Arrowhead

1. Introduction

What legal duty does a credit union have when responding to a credit inquiry about one of its members, received from a party with no prior relationship to the credit union? We hold that, while a legal duty may exist if the credit union undertakes to make a response, in this instance, no material disputed facts prevented the trial court from granting summary judgment in favor of defendant Arrowhead Central Credit Union.

In March 1998, plaintiff Lease and Rental Management Corporation, doing business as “Auto Loan,” first contemplated loaning money to Michael and Nanette Maloof, doing business as National Fleet and Lease Services. Three times Auto Loan asked defendant Arrowhead for credit references. In March 1998, October 1998, and December 1999, Arrowhead responded that the Maloofs had satisfactory credit. After the Maloofs filed for bankruptcy in April 2001, Auto Loan suffered losses of about $900,000. Auto Loan then sued Arrowhead and the Maloofs for fraud and negligence. The substance of Auto Loan’s claim against Arrowhead is it provided false or misleading credit references, causing Auto Loan to extend credit to the Maloofs.

Based on two separate…