Ethel M. Ahrendt, et al. v. Granite Bank

Breach of Fiduciary Duty - Duty of Care - Breach of Contract - In July 1992, the plaintiff was eighty years old. One of
her accounts with the defendant, which then operated as
Peterborough Savings Bank, was a money market account. Through a
series of withdrawals, the account balance fell from more than
$52,000 to less than $200 in under five weeks. Four
transactions, accounting for $50,500 of the withdrawals, were
carried out by four handwritten notes, each requesting that the
bank pay George Ward for purported home repairs.

The first payment of $11,500 was made on July 29, 1992. On
that day, the plaintiff telephoned Jessica Cheney, a bank
employee, to ascertain the balance in her account. For security
purposes, Cheney first asked the plaintiff to state her social
security number and then reported the balance. The plaintiff
asked Cheney to repeat the balance to a man she identified as
George Ward. The plaintiff stated that she could not find her
checkbook but wished to withdraw money from her account to pay
Ward. Cheney explained that the bank would honor a written
authorization signed by the plaintiff. Ward later presented
Cheney a written authorization signed by the plaintiff. Cheney
verified the plaintiff's signature, asked Ward for
identification, and made out a bank check payable to Ward.
Before she processed the check, Cheney called the plaintiff to
confirm her desire to make the transaction. The plaintiff
confirmed that she wanted to pay Ward $11,500 from her account.
Although Cheney felt "uncomfortable," especially when the
plaintiff asked her to repeat the balance to Ward, the plaintiff
"sounded clear" each time Cheney spoke with her.

Similar scenarios followed. On July 31, August 3, and
August 5, the plaintiff asked the bank to pay Ward $11,000,
$14,000, and $14,000, respectively. Each time the plaintiff
called the bank, and Ward presented the bank with a written
authorization signed by the plaintiff. For all but the July 31
transaction, the plaintiff's signature was verified, and the
plaintiff was called to confirm her desire to make the
transaction. After the account was overdrawn on August 13, a
bank employee called the plaintiff to request that she cover the
overdraft, and the plaintiff's family discovered that Ward had
cheated the plaintiff. Following a police investigation, Ward
was prosecuted and convicted.

The plaintiff thereafter brought suit, alleging that by
honoring the signed written authorizations, the defendant: (1)
breached the duty it owed the plaintiff that arose from a
fiduciary or confidential relationship; (2) breached its duty of
care to the plaintiff; and (3) breached its contract with the
plaintiff.

Summary judgment for the defendant was given on the first claim and defendant's verdicts on both the other claims

Unknown

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Affirmed by the Supreme Court of New Hampshire. See: ___ A.2d ___, ___ N.H. ___ (1999). Note: The above date reflects the appellate court decision date, not the original trial date. Reported by kkm.