September 5, 2008
ROBERT J. TRIFFIN, PLAINTIFF-APPELLANT,
TRIANGLE TRANSPORT, INC., DEFENDANT-RESPONDENT, AND GONZALO MORGA, DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Somerset County, Docket No. DC-3797-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 14, 2008
Before Judges Stern and A. A. Rodríguez.
Plaintiff Robert J. Triffin sued Triangle Transport, Inc. (Triangle) and Gonzalo Morga in the Special Civil Part, as the assignee of Fairview Check Cashing Corp. (Fairview), asserting a claim arising from a dishonored check. The check on its face indicates that: the payee is "Gonzalo Morga," the maker is Triangle and the drawee is "First Union Bank." The amount of the check is $385.45. It is dated "12/30/2002," designated as "payroll check number 03208901" and signed by "Francis B. Brown." On the back, the check is endorsed by a signature that reads "Gonzalo Morga." The check was paid by Fairview on January 6, 2003. It was later dishonored by Fairview's bank.
Triangle filed an answer to the complaint pro se, denying the allegations and asserting a defense that the check at issue was counterfeit. At trial, John A. Houseman, Triangle's Director of Human Resources, testified that: the check had never been issued by Triangle; ADP issued all of Triangle's payroll checks; and no one named Gonzalo Morga was employed by Triangle. Significantly, there is no denial by Triangle that Francis B. Brown is an employee of Triangle or an authorized signer of its checks.
In addition, Houseman presented a letter addressed "To Whom It May Concern" from Dolly Molina, a Manager in the Loss Prevention department at ADP, whose office is in San Diego, California. The letter states that the check was a forgery because it: was not printed on ADP "secure check stock;" the check number was not "produced for any client;" and ADP was never requested to issue a check to Gonzalo Morga. Triffin objected to the admission of this letter as hearsay. The judge overruled the objection noting the need for flexibility in presenting evidence in the Special Civil Part.
Following the hearing, the judge ordered certain post-trial submissions from the parties. Triangle submitted an affidavit by Molina restating the same information as contained in her letter. Attached to the certification was ADP's "security feature brochure." The judge issued a written opinion, dismissing the complaint with prejudice.
Triffin appeals contending that the judge erred by assuming "facts not in evidence," and by finding that "through the court's admission of ADP's security feature brochure and related documents into evidence, Triangle met its burden of production to prove its counterfeit check defense." Triffin also contends that the judge erred by admitting into evidence "for purposes of establishing the truth of the matters asserted therein, Molina's affidavit and ADP's promotional security feature brochure."
We do not address the evidentiary rulings because we conclude that, even if the affidavit and brochure were properly admitted, Triangle's defense failed and Triffin was entitled to judgment.
According to Article 3 of the Uniform Commercial Code, codified as N.J.S.A. 12A:3-101 to 3-605, a person is a holder in due course if:
(1) the instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its authenticity; and
(2) the holder took the instrument for value, in good faith, without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series, without notice that the instrument contains an unauthorized signature or has been altered, without notice of any claim to the instrument described in [N.J.S.A.] 12A: 3-306, and without notice that any party has a defense or claim in recoupment described in [N.J.S.A.] 12A:3-305[a]. [Triffin v. Somerset Valley Bank, 343 N.J. Super. 73, 83 (2001) (quoting N.J.S.A. 12A:3-302a).]
In short, in order to defeat the rights of a holder in due course, it must be apparent on the face of the instrument that it is fraudulent. N.J.S.A. 12A:3-302. The same applies to transferee of the holder in due course, such as Triffin. N.J.S.A. 12A:3-203b. For that reason, this case turns on the information before the Fairview cashier at the time the cashier paid the check. Information gathered subsequently, such as that contained in Houseman's testimony or Molina's affidavit, are not relevant to the suit on the check.
Applying that standard to the proofs here, we conclude that Triffin is a holder in due course as assignee of Fairview. The judge specifically found that Triangle had provided evidence to defeat Triffin's status as transferee of a holder in due course. We disagree. From our careful review of the record we perceive nothing in the appearance of the check to put Fairview on notice that the check was not valid. The testimony by Houseman and Molina's affidavit go to establish that a cashier who is familiar with ADP payroll records should have recognized this one as a fraud. However, this check did not purport to be an ADP check, but one drawn on First Union and made by Triangle. Moreover, there was no proof that a reasonably prudent cashier would be familiar with ADP payroll records.
We are mindful that the burden of establishing the validity of the signature shifts to the plaintiff if the defendant specifically denies the signature's validity in the pleadings.
N.J.S.A. 12A:3-308a. "In the absence of such specific denial the signature stands admitted, and is not in issue." N.J.S.A. 12A:3-308, Comment 1.
Here the Answer made no such specific denial. Moreover, a signature is presumed to be authentic, absent evidence of forgery or lack of authorization. Therefore, even if Triangle's general denial is sufficient, the presumption that the signature is valid still remains. N.J.S.A. 12A:3-308. Therefore, Triangle's forgery defense failed and Triffin is entitled to judgment.
Triffin also contends that the trial court's "alternative arguments in support of its dismissal of plaintiff's complaint are not applicable to the facts of this case." Specifically, Triffin argues that: (a) holder in due course principles are not applicable to the facts of this case; (b) claims of ethical violations by Triffin are not applicable to the facts of this action; and (c) the judge's "alternative claim, that [Triffin] has failed to meet his burden of persuasion[,]" was erroneous. Given our holding, we need not reach these contentions.
Reversed and remanded to the trial court for the entry of judgment in favor of Triffin.
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