Metropolitan News-Enterprise


Thursday, June 13, 2019


Page 3


Ninth Circuit:

Citibank Might Be Liable for Thefts From Safe Deposit Boxes

Majority Says Triable Issues of Fact Exist as to Breach of Contract, Negligence


By a MetNews Staff Writer


The Ninth U.S. Circuit Court of Appeals yesterday reinstated, over a dissent, an action for breach of contract and negligence against Citibank by five persons who had rented safe deposit boxes in which they placed cash and other valuables, and which disappeared.

Comprising the majority were Circuit Judge Carlos Bea and District Court Judge Stanley Allen Bastian of the Eastern District of Washington, sitting by designation. Circuit Judge Johnnie B. Rawlinson dissented as to reinstating the contract and negligence claims, while agreeing that other causes of action were properly scuttled.

District Court Judge John A. Kronstadt of the Central District of California had dismissed the plaintiffs’ fraud claim and granted summary judgment to the bank on claims of breach of contract, negligence, and conversion.

Presumption Arises, Disappears

The majority recited that when a bailor loses property of a bailee, a rebuttable presumption of negligence arises, a proposition with which Rawlinson agreed. She also agreed with the majority that once Citibank presented evidence that it followed normal banking practices, that presumption vanished.

Where the majority and the dissenter parted company was on the question of whether the plaintiffs presented sufficient evidence as to give rise to triable issues of fact.

The majority said, in a memorandum opinion, that the plaintiffs showed that they placed valuable items in their boxes which “went missing” and that keys can be duplicated in various ways. The opinion recites that one plaintiff, Zhanna Weiss “ ‘vague[ly]’ recalls a bank employee leaving her key in the lock while she was in another room—thereby giving bank employees access to the key outside her presence, and (e) on one occasion Plaintiff Arsen Nalbandyan recalls briefly leaving his key with a bank employee while he chased after his young daughter.”

Sherlock Holmes Quoted

The opinion continues:

“Citibank admitted at oral argument that it would have been a breach of their policies for Citibank employees to have had access to Plaintiffs’ customer keys outside the presence of the customer. The question is thus whether Plaintiffs presented sufficient evidence to create a triable issue of fact as to Citibank’s breach, and whether such a breach caused Plaintiffs’ losses. The evidence adduced showed that the only ways to access a safe deposit box are (a) to pick the box’s locks, (b) to drill through the box’s locks, or (c) to use the customer key in conjunction with the bank’s master key to unlock the box. Plaintiffs presented evidence that their boxes were neither picked nor drilled. The process of elimination suggests that if the boxes were looted, they were looted by use of the customer keys (or duplicates thereof).”

A footnote quoted Sir Arthur Conan Doyle’s Sherlock Holmes as observing that “[W]hen you have eliminated all which is impossible, then whatever remains, however improbable, must be the truth.”

The opinion adds:

“This inference—combined with the evidence that Citibank employees had access to Plaintiffs’ customer keys outside their presence, and the evidence regarding the ease with which customer keys can be duplicated—creates triable issues of material fact as to whether Citibank was negligent, and whether any such negligence was a substantial factor in causing the claimed losses. These are issues which should have gone to a jury.”

Rawlinson’s Dissent

In her dissent, Rawlinson said:

“The most evidence the Plaintiffs could muster in their effort to defeat summary judgment was the following:

“1. Safe deposit box keys can be duplicated in a variety of ways;

“2. On one occasion Plaintiff Zhanna Weiss “vague[ly]” recalls a bank employee leaving her key in the lock while the Plaintiff was in another room;

“3. On one occasion Plaintiff Arsen Nalbandyan recalls briefly leaving his key with a bank employee while he chased after his young daughter….

“Notably absent from these assertions is whether the singular occasions  referenced were anywhere near the time frame of the extended periods during  which the valuables purportedly went missing, or that the referenced bank  employees had any means of copying the keys during the two described instances.  And importantly. Plaintiff Weiss self-described her recollection as ‘vague.’ This  is precisely the type of evidence that has been rejected as too speculative.”

The case is Nalbandyan v. Citibank, NA, 17-55856.


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