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Hirl v. Bank of America, N.A.

401 N.J. Super. 573, 952 A.2d 479 (App. Div. 2008)

ELECTRONIC FUND TRANSFER PRIVACY ACT — A customer qualifies for a remedy under the Electronic Fund Transfer Privacy Act only if the customer’s bank account has electronic fund transfer capability so as to qualify for privacy protections under the Act.

NOTE: Ruling in this case was reversed by the New Jersey Supreme Court on April 1, 2009 (A-42-08).

A divorcee had an ongoing dispute with her ex-husband over support payments. A facially valid subpoena in the matrimonial action was served on a bank. It requested bank statements for the divorcee’s customer account. The subpoena indicated that no evidence should be produced prior to a given date and that the recipient must not produce the subpoenaed information if notified that a motion to quash had been filed. On the same day, an attorney for the divorcee advised the bank that it was going to file a motion to quash the subpoena. Four days before the production date, the bank delivered the requested bank documents. The divorcee sued the bank for damages, alleging a violation of her privacy in the bank’s disclosure of her records to her former spouse in connection with the family law matter. The lower court found that the bank had violated the Electronic Fund Transfer Privacy Act (EFTPA) and awarded the customer damages. The bank appealed.

The Appellate Division reversed and remanded for a determination whether the customer’s bank accounts had electronic fund transfer capability so as to qualify for privacy protections under EFTPA. It noted that she was asserting a right to privacy for financial records without identifying the source of her right or the damages. The Court analyzed the privacy protections of EFTPA and held that a customer may invoke that law’s remedies if information pertaining to an account which electronic transfer capability is improperly disclosed. It found that the bank released privileged information earlier than it was required, and with notice of intent to quash the requesting subpoena. The Court concluded that the bank acted negligently and recklessly; however, it remained a question of fact whether the customer could qualify for a remedy under the EFTPA depending on the character of her bank accounts.

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