Commercial Cotton Co. v. United California Bank

United California Bank (UCB) appeals a judgment in favor of Commercial Cotton Company, Inc. and its principal shareholder, Travis H. Calvin, Jr., awarding them $4,000 for negligently debiting Commercial Cotton’s commercial checking account in that amount on a check containing unauthorized signatures, $20,000 for intentionally inflicting emotional distress by unjustifiably refusing to repay Calvin the loss sustained by its error, and $100,000 punitive damages because UCB breached the implied covenant of good faith and fair dealing inherent in the contractual relationship with its depositor.

UCB admits it negligently debited the bank account for a check plainly containing unauthorized signatures, but contends no substantial evidence supports a finding Calvin suffered compensable emotional distress from its refusal to reimburse. UCB further argues it did not breach its duty of good faith and fair dealing because it legitimately pursued its economic interest by raising what it perceived as legitimate defenses in refusing to reimburse the loss its negligence caused. We find no substantial evidence supports the award of damages for emotional distress, but affirm the rest of…