Court Opinion

ID: 9701218
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:11:08.958428+00
Date Added: 2024-06-11T18:21:21.012315
License: Public Domain

WEISBERGER, Chief Justice,
concurring and dissenting with whom Justice BOURCIER joins.
I concur with the majority with respect to their analysis of the Federal Bankruptcy Code as it may affect a creditor’s right of setoff. I am in agreement that setoff is a matter of state law.
However, I think that we should be somewhat more skeptical of the right of a bank, by means of an adhesion contract, to seize the life savings of an elderly couple who made the mistake of placing their son’s name on a joint account. See Donartelli v. Fleet National Bank, 692 A.2d 339, 340 (R.I.1997) (mem.) (“the general rule that joint bank accounts may be seized by creditors of one of the depositors is limited by the caveat that the creditor may reach only those funds in the account which the debtor depositor equitably owns”) (citing Joint Bank Account as Subject to Attachment, Garnishment, or Execution by Creditor of One of the Joint Depositors, 11 A.L.R.3d 1465, 1473 (1967)).
It is true that the order in Donatelli distinguished our opinion in Paradis v. Greater Providence Deposit Corp., 651 A.2d 738, 740 (R.I.1994), on the ground that Paradis involved a depository contract to which both the depositors and defendant bank were parties. Donatelli, 692 A.2d at 340. Indeed, that was true in the case at bar. However, the issue of the contract of adhesion was not raised in Par-*838adis. There is no question that the holding in Paradis, save for the existence of an adhesion contract, would be controlling in the case at bar.
Nevertheless, on reflection, I am of the opinion that the draconian power of a bank or credit union to seize the life savings of parents, who may add the name of a son or daughter to an account to which he or she has contributed nothing, is a subject that should give us pause before blindly following the doctrine of Paradis in every case.
I believe that the general statement, quoted by the majority (“PCU may at its discretion, apply any or all of the funds represented by the certificate against any indebtedness in default which may be owing to it by the [account] holder as an offset against such debt”), does not necessarily give an adequate warning to parents of the disastrous results that may occur from their adding the name of a noncontributing child to their joint account. It would not be unduly harsh to require a bank to set forth in bold type that the indebtedness of any individual, who is a joint holder of an account, may be set off against the entire account, regardless of whether he or she has contributed anything to it.
Meanwhile, in the case at bar, I believe that the adequacy of the warning thát was given by the setoff clause constitutes an issue of fact that should not be decided on summary judgment.
In the insurance context, we have considered the effects of contracts of adhesion. In Pickering v. American Employers Insurance Co., 109 R.I. 143, 282 A.2d 584 (1971), we observed that “[a]n insurance contract is not the end result of the give-and-take that goes on at a bargaining table. * * * [A]n insurance policy is not a true consensual arrangement but one that is available to the premium-paying customer on a take-it-or-leave-it basis. This being the case * * * it is most appropriate that a carrier not be permitted to declare a forfeiture of * * * bargained-for protection unless there has been a breach of the notice provisions and the likelihood that the carrier has been prejudiced thereby.” Id. at 159-60, 282 A.2d at 593 (citing Cooper v. Government Employees Insurance Co., 51 N.J. 86, 237 A.2d 870 (1968)). (Emphasis added.) The United States Supreme Court has also considered the effects of contracts of adhesion. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991) (Stevens, J., dissenting) (“Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all of the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.”). Id. at 600-01, 111 S.Ct. at 1531, 113 L.Ed.2d at 636 (quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449-50 (D.C.Cir.1965)); see generally Friedrich Kessler, Contracts of Adhesion — Some Thoughts About Freedom of Contract, 43 Colum. L.Rev. 629, 632 (1943) (“Standard contracts are typically used by enterprises with strong bargaining power. The weaker party, in need of the goods or services, is frequently not in a position to shop around for better terms, either because the author of the standard contract has a monopoly (natural or artificial) or because all competitors use the same clauses. * * * Thus, the standardized contracts are frequently contracts of adhesion; they are a prendre ou a laisser.”). As the majority indicates, the bank has given itself a contractual right to allow any holder of joint account status to withdraw the entire sum. However, this would not, and indeed should not, prevent the parents from seeking equitable relief *839to prevent such a withdrawal if such relief was sought before the withdrawal occurred.
Nevertheless, I believe we should take a closer look at the bank’s relationship to the joint depositors in this instance. This case came to us based upon a summary judgment in favor of the plaintiffs. I believe that summary judgment was not an appropriate remedy. I would remand this case to the Superior Court for a determination of the precise contribution that the son made to this joint account and also to determine whether his name was placed on this account as a matter of convenience.
We have held that a joint account may be utilized as a means of bestowing a right of survivorship upon a child or other family member without the hindrance of the requirement of the statute of wills. See Robinson v. Delfino, 710 A.2d 154, 161 (R.I.1998) (“the opening of a joint bank account wherein survivorship rights are specifically provided for is conclusive evidence of the intention to transfer to the survivor an immediate in praesenti joint beneficial possessory ownership right in the balance of the account remaining after the death of the depositor, absent evidence of fraud, undue influence, duress, or lack of mental capacity”). We have never held that there may not be equitable restraints upon a person whose name is on a joint account but who has contributed nothing to it to withdraw the entire sum or any portion without the permission of the donors. I do not contend that such an individual would be inhibited from withdrawing the entire sum from the bank or credit union without any liability on behalf of the bank or credit union.
However, I do not consider it at all impossible for the donors to seek equitable relief to avoid such a withdrawal before it has actually taken place, as sometimes occurs in a family law context. Consequently, I am of the opinion that the credit union should be subject to the equitable defenses of the parents against the credit union’s right of setoff, the contract of adhesion to the contrary notwithstanding. Little or no warning may have been given to depositors who added a noncontributing member to their joint account. They certainly took the chance that the noncontributing member would withdraw the funds without their permission and that the bank would not be liable therefor. However, I believe it is a significant question of fact, concerning whether they were adequately warned in a situation, such as presented in the case at bar, that their son’s indebtedness might be setoff against them without ceremony or even consideration to their supervening equitable interest in the account.
I would remand this case to the Superi- or Court for a trial on the merits to determine what, if any, contribution the son made to this account, and whether the credit union had warned, in decisive terms, the mother and father of their potential liability in respect to the son’s indebtedness. In the event that the son made no contribution, and in the event that no specific warning other than boilerplate language was given to the elder Coutures, I would deny the right of setoff on equitable grounds. My concern for the credit union and its financial integrity is not sufficiently great to prevent the plaintiffs in this case from presenting equitable defenses to this right of setoff, in the same manner that they might present them in litigation with their son if they sought to prevent his withdrawing the entire deposit or some portion thereof, or against another creditor, as in Donatelli, supra.