Lawyer says bank does not owe any special duties to Saipan Mayor Flores

The Union Bank of California has asserted that it does not owe any special duties to Saipan Mayor Donald G. Flores who is suing Union Bank and First Hawaiian Bank for allegedly refusing to return the principal and interest earned of a Time Certificate of Deposit in the amount of $200,000.

Union Bank of California, through counsel Elyze McDonald Iriarte, joined the First Hawaiian Bank’s motion to dismiss Flores’ lawsuit.

In the Union Bank’s joinder, Iriarte said Flores asserts that banks holds various duties to him, as a holder of a certificate of deposit (CD).

Iriarte said Flores claims that Union Bank and First Hawaiian Bank have a duty to establish and record CD accounts in their ledgers.

Iriarte said the plaintiff also claims that the banks have a duty to transfer those CD accounts upon the sale of assets, and that they have a fiduciary duty to exercise a high standard of care with respect to his investment.

“It is well-established that banks do not have any special duties to customers holding non-fiduciary accounts,” the lawyer pointed out.

Iriarte said Flores has not pled the existence of any fiduciary relationship between himself and Union Bank.

“Plaintiff has not alleged any facts showing or inferring that Union Bank knew or had reason to know that it held duties other than those established by the contractual relationship,” the lawyer said.

Under such circumstances, Iriarte said, Flores has failed to state a claim for negligence, or for breach of fiduciary duty.

“Moreover, because as a matter of law Union Bank owes only contractual duties, plaintiff has no legal basis supporting his claim of breaches of tort duties by Union Bank,” Iriarte said.

The Union Bank counsel said Flores’ claims are based on speculation.

Iriarte said Flores alleges that perhaps the CD was properly recorded, but that Union Bank then negligently, or grossly negligently, failed to ensure that his CD account included in the sale of assets to First Hawaiian Bank.

“By these allegations, plaintiff demonstrates that both scenarios—the failure to record his CD, and the failure to include the CD in the sale—are hypothetical and speculative,” the lawyer pointed out.

Flores, through counsel Juan T. Lizama, is suing the two banks for breach of contract, unjust enrichment, negligence or gross negligence, breach of fiduciary duty, and fraud.

Lizama stated in the complaint that Flores purchased the CD in the principal amount of $200,000 that was issued in his name by the Saipan Branch of Union Bank on Sept. 10, 1993.

Lizama said his client kept the issued certificate with the intent of eventually redeeming it.

Lizama said an officer or employee of Union Bank signed the CD.

Lizama said that on Nov. 15, 2001, Union Bank sold all assets and liabilities of its Saipan branch office to First Hawaiian Bank.