PUGET SOUND BANK CERTIFICATE OF DEPOSIT

Attorney West Seattle, P.S. is representing several people that are being denied redemption of their bank bonds, bank bills, and certificate of deposits from Puget Sound Bank. Their certificates were issued in the 1980’s.

If you have a bank bond, bank bill, or certificate of deposit from Puget Sound Bank, call us today for a free consultation. Our phone number is 206 745 3738.

A copy of our draft complaint against Key Bank is below.

COMES NOW, the Plaintiff, by and through her attorney of record, Eric J. Harrison of Attorney West Seattle, P.S., and alleges on information and belief the Complaint.

INTRODUCTION

In 1991, Plaintiff and/or her benefactors deposited money in exchange for a Savings Certificate of Deposit (“CD”) issued by Puget Sound National Bank. A copy of Plaintiff Danielle Diehl’s CD is attached as Exhibit A. Plaintiff’s initial annual interest rate on the CD is “6.3%" and provides for automatic renewal. Plaintiff held the original CD in a secure place for safekeeping. The terms on the CD require the registered owner to surrender the original CD to redeem their principal and unpaid interest. Defendant KeyCorp acquired Puget Sound National Bank and is the successor institution to Puget Sound National Bank. Recently, Plaintiff went to KeyCorp to surrender her CD and withdraw her money. KeyCorp refused to return Plaintiff’s money. KeyCorp has previously been sued for their failure to redeem certificates of deposits from similarly acquired local banks. In one case, Harris, et al. v. U.S. BankCorp, et al., Case No. 2:19-CV-00291, Federal District Court Judge Barbara J. Rothstein denied KeyCorp’s motion to dismiss the breach of contract and violations of Washington Consumer Protection Act claims. Nevertheless, KeyCorp continues to tell Plaintiff that her CD is worthless and that it has no value.

PARTIES

1.              Plaintiff Danielle Diehl is a resident of Thurston County, Washington. Danielle Diehl’s maiden name is Danielle N. Ball.

2.              Defendant KeyCorp (“Key Bank”), is a national banking association with its main office in Cleveland, Ohio. Key Bank is regulated by the Office of the Comptroller of the Currency, an independent bureau of the United States Department of the Treasury. Key Bank is the parent company of Key Bank National Association. Key Bank National Association holds successor interest in Puget Sound Bancorp and Puget Sound National Bank (together “Puget Sound Bank”), including Puget Sound Bank’s assets and liabilities. All further references to “the bank” or to “Defendant”, refer to Key Bank, Key Bank National Association and their predecessors.

JURISDICTION & VENUE

3.              At all relevant times, Defendant Key Bank maintained offices and transacted business in Washington, including King County.

FACTUAL ALLEGATIONS

4.              On June 5, 1991, Puget Sound Bank issued a Certificate of Deposit under Certificate No. 3081017125 (“CD”) to Danielle N. Ball (“registered owner”) for funds deposited with the bank in the principal amount of $1,161.00. The CD was issued by the Port Orchard branch of Puget Sound Bank. Plaintiff Danielle Diehl’s maiden name is Danielle N. Ball, and she is listed as the registered owner of Puget Sound Bank Certificate No. 3081017125. The CD states that it will be paid to “DANIELLE N BALL, NOT TO BE CASHED BEFORE EIGHTEEN YEARS OLD PER ATTACHED COURT ORDER”.

5.              Plaintiff is the registered owner to the CD listed in this Complaint.

6.              Plaintiff’s initial annual interest rate on the CD is “6.3%” and the CD interest payments are “Added to Principal”.

7.              According to the terms printed on the face of the CD, the CD automatically renews with interest for subsequent maturities equal in length to the original maturity period unless (a) the original CD is returned for payment by the payee or (b) the Bank at its option gives notice to the payee.

8.              Puget Sound Bank and its successors never gave notice to the registered owner of the CD that the CD was not being renewed. Plaintiff did not return the CD for payment until recently.

9.              Plaintiff held the CD in a secure place for safekeeping.

10.           At no time after the issuance of the CD, did Puget Sound Bank nor its successors lose contact with the registered owner.

11.           After the time of the first renewal, the registered owner did not receive any notice from any bank that the CDs were not being renewed, were dormant, or that funds had escheated to the State of Washington.

