United States District Court, D. New Jersey
McNulty United States District Judge.
matter comes before the court on motions for summary judgment
filed by both sides. The case arises from the cashing by
Check Pros of a check allegedly stolen from plaintiff Gregory
Alt LLC d/b/a Check Pros ("Check Pros") and
Brunswick Bank 85 Trust Company ("Brunswick Bank")
move for summary judgment on Gregory Levine's UCC and
common-law conversion claims. (DE 52) Defendants seek an
order dismissing Counts 1 and 3, Levine's common-law
conversion claims, as duplicative of the UCC claims. As to
Count 2, Check Pros claims that it was a holder in due course
of a stolen check, and therefore is not liable to Levine
under the UCC. (Id.) As to Count 4, Brunswick Bank
moves for summary judgment because it acted as an
intermediary and therefore cannot be liable under the UCC in
connection with the negotiation of the check. Plaintiff
Levine moves for summary judgment on his UCC conversion claim
against Check Pros, arguing that the check at issue was
indisputably stolen and that Check Pros failed to follow
commercially reasonable practices. (DE 59) Therefore, he
says, Check Pros was not entitled to enforce the check.
legal arguments on these motions for summary judgment are
similar to those on the defendants' prior motion to
dismiss, but of course are now supplemented by a factual
record. Familiarity with my prior opinion on the motion to
dismiss (DE 28) is presumed.
reasons explained below, I will grant defendants' motions
for summary judgment with respect to Counts 1, 3, and 4.
Levine's motion for summary judgment on Count 2 is
January 2, 2018, just prior to undergoing knee surgery,
Gregory Levine came into possession of a check in the amount
of $253, 023.04, made out to himself as payee, representing
his share of the proceeds from the sale of his parents'
house. (DE 62-12 ¶ 1) The drawer is Albert B Levine Rev
Inter Vivos Trust. (Id.) The drawee bank is Wells
Fargo Bank, N.A. (Id.) Levine asserts that upon
receiving the check, he placed it in a desk drawer at his
office. (DE 59-13 ¶ 3) The following day, January 3,
2018, Levine underwent knee surgery.
point, an individual named Skippy Ely came into possession
of the check. Levine states that he does not know Mr. Ely,
and asserts that the unrebutted facts establish that the
check was stolen by Ely. (L.MSJ at 6-7) Defendants point out
that the only evidence supporting Levine's account is his
own post hoc testimony, as Levine did not file a police
report at the time, nor did he log the alleged theft in the
records kept at his business. (Id.) On January 24,
2018, over three weeks after Levine received the check, Ely
presented the check to Check Pros. (DE 52-1 ¶¶
11-12) Check Pros is a check cashing business located at 785
Roosevelt Avenue in Carteret, New Jersey. (Id.
¶ 2) It is undisputed that Levine was not present in New
Jersey at this time. Ely presented a copy of Levine's
driver's license and social security number.
(Id. ¶¶ 11-12) Check Pros ran various
checks to verify the authenticity of the driver's license
and social security number. (Id. ¶¶ 11-13)
A Check Pros employee also communicated with Wells Fargo,
which verified that the account associated with the check had
sufficient funds. (Id.)
January 24, 2018, however, Check Pros advanced Ely only $3,
795.58, a nominal portion of the face amount of the check.
(59-13 ¶ 18) Check Pros told Ely that he would need to
present an affidavit stating that he was authorized to cash
the check on behalf of Levine. (DE 52-1 ¶ 12)
January 25, 2018, Check Pros received from Ely an affidavit
which read as follows:
it may concern,
On this day 1/25/2018, I Gregory Allen Levine authorize
Skippy Eli to be able to receive access to all funds from
JJJ&P Industries located at 785 Roosevelt Avenue,
Carteret, New Jersey 07008.
affidavit (DE 59-8) does not refer specifically to the check
at issue. It does not refer to Check Pros. JJJ&P
Industries, Inc., the business referred to in the affidavit,
was a check cashing business that was formerly operated by
the managing member of Check Pros, Joseph Lopresti, under a
different name (United Check Cashing) at a different address
(805, not 785, Roosevelt Avenue). (DE 52-1 ¶ 2, 52-12
¶¶4-5) The affidavit was notarized with a raised
seal by a New York notary. (DE 52-12 ¶17) Levine notes
that the date the document was notarized, January 24, 2018,
is one day before the date Levine purportedly signed it,
January 25, 2018. (DE 59-8)
January 25, 2018, Brunswick Bank released the proceeds of the
check to the account maintained at Brunswick by Check
Pros. (DE 59-13 ¶ 21) Check Pros then
waited Five business days, until January 30, 2018, and then
disbursed the remaining $244, 167 to Ely. [Id.
