23 Jan No Comments Remik Expert Matters

Facts:  The plaintiff was an elderly widow who maintained a checking account at the defendant bank.  The plaintiff’s daughter-in-law forged the plaintiff’s signature on a series of checks made payable to the daughter-in-law and deposited the checks into her own account at another bank.  To prevent the plaintiff from discovering the misappropriation of funds, the daughter-in-law instructed the defendant bank to change the address of record on plaintiff’s account to the address of the daughter-in-law.  The plaintiff did not notice the fact that she was no longer receiving monthly bank statements.  After several years, the plaintiff was declared mentally incompetent and the court-appointed guardian discovered the misappropriation.  The guardian brought suit against the bank and the bank defended on the basis that the one-year outside time limit for reporting forgeries to the bank in Section 4-406 of the Uniform Commercial Code barred the plaintiff’s claims.

Issue for the Expert: Whether or not it was a commercially reasonable banking practice for a bank to allow a person who was not an authorized signer on an account to change the mailing address for the account.

Client: The Plaintiff.

Outcome: The attorney for the Plaintiff died during the pendency of the lawsuit.  The Plaintiff was unable to retain other counsel and the matter was ultimately dismissed by the court for failure to prosecute.