$9,250,000 Judgment for Missed Paperwork

It's a Security Officer's worst nightmare. The bank was sued - and nobody knew about it. Sam Butler, from Little Rock Arkansas, sued the bank for alleged malicious prosecution. Seems back in 1996 someone posing as Sam Butler signed his name to a counter check for $125 at a bank branch in a little town called DesArc, Arkansas. Mr. Butler says he's never even been in DesArc. The first he knew about the check was when he was stopped for speeding five years later, in 2001, and it was discovered that he was wanted on a 1996 bad check warrant. He was promptly handcuffed and arrested. Hours later he managed to post bail, and eventually straightened things out with the bank on the $125 check. The bank dropped the complaint.

But Mr. Butler was angry. He sued the bank in May 2002 for malicious prosecution, abuse of process, negligence and defamation. The attorney for the bank said, "He [Butler's attorney] served the papers on the manager of the small branch of the bank, (in DesArc) who faxed it to the corporate office in Memphis [Tenn.], where it disappeared into thin air."

Unaware that it was being sued, the bank did not appear during a hearing in June where there was a default judgment against the bank, nor in December when a jury awarded Butler $250,000 in compensatory damages and $9 million in punitive damages! The bank is now petitioning the court to have the default judgment against it set aside, arguing it was improperly served.

The lesson is a chilling one for security officers. Make sure there is a central location where any papers delivered to the bank can be reported!

Source: Butler v. Union Planters Bank, No. CV 2002-4985 (Pulaski Co., Ark., Cir. Ct.)

Copyright © 2004 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 1, 3/05