On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, DC-11392-01.
Before Judges Kestin, Eichen and Weissbard
The opinion of the court was delivered by: Eichen, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 5, 2003
Plaintiff, Robert J. Triffin, appeals from an order of the Special Civil Part, Small Claims Section, dismissing his complaint following a bench trial.
Plaintiff is in the business of buying dishonored checks from licensed check cashers and enforcing them free of personal defenses based on his status as an assignee of a holder in due course under N.J.S.A. 12A:3-203. See generally Triffin v. Cigna Ins. Co., 297 N.J. Super. 199 (App. Div. 1997); see also Triffin v. Quality Urban Housing Partners, 352 N.J. Super. 538, 542 (App. Div. 2002). It is the purchase of such checks that has given rise to this action.
On October 17, 2001, plaintiff, acting pro se, filed a complaint in the Special Civil Part against Adele Johnston, her husband, Theodore Johnston (the Johnstons), and Sam Curtis, seeking to enforce two checks made out to Curtis by Adele Johnston.
On November 26, 2001, the Johnstons filed an answer to the complaint, asserting in defense that the goods or services for which the checks were issued were not received or were defective. The matter was tried in the Small Claims Section of the Special Civil Part on January 15, 2002.
These are the relevant facts. The checks plaintiff sought to enforce were signed by defendant Adele Johnston and were made payable to Curtis pursuant to an agreement wherein Curtis promised to build a concrete and brick walkway at the Johnstons' home for $1,200. On April 30, 2001, the Johnstons gave Curtis check #2204 in the sum of $520, and on May 1, 2001, they gave him check #2205 in the sum of $400. The work was expected to take only two days to complete. On May 2, 1991, the Johnstons noted that the work had been only partially completed, and was unacceptable in quality. Accordingly, on May 3, 2001, Theodore Johnston went to Shrewsbury State Bank (Shrewsbury) and stopped payment on the checks. His account, therefore, was never debited.
In the meantime, Curtis had endorsed the checks and taken them to Walstein Financial Services, LLC d/b/a/ United Check Cashing (Walstein Financial), a licensed check casher, which gave Curtis the full amount of the checks, minus a 2% fee, and then stamped them for deposit in its own bank. The deposits were dated April 30 and May 1, 2001. Thereafter, the checks were returned to Walstein Financial stamped "Payment Stopped" by Shrewsbury.
About two weeks after the Johnstons issued the checks, Walstein Financial's principal, Jeffrey Walstein, visited the Johnstons at home and observed for himself the defective workmanship and learned of the reason why the Johnstons had stopped payment on the checks. According to the Johnstons, after viewing the walkway, Walstein telephoned Curtis in their presence and told Curtis that he could see that the job was not satisfactory and was not completed. The Johnstons testified that Walstein then told them he would work to recover the money from Curtis. *fn1 There was no further evidence on whether the money was ever recovered from Curtis by Walstein.
Plaintiff testified that on October 3, 2001, he purchased the checks from Walstein Financial for $138 pursuant to two assignment agreements (assignments). Plaintiff acknowledged that both checks were stamped "Payment Stopped" when he received them. The assignments recited that the principal sums of $520 and $400 "presently due and owing Seller" (Walstein Financial) were assigned to "Buyer" (plaintiff) and identified the Johnstons and Curtis as "Debtors." The assignments did not refer to any checks, but noted at the bottom respectively, "#2261" and "#2262." These numbers were not the check numbers of the Johnstons' checks. The assignments also stated: "Seller represents and warrants to Buyer that there are no set-offs, counterclaims, abatements, and/or defenses cognizable at law or equity which will render the referenced claim legally unenforceable - or reduced in amount - as against any of the identified Debtor(s), or any parties that may be secondarily liable on the referenced claim."
At the conclusion of the trial, although the judge acknowledged the decisional law that permits an assignee of a holder in due course to enforce checks against drawers, see, e.g., Triffin v. Cigna Ins. Co., supra, 297 N.J. Super. at 201, he nonetheless questioned the validity of the assignments, noting that they were copies that had been altered by taping over and adding language. The judge also observed that the numbers at the bottom of the assignments (#2261 and #2262) did not correspond to the numbers on the Johnstons' checks (#2204 and #2205). In addition, the judge pointed out that Walstein's signature was a copy. Finding a genuine question as to the authenticity of the assignments, and noting the absence of any testimony from Walstein, the court entered judgment for the Johnstons. It concluded that plaintiff had failed to satisfy his burden of proof with respect to the validity of the assignment, and entered judgment in favor of defendants Johnstons.
In so ruling, the judge further observed that certain warrantees made in the assignments probably had been violated because, at the time of the assignments, Walstein Financial's principal knew that payment had already been stopped on the checks and knew that the Johnstons had defenses to any claim by Curtis. At the ...