HOUSTON – A Texas appeals court recently declined to revive a landlord's breach of contract and negligence lawsuit against Amegy Bank of Texas after the bank froze his accounts over allegedly suspicious cash deposits.
In its 12-page memorandum opinion issued Dec. 19, a Texas First District Court of Appeal three-judge panel affirmed a lower court's ruling that the bank could freeze the accounts without notice under its deposit agreement with the accounts holder.
Justice Gordon Goodman wrote the opinion in which Justice Evelyn Keyes and Justice Julie Countiss concurred.
Alan Schrock, a Baytown-area landlord, appealed a Harris County district court's summary judgment dismissing his claims against Amegy Bank of Texas, which Schrock alleges froze his accounts in November 2016 following a dispute over his cash deposits
"After many years of serving as Schrock’s bank, Amegy began to suspect that Schrock might be structuring his cash deposits to avoid federal reporting requirements," the background portion of the opinion said. "Amegy notified Schrock of its concerns, warned him that the continued appearance of structuring could result in the closure of his accounts, and urged him to contact his account manager to discuss the matter further."
Amegy froze the accounts and sent Schrock a notice that the accounts would be permanently closed in 30 days after Schrock failed to contact his account manager "and continued to make the concerning deposits," the opinion said.
Schrock subsequently sued Amegy over allegations of breach of contract and negligence, claiming the freeze disrupted his professional and personal life. Schrock claimed Amegy had violated the deposit agreement between them when his accounts were frozen without prior notice.
The trial court granted Amegy's motion for summary judgment in which the bank argued, among other things, that the deposit agreement allowed Amegy the right to freeze Schrock's accounts before providing him notice that the freeze was in effect. Amegy backed up its motion with sent three letters warning Schrock about the possible deposit irregularities, an affidavit from Schrock's Amegy account relationship manager and excerpts from Schrock's deposition.
Schrock appealed but the opinion stated the deposit agreement "expressly permits Amegy to freeze an account before giving notice should it suspect fraudulent activity on the account."
"Because Amegy had the right to freeze Schrock's accounts before giving him notice, Schrock's claims fail as a matter of law," the opinion said. "Therefore, we affirm."