Any Kind Checks Cashed, Inc. v. Talcott

830 So.2d 160 (2002)

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Nature of the Case

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Facts

The players are John G. Talcott, Jr. (D), a ninety-three-year-old Massachusetts resident, D.J. Rivera (D), a financial advisor to Talcott, and Salvatore Guarino (D), a cohort of Rivera. Rivera sold Talcott an investment in the amount of $ 75,000 that produced no returns. On December 7, 1999, Guarino established check cashing privileges at P by filling out a customer card. It included his social security number and identification by a driver's license. Guarino listed himself as a broker. He cashed a $450 check without incident. On January 10, 2000, Rivera telephoned Talcott and talked him into sending him a check for $10,000 made out to Guarino, for travel expenses to obtain a return on the original $75,000 investment. Talcott was informed that Guarino was Rivera's partner. Rivera received the check on January 11. Rivera said that $10,000 was more than what was needed for travel and that $5,700 would do. Talcott called his bank and stopped payment on the $10,000 check. Guarino presented the check at P to cash it. Guarino showed his driver's license and the Federal Express envelope from Talcott in which he received the check. Guarino told P that he was a broker and that the maker of the check had sent it as an investment. P was unable to contact the maker by telephone. Based on experience, P's office manager believed the check was good; the Federal Express envelope indicated that the maker of the check had sent it to the payee trying to cash the check. After deducting the 5% check cashing fee, P cashed the check and gave Guarino $9,500. The next day P deposited the check. On January 15, 2000, Rivera called Talcott and asked about the $5,700. Talcott sent a check for $5,700. He assumed that Rivera knew that he had stopped payment on the $10,000 check. On January 17, 2000, Guarino went into a different P location and presented the $5,700 check with the Federal Express envelope. The clerk noticed that the $10,000 check had been approved and she called the prior supervisor and told her about Guarino's check. The clerk was instructed not to cash the check until the maker was contacted. P called the maker but got no answer. Guarino gave her another number to call, which was the same as the first number except that two numbers were reversed. A woman answered the phone and Talcott approved cashing the $5,700 check. There was no discussion of the $10,000 check. P cashed the second check for Guarino, from which it deducted a 3% fee. On January 19, Rivera called Talcott to warn him that Guarino was a cheat and a thief. Talcott stopped payment on the $5,700 check. Talcott's daughter called P and told it of the stop payment on the $5,700 check. Guarino and Rivera had pulled a scam on Talcott to get him to issue the checks. P sued Guarino and Talcott, claiming it was a holder in due course. Talcott's defense was that P was not a holder in due course and that his obligation on the checks was nullified because of Guarino's illegal acts. The trial court entered final judgment for P for only the $ 5,700 check. On the $10,000 check, the judge found for Talcott. No evidence was presented as to standard practices in the check cashing industry. P appealed.