Clemente Bros. Contracting Corp. v. Hafner-Milazzo

14 N.E.3d 367 (2014)

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Nature of the Case

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Facts

P opened three corporate operating accounts at D and took out a loan and a line of credit, each backed by a promissory note. As a condition precedent to opening the accounts Jeffrey Clemente, P's principal, executed a personal guaranty with respect to the loan and line of credit, and P passed a corporate resolution, which provided that Jeffrey Clemente was the only authorized signatory on the accounts and the only one authorized to sign drawdown requests on the line of credit. The corporate resolution also provided that P must notify D in writing within fourteen calendar days of the delivery or mailing of any statement of account and canceled check, draft or other instrument for the payment of money (hereinafter referred to as 'Instrument') of any claimed errors in such statement, or that P's signature upon any such returned Instrument was forged, or that any such Instrument was made or drawn without the authority of P . . . or that it was raised or otherwise altered . . . said statement of account shall be considered correct for all purposes and D shall not be liable for any payments made and charged to the account of P or for any other errors in the statement of account as rendered to it.' Aprile Hafner-Milazzo (D) worked as a secretary and bookkeeper for P until it was discovered that she had been forging Clemente's signature on certain D bank documents, including drawdown requests on the line of credit and checks paid from one of Clemente Brothers' accounts. Hafner (D) embezzled approximately $386,000 over the course of approximately two years. This was from January 2008 through December 2009. In February 2010, P notified D of the thefts. D determined that an event had occurred that adversely affected P's ability to repay its debts and declared all amounts due and payable. P sued Ds to recover damages and to prevent D from forcing repayment on the loans. D moved for summary judgment dismissing the complaint in that P failed to notice D within 14 days. The court granted D's motion in its entirety and awarded it the principal sum of $1,146,262.90 on its counterclaims. The court observed, P and D, by agreement, properly abbreviated the one-year period to 14 days, within which P failed to report each of the alleged forgeries. The Appellate Division affirmed, and P appealed.