Plaintiff customer sued defendants, a bank and its branch manager, for negligent misrepresentation, breach of contract, and negligence. The Orange County Superior Court, California, sustained demurrers to each of the customer’s claims and dismissed the action. The customer appealed.
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Overview
The customer had deposited a $10,000 check into his business checking account, but the check was returned for nonsufficient funds. The court concluded that the customer’s complaint adequately stated a cause of action for negligent misrepresentation because it alleged the branch manager assured the customer he could write checks against his deposit, despite knowing the deposited check had been dishonored. The customer’s negligent misrepresentation claim did not take issue with the bank’s right to charge back the provisional credit it had given to him on the check, but with statements made by the branch manager, which induced the customer to write checks against his $10,000 deposit. There was nothing in the California Uniform Commercial Code prohibiting a claim based on a depositor’s detrimental reliance on a bank employee’s incorrect statements. However, the customer’s breach of contract failed because it did not adequately describe the contract and the terms purportedly breached. The customer’s negligence claim also failed because it duplicated his negligent misrepresentation claim and failed to allege the bank breached any duties it owed to the customer.
Outcome
The judgment was reversed.
