On appeal from the Superior Court of New Jersey, Law Division-Special Civil Part, Somerset County, Docket No. DC-003376-10. Robert J.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: February 29, 2012 -
Before Judges Cuff and Waugh.
Plaintiff Robert Triffin appeals from the order dismissing his complaint to recoup a dishonored check. The trial judge concluded he was not a holder in due course.
On November 6, 2009, Daryl Kilgore requested a donation from defendant Storr Tractor Company (Storr) for a charity sponsoring "an extreme makeover for a single mother of a disabled child in the area." Storr wrote a check for $2000 made payable to the sponsoring company, Down & Dirty Maintenance, LLC, owned by Kilgore. He cashed the check that day at Friendly Check Cashing Corporation (Friendly), a state-licensed check casher. Later that day, Storr realized Kilgore's "charity" was a fraud and put a stop payment order on the check. On February 9, 2010, Friendly sold its rights in the check to Triffin, who filed a complaint seeking recoupment on April 26, 2010.
Two witnesses testified for Triffin at trial. The president of Friendly, Jose Fernandez, explained Friendly's practice of obtaining a corporate resolution before it cashed any corporate checks. Friendly maintained those resolutions on file. Fernandez verified that Friendly kept a corporate resolution for Down & Dirty Windows, Inc. on file; however, he did not have a corporate resolution for Down & Dirty Maintenance, LLC. Jessica Garrido, the Friendly teller who cashed Storr's check, also testified. She knew Kilgore as a frequent customer who cashed corporate checks with Friendly many times. She believed Friendly had a corporate resolution for Down & Dirty Maintenance, LLC. She was not aware at the time she cashed the check that Kilgore obtained it by misrepresentations or fraud.
On appeal, Triffin argues that the trial judge based his decision on facts not in evidence and committed legal error by utilizing N.J.S.A. 17:15A-1 to -52 to establish the standard of care for a check casher. He also contends that the judge misapprehended that the drawer's intent, not misidentified or misspelled names, determines the payer of a check.
A holder in due course of a negotiable instrument is exempt from certain defenses raised by an adverse party. See N.J.S.A. 12A:3-305a, b; Triffin v. Automatic Data Processing, Inc., 394 N.J. Super. 237, 247 (App. Div. 2007). The status relieves innocent purchasers from losing their security in unsound financial instruments. Gen. Inv. Corp v. Angelini, 58 N.J. 396, 403 (1971) (quoting Unico v. Owen, 50 N.J. 101, 109 (1967)).
In order to be a holder in due course, one must "take the instrument (a) for value, (b) in good faith and (c) without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person."
Breslin v. N.J. Investors, Inc., 70 N.J. 466, 471 (1976) (citing N.J.S.A. 12A:3-302[a(2)]). "Good faith" requires that the holder act honestly and "'observe "reasonable commercial standards of fair dealing" under the particular circumstances.'" Pascack Cmty. Bank v. Universal Funding, LLP, 419 N.J. Super. 279, 292 (App. Div. 2011) (quoting Uniform Commercial Code Comment 5 at N.J.S.A. 12A:9-331).
In Triffin v. Liccardi Ford, Inc., 417 N.J. Super. 453, 460 (App. Div. 2011), this court held that "reasonable commercial standards" include the statutory requirements imposed on licensed check cashers by the New Jersey Check Cashers Regulatory Act (NJCCRA), N.J.S.A. 17:15A-1 to -52. Accord Valley Nat'l Bank v. P.A.Y. Check ...