Why I Love Being a Lawyer — Taking Bank of America to the Woodshed

In case you missed it, there was a video posted on YouTube a few years back, consisting of a music video entitled “United Breaks Guitars.” Singer, songwriter Dave Carroll was sitting in a United Airlines plane while his beloved Taylor guitar was being loaded in the luggage compartment. He looked out and saw the baggage handlers throwing his guitar case, and upon landing, he discovered that they had broken his guitar.

The moment he saw his flying guitar, he reported the incident to the flight crew, but he did not report the broken guitar to the right person at United within 24 hours, so when he finally managed to navigate to said right person, his claim was denied.

Carroll used the best weapon at his disposal to express his frustration with United. He wrote a really catchy tune and created a music video about the incident, which at last count has been viewed by just shy of 14,000,000 people. He followed with a second and third video, but those have been viewed a paltry 2,000,000 and 600,000 times. Here is the first video, and I bet you’ll find your foot tapping:

The way United handled this disgruntled customer was a object lesson on the dangers of hubris, and that reminded me of my case against Bank of America.

Our client was on his way to work early one morning, when he received a frantic phone call from his bookkeeper.  His business was cash intensive, and it was the practice of the bookkeeper to run a daily activity report at the beginning of each day.  On this particular day, it was discovered that $50,000 was missing from two accounts, and that the checks our client had written to customers were bouncing as a result. Our client called Bank of America to report what he thought must be a theft, only to learn that it was Bank of America that had closed his accounts and seized the funds.  When he asked why, he was told, “because we can, that’s why.”  He asked only for an explanation and a letter of apology that he could show to his customers, but Bank of America refused.

When we became involved, Bank of America offered a number of excuses for its conduct, from computer errors to a claim that the accounts had been closed because of “suspicious activity.”  It was not until we sued and conducted discovery that we uncovered an internal document revealing the real reason Bank of America had taken the $50,000 without notice.  Although it had never had any problems with our client, Bank of America had decided that our client’s business was too check intensive, requiring too much work for the bank and potentially exposing the bank to losses. We never claimed that Bank of America had to maintain our client’s accounts, but there was no reason Bank of America could not have provided advanced notice so our client could have closed the accounts in an orderly manner.  We repeated our client’s request for a letter of explanation, so that our client could undo some of the harm to his business reputation, but Bank of America still refused, steadfastly arguing that it had every right to act as it did.  Bank of America could have walked away for nothing, but instead elected to stand on its own “rules.” We were left with no option but to sue.

Bank of America was ably represented by attorneys who took the position that Bank of America was permitted to close the accounts pursuant to its disclosure statement, and therefore whatever the motivation of Bank of America, and whatever harm Bank of America might have caused, we could not establish liability because Bank of America was permitted to do what it did.

When opening a deposit account at Bank of America, the customer signs a signature card which also acts as an agreement between the customer and Bank of America. The signature card states “the written information we give you is part of this agreement and tells you the current terms of our deposit accounts” and that the agreement can be changed at any time. Although it is Bank of America’s policy to provide the other “written information” whenever a customer opens an account, the new customer may or may not receive this other information, depending on whether the Bank of America employee remembers to provide a copy.  As a result, a new customer may enter into a contract with Bank of America, without ever having read the agreement or knowing its terms.  Contained in the other, unnamed document is language which purports to give Bank of America the right to seize a customer’s funds without cause and without warning. Unfortunately for Bank of America, our client had never been provided a copy of this “other information” so it was not a part of the agreement.

Bank of America’s conduct had only resulted in about 12 bounced checks totaling less than $3,000, but I argued that the damage to my client’s reputation from those 12 customers reporting to all who would listen that my client had given them bad checks, would be significant. I came up with a formula for calculating those damages from loss of reputation, and sought $227,162. 

For its part, Bank of America brought in an a really impressive CPA from one of the biggest accounting firms. In establishing his expertise, he testified that it is his firm that tabulates and confirms the votes for the Academy Awards every year when they award the Oscars. Mr. Oscar Vote Counter so much as called me an idiot for coming up with such an outrageous claim, and testified that my client could not have possible suffered any damages, but giving my tortured calculation every benefit of the doubt, the damages would total no more than $17,000, he claimed. He then presented his own method of calculating damages, and under his formula, my client had not suffered any damages.

But I had him. During Mr. Oscar Vote Counter’s direct examination, I saw that he had made a math error (putting all the Oscar awards in question, when you think about it). Quite simply, he had just put a decimal in the wrong place, so instead of multiplying 10 times 10, he had multiplied 10 times .1.  This was great for my client’s case.

During my closing argument (I certainly didn’t ask him about it on cross; he might have had an explanation), I put up one of the expert’s blow-ups and showed that this very high-priced accountant had made a simple but significant mathematical error which, when corrected, showed that by his own calculations the damages were at least $79,000.  This was not a matter of conjecture or interpretation.  Even though the calculated amount was far less than what we were seeking, the calculation by Bank of America’s own expert showed that money was owed, removing the issue of liability and leaving the jury to decide only the amount of damages.

The first phase of my closing argument ended at the lunch break, and at lunch a betting pool was started among the trial watchers as to how counsel for Bank of America would handle this devastating math error.  There was no denying the error, so most assumed counsel for Bank of America would acknowledge it and then try to put a positive spin on it, stating perhaps that while this did change the ultimate calculation, the expert was not stating that Bank of America was actually liable for any damages.  Others in the pool bet that he would just ignore the whole argument and never mention the error.  No one bet on what actually happened.  In his closing argument, opposing counsel put up the error, and argued, in essence, that if the expert said that 10 x 10 = 1, the jury should accept that as his expert opinion, and that there had not been any showing that 10 x 10 was not equal to 1.

The jury completely rejected the damage calculation by Bank of America’s expert, and adopted the calculation by our expert, to the penny (dang, should have asked for more). The jury awarded my client $227,162, which grew to $264,162 by the time we were done.

Don’t follow your clients down “We Were Following Our Policy” Road or the parallel, “We Had Every Right To Do What We Did” Street. I have said over and over, the biggest problem with attorneys is that they think like attorneys. When United called its counsel about the broken guitar (if indeed it ever got that far up the chain), no doubt the attorney quoted line and verse from the FAA regulations that absolve airlines of all liability if damage to luggage is not reported within 24 hours. And when the Bank of America branch called to ask if it could withdraw the money from a customer’s account, the attorney undoubtedly pulled out the signature card agreement and gave the withdrawal a green light.

Indeed the Bank of America attorneys were so certain the law was on their side, they brought an unsuccessful motion for summary judgment, claiming the court could determine as a matter of law that my client had received the “other papers” referenced in the signature card agreement. You can’t make this stuff up. In support of its motion for summary judgment, Bank of America attached a declaration from a “banking expert”, a retired Chairman of the Federal Reserve or such, who attested that in his expert opinion, it is simply not possible that my client opened a business checking account, and was not given a copy of the “other documents” referenced in the signature card agreement. Unbelievable.

Never lose site of common sense, no matter what your client’s policies might be. (Be sure to read the comments for some humorous details about this case.)

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