23 Jan No Comments Remik Expert Matters

Facts:  The plaintiff consumer was delinquent on his mortgage held by the defendant mortgage company.  The mortgage company agreed to reinstate the plaintiff’s mortgage if the plaintiff paid all of the arrearages.  To make the payment, the plaintiff obtained a cashier’s check from a local bank.  The cashier’s check was tendered to the mortgage company which in turn deposited the check at its bank.  The mortgage company’s bank then sent the check through regular bank collection channels to the payor bank for payment.  The payor bank dishonored its own cashier’s check for the reason that the payee’s endorsement was not “legible.”  The dishonored check was returned to the depositary bank which again presented the check for payment.  The payor bank again dishonored its own cashier’s check because the payee’s endorsement was not legible.  The mortgage company then commenced and completed a foreclosure action and the consumer lost his home.  The consumer then filed suit against the mortgage company for not honoring the reinstatement agreement.  In turn. the mortgage company filed a third-party complaint against the bank that issued the cashier’s check for wrongful refusal to pay the cashier’s check.

Client:  The defendant mortgage company.

Issue for the Expert:  Whether or not the reasonable commercial standards of the banking business obligate a payor bank to review the back of a check for a legible endorsement and require a legible endorsement of the payee before it becomes obligated to pay the check.

Outcome:  The case settled at the conclusion of discovery.