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Isaac v. First Nat. Bank of Maryland

September 22, 1994


Appeal from the Superior Court of the District of Columbia; (Hon. Cheryl M. Long, Trial Judge)

Before Steadman, Schwelb and King, Associate Judges.

The opinion of the court was delivered by: Steadman

STEADMAN, Associate Judge: This case involves the enforceability of a provision in a bank certificate of deposit agreement in joint tenancy form under which the bank set off half the moneys in the account against an obligation owed to the bank by a joint tenant who had no actual beneficial interest in the account. The trial court granted summary judgment in favor of the bank. We affirm.


We apply the oft-repeated and familiar criteria for review of grants of summary judgment. The movant, here the bank, must demonstrate that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Colbert v. Georgetown University, 641 A.2d 469, 472 (D.C. 1994) (en banc). The record is viewed in the light most favor able to the party opposing the motion. Id. The facts, so viewed, may be summarized as follows.

Appellant established a joint tenancy certificate of deposit account with her son at appellee bank, but all parties, including the bank, knew that all the funds in the account belonged to and were the property of appellant, at least at the inception of the account. *fn1 The certificate of deposit agreement signed by both joint tenants contained a provision which, in relevant part as quoted by appellant in her brief, *fn2 dealt with the bank's right of set-off:

SET-OFF: Each of you *fn3 who has the right to withdraw from this account agrees that we may set-off any debt you owe us now or later against the amount of money you could withdraw from this account. For example, if any one of three of you can withdraw all the money from this account, the debt of any one of you can be set-off against the balance in this account (even though the others are not obligated on the debt). We may exercise this right of set-off, without notice to you, any time your debt is in default.

Some time thereafter, the bank made a loan to the son, and when the son defaulted on the loan, the bank set off half the funds in the joint account against the debt of the son to the bank. Appellant thereupon brought the instant suit against appellee bank in a complaint which set forth three separate counts: breach of contract, replevin, and intentional infliction of emotional distress. *fn4

Appellant does not in the main challenge the proposition that the language of the certificate of deposit agreement as written permitted the bank to exercise the right of set-off. *fn5 Rather, she principally argues that 1) the certificate of deposit did not correctly set forth the intent of the parties; and 2) in any event, the provision allowing set-off is, on the facts of this case, unconscionable and should not be enforced. *fn6


The relationship between a bank and a depositor is a contractual relationship that is governed by the written agreement between the parties. See Watts v. American Sec. & Trust Co., 47 A.2d 100, 101 (D.C. 1946); Gibson v. Industrial Bank of Washington, 36 A.2d 62, 63 (D.C. 1944). We recapitulated in Howard Univ. v. Best, 484 A.2d 958, 967 (D.C. 1984) the controlling principles relevant here in dealing with a written instrument challenged by a party thereto:

This court adheres to the 'objective law' of contracts, whereby the written language embodying the terms of an agreement will govern the rights and liabilities of the parties, irrespective of the intent of the parties at the time they entered the contract, unless the written language is not susceptible of a clear and definite undertaking, or unless there is fraud, duress or mutual mistake. Minmar Builders, Inc. v. Beltway Excavators, Inc., 246 A.2d 784, 786 (D.C. 1968) (quoting Slice v. Carozza Properties, 215 Md. 357, 368, 137 A.2d 687, 693 (1958)).

See also Reliable Constr. & Realty Co. v. Waterproofing Serv., Inc., 34 A.2d 124, 126 (D.C. 1943) ("It will not do for a man [or woman] to enter into a contract, and, when called upon to respond to its obligations, to say that he [or she] did not read it when he [or she] signed it, or did not know what it contained") (quoting Upton v. Tribilcock, 91 U.S. 45, 50, 23 L. Ed. 203 (1875)). This same principle underlies the well-established parol evidence rule, generally barring introduction of an alleged understanding in variance, addition, or contradiction to the written terms. See Stamenich v. Markovic, 462 A.2d 452, 455 (D.C. 1983).

Thus, it will not suffice simply to assert that the parties' "intent" is not reflected in the set-off provision or that there was no "meeting of the minds" on that issue. *fn7 Nor does her argument, obviously correct as a general principle, that transactions in multiple parts, as here, see supra note 1, must be reviewed as a whole and considered in all their parts, advance her case because the language here is free of ambiguity and in any event, nothing in the multi-part transaction sheds any particular light on the creation or interpretation of the joint tenancy aspect of the transaction other than perhaps to support her postulated assertion that sole ...

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