12.           Puget Sound Bank and its successors never escheated the deposited money from the CD to Washington State.

13.           The Federal Deposit Insurance Corporation (“FDIC”) states that Key Bank is the successor to Puget Sound Bank.

14.           Key Bank acquired Puget Sound Bank in 1992. Key Bank’s purchase included Puget Sound Bank’s deposits and obligations on CDs issued by Puget Sound Bank.

15.           Key Bank received benefit from the Puget Sound Bank issued CDs by earning interests on the deposits.

16.           Defendant knew, or should have known, about CDs issued by Puget Sound Bank. Key Bank has previously been sued for their failure to redeem certificates of deposits from similarly acquired local banks. In one case, Harris, et al. v. U.S. BankCorp, et al., Case No. 2:19-CV-00291, Federal District Court Judge Barbara J. Rothstein denied Key Bank’s motion to dismiss the breach of contract and violations of Washington Consumer Protection Act claims. Nevertheless, Key Bank continues to tell Plaintiff that her CD is worthless and that it has no value.

17.           Defendant knew, or should have known, about the validity of Puget Sound Bank CDs. Defendants failed to disclose the validity of the CD to the Plaintiff.

18.           After being made aware of their obligation on CDs issued by Puget Sound Bank, Defendant continued a policy of misinforming Plaintiff and other holders that the CDs were worthless.

19.           Recently Plaintiff presented her original CD to surrender for redemption at Defendant’s branch location. Defendant refused to redeem the CD.

20.           Defendant told Plaintiff that the CD had no value. Defendant told Plaintiff that the CD had either already been redeemed, or that the CD funds had escheated to the State of Washington. Defendant knew, or should have known, these statements were false. Prior to making these statements to the Plaintiff, Defendant had failed to investigate and/or perform due diligence on Plaintiff’s CD.

21.           Plaintiff spent time investigating Defendant’s false claims. Plaintiff spent time contacting the Washington State Department of Revenue which confirmed that it had no record of having received any funds belonging to the registered owners of the CD.

22.           The terms for withdrawing the CD funds are stated on the face of the CD. The face of the CD states that the principal amount and any accrued interest will be paid to the owner “upon return of this certificate properly endorsed”.

23.           Defendant holds the money deposited by Plaintiff by way of acquisition of Puget Sound Bank.

24.           As successor in interest to Puget Sound Bank, Defendant earned interest on the money deposited by Plaintiff.

25.           As successor in interest to Puget Sound Bank, Defendant benefited from money deposited by Plaintiff.

26.           Plaintiff attempted to redeem her original CD according to the instructions printed on the face of the CD and Defendant refused to return the money and refused to pay the interest owed to the Plaintiff as required by the terms of the CD.

27.           Defendant adopted an unfair policy universally refusing Washington residents’ CDs issued by Puget Sound Bank.

28.           Defendant adopted a deceptive policy to tell Washington residents that their Puget Sound Bank CDs had no value and were worthless.

29.           Other Washington residents have similarly been denied redemption of their Puget Sound Bank CDs.

30.           Defendant’s refusal to pay registered owners upon their surrender of the original CDs affects other registered owners, transferees, beneficiaries, and heirs in Washington state.

FIRST CAUSE OF ACTION – Breach of Contract

31.           Plaintiff re-alleges and incorporates by reference each allegation set forth herein.

32.           Puget Sound Bank entered into a valid written contract with the registered owner. As part of that written contract, Puget Sound Bank accepted a cash deposit from the registered owner in exchange for the CD issued to the registered owner.

33.           Key Bank acquired the liability on the CD listed in this Complaint when Key Bank acquired Puget Sound Bank.

34.           Defendant, as successor to Puget Sound Bank, breached the contract with Plaintiff by declining to redeem and pay the balance of the CD, plus interest. Defendant and their predecessors have not provided any notices to the registered owner that the CD would not be renewed, that it was dormant or that the CD’s funds were being escheated to the State.

35.           In breaching the contract with Plaintiff, Defendant also breached the contractual covenants of good faith and fair dealing that it owed Plaintiff as a party to the contract.

36.           Defendant is liable to Plaintiff for the principal amounts of the CD as well as all interest accrued since the CD issuance.

