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Levine v. Banc Alt LLC

United States District Court, D. New Jersey

October 3, 2019



          Kevin McNulty United States District Judge.

         This 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 Levine.

         Bank 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.

         The 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.

         For the 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 denied.

         I. Summary[1]

         On 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.

         At some point, an individual named Skippy Ely[2] 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.)

         On 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)

         On January 25, 2018, Check Pros received from Ely an affidavit which read as follows:

         To whom 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.

(DE 59-8)

         The 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)

         On January 25, 2018, Brunswick Bank released the proceeds of the check to the account maintained at Brunswick by Check Pros.[3] (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. ¶ 22)

         The factual submissions regarding the allegedly forged indorsement, the theft of the check, and Levine's reporting of the theft are as follows.

         It was 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)

         Defendants 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)

         It was 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)

         The 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 125-126)

         On 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.

         On May 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)

         On 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.

         In June 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.

         II. Discussion

         a. Legal standard

         Federal 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 ...

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