July 3, 2008
ROBERT J. TRIFFIN, PLAINTIFF-APPELLANT,
WAL-MART STORES, INC., DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Atlantic County, DC 905-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 12, 2008
Before Judges Stern, Collester and C.L. Miniman.
Plaintiff appeals from an order of September 4, 2007, which granted summary judgment to defendant Wal-Mart Stores, Inc., and an order of September 25, 2007, denying reconsideration. The Special Civil Part held that plaintiff's opposition to summary judgment was untimely and, on reconsideration, that plaintiff "failed to meet [his] burden" to show "that the Court erred or overlooked something in [its] prior decision." We can find no statement of reasons for the original order granting summary judgment, apparently because it was marked "unopposed."*fn1
The answer to the summary judgment motion was filed on a date later than that noted in a "status report" letter from WalMart's counsel to the court, dated July 19, 2007, which stated "absent settlement, Plaintiff will file opposition to the Motion for Summary Judgment on or before August 3, 2007." Plaintiff states he understood that he had until August 8, 2007, to respond and he met that deadline. The judge relied on the defendant's letter of July 19, 2007, notwithstanding that the motion was originally made returnable on August 17, 2007. See R. 6:3-3(b)(1) (referring to R. 1:6-2(d)).
We need not pursue the issue, in any event, as summary judgment presents a question of law, and there are no reasons given for the original grant of the motion. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We cannot simply affirm the disposition on procedural grounds, even if we were otherwise inclined to do so, because no statement of reasons or opinion accompanied the grant of summary judgment. See R. 1:7-4.
It is undisputed that plaintiff purchased the subject dishonored checks drawn on Wal-Mart's account with J.P. Morgan Chase Bank. In his first amended complaint, plaintiff alleged with respect of each of the nine checks:
1. As evidenced by an assignment agreement attached hereto as Exhibit "A", plaintiff Triffin purchased from the assignor identified in Exhibit "A", all of assignor's rights in a dishonored check, Exhibit "B", that the defendants respectively drew and cashed with assignor.
2. As evidenced by the back of the attached dishonored check, on the date identified thereon the defendant payee endorsed the referenced check, and in exchange for such endorsement, assignor gave value by cashing the referenced check for said defendant payee.
3. At the time assignor cashed the referenced check, assignor had no knowledge of any defenses or claims by any party to the referenced check, and thereby, assignor became a holder in due course of the referenced dishonored check as provided by N.J.S.A. 12A:3-302.
4. Pursuant to the controlling decision of the Appellate Division of the Superior Court of New Jersey in Triffin v. CIGNA Insurance Company, 297 N.J. Super. 199 (App. Div. 1997), plaintiff has the legal status of a holder in due course in this action.
5. Pursuant to N.J.S.A. 12A:3-414, the defendant drawer of the underlying dishonored check is deemed to have contracted with all who gave value for its referenced check; upon dishonor of its attached check that the defendant drawer would pay the amount of the referenced item to a party with the legal status of a holder in due course.
6. Pursuant to N.J.S.A. 12A:4-403, [and as explained in Official Comment Seven thereto], the defendant drawer's dishonor by "stop payment" is not a cognizable legal defense against a party such as plaintiff who has the legal status of a holder in due course.
Triffin contends that Triffin v. Cigna Ins. Co., 297 N.J. Super. 199 (App. Div. 1997), and Triffin v. Somerset Valley Bank, 343 N.J. Super. 73 (App. Div. 2001), establish that claims, including those under N.J.S.A. 12A:3-414, are freely assignable by a holder in due course even if taken by the assignee with knowledge of the dishonor. He further argues that "there is a material dispute as to Wal-Mart's claim  that it did not issue the reference checks," thereby precluding summary judgment.
Triffin v. TD Banknorth N.A., 190 N.J. 326 (2007), dealt with assignability of dishonored checks and held the assignee could not enforce the midnight deadline against payor banks. Defendant asserts Triffin has no standing to the rights of the assignor of dishonored checks and that the checks were not issued by defendant and therefore not negotiable instruments.
Defendant insists the TD Banknorth opinion applies because plaintiff took the checks with knowledge of their dishonor.*fn2
Defendant also asserts it is not responsible because it never issued nor authorized the checks. Plaintiff counters that TD Banknorth is distinguishable because it related only to rights of assignees to claims under N.J.S.A. 12A:4-302, and does not overrule the Cigna and Somerset Valley Bank opinions.
We need not decide whether TD Banknorth applies to an assignee with knowledge of the dishonor for a claim under N.J.S.A. 12A:3-414 if the check cashing companies from which he purchased the checks were holders in due course. Stated differently, we need not decide if TD Banknorth stands for the proposition that all provisions of the Uniform Commercial Code (UCC) cannot be enforced by an assignee taking with knowledge of the dishonor, or if it dealt only with an issue under N.J.S.A. 12A:4-302 because it dealt with the legislative policy regarding that section which benefits "only the payee, collecting banks, and others who may have received the check before dishonor." TD Banknorth, supra, 190 N.J. at 328-29.*fn3 This is so because there appears to be a dispute as to whether the assignors were holders in due course.
Before resolving whether section 3-414 provides a remedy for the assignees of holders in due course, if they take with knowledge of the dishonor, the dispute of fact regarding whether the check cashing companies from which Triffin obtained these checks were holders in due course must be resolved. Wal-Mart claims that the checks were counterfeits and the front of the checks stated "THIS DOCUMENT CONTAINS A COLORED BACKGROUND ON FACE AND ARTIFICIAL WATERMARK ON BACK -- HOLD AT ANGLE TO VIEW." As the checks did not contain a watermark, Wal-Mart contends that "it was apparent that they were irregular and any holder was on notice to question their authenticity" and so no one could be a holder in due course under N.J.S.A. 12A:3-302(a)(1).*fn4
See N.J.S.A. 12A:3-305(b) (protecting holders in due course from personal defenses of N.J.S.A. 12A:3-305(a)(2) and (3)); N.J. Mortgage & Inv. Corp. v. Berenyi, 140 N.J. Super. 406, 408-09 (App. Div. 1976) ("[r]eal defenses are available against even a holder in due course ...; personal defenses are not available against such a holder"). If such checks were clearly fraudulent, then the check cashing companies would not be holders in due course and all rights assigned to Triffin would be subject to any defense available to Wal-Mart either under the Code or at common law.
We remand for further proceedings consistent with this opinion.