Oklahoma:Breach of GoodFaith/Fair Dealing:Fiduciary

David A. Szwak

Oklahoma:Breach of GoodFaith/Fair Dealing:Fiduciary

Postby David A. Szwak » Fri Oct 07, 2005 8:10 pm

The Oklahoma Supreme Court first recognized the existence of a breach of the Covenant of Good Faith and Fair Dealing theory of recovery in the commercial loan context between a debtor and creditor in Rodgers v. Tecumseh Bank, 1988 OK 36, 756 P.2d 1223.

The relationship between a bank and its depositor is generally considered contractual. Beshara v. Southern Nat. Bank, 1996 OK 90, 928 P.2d 280; citing Allied Fidelity Ins. Co. v. Bank of Okla., 894 P.2d 1101, 1003 [Okla. 1995].

Under the common law, each contract carries an implicit and mutual covenant to act towards each other in good faith. Beshara, citing First National Bank & Trust Company of Vinita v. Kissee, 869 P.2d 502, 509 [Okla. 1993].

Likewise, under the Uniform Commercial Code, 12(A) [1981], section 1-203, commercial transactions carry on obligation of good faith in their performance and enforcement.

The Beshara court acknowledged and reaffirmed the holdings of First National Bank & Trust Company of Vinita v. Kissee and Rodgers v. Tecumseh Bank which refused to recognize an action for breach of the implied Covenant of Good Faith and Fair Dealing which results from a commercial contract between a bank and its customer, unless there is a showing of gross recklessness or wanton negligence on behalf of a party. Beshara, supra.

Defendant cannot contest that FNBN stood in the relation of a fiduciary to plaintiffs, particularly in connection with its credit reportings. Crockett v. Root, 194 Okla. 3, 146 P.2d 555, 559 [Okla. 1943]. FNBN has breached its duties to the plaintiffs.

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