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Triffin v. Bank of America

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 22, 2009

ROBERT J. TRIFFIN, PLAINTIFF-APPELLANT,
v.
BANK OF AMERICA, DEFENDANT-RESPONDENT, AND FRANK WALLACE, AND DAVID AOCHOA, DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Somerset County, Docket No. DC-5025-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued telephonically September 11, 2009

Before Judges Messano and Alvarez.

Pro se plaintiff Robert J. Triffin appeals the denial of reinstatement of his complaint against several named parties including defendant Bank of America, the only defendant actually served. Plaintiff also appeals the award to defendant of $7857.92 in counsel fees and $377.92 in costs. For the reasons that follow, we affirm as to the denial of reinstatement of the complaint, but reverse the award of counsel fees.

"Plaintiff is in the business of purchasing dishonored negotiable instruments." Triffin v. Somerset Valley Bank, 343 N.J. Super. 73, 78 (App. Div. 2001). After acquisition, plaintiff pursues the rights and interests he claims are created by those instruments, over and above their face value. See, Ibid. In this case, plaintiff purchased check number 2390 on March 1, 2006. The instrument, written for $89.11, was made payable to Frank Wallace, a named defendant who was not served. The check was drawn on an account maintained by Golden Eagle Cleaning Services, Inc. After the check was cashed by Credit Currency One, Inc., the assignor, it was discovered that Golden Eagle had issued a stop payment on the check.

Defendant, the bank at which the account was maintained, supplied a substitute check to Cash Currency One, Inc.; plaintiff alleged that this violated 12 C.F.R. 229.51 and 12 C.F.R. 229.52. Specifically, plaintiff claimed that defendant's substitute check did not "accurately represent[] all of the information that was on the face and back of the original check at the time of its truncation by [defendant]."

Plaintiff filed a first amended complaint against defendant on September 26, 2006, as to check number 836. The instrument was made payable to David Aochoa, a second named defendant who was not served. It was drawn on the account of Marcellus Hill and was cashed by plaintiff's assignor, Check Cashing Service, Inc. The check was dishonored by defendant because the account had insufficient funds to clear the check. Similar claims referring to 12 C.F.R. 229.51 and 12 C.F.R. 229.52 were made by plaintiff against defendant arising from this check.

As has been true in the past, plaintiff pursues his claims against the only defendant who indisputably has the financial means to satisfy a judgment. See, e.g., Triffin v. TD Bank-North, N.A., 199 N.J. 326 (2007); Triffin v. Wachovia Bank, N.A., 406 N.J. Super. 427 (App. Div.), certif. denied, 199 N.J. 131 (2009); Triffin v. Bank of America, 391 N.J. Super. 83 (App. Div. 2007).

Plaintiff's complaint sought damages for defendant's purportedly wrongful conversion related to the checks. Plaintiff's key contention, however, is that defendant violated the Check Clearing for the Twenty-First Century Act (the Check 21 Act), 12 U.S.C. 5001-5018, adopted by Congress on October 28, 2003, and made effective on October 28, 2004.

The Federal Reserve implements the Check 21 Act through the regulations promulgated in the C.F.R. The stated purpose of the law is to enhance the "ability of banks that want to process checks electronically to take full advantage of that technology." 69 Fed. Reg. 47290 (Aug. 9, 2004). The Check 21 Act, implemented after the tragic events of September 11, 2001, provides for the creation and use of electronic images of checks, technically referred to as truncated checks. 12 U.S.C.A. § 5002 (2009). This process allows banking institutions to shield the overall system from disruptions in the physical transportation of checks thereby "improv[ing] the overall efficiency of the Nation's payment system." Ibid.

Defendant filed an answer, separate defenses and crossclaims on October 23, 2006. Defendant's attorneys notified plaintiff on October 24, 2006, that if he did not dismiss all claims with prejudice within twenty-eight days, defendant would seek damages pursuant to the frivolous litigation statute, N.J.S.A. 2A:15-59.1, and Rule 1:4-8. Defendant's attorney reasserted the demand that plaintiff dismiss all remaining claims against defendant by correspondence on October 27, 2006.

Plaintiff thereafter filed a notice of dismissal with prejudice of the conversion counts on November 6, 2006. The matter was scheduled for trial on December 18, 2006, a Monday. Plaintiff dismissed his remaining claims against defendant with prejudice on December 15, 2006, the Friday before trial, in mid-afternoon.