factual submissions regarding the allegedly forged
indorsement, the theft of the check, and Levine's
reporting of the theft are as follows.
not until approximately January 27, 2018, when he returned to
work, Levine testified, that he discovered that the check was
missing from his desk drawer. (DE 59-13 ¶¶ 4-6)
Because the check had been in a locked office with limited
access, Check Pros alleges that "plaintiffs claim of
theft could not be believed by the rational finder of
fact." (DE 52-1 ¶ 26)
assert that Levine unreasonably delayed reporting the check
stolen. (D.MSJ at 14-15; D.Reply at 7) Levine testified that
when he discovered the check missing, he and his sister
immediately went online and discovered that it had been
cashed. (DE 62 ¶ 23, citing DE 62-6 (Levine Dep. at 76))
Subpoenaed records from Wells Fargo confirm that one of three
authorized users went online to view the account for
approximately two minutes on January 26, 2018. (DE 62¶
23; DE 62-10 at 4)
not until sometime in mid-February that the police were
alerted that the check had been stolen. (DE 52-8 at 5-6)
Levine's brother first notified the bank of the problem
sometime in the first ten days of February, 2018. (DE 62
¶24, citing DE 62-6 (Levine Dep. at 98)) It was not
until February 9, 2018, that Levine himself went to the bank
and submitted an "affidavit of check fraud,"
claiming that his indorsement was forged. (DE 52-1 ¶ 18;
DE 52-8 at 2)
check was indorsed on the back with what purports to be
Levine's signature. (DE 59-2 at 2) On this issue,
Levine's testimony was somewhat equivocal. He initially
testified that when asked by the investigator at Wells Fargo
if he signed the check, he "said no. I said actually it
looks like my signature, but it can't be my signature on
the back of the check." (DE 62-6 (Levine Dep. at 112))
Then, when shown the original check at his deposition, he
acknowledged that the signature "has to be mine, the way
'Gregory' is" (id. at 122), and that
the signature "looks just like" his signature.
(Id. at 124) Attempting to explain, Levine testified
that "I know I did not sign the back of a check, because
if I had I would then go right to the bank"-i.e., it
would not have been his usual practice to indorse a check and
leave it in a drawer. (Id. at 124) He then testified
that he did not recall signing the check. [Id. at
April 12, 2018, Levine filed the complaint in this action.
Count 1 of the complaint asserts a common-law conversion
claim and Count 2 asserts a claim under the UCC (N.J. Stat.
Ann. § 12A:3-420), both against Check Pros. Counts 3 and
4 assert parallel claims against Brunswick Bank.
8, 2018, Check Pros moved to dismiss the complaint or in the
alternative for summary judgment. (DE 6) On June 4, 2018,
Levine opposed the motion to dismiss and filed his own motion
for summary judgment. (DE 16)
September 25, 2018, I denied defendants' motion to
dismiss in a written opinion. (DE 28) The parties'
motions for summary judgment I denied without prejudice
pending further discovery. Discovery proceeded.
2019, the parties filed competing motions for summary
judgment. (DE 52, 59) In July 2019, the parties filed
oppositions and replies. (DE 60, 61, 62, 63) The summary
judgment motions are thus fully briefed.
Rule of Civil Procedure 56(a) provides that summary judgment
should be granted "if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." SeeKreschollek v. S. Stevedoring Co.,223 F.3d 202, 204
(3d Cir. 2000); Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). In deciding a motion for summary
judgment, a court must construe all facts and inferences in
the light most favorable to the nonmoving party. SeeBoyle v. Cnty. of Allegheny Pennsylvania, 139 F.3d
386, 393 (3d Cir. 1998) (citing Peters v. Delaware River
Port Auth. of Pa. & N.J.,16 F.3d 1346, 1349 (3d
Cir. 1994)). The moving party bears the burden of
establishing that no genuine issue of material fact remains.
SeeCelotex Corp. v. Catrett,477 U.S. 317,
322-23 (1986). "[W]ith respect to an issue on which the
nonmoving party bears the burden of proof . . . the burden ...