Miner County Bank v. Laible ( 1984 )

MILLER, Circuit Judge.

Appellant as Administratrix of her husband’s estate seeks to set aside a judgment entered by the trial court awarding appel-lee bank recovery under a promissory note executed by the decedent. We affirm.

Decedent, a Miner County farmer, had always done his banking business at the Miner County Bank (the bank). On April 13, 1981, he signed a note to the bank renewing two prior notes. This note was in the principal amount of $19,850.00, bearing 18% interest.

The note, on its face, contained a small box relating to credit life insurance. It provides:

Credit Life Insurance is voluntary and not required for credit

I [ ] DO [ ] DO NOT desire Credit Life Insurance at a cost of $_for the term of the loan.

SIGNED __

DATE_19_

This section of the note was not completed by either the decedent or the bank officers making the loan.

Although the bank has an insurance agency in the same building, whose majority stockholders are the majority stockholders of the bank, it is the policy of the bank that it is not in the insurance business and credit life is never offered. In fact, of the approximately 8,540 notes taken by it since January 1, 1974, none of the loan customers were offered credit life insurance.

The bank holds itself out as a “full-service bank” and advertises accordingly; however, it has never advertised nor held itself out as being in the insurance business or that it sells credit life insurance.

Appellant raises two issues contending that the trial court erred in granting judgment for the bank. She first argues that the bank was negligent in failing to disclose that credit life insurance was available for purchase. She further asserts that the bank was guilty of professional malpractice in failing to disclose or discuss the matter of credit life insurance with decedent.

It is “black letter law,” not requiring citation, that actionable negligence requires a legal duty.

There are no South Dakota statutes, regulations or case authority imposing a duty upon a bank to offer credit life insur-anee to its customers. We are not willing, as suggested by appellant, to attach or extend the same strict liability to banks to create such a duty that the court imposed upon the manufacturers of products. See Engberg v. Ford Motor Co., 87 S.D. 196, 205 N.W.2d 104 (1973). Therefore, appellant may not prevail on that issue.

Plaintiff next argues that the informed consent/informed refusal doctrine from legal and medical malpractice litigation should logically extend to the banking industry so as to require banks to inform and advise its loan customers of the availability of credit life insurance. Canterbury v. Spence, 464 F.2d 772 (D.C.Cir.1972); Cunningham v. Yankton Clinic, P.A., 262 N.W.2d 508 (S.D.1978).

We are not willing to so extend the informed consent doctrine, nor have we been cited to other jurisdictions that have done so.

The judgment is affirmed.

WOLLMAN, DUNN, and MORGAN, JJ., concur. HENDERSON, J., concurs specially. MILLER, Circuit Judge, sitting for FOSHEIM, C.J., disqualified.