First Financial Bank, N.A. v. Citibank, N.A.

2012 WL 3065546 (2012)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

McDonald, an attorney, was contacted by someone who purported to be seeking legal assistance. The party was seeking an attorney to help collect money it was owed by Accurate Manufacturing, an Indiana company. McDonald would be paid 10% of whatever money she collected. When Accurate Manufacturing heard that an attorney had been hired, it agreed to make a partial payment on its debt by July 7th and a second payment by July 23rd. She received in the mail a letter that purported to be from Accurate Manufacturing along with a check. The check purported to be Citibank Official Check No. 260356932, dated July 2, 2010, in the amount of $298,750.00; the remitter was listed as Accurate Manufactured Products Group, Inc., and the check was made payable to 'Misty Y. McDonald, Attorney at Law.' She wrote 'For Deposit Only' on the back of the Check, took it to First Financial (P), and deposited it into her IOLTA account. Her client in Arizona requested that she wire 90% of the amount of the Check to the Bank of China. She then went to P and wired 90% of the amount of the Check to the Bank of China. She then transferred the remaining 10% into her own business account as her fee. Citibank (D) determined that no bank account existed for Accurate Manufacturing and refused to pay the Check. The monies sent to China were gone. P has a correspondent banking relationship with J.P. Morgan Chase, N.A. ('Chase'), for the forward processing of checks. P created an electronic image of the check for use in the forward and downstream processing of the Check. P sent the Check to Chase for forward processing. The following day, July 8, 2010, Chase sent an electronic image of the Check to D. D determined that the account number did not exist and marked it 'invalid account number, account unknown.' D also determined that the endorsement was illegible. D returned the Check for nonpayment to Chase. D indicated that the Check was being returned for an invalid account number. D then sent the Check and its accompanying cash letter to the Federal Reserve Bank. Chase notified P that the Check had been returned by sending two letters by regular U.S. mail, one dated July 9th and the other dated July 13th. Chase also sent P a fax bearing the image of the Check with the notice of nonpayment. On July 9, 2010, at 12:56 p.m., FP completed a wire transfer for 90% of the amount of the Check. P attempted to recall the wire transfer but was notified by the Bank of China on July 19th that it had paid the beneficiary. P argues that D failed to provide timely and proper notice of nonpayment and return of a check. P moved for summary judgment.