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Valley Bank of Nev. v. Superior Court

Supreme Court of California

December 9, 1975

S. F. No. 23313


 [*654]  [**977]  [***553]    In this case we consider under what circumstances a litigant may, through ordinary civil discovery procedures, obtain from a bank information disclosed to it in confidence by a customer. We have concluded that although such information is discoverable in a proper case, nevertheless the bank must first take reasonable steps to locate the customer, inform him of the discovery proceedings, and provide him a reasonable opportunity to interpose objections and seek appropriate protective orders.

Petitioner (Bank) sued real parties to recover the [****2]  balance assertedly due on a promissory note executed and delivered by them to Bank to assist them in the purchase of the King's Castle Casino at Lake Tahoe. Although Bank loaned real parties $ 250,000 for this purpose, the remaining financing was unavailable and the purchase  [**978]   [***554]  was never completed. Real parties defaulted on the note, and the present suit followed.

 [*655]  Real parties' primary defense to the suit is that Bank misrepresented the availability of additional financing "in order to induce defendants [real parties] to borrow $ 250,000 to give to the seller, Nathan Jacobsen, who would use the money to keep King's Castle open," thereby protecting the investment in King's Castle of other specified Bank customers, including the Teamsters Union.

In order to prove these allegations, real parties noticed the deposition of Bank's chairman, Mr. Thomas, asking him to bring with him bank records pertaining to loan transactions between Bank and seven named persons and corporations (including Jacobsen and King's Castle), "together with any and all records of any banking relationships with the Teamsters Union and/or any casino owned, operated or mortgaged [****3]  to the Teamsters Union."

Bank, objecting to the disclosure of allegedly confidential information received from its customers, sought a protective order pursuant to section 2019, subdivision (b)(1), of the Code of Civil Procedure.  In support of its motion, Bank submitted the affidavit of its president, Mr. Sullivan, which stated, among other things, that Bank "insists upon protecting the privacy of its customers and is not willing to disclose copies of any documents or records concerning the confidential transactions of its customers, other than the parties to this action."

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15 Cal. 3d 652 *; 542 P.2d 977 **; 125 Cal. Rptr. 553 ***; 1975 Cal. LEXIS 260 ****

VALLEY BANK OF NEVADA, Petitioner, v. THE SUPERIOR COURT OF SAN JOAQUIN COUNTY, Respondent; JOSEPH A. BARKETT et al., Real Parties in Interest

Disposition:  [****1]  Let a writ of mandate issue directing the trial court to vacate its order granting discovery herein and to conduct further proceedings consistent with this opinion.


customer, discovery, confidential, disclosure, bank customer, real party, proceedings, protective order, privileged, privacy, trial court

Civil Procedure, Discovery, Privileged Communications, General Overview, Discovery & Disclosure, Relevance of Discoverable Information, Evidence, Privileges, Doctor-Patient Privilege, Scope, Healthcare Law, Business Administration & Organization, Attorney-Client Privilege, Banking Law, Consumer Protection, Right to Financial Privacy, Constitutional Law, Substantive Due Process, Privacy, Personal Information, Criminal Law & Procedure, Search & Seizure, Expectation of Privacy, Directors & Officers, Duty of Loyalty, Warrantless Searches, Consent to Search, Protective Orders, Burdens of Proof