Legal Claim That Depends on Bank Record Must be Filed Within Time Limit for Retention of That Record
2008-0900. Spiller v. Sky Bank – Ohio Bank Region, Slip Opinion No. 2009-Ohio-2682.
Logan App. No. 8-07-03, 2008-Ohio-1338. Judgment reversed and cause dismissed.
Moyer, C.J., and Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Pfeifer, J., dissents.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2009/2009-Ohio-2682.pdf 
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(June 16, 2009) The Supreme Court of Ohio ruled today that when a lawsuit involving a claim against a bank account depends on a record that the bank is required by law to maintain, the suit must be brought within the statutory time period for which the bank is required to retain that record, even when the account at issue is an automatically renewing certificate of deposit.
Today’s 6-1 decision, authored by Chief Justice Thomas J. Moyer, reversed a ruling by the 3rd District Court of Appeals that required a Logan County bank to honor a decades-old deposit certificate for which the bank had no surviving record.
Under R.C. 1109.69(B), a bank is authorized to destroy its records of any account or transaction six years after the “date of completion of the transaction to which the record relates” or six years after the “date of the last entry” relating to that transaction or account. A subsequent section of the same statute, R.C. 1109.69(F), requires that if a customer wishes to pursue a legal claim against a bank, and that claim depends on the content of a bank record that is covered by the records retention schedule, the customer must file suit “within the time for which the record must be retained or reserved.”
In this case, while moving furniture that had belonged to her recently deceased friend and long time housemate, Roberta Stayrook, former Bellefontaine resident Maxine Spiller found a hidden envelope containing $2,500 in cash and four 30-month certificates of deposit that Stayrook had purchased from the former Bellefontaine Federal Savings and Loan Association between 1974 and 1979. Through a series of mergers and acquisitions, Sky Bank had become the legal successor to Bellefontaine Federal.
Two of the certificates were issued in the name of Stayrook with notation that they were “payable on death” to Spiller, and a third certificate was payable to either Stayrook “or” Spiller. The fourth certificate was issued in the name of Spiller, with “payable on death” assignment to Stayrook. Each certificate indicated that, after the original 30-month period following issuance, it was “automatically renewing” for subsequent 30-month periods without any required action on the part of the owner. The certificates stated that they would continue to renew until redeemed by the owner, or until the bank gave written notice to the owner that it was declining to renew the certificate or had converted the proceeds to a passbook savings account.
Spiller presented all four certificates to Sky Bank for payment. The bank declined to honor them on the basis that it had no records showing that they remained open, active and unpaid. Spiller filed suit in the Logan County Court of Common Pleas to force Sky Bank to redeem the certificates for their face value plus accumulated interest dating back to their issuance dates. The bank moved for summary judgment, arguing that its predecessor’s records relating to the certificates had long since been lawfully destroyed pursuant to the bank records retention statute, and Spiller’s suit could not be adjudicated because it had not been brought within the six-year retention period applicable to the account at issue under R.C. 1109.69(F).
The trial court denied the bank’s motion, ruling that documents recording automatically renewing deposit certificates were not subject to the six-year retention limit set forth in R.C. 1109.69(B). The judge subsequently ruled that Spiller had not proven her entitlement to the proceeds of three of the certificates, but was entitled to the proceeds of the $3,000 certificate issued solely in her own name, which amounted to $26,832 with the interest that had accrued from the date of issue. Spiller and Sky Bank appealed the portions of the trial court judgment that were unfavorable to them. On review, the 3rd District Court of Appeals affirmed the rulings of the trial court. The Supreme Court subsequently agreed to review the issue of whether Spiller’s claims against the bank are barred as untimely under R.C. 1109.69(F).
In today’s decision, Chief Justice Moyer wrote: “This case is controlled by our decision in Abraham v. Natl. City Bank Corp (1990). ... Here, as in Abraham, the plaintiff presented stale evidence of money deposited with a bank and testified that the money had never been withdrawn. In each case, the defending bank lacked records of any such account and provided a list of customers who had open accounts as of a date more than six years prior to the plaintiff’s claim, and the plaintiff’s name was not on the list. ... In Abraham, we considered the date of the last entry in the plaintiff’s savings passbook and reasoned: ‘The problem is that the passbook proves only that the account existed; it does not explain how the funds were removed from the account. Only the internal bank records could explain it.’ We concluded that the action depended upon records that the bank was permitted by statute to destroy, and therefore we held that the suit was time-barred by the statute.”
“Similar circumstances are presented in this case. Spiller has only the original paper certificate issued in 1975 and her testimony to prove the existence of the deposit. Sky Bank has produced an all-accounts list which indicates that no such account existed in 1993. The absence of any record of Spiller’s account as of December 31, 1992, raises an inference that the account was closed at some time between 1975 and December 31, 1992. Spiller cannot explain when, why, or how the account terminated; only the bank’s internal records could do that. Accordingly, this is a lawsuit ‘based on, or the determination of which would depend on, the contents of records’ retained pursuant to R.C. 1109.69(A) or (B). R.C. 1109.69(F). ... The lone difference between this case and Abraham is the type of account involved, but it is a difference with no legal significance. For purposes of R.C. 1109.69(F), there is no meaningful difference between a passbook savings account of indefinite duration and an automatically renewing certificate of deposit.”
The Chief Justice concluded: “Our holding today ensures that R.C. 1109.69(F) has effect, by reiterating that banks may dispose of records as provided by R.C. 1109.69(E) without risking liability to suit. Were it otherwise, a bank could never dispose of records relating to an automatically renewing certificate of deposit without subjecting itself to liability on a claim that the account was never actually closed. When an action on an account against a bank is based on or depends on the contents of records that the bank is required to maintain, the action must be asserted within the time provided by R.C. 1109.69 for retention of those records, even when the account at issue is an automatically renewing certificate of deposit. Because the decision of the court of appeals is contrary to R.C. 1109.69, it is hereby reversed.”
Chief Justice Moyer’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor, Terrence O’Donnell, Judith Ann Lanzinger and Robert R. Cupp.
Justice Paul E. Pfeifer dissented, stating: “Not everyone sits and counts his or her money every day. Mrs. Spiller has the certificate of deposit. The bank has nothing. The bank wins? I dissent.”
Contacts
Matthew D. Harper, 419.247.1822, for Sky Bank.
Steven R. Fansler, 937.465.5056, for Maxine Spiller.