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December 11, 1995


The opinion of the court was delivered by: BASSLER


 This matter comes before the Court on the motions of: (1) Defendant and Third-Party Plaintiff, Pamrapo Savings Bank, S.L.A. ("Pamrapo"), for summary judgment dismissing Counts Six (conversion under the Uniform Commercial Code ("U.C.C.")), Seven (breach of U.C.C. transfer warranties) and Eight (common law negligence) asserted by Bank Polska Opieki, S.A. ("Bank Polska") in its Amended Complaint; (2) Fourth-Party Plaintiff, The Chase Manhattan Bank, N.A. ("Chase Manhattan"), for summary judgment granting indemnification and attorneys' fees under U.C.C. § 4-207 (U.C.C. warranty); (3) Third- and Fourth-Party Defendant, Donald Meliado ("Meliado"), for summary judgment dismissing the claims for indemnification and contribution asserted against him by Pamrapo and Chase Manhattan. This Court has jurisdiction pursuant to 28 U.S.C. § 1332. For the reasons set forth below: (1) Pamrapo's motion for summary judgment is granted; (2) Chase Manhattan's motion for summary judgment is granted in part and denied in part; and (3) Meliado's motion for summary judgment is denied.


 These motions raise intricate issues regarding the U.C.C. loss allocation scheme and how it should be applied when a forged instrument enters banking channels.

 The underlying dispute involves a $ 2,000,000.00 check, drawn by Bank Polska on its account with the drawee bank, Manufacturer's Hanover Trust ("MHT"), *fn1" now Chemical Bank ("Chemical"), that was allegedly forged by Andrzej Smolinski ("Smolinski"). (Amended Compl. at P 10).

 Bank Polska allegedly entered into a loan agreement with Smolinski-Elektronik, a Polish corporation owned by Smolinski. (Plaintiff's Brief in Opposition to Defendant Pamrapo Savings Bank, S.L.A.'s Motion for Summary Judgment at 3-4). Pursuant to the loan agreement and allegedly without adequately investigating Smolinski's financial background, Bank Polska provided Smolinski with the $ 2,000,000.00 check, which was made payable to "Braxton Industries, New York USA."

 Smolinski then came to the United States and engaged Meliado, a New Jersey attorney, to assist him in incorporating Braxton Industries, Inc., (Meliado Cert. at P 3), which Meliado formed. (Id.). Several days later, Smolinski returned to Meliado's office with the $ 2,000,000.00 check to seek assistance in opening up a corporate account. (Id. at P 7). Meliado suggested Pamrapo and accompanied Smolinski to Pamrapo to open the account. (Id. at P 10). While at the bank, Pamrapo alleges that Meliado made certain representations concerning Smolinski's financial means and his authority to indorse the $ 2,000,000.00 check. (See Memorandum on Behalf of Pamrapo Savings Bank, S.L.A. in Opposition to Donald J. Meliado's Motion for Summary Judgment at 1-2). Meliado denies having made any representations to Pamrapo.

 Smolinski allegedly forged an endorsement to the check, deposited the $ 2,000,000.00 in the Pamrapo corporate account Meliado and he established, and eventually withdrew substantial sums of the money. The United States Attorney's Office subsequently brought criminal charges against Smolinski for his actions in connection with the $ 2,000,000.00 check.

 Pamrapo, the depositary bank, allegedly accepted the forged check for deposit and placed it in the collection process. (Amended Compl. at PP 17-20). Pamrapo forwarded the check to Federal Home Loan Bank of New York ("New York Bank"). (Chase Manhattan's Rule 12G Statement at P 1). New York Bank then transferred the check to Chase Manhattan, which forwarded it to Chemical. Chemical eventually certified the check and debited Bank Polska's account $ 2,000,000.00. (Id. at PP 2-3).

 Pursuant to an Indemnification/Settlement Agreement entered in November, 1994, Pamrapo agreed to indemnify New York Bank.


 A. The Summary Judgment Standard

 Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Whether a fact is material is determined by the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). An issue involving a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Healy v. New York Life Ins. Co., 860 F.2d 1209, 1219 n.3 (3d Cir. 1988), cert. denied, 490 U.S. 1098, 104 L. Ed. 2d 1004, 109 S. Ct. 2449 (1989).

 The moving party has the initial burden of showing that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Where the moving party satisfies this requirement, the burden shifts to the nonmoving party to present evidence that there is a genuine issue for trial. Id. at 324. Once the moving party has carried its burden of establishing the absence of genuine issues of material fact, the nonmoving party "may not rest upon mere allegations or denials" of its pleading, Federal Rule of Civil Procedure 56(e), but must produce sufficient evidence to reasonably support a jury verdict in its favor, Anderson, 477 U.S. at 249, and not just "some metaphysical doubt as to material facts." Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).

