Bank May Have to Pay $4.1 Million Penalty : Courts: Judge’s tentative order against B of A says the institution dealt fraudulently with the owner of a truck dealership.

A San Diego Superior Court judge has tentatively ordered the Bank of America to pay $4.1 million to the owner of a San Diego truck dealership who contended that the bank’s fraudulent business dealings caused him to lose an automotive franchise and other revenues.

In a proposed decision, Judge James A. Malkus ruled that the bank intentionally breached its covenant of good faith and fair dealing with a customer, Norm Pressley, through acts that were done “oppressively, maliciously and fraudulently.”

Pressley’s lawyer, Patrick R. Frega, said Monday that his client was an unwitting pawn caught in a personal vendetta between two bank employees.

A vice president, William J. Landry, nurtured a close financial relationship with Pressley, offering continuing assistance in the form of $500,000 and $650,000 loans, Frega said. But an assistant branch manager, at odds with Landry for personal reasons, sabotaged those financial agreements, Frega argued.

As a result of actions by bank employees, Malkus concluded in his opinion, Pressley was forced to sell the site upon which his truck dealership sat, as well as his General Motors franchise.

“A special relationship of a fiduciary nature came to exist between plaintiff and defendant which were breached by acts and conditions of employees of” the bank, Malkus wrote. He found that Landry’s promises, accompanied by “the purposefully maintained atmosphere of friendship,” encouraged Pressley to place trust in the bank--trust that was eventually broken.

Lawyers representing Pressley and the bank have 30 days to recommend to Malkus whether his final order should differ from his proposed action, which calls for $3.39 million in compensatory damages and $750,000 in punitive damages. Frega said he will ask for the punitive damages to be increased in order to teach the bank a lesson.

Frega said that for Bank of America, the largest bank in California, the $750,000 penalty is “not even a slap on the wrist. The bank will laugh at it. It’s worthless.”

Frank Ker, a spokesman for Bank of America, did not return phone calls Monday.

Frega said his case turned in large part on the testimony of Landry, who was called as a witness by the bank’s attorneys.

Frega said Landry, who had by then retired from the bank, wrote to his former employer that “Bank of America was my life for over 30 years, and I will cooperate with your office and the general counsel in whatever way I can, but the truth of the matter is that Norm Pressley got a raw deal from Bank of America.”

The Pressley case is the second lender liability case in San Diego in recent years in which a bank has been found guilty of fraud. In 1986, a Superior Court judge ordered Security Pacific National Bank to pay $4.8 million to a former San Diego car dealer who charged that the bank caused him to lose a pair of dealerships in San Diego and Los Angeles.

The judge ruled that the bank “fraudulently induced” former Baron Buick owner James Williams to purchase a Los Angeles Dodge dealership that the judge described as “failure waiting to happen.” By arranging for Williams to buy the financially strapped dealership, the judge ruled, Security Pacific made it impossible for Williams to fulfill his contracts with the bank.

The $4.8-million judgment, which has been upheld on appeal, included $2.5 million in punitive damages, $1.7 million in lost income and $300,000 in emotional distress damages, as well as other damages.

Malkus’ proposed decision in the Bank of America case, which was handed down last week, rejects Pressley’s claims that the bank slandered him and caused him to suffer emotional distress.