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Triffin v. Bank of America

March 6, 2007


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Gloucester County, DC-2125-05.

The opinion of the court was delivered by: Winkelstein, J.A.D.



Argued January 31, 2007

Before Judges Winkelstein, Fuentes and Baxter.

Plaintiff Robert Triffin purchased an assignment of the rights to a number of dishonored checks from A1 Check Cashing (A1), a licensed check cashing agency. As a holder in due course, plaintiff sued defendant Bank of America (BOA), the drawer bank, and defendant April Jackson, the maker of one of the checks, for the amount of the check plus other miscellaneous charges. BOA appeals from a summary judgment in favor of plaintiff in the amount of $591.*fn1 We affirm.

Plaintiff routinely takes assignments of the rights to dishonored checks from licensed check cashers. He then, pursuant to various provisions of the Uniform Commercial Code as adopted in this State, see generally N.J.S.A. 12A, sues the maker of the check and the drawer bank. Here, A1 cashed a check for Jackson in the face amount of $471 and BOA stopped payment on the check due to insufficient funds. After taking an assignment of the rights to the check from A1, plaintiff, as a holder in due course, sought payment of the check from BOA. See N.J.S.A. 12A:3-414b (drawer of an unaccepted check liable for payment to a holder in due course); N.J.S.A. 12A:4-403 (Uniform Commercial Code Comment 7) (while payment on check may be stopped by drawer bank, bank remains liable on check to holder in due course); State v. Burks, 188 N.J. Super. 55, 60 (App. Div.) ("drawer of a check is liable for the amount of the check regardless of whether there are sufficient funds in the account to pay it"), certif. denied, 93 N.J. 285 (1983).

BOA does not dispute that if the assignment agreement between A1 and plaintiff is valid, plaintiff, as a holder in due course, is entitled to judgment against BOA for the face amount of the check. See Triffin v. Cigna Ins. Co., 297 N.J. Super. 199, 201-02 (App. Div. 1997) (transferee who took assignment of instrument with notice of its dishonor from holder in due course entitled to enforce instrument against issuer). Instead, BOA asserts that A1 is barred from assigning its rights to the dishonored check to plaintiff because of a civil fraud judgment entered against plaintiff in 1988. See In re Triffin, 151 N.J. 510, 513-14 (1997) (judgment for civil fraud entered against plaintiff in Pennsylvania Superior Court in 1988) (citing Triffin v. Cont'l Bank, 555 A.2d 947 (Pa. Super. Ct. 1988), appeal denied, 569 A.2d 1369 (Pa. 1989)). BOA claims that the public policy expressed by N.J.S.A. 17:15A-48a(5), a provision of The Check Cashers Regulatory Act of 1993, N.J.S.A. 17:15A-30 to -52 (Check Cashers Act), prohibits a licensed check casher, such as A1, from entering into a contract with a person, who, like plaintiff, has had a civil fraud judgment entered against him. That statute provides that the Commissioner of Banking may revoke or suspend a license if, after notice and hearing, the commissioner determines that the licensee . . . [i]s associating with, or has associated with, any person who has been convicted of an offense involving breach of trust, moral turpitude or fraudulent or dishonest dealing, or who has had a final judgment entered against him in a civil action upon grounds of fraud, misrepresentation or deceit[.] [N.J.S.A. 17:15A-48a(5) (emphasis added).]

Said another way, BOA claims that if the check casher cannot associate with plaintiff because of the judgment for fraud, public policy also prohibits it from conducting business with him by assigning him the rights to the dishonored check.

While no published opinion in this State has directly addressed the issue,*fn2 we are guided in our analysis by the general principles that apply to determine when public policy requires the invalidation of a private contract, such as the assignment agreement between A1 and plaintiff. We discussed those principles in Briarglen II Condo. Ass'n, Inc. v. Twp. of Freehold, 330 N.J. Super. 345, 348-49 (App. Div.), certif. denied, 165 N.J. 489 (2000), where the Township had entered into an agreement with a private community developer that required the developer to provide services to the condominium project it was constructing without reimbursement for those services from the Township. The services included road maintenance, trash removal and the like, services that are typically provided by a local government to its residents, including residents of private communities. See id. at 348-49. In light of N.J.S.A. 40:67-23.3, which directs that local governments shall reimburse "qualified private communit[ies] for . . . services . . . or provide . . . services within a qualified private community in the same fashion as the municipality provides these services on public roads and streets," we invalidated the agreement, concluding that it contravened the express legislative policy of the statute. Id. at 356.

In arriving at our conclusion, we addressed the principles that impact upon a determination of whether public policy requires invalidation of private contracts:

the dictates of public policy may require invalidation of private contractual arrangements where those arrangements directly contravene express legislative policy or are inconsistent with the public interest or detrimental to the common good.

Our power to declare a contractual provision void as against public policy must be exercised with caution and only in cases that are free from doubt. We must employ a balancing test, weighing the legislative policy and the public interest against the enforcement of the contractual provision, to determine whether the contractual provision at issue is void. [Id. at 355-56 (internal quotations and citations omitted).]

To apply these precepts here, we look first to the wording of N.J.S.A. 17:15A-48a(5) to ascertain its plain meaning and intent. See Bergen Commercial Bank v. Sisler, 157 N.J. 188, 202 (1999). In doing so, we observe that the statute does not actually prohibit a check casher from associating with a person who has had a civil fraud judgment entered against him; nor does it address whether a licensee may contract with, or otherwise conduct lawful business with, such a person. It simply provides the Commissioner of Banking with the discretion, after notice and a hearing, to revoke a check casher's license if the licensee associates with such a person. Attributing an ordinary meaning to the language of the statute, see Briarglen, supra, 330 N.J. Super. at ...

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