Court Opinion

ID: 9519030
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:07:36.170024+00
Date Added: 2024-06-11T12:40:51.386834
License: Public Domain

YOUNG, Presiding Judge,
dissenting.
I dissent.
Under Indiana law, a banking customer has no Fourth Amendment right to privacy in a bank's records of his account. The absence of a constitutional right to privacy, however, does not define or limit the scope of a bank's implied contractual duty of confidentiality toward its customer. The scope of the bank's duty depends, not upon constitutional rights, but as in all questions of implied contractual terms, upon the intention of the parties to the contract.
"A bank customer's reasonable expectation is that, absent compulsion by legal process, the matters he reveals to the bank will be utilized by the bank only for internal banking purposes." Burrows v. Superior Court of San Bernardino County (1974), 13 Cal.3d 238, 118 Cal.Rptr. 166, 529 P.2d 590. In this case, INB provided financial information concerning Chapman pursuant to a police officer's informal oral request. This action breached the bank's implied duty of confidentiality.
A review of Indiana cases on invasion of privacy reveals no incongruity in a determination that a bank's disclosure of information without legal compulsion constitutes a breach of contractual duty although it does *485not violate the customer's Fourth Amendment rights.1 In Leonard v. State (1968), 249 Ind. 361, 232 N.E.2d 882, our supreme court addressed the issue of whether the introduction into evidence of a bank's records in a criminal case violated a defendant's constitutional rights under the Fourth and Fifth Amendments. The court confined its inquiry to the "question of whether the bank lawfully had possession of the records," since the defendant could not claim an illegal search and seizure if the records were not in his possession. Id. 232 N.E.2d at 885.2 The court did not address the existence or scope of a bank's implied contract of confidentiality.
Similarly, in In re Order for Indiana Bell Telephone (1980), 274 Ind. 131, 409 N.E.2d 1089, our supreme court asked only whether release of telephone records infringed upon a customer's freedom of speech and association guaranteed by the State and Federal Constitutions. The court concluded that the "expectation of privacy protected by the Fourth Amendment attaches to the content of the telephone conversation and not to the fact that a conversation took place." Id. 409 N.E.2d at 1090. The dicta in Indiana Bell cannot fairly be held to imply that a bank has no contractual duty to keep account information confidential absent legal compulsion since the issue before the court was not the contractual rights of the parties, but, rather, the scope of the customer's constitutional rights. Moreover, the issue of compliance with an informal request for information was not before the court since the request was presented as a subpoena duces tecum.
Neither does U.S. v. Miller3 (1976), 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71, limit the scope of a bank's implied contract of confidentiality. In Miller, a banking customer charged that the bank's compliance with subpoenaes duces tecum violated his Fourth Amendment rights. The court reasoned that a depositor takes the risk that his bank will divulge account information since the transfer of information to a third party extinguishes the customer's Fourth Amendment rights. Not only did the court limit its inquiry to Fourth Amendment rights, but it also distinguished cases, such as the present one, involving "statements to police in response to an informal oral request for information." Id. 96 S.Ct. at 1625 n. 7. The Court noted that "the court in Burrows found it 'significant ... that the bank [in that case] provided the statements to the police in response to an informal oral request for information'." Id. In contrast, the government in Miller "exercised its powers through narrowly directed subpoenaes duces teeum subject to the legal restraints attendant to such process."
Neither does Indiana slander law define the contractual liability of a bank toward its customer. Even though a communication made to law enforcement officers in good faith will not support a charge of slander, that communication may nevertheless breach the implied contract between the parties if it contravenes their intentions.
Given the persuasive reasoning of the court in Suburban Trust Co. v. Waller (1979), 44 Md.App. 335, 408 A.2d 758, and the example of the Financial Privacy Act, 12 U.S.C. § 3401, et seq., together with the absence of any Indiana statutory or case law to the contrary, we should recognize that a bank's duty of confidentiality to its customers does not end upon a policeman's informal, oral request for information. "'To permit a police officer access to these records merely upon his request, without *486any judicial control as to relevancy or other traditional requirements of legal process, and to allow the evidence to be used in any subsequent criminal prosecution against a defendant, opens the door to a vast and unlimited range of very real abuses of police power." Burrows, 529 P.2d at 596. The trial court in this case correctly refused to grant a directed verdict on the breach of contract issue.

. Fourth Amendment cases in no way imply that a bank has a duty to comply with an informal police request. Indeed, a bank has a contractual duty to its customers mot to comply with such a request.

. See also Cox v. State (1979), 181 Ind.App. 476, 392 N.E.2d 496, where the first district, in addressing a similar Fourth Amendment claim stated, "Fourth Amendment rights are personal rights which, like some other constitutional rights, may not be vicariously asserted." Id. 392 N.E.2d at 497, quoting Rakas v. Illinois (1978), 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed.2d 387.

. The Right to Financial Privacy Act of 1978, 12 U.S.C. §§ 3401-3421, was designed to limit the holding in Miller Hancock v. Marshall, 86 F.R.D. 209 (D.D.C.1980).