18 Jul No Comments Remik Expert Matters

Facts:  The checking account signature card and account agreement of the plaintiff corporation required that all of the plaintiff’s checks had to be signed by two authorized officers of the corporation.  Some years after the account was opened, a bookkeeper for the corporation began to embezzle funds by issuing corporate checks payable to herself or to her personal creditors.  In some cases, she signed the checks with her own name only and in other cases she forged the signature of the president of the corporation.  None of the checks used to embezzle funds carried two signatures.  All of the checks were paid by the defendant bank.

Client:  The plaintiff corporation.

Issues for the Expert:  Whether or not a bank acts in bad faith and/or inconsistently with the reasonable commercial standards of the banking business by agreeing to a “two signature requirement” on checks and then having no means or process to review checks presented for payment with the requirement.

Outcome:  The case settled at the end of discovery.