On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. DC-018008-09.
The opinion of the court was delivered by: Reisner, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 15, 2010 - Decided Before Judges Lisa, Reisner and Alvarez.
Respondent has not filed a brief.
The opinion of the court was delivered by REISNER, J.A.D.
Plaintiff Robert J. Triffin appeals from a November 5, 2009 order dismissing his complaint seeking to collect on a dishonored check originally issued by defendant Liccardi Ford, Inc. (Liccardi).*fn1 Because the check was post-dated, and the check cashing service from which Triffin purchased it had made payment in violation of the Check Cashers Regulatory Act of 1993 (Act), N.J.S.A. 17:15A-30 to -52, we hold that the service was not a holder in due course. Triffin's complaint was properly dismissed based on evidence that the check was stolen from Liccardi.
Viewed in the light most favorable to Triffin, these are the facts. See Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010); Triffin v. Somerset Valley Bank, 343 N.J. Super. 73, 82 (App. Div. 2001). The underlying dispute concerns a check dated August 10, 2007, that was made payable to one of Liccardi's employees, Charles Stallone, Jr. According to an unrebutted certification submitted in support of Liccardi's summary judgment motion, the company withheld the check from Stallone because he was suspected of embezzlement. However, the check disappeared from the company offices, and when the disappearance was discovered, Liccardi "immediately placed a stop payment on [the check]."
On this record there is no dispute that JCNB Check Cashing, Inc. (JCNB) cashed the check for Stallone before the issue date and then deposited the check in its own bank account on or before August 9, 2007. However, the issuing bank refused to honor the check. On February 11, 2009, Triffin acquired the dishonored payroll check from JCNB and sued Liccardi and Stallone for the amount of the check plus interest.*fn2
The Special Civil Part judge granted Liccardi's summary judgment motion. The judge reasoned that JCNB was not a holder in due course because the fact that the check was postdated should have put JCNB on notice that there was a claim or defense against collection. The judge further reasoned that Triffin was not a holder in due course because he acquired the Liccardi check, and seven other checks, as part of a "bulk transaction" from JCNB. See N.J.S.A. 12A:3-302c.*fn3
Under the New Jersey Uniform Commercial Code (UCC), N.J.S.A. 12A:3-302a, to be a holder in due course one must take "an instrument for value, in good faith, and without notice of dishonor or any defense against or claim to it on the part of any person." Triffin v. Quality Urban Hous. Partners, supra, 352 N.J. Super. at 541. "Good faith" includes "the observance of reasonable commercial standards of fair dealing." N.J.S.A. 12A:3-103a(4). Further, the document must not be "so irregular or incomplete as to call into question its authenticity." N.J.S.A. 12A:3-302(a)(1); see Triffin v. Pomerantz Staffing Servs., LLC, 370 N.J. Super. 301, 307 (App. Div. 2004).
Triffin did not take the Liccardi check as a holder in due course, because he purchased the instrument with notice that it had been dishonored. See N.J.S.A. 12A:3-302a; Triffin v. Quality Urban Hous. Partners, supra, 352 N.J. Super. at 541-42. However, if JCNB was a holder in due course when it obtained the check from Stallone, it could assign its interest in the check to Triffin and he in turn could enforce JCNB's rights as its assignee. Triffin v. Quality Urban Hous. Partners, supra, 352 N.J. Super. at 542; see also N.J.S.A. ...