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Forget Hindsight: Work on Foresight

by Mary Beth Guard, Esq. Hindsight, they say, is 20/20. Looking back at a situation, it is often possible to see with great clarity what could have been, what should have been. While a post mortem dissection of a troublesome circumstance might come too late to change its outcome, it can still be highly useful and instructive as a learning tool that may help your employees avoid mistakes and your institution avoid liability.

For training purposes, I like to find cases that are memorable. Over the years, I've found a few that have made banking audiences gasp in horror as I have recounted the facts. Other times, I've witnessed the panicked looks of banking employees who are thinking, "Holy teller cage, Batman. We do that all the time. We're going to get nailed."

To drive home your point, find cases where:

  • the dollar amount of the judgment was large; or
  • the facts hit close to home (such as where your institution does the same thing that another institution has been successfully sued for); or
  • the plaintiff is someone that a jury would naturally be sympathetic toward; or
  • the consequences of the financial institution's wrongful actions were particularly dire.

The cases don't necessarily have to have resulted in a judgment against the financial institution in order for them to make instructive examples. Sometimes, the court's analysis of the facts and its explanation of the standards to be applied are, by themselves, extremely useful.

Before you begin to describe the facts of the case, ask your employees to imagine that they have never worked for a financial institution and are instead members of the jury in the case. After you have detailed the facts, examine what the financial institution did, as outlined in the court's decision or the media reports on the case, if it hasn't yet gone to trial. Then, ask your employees what they believe the result was, or what they think it should be. Finally, reveal to them what the actual outcome was.

Use a blackboard or flip chart and draw a vertical line down the middle. On the left side, write down what the financial institution actually did. On the right side, with input from your employees, write down what a better approach would have been.Let's look at some examples. This month, we'll look at a case involving an attack on a customer.

Jesse Pinsonneault was a 23 year old assistant manager of a pizza joint. He worked late into the night and probably didn't earn a whole lot. One November night, at 1:30 a.m., he drove a short 300 feet to the bank his restaurant did business with to deposit the evening's receipts and operating cash into the night deposit box. It was the last thing he ever did.

Two jail escapees who had been at large for five days were hiding and watching atop a hill behind a McDonald's adjacent to the bank. They watched as Jesse left the pizza place. One of the men scrambled down the hill and secured a hiding place behind the bank. As Jesse walked up to the night deposit box, he was met with a gun and a demand for the money. In the ensuing struggle over the $64.06 in cash in the night deposit bag, Jesse lost his life.

The parents of the young man filed suit against the bank and its insurer, alleging the bank failed to provide adequate security to customers using the night depository. His mother asserted a claim for the severe emotional distress she suffered upon arriving at the scene immediately after the shooting. Sadly, Mrs. Pinnsoneault didn't even live to see the trial. She passed away from cancer before the case could be heard. Jesse left behind a twin brother, however, who carried forward in her stead.

How tragic and heart-breaking can you get? The twin brother sitting in the court room would provide a constant visual reminder to the court about how the deceased young man was taken away in his prime. The mother's death certificate may have said cancer, but it is easy to believe what she really died from was a broken heart. What do you think the court decided? What were the issues?

  • Did the bank have a duty to provide protection to a customer against the criminal acts of third parties?
  • What is adequate security?
  • Was the bank's security plan reasonable?
  • Was the attack Jesse suffered foreseeable such that the bank was obligated to engage in additional security measures?

The trial court ruled the bank did not breach its duty. The Court of Appeal reversed and awarded total damages of $1,236,890.87. Forty percent of the fault for the injury was allocated to the bank, 60% to the intentional tortfeasors, but under a quirk in state law, the bank became liable for 100% of the damages. The state Supreme Court ultimately reversed, finding that the decision of the trial court was reasonable in its determination that the bank did not breach its duty regarding security.

Even though the ultimate decision here was in favor of the bank, no one really "won". The attack occurred in November, 1992. It wasn't until a decade later, April, 2002, that the bank could put this litigation to rest.

In this case, the court said that while business owners generally have no duty to protect others from the criminal acts of third persons, they do have a duty to implement reasonable measures to protect their customers from criminal acts when those acts are foreseeable. You balance the foreseeability of the risk and the gravity of the risk in order to determine the existence and extent of the business owner's duty. The greater the foreseeability and gravity of the harm, the greater the duty of care that will be imposed on the business.

Ask your employees to discuss the range of actions the bank could have taken, and the costs and benefits of each. For example:

  • posting security guards;
  • utilizing guards only while jail escapees are on the loose;
  • using surveillance cameras;
  • installing improved lighting;
  • using fencing to limit access to the area;
  • trimming shrubbery;
  • warning customers to take extra precautions.

Talk about how important it is to be aware of the existence and frequency of crimes around each of your offices in order to evaluate what security measures should be taken.

Next time, we'll examine the case of a nasty niece whose forged endorsements robbed her elderly aunt of a large sum of money, right under the noses of bank employees who ignored bank procedures in accepting the checks for deposit.

In the meantime, you'll find the case I described above, and many others, in's new Court Watch section.

Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 5, 6/02

First published on 06/01/2002

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