, I would request that the funds be interpleaded into the court in Nome in Case 2NO-92-250 Civil. Thank you for your attention regarding this matter. Shortly thereafter, Mr. Brown's attorney wrote NBA a letter stating that this is not a case for interpleader and provided documents that the Browns' attorney hope[d] [would be] sufficient to allow Wayne Brown to unfreeze the account that he froze, and to sign new signature cards on which he [and Mrs. Brown] would be the sole signators. The Browns contend that NBA then embarked on a campaign of retribution against NCC and the Browns. NBA refused to let the Browns open personal accounts, deposit cash into the accounts of NCC's vendors, buy bank checks or cashier's checks, or convert bills to change. Mrs. Higashi was allowed to continue using NBA for all her personal banking. On December 21, 1992, NBA filed an interpleader action. NCC and the Browns counterclaimed for damages. NBA was granted either a summary judgment or a directed verdict on all of NCC's and the Browns' claims. NCC and the Browns appeal.