Opinion ID: 2075955
Heading Depth: 2
Heading Rank: 4

Heading: The Validity of the Purported Contract.

Text: Having examined the signature cards on which Riggs relies for its claim that it complied with Section 42-206(a), we share the trial judge's misgivings in regard to the basic fairness of characterizing them as a contract in which the customer agreed to the imposition of service charges. As the District points out, brief at 38, a depositor given a signature card to sign for the purpose of preventing fraudulent transfers is not likely to be aware that the obverse side of the card contains terms and conditions of a contract. Nothing in the record demonstrates that the bank called these terms or conditions to depositors' attention at the time the account was opened. In light of concessions made by the District in the trial court, however, we think that Riggs must prevail on this issue. It is generally held that a binding contract between a bank and its depositors is created by a deposit agreement contained on a signature card. See, e.g., Bennett v. First Nat'l Bank, 443 F.2d 518, 520 (8th Cir.1971); Perdue v. Crocker Nat'l Bank, 38 Cal.3d 913, 919, 702 P.2d 503, 509, 216 Cal.Rptr. 345, 351 (1985), appeal dismissed 475 U.S. 1001, 106 S.Ct. 1170, 89 L.Ed.2d 290 (1986); In re Estate of Cilvik, 439 Pa. 522, 525, 267 A.2d 836, 838 & n. 2 (1970). Such a contract may be one of adhesion, and is therefore subject to judicial scrutiny for unconscionability. Perdue, supra, 38 Cal.3d at 922, 702 P.2d at 511-12, 216 Cal.Rptr. at 354. To establish unconscionability, however, the District must prove not only that one of the parties lacked a meaningful choice but also that the terms of the contract are unreasonably favorable to the other party. Williams v. Walker-Thomas Furniture Co., 121 U.S. App.D.C. 315, 319, 350 F.2d 445, 449 (1965); see also Perdue, supra, 38 Cal.3d at 924, 216 Cal.Rptr. at 354-55, 702 P.2d at 512-13. [31] In support of its motion for summary judgment on the service charge issue, Riggs set forth, and the District conceded as not in dispute, the following facts: Riggs' signature cards and the Rules and Regulations governing savings deposits at the bank have long carried a provision informing customers that the bank is authorized to impose service charges on small inactive accounts.       At the beginning of 1980, both the signature card in use for savings accounts and Section J of the Rules and Regulations governing savings deposits informed customers that the bank would impose a reasonable service charge ... on accounts with balances less than $50.00 which have been inactive for three years or more.       During the period 1980-82, the service charges on dormant accounts were imposed in March and September, and were shown as service charges on the quarterly statements mailed to each customer for whom the bank still had an address.       The signature cards used by Riggs on savings accounts conformed with generally accepted banking practices for the drafting of signature cards. The District filed no affidavits in the trial court by customers claiming to have been misled by the allegedly inadequate disclosure on the signature card and offered no proof that the charges were unreasonably high. Given the District's concession that Riggs' signature cards were consistent with generally accepted banking practices and the judicial consensus that such cards create a valid contract between the bank and the customer, we think that, for purposes of this litigation, Riggs has met its burden under Section 42-206(e)(1) of proving a valid and enforceable contract between holder and owner. We emphasize that we find the use of these cards troubling, and that it is the District's acceptance as undisputed of Riggs' basic allegations about them that has put Riggs over the top. A different result might well follow on a different record.