State Sec. Check Cashing, Inc. v. American General Financial

972 A.2d 882 (2009)

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

D was contacted by telephone by a man, who was posing as Ronald E. Wilder. This imposter sought a $20,000.00 loan. D took the information and discovered that the real Ronald E. Wilder had excellent credit. The imposter completed the information required for the loan. The imposter obtained approval from senior management for an $18,000.00 loan. The loan was approved, and the imposter appeared at D and produced identification and took off with the check. The imposter then presented the check to P, a check cashing business. The employee at work for P considered the same driver's license that the imposter presented to D, and reviewed the D loan documents related to the check. She also compared the check to other checks issued by D which had been cashed previously by P. The employee called P's compliance officer, to confirm that she had taken the proper steps in verifying the check. Upon reconfirmation of all the details, P then cashed the check. The next business day after the imposter negotiated the check at P, the real Ronald E. Wilder appeared at the offices of D indicating that he had been notified by the U.S. Secret Service that a person applied for a loan in his name. The true Ronald E. Wilder completed an Affidavit of Forgery. D's Branch Manager called Wachovia Bank to determine whether the $18,000.00 check had been presented for payment. Learning that the check had not been presented yet, a 'stop payment' on the check was issued. P sued D asserting that it was a holder in due course. The Court held for D, explaining: P could have withheld payment, to the imposter, until the check cleared on D's 'out of town' bank. The court held that P had not exercised ordinary care in paying the imposter's check and that its failure to exercise ordinary care contributed substantially to the loss. P appealed, and the Circuit Court affirmed. P appealed.