On January 4, 2007, defendant filed a motion seeking attorneys' fees and costs pursuant to the frivolous litigation rule and statute. On January 8, 2007, plaintiff filed a cross-motion for leave to reinstate all of his Check 21 Act claims against defendant. By order dated January 10, 2007, the first motion judge awarded attorneys' fees and costs, subject to submission of a detailed certification of services. For reasons not clear from the record, the motion to reinstate was separately addressed by a second motion judge. The application was denied without prejudice on February 14, 2007, and the second motion judge directed that any future "resubmission . . . explain[] why the complaint has merit."

On January 17, 2007, plaintiff filed an application seeking reconsideration of the award of counsel fees and costs. A subsequent order was entered on March 5, 2007, by the first motion judge denying plaintiff's application for reconsideration as to attorneys' fees. On March 14, 2007, defendant's attorneys submitted a detailed certification of services. By order dated March 28, 2007, the first motion judge awarded defendant $7857.92 in attorneys' fees and $377.92 in costs.

Plaintiff appeals the January 10, 2007 order awarding defendant attorneys' fees and costs, the February 14, 2007 order denying reinstatement of his complaint against defendant, the March 5, 2007 order denying reconsideration of attorneys' fees and costs, and the March 28, 2007 order which actually made the award to defendant of $8235.84 in combined attorneys' fees and costs. The matter was initially remanded for reconstruction of the record on June 9, 2008, and further proceedings took place. Thereafter, on October 24, 2008, the first motion judge affirmed the award of counsel fees and denied reconsideration of plaintiff's application to reinstate the complaint.

In his brief, plaintiff alleges the following errors:

POINT ONE

[THE SECOND MOTION JUDGE] ABUSED HIS DISCRETION AND COMMITTED REVERSIBLE ERROR, WHEN HE DENIED TRIFFIN'S MOTION TO REINSTATE HIS NON-TORT CLAIMS AGAINST BANK OF AMERICA.

POINT TWO

[THE FIRST MOTION JUDGE] MISAPPLIED THE APPLICABLE LEGAL STANDARDS, AND ABUSED HIS DISCRETION, WHEN HE AWARDED BOA $8,235.84 ON ITS MOTION TO RECOVER ITS COUNSEL FEES AND COSTS FROM TRIFFIN.

As to his first contention, when plaintiff requested his "non-tort claims" be reinstated, he did not explain why the claims had any merit. Plaintiff instead asserted in his certification that an employee submitted the notice of dismissal with prejudice without his consent or authorization. This certification was signed by plaintiff, not by the employee, which seems curious in light of the circumstances surrounding the dismissal. In any event, the assertion did not elaborate on the merits of the dismissed claims. Without elucidation as to the merits of the complaint, there was no basis for either motion judge to have taken the extraordinary step of reinstating the complaint a plaintiff himself dismissed with prejudice.

In fact, the only material the second motion judge had available on the reinstatement motion as to the merits of the complaint was the frivolous litigation notice authored by defendant's counsel which outlined why all of plaintiff's claims, both for conversion as well as under the Check 21 Act, were unwarranted. Similarly, even after remand, plaintiff failed to submit anything as to the merits of his complaint.

Plaintiff's second contention is a different matter. It was not until Triffin v. Wachovia, supra, decided January 20, 2009, that we held that claims under the Check 21 Act based on breach of warranties were not assignable, and that therefore plaintiff has no standing to sue a banking institution for any alleged violations of the Check 21 Act.

Plaintiff's Check 21 Act claims, as we have previously said, are based not on contractual relationships that the assignors had with the issuing bank, but on warranties plaintiff asserts are created by the Check 21 Act. Arguably, since Triffin v. TD Banknorth, 190 N.J. 326 (2007), plaintiff has been on notice that the claimed cause of action fell within a gray area at best. In TD Banknorth, our Court found an assignee of a dishonored check may only pursue contractual not statutory rights. In that case, however, the purported rights were created under state and not federal law. Plaintiff's complaint in this case, involving claims under federal law, therefore, did not amount to litigation conduct warranting sanction under the rule. See K.D. v. Bozarth, 313 N.J. Super. 561, 574-75 (App. Div.), certif. denied, 156 N.J. 425 (1998). At the time the door was not completely shut on federal claims such as the ones plaintiff was making.

Accordingly, the award of attorneys' fees must be reversed. Plaintiff's filing of the dismissal with prejudice was certainly beyond the twenty-eight-day limit allowed by Rule 1:4-8(b) and the frivolous litigation statute. But in order to avoid the award of fees, a litigant's claims must be entirely unwarranted "by existing law." R. 1:4-8(a)(2). Because we do not agree that when made the claims entirely lacked any foundation, we vacate the award of attorneys' fees and costs.

Affirmed as to the denial of reinstatement, reversed as to counsel fees and costs.

20091022

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