Audit Clarity

Risk Point, LLC v. Santander Bank, N.A., a permissive appeal, addressed the proper interpretation of a complex “reconciliation audit provision” in a contract between a bank and a business that arranged insurance for car dealers who received financing assistance from that bank.

The Fifth Court held that the provision does not allow for reconciliation audits to be initiated at any time, as the bank had argued, but could instead only be initiated “during the three-month period following renewal, expiration, or earlier termination of a dealer’s coverage,” or, alternatively, during the policy term for specific portions of the year.

The court emphasized that reading the provision to allow audits at any time would render meaningless the specific timing language in the contract about timing, stating, “Santander’s interpretation of the second provision renders the first provision meaningless: the specific time period of three months following the end of coverage would add no meaning to the Reconciliation Audit provision under Santander’s interpretation, because the boundless second provision would simply incorporate and swallow the specific provision whole.” No. 05-24-00469-CV, June 25, 2025.