17 Apr No Comments MikeT Expert Matters, Theft of Checks Payable

Facts:  Two corporations with substantially similar names maintained checking accounts at the same community bank.  The spouse of the owner of one corporation worked for the second corporation.  Over an 18 month period, the spouse misappropriated checks payable to her employer and deposited the checks into the account of the other corporation owned by her spouse.  After the misappropriation was detected, the victim corporation filed suit against the bank alleging that the bank converted the plaintiff’s funds by negligently accepting the checks for deposit into the account of the other corporation.

Client:  The plaintiff corporation.

Subject of Expert Report:  Whether or not the bank failed to act with ordinary care and in accordance with the reasonable commercial standards of the banking business by accepting certain checks payable to the order of the plaintiff corporation into the account of another corporate entity with a substantially similar name.

Outcome: The case settled during discovery.