 In determining whether any genuine issues of material fact exist, the Court must resolve "all inferences, doubts, and issues of credibility . . . against the moving party." Meyer v. Riegel Products Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983), cert. dism'd., 465 U.S. 1091, 104 S. Ct. 2144, 79 L. Ed. 2d 910 (1984) (citing Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 874 (3d Cir. 1972)).

 Since a motion for summary judgment is designed to go beyond the pleadings, factual specificity is required of a party who opposes such a motion. Celotex, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Accordingly, in order to defeat a properly supported motion for summary judgment, a party may not merely restate the allegations of his complaint. Farmer v. Carlson, 685 F. Supp. 1335, 1339 (M.D.Pa. 1988). Moreover, a party cannot rely upon self-serving conclusions, unsupported by specific facts in the record. Celotex, 477 U.S. at 322- 23. A non-moving party must point to concrete evidence in the record which supports each essential element of his case. Id. If the party fails to provide such evidence, then he is not entitled to a trial and the moving-party is entitled to summary judgment as a matter of law. Fed. R. Civ. P. 56(e).

 In deciding a summary judgment motion, however, the Court's role is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 248. If the party opposing summary judgment has exceeded the "mere scintilla" threshold and has offered a genuine issue of material fact, then the Court cannot credit the movant's version of events, even if the quantity of the movant's evidence far outweighs that of its opponent. Big Apple BMW v. BMW of North America, 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 507 U.S. 912, 122 L. Ed. 2d 659, 113 S. Ct. 1262 (1993).

 When a case turns on credibility determinations, summary judgment is inappropriate. Coolspring Stone Supply, Inc. v. American States Life Ins. Co., 10 F.3d 144, 148 (3d Cir. 1993). Furthermore, "issues of knowledge and intent are particularly inappropriate for resolution by summary judgment, since such issues must often be resolved on the basis of inferences drawn from the conduct of the parties." Id. (quoting Riehl v. Travelers Ins. Co., 772 F.2d 19, 23 (3d Cir. 1985)).

 B. Pamrapo's Motion for Summary Judgment Against Bank Polska

 Pamrapo moves for summary judgment dismissing Counts Six, Seven and Eight of Bank Polska's Amended Complaint, which allege, respectively, conversion under the U.C.C., breach of warranty under the U.C.C., and common law negligence. For the reasons set forth below, Pamrapo's motion is granted and Counts Six, Seven and Eight of Bank Polska's Amended Complaint, insofar as they pertain to Pamrapo, are dismissed with prejudice.

 1. Choice of Law

 A federal court sitting in diversity applies the choice of law rules of the forum state. Van Dusen v. Barrack, 376 U.S. 612, 11 L. Ed. 2d 945, 84 S. Ct. 805 (1964); Klaxon Co. v. Stentor Electronic Mfg. Co., 313 U.S. 487, 496-97, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Shields v. Consolidated Rail Corp., 810 F.2d 397 (3d Cir. 1987).

 N.J.S.A. § 12A:4-102(2) *fn2" provides, in part:

The liability of a bank for action or non-action with respect to any item handled by it for purposes of presentment, payment or collection is governed by the law of the place where the bank is located.

 Pamrapo is a New Jersey bank with its principal place of business in Bayonne, New Jersey. (Amended Compl. at P 5). Accordingly, New Jersey law governs Bank Polska's claims against Pamrapo.

 2. Bank Polska's Claim that Pamrapo Converted the Check

 In its January 24, 1995 Opinion and Order, this Court held under New York law, but relying in part on the New Jersey case, Life Insurance Co. of Virginia v. Snyder, 141 N.J. Super. 539, 545, 358 A.2d 859 (Law Div. 1976), that Bank Polska could not maintain a conversion action against its drawee bank, Chemical, because Bank Polska lacked a property or ownership interest in the allegedly converted check. See 1-24-95 Op. at 16-17.

 Bank Polska argues that the law of the case doctrine does not apply, because New Jersey, not New York, law applies to Bank Polska's claims against Pamrapo.

 Because the Court concludes that New Jersey law precludes a conversion action by the drawer against the depositary bank in these circumstances, it need not reach whether the law of the case doctrine also bars the claim.

 The Court applies the same reasoning it did in its January 24, 1995 Opinion to determine that Bank Polska lacks standing to assert a conversion claim against Pamrapo. See 1-24-95 Op. at 15. Although the term owner is not defined in Section 1-201, official comment 2 to Section 3-419 states that "[a] negotiable instrument is the property of the holder." Section 1-201(20) defines a holder as a person in ...

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