This post concludes our summary of the recent Fifth Court of Appeals decision, JP Morgan Chase Bank, N.A. v. Borquez et al., 2015 WL 6690027 at *19 (Tex. App.—Dallas Nov. 3, 2015, no pet. h.), reversing a $4.3 million verdict against Chase Bank arising from the robbery and murder of an armored car driver at a Chase branch, as discussed in more detail in my previous posts. This post finishes our discussion of the Fifth Court’s analysis and provides some suggestions for how banks can use the Borquez decision to assess, and potentially reduce, their liability risk for crimes occurring at bank branches.
Having concluded its Timberwalk analysis, the Fifth Court then considered appellees’ arguments outside of the Timberwalk framework. Appellees argued that Tex. Fin. Code Ann. §§ 59.308–.310, which require ATM owners to take various precautions to improve user safety, demonstrated that the risk of violent crime at an ATM was reasonably foreseeable. Id. at *18. The Fifth Court rejected that argument because the Finance Code did not explicitly address the issue of foreseeability and “taking preventative measures to protect against the possibility of future crime is not the same as foreseeing that criminal activity.” Id. Appellees also pointed to Chase’s characterization of the branch as being at a “high risk for robberies” and to various safety precautions Chase had taken inside the branch as evidence of foreseeability, which the Fifth Circuit rejected, again noting that taking preventative measures did not equate to foreseeing a particular criminal act. Id. at *19.
The Borquez decision provides useful information for banks in evaluating their liability risk at various branches.
- Recency: The Fifth Court emphasized “two years” as a “reasonable period” of time to consider past criminal conduct. If there has been criminal activity within the past two years near a breach, a bank may face a higher liability risk should an on-premises crime affect a patron, and should consider increasing security precautions at that branch. Not all criminal activity (e.g. minor drug offenses) necessarily warrants increased security precautions, but if there has been recent criminal activity that could affect branch patrons, such as robberies or violent crime, consider taking additional precautions.
- Proximity: Bank managers should consider paying particular attention to crimes within a limited geographic area near the branch. While the Fifth Court did not identify a specific mileage range in which it would consider criminal activity in a foreseeability analysis, it noted that it and the Texas Supreme Court had considered crimes with a mile or a quarter-mile of a location in other cases. Id. at *13, *17. Accordingly, managers should pay particular attention to crimes within a mile or less of a branch.
- Similarity: Banks are at a higher risk of liability for crimes that are significantly similar to those which have recently occurred close to a branch. Under the Fifth Court’s analysis, though, there appears to be a high bar for what is considered a “similar” crime. The Fifth Court, for example, did not consider the 2006 robberies at Oak Cliff branch to be similar to the robbery that led to Mr. Borquez’s death because the earlier robberies were indoors and non-violent.
- Precautions: A branch’s institution of precautions to improve security, commission of reports of local criminal activity, or internal characterization of a branch as a high risk for robberies should not necessarily increase liability risk. The Fifth Court rejected appellees’ attempts to use all of those points to prove that Mr. Borquez’s death was reasonably foreseeable. And the Fifth Court’s rejection of safety precautions as demonstrating foreseeability makes perfect policy sense; there is no reason to deter banks or other business from taking precautions by using those precautions as the basis for liability.
A caveat: appellees have asked the Fifth Court for en banc review