37.           Defendant’s breach of the contract caused Plaintiff to suffer foreseeable damages. From the outset of the contract, it was foreseeable that breaches would cause direct and consequential damages to Plaintiff, including, but not limited to, loss of principals, loss of interests, attorneys’ fees, and related costs of litigation, all in amounts to be proven at trial.

SECOND CAUSE OF ACTION – VIOLATION OF CONSUMER PROTECTION ACT

38.           Plaintiff re-alleges and incorporates by reference each allegation set forth herein.

39.           The actions, practices, and omissions of Defendant constitute unfair and deceptive acts and practices in the conduct of trade and commerce that affect the public interest within the meaning of the Washington Consumer Protection Act, RCW 19.86.

40.           The CD states on its face that the funds shall be withdrawn “upon return of this certificate properly endorsed”. No other terms are stated as an alternative procedure for withdrawing the Bonds’ funds.

41.           Plaintiff has fully complied with all the steps necessary to redeem the CD. Defendant has refused to redeem the CD by making up erroneous theories in the absence of any evidence that one of its predecessors may have followed unwritten and unpublished rules unknown to Plaintiff by redeeming the CD without requiring the surrender of the original certificate.

42.           Defendant’s adoption of a policy to refuse redemption by Washington State CD holders without investigation into their individual Bonds/CDs is an unfair business practice.

43.           Defendant’s conduct of telling Plaintiff that her CD has no value is an unfair business practice.

44.           Defendant’s position that they do not have to fulfill the terms of the CD’s contract with Plaintiff solely because the bank speculates without any evidence, that they may have followed procedures contrary to the terms printed on the face of the CD certificate is an unfair business practice.

45.           Defendant has refused to pay other substantially similar CD holders in Washington State. Defendant has no evidence to support their non-payment position. Their refusal to redeem the CD based upon an unpublicized change in the rules from those printed on the face of the CD is an unfair business practice. The CD was purposely structured to renew automatically, with no termination date so that consumers would leave their money on deposit with the bank indefinitely.

46.           When a consumer has kept their CD funds at the bank for an extended period, just as the terms of the CD encouraged, but is denied redemption because the bank has not retained the records for that account, the burden for the costs of enforcing the contract should fall on the bank. It would have been a simple and inexpensive matter for the bank to have retained the records for any bond/CD accounts for which the original bond/CD certificates were not surrendered. For its own reasons Defendant, or its predecessor, chose not to retain those records, or any other records regarding the registered owner’s account. The bank cannot use the bank’s own business decision not to retain records as the basis for denying a valid consumer claim supported by the customer’s records that the bank pledged to rely upon. To do so is an unfair business practice.

47.           Defendant’s responses to Plaintiff’s attempt to redeem her CD are per se misrepresentations. The CD certificate states the rules and process for redemption. When Plaintiff, and other persons similar to them in Washington State, complied with those rules, Defendant refused to pay and informed the Plaintiff that her CD had no value. This type of unfair business practice toward consumers is exactly what the Washington Consumer Protection Act was designed to protect against.

48.           As a direct and proximate result of Defendant’s violation of the Consumer Protection Act, Plaintiff has suffered damages, including but not limited to loss of principal and interest, loss of time spent investigating Defendant’s false claims, attorneys’ fees, and related costs of litigation, all in amounts to be proven at trial.

49.           These actions by Defendant have affected the public interest. Puget Sound Bank issued numerous similar other bonds/CDs to numerous other people that Defendant is refusing to redeem when presented with the original bond/CD certificate.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays that this Court grant the following relief:

1.     Judgment against Key Bank awarding Plaintiff damages in an amount to be proven at trial, including the face value of the CD, plus accrued interest at the stated amount for the initial term of the CD and at “the maximum rate then paid by the Bank as of the first day of such renewal period for time deposits of like maturity and principal amount” on the successive automatic renewal dates for the CD up to the date of the redemption request;

2.     That Plaintiff be awarded damages under the Consumer Protection Act, RCW 19.86, including treble damages, and costs and attorneys’ fees;

3.     That Plaintiff be awarded prejudgment interest from the date that redemption was denied through the date of judgment; and

4.     For such other relief as the Court deems just and equitable.

RESPECTFULLY SUBMITTED.

Attorney West Seattle, P.S.  

Eric J. Harrison, WSBA# 46129

Attorney for Plaintiffs