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Triffin v. Third Federal Savings Bank

December 17, 2008

ROBERT J. TRIFFIN, PLAINTIFF-APPELLANT,
v.
THIRD FEDERAL SAVINGS BANK, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Mercer County, Docket No. DC-2968-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: October 8, 2008

Before Judges Lihotz and Messano.

On cross motions for summary judgment, the Law Division granted defendant's motion and dismissed plaintiff's complaint. Additionally, plaintiff's motion to amend his complaint was denied. Plaintiff appeals from these orders asserting the court erroneously interpreted the applicable law. Following our review, we affirm for the reasons stated below.

The facts are undisputed. Plaintiff Robert J. Triffin is in the business of purchasing dishonored checks. Plaintiff entered into separate assignment agreements with Richmond Financial Services, Inc., a check cashing company (Richmond), to purchase Richmond's rights and interests in five dishonored checks drawn on defendant Third Federal Savings Bank. More specifically, the checks at issue were drawn on the account of defendant's depositor, Veterans of Foreign Wars Post 22 (Veterans).

The five checks uttered on Veterans' account were presented to Richmond, which cashed them. Richmond deposited the checks into its account at Wachovia Bank (Wachovia). Wachovia credited Richmond's account and presented the checks to the Federal Reserve Bank, Philadelphia, PA (the Fed) branch for transmittal to defendant. The Fed presented electronic images of the checks to defendant for payment. Defendant paid Wachovia through a debit of defendant's Fed account and also debited Veterans' depository account.

After Veterans informed defendant it executed affidavits attesting the checks were forgeries, defendant printed an electronic copy of each check. On the face of each check, defendant stamped, "RETURNED UNPAID," with the additional notation "OTHER FORGERY." A different stamp appears on the back of the electronic copy of each check, which states:

This is a photographic facsimile of the original check, which was endorsed by the undersigned and reported lost, stolen or destroyed, while in the regular course of bank collection. All prior endorsements and any missing endorsements and the validity of this facsimile are hereby guaranteed, and upon payment hereof in lieu of the original check, the undersigned will hold each collecting bank and payor bank harmless from any loss suffered, provided the original check is unpaid and payment is stopped thereon. Third Federal Savings Bank 2313-7218-3.

Below the stamp is a signature of defendant's authorized representative, who appears to be Junita John. The checks were sent to the Fed to reverse the prior account debit. The Fed credited defendant's account and debited Wachovia's account. Defendant credited Veterans' account. It can be assumed Wachovia debited Richmond's account.

Plaintiff purchased the dishonored checks from Richmond, pursuant to the terms of an assignment agreement. Plaintiff filed this action, solely against defendant, seeking payment on the instruments.*fn1 In his complaint, plaintiff alleges liability based on a "breach of contract/warranties." Plaintiff argues the copies of the checks returned to Richmond, plaintiff's assignor, "do not constitute legally enforceable dishonored checks" because the copies failed to include the legend: "THIS IS A LEGAL COPY OF YOUR CHECKS YOU CAN USE IT THE SAME WAY YOU WOULD USE THE ORIGINAL CHECKS." Plaintiff also contends defendant received funds from Richmond's account in an amount equal to the amount of the dishonored checks, triggering warranties extended to depositors. Citing 12 C.F.R. 229.56(a), plaintiff claims defendant is obligated to satisfy the face amount of the dishonored checks, pay prejudgment interest, and reimburse the return check fees.

Plaintiff moved and defendant cross-moved for summary judgment. Plaintiff also filed a motion to amend his complaint, asserting that without defendant's provision of legally enforceable substitute checks, he can not sue the forger for recovery. Finally, plaintiff voluntarily dismissed, with prejudice, the "Sixth Claim" of his action. The parties' motions were determined without benefit of oral argument.

The Special Civil Part judge denied plaintiff's motion to amend his complaint with this notation on the June 25, 2007 order: "Plaintiff is free to file a complaint against the alleged 'endorser' of the checks, or the forger of the checks. However, there is no reason to continue the case as to the defendant bank." In a second order dated June 25, 2007, the judge denied plaintiff's motion for summary judgment and granted defendant's cross-motion for summary judgment.

In making his determination, the motion judge provided no conclusions of law, as required by Rule 1:7-4(a). We undertake a de novo review, Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995), to determine whether the competent evidentiary materials presented, when viewed in the light most favorable to the plaintiff, are sufficient as a matter of law to resolve the alleged ...


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