UC Davis sues U.S. Bank for breach of contract after Occupy protests

Published: Tuesday, May. 8, 2012 - 12:00 am | Page 6B

In continuing fallout from the Occupy campus protests at UC Davis, the university has filed a complaint against U.S. Bank, alleging breach of contract.

The bank announced March 1 that it was pulling out of its UC Davis campus contract, citing days of disruption during student protests against the bank last January and February. During that period, the bank either did not open or closed its doors early.

UC Davis spokesman Barry Shiller said the complaint, filed in Yolo Superior Court, is intended to "simply nudge the bank to return to the table and continue talking. If it's going to be a wind-down, we'd like to wind it down cordially, amiably and with the least amount of friction."

The university, which hired outside legal counsel from San Francisco to represent it in the matter, has been negotiating with U.S. Bank attorneys to reach a settlement over the contract dispute.

In an email, U.S. Bank spokeswoman Teri Charest said, "We had been working with the university to resolve this matter and were surprised that they filed a court claim. We strongly disagree with their claim and will respond."

The 10-year contract, announced in 2009, gave UC Davis its first-ever campus bank branch and guaranteed the university annual payments of $130,000 to $780,000, based on the number of bank accounts activated. Last year, the program generated $167,000 for student programs, UC Davis said.

In addition, U.S. Bank opened seven campus ATMs, which remain open, and conducted a financial management workshop for parents and students.

Shiller, who likened the situation to a "landlord- tenant dispute," said the university wants to ensure that students and taxpayers are covered against anticipated losses from the bank's early departure.

"There was a contemplated stream of revenue that's now lost. … We do have the financial interests of UC Davis and taxpayers in mind," he said, noting the agreement called for as much as $3 million over 10 years for student services.

In announcing the branch closure earlier this year, the bank said the Occupy protests "constructively evicted the branch" from its Memorial Union location. It said employees were essentially held prisoner inside the bank, which suffered losses due to customers' inability to enter.

"We closed our branch in March because employees and customers were unable to enter and exit the office safely, and we refuse to put our customers and employees at risk," Charest said Monday.

The campus branch's 2,500 account holders were directed to use the bank's branches in Davis or Woodland.

Meanwhile, 11 students and one faculty member – the so-called "Bankers' Dozen" – are due back in Yolo Superior Court on Thursday to face misdemeanor charges of conspiracy and blocking a public entrance.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Claudia Buck



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