OXFORD BANK V VICKI S ROHLMAN
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STATE OF MICHIGAN
COURT OF APPEALS
OXFORD BANK,
UNPUBLISHED
February 22, 2007
Plaintiff-Appellant,
v
No. 267784
Lapeer Circuit Court
LC No. 04-034594-CK
VICKI S. ROHLMAN,
Defendant-Appellee.
Before: Meter, P.J, and O’Connell and Davis, JJ.
DAVIS, J. (concurring).
I agree with the lead opinion. I write separately only to emphasize two points.
First, for the sake of clarity, I note that the trial court correctly held that under MCL
440.4302, written notice would have been required. See Mut S & L v Nat’l Bank of Detroit, 185
Mich App 591, 595; 462 NW2d 797 (1990). However, under the correct statute, MCL 440.4207,
written notice is not required. In the absence of such a requirement, the notice given need only
be sufficient to bring the matter to the attention of the other party. See MCL 440.1201(25) and
MCL 440.1201(26)(a). Therefore, the oral notice given by plaintiff was adequate here.
Second, as the lead opinion notes, defendant has alleged that, approximately two weeks
after she deposited the check and two weeks before the notice of dishonor, plaintiff affirmatively
initiated contact with her and informed her that the funds had cleared. If this is true, I believe it
has significant implications to defendant’s argument that plaintiff breached its duty of care.
The UCC does not define the term “cleared.” However, both Black’s Law Dictionary
and the Random House Webster’s College Dictionary indicate that the term means the funds
were actually paid or authorized. A reasonable bank customer could interpret this as a reliable
statement by her bank that the check had been honored and that she could therefore utilize the
funds without further concern. Furthermore, a reasonable bank customer could conclude that the
bank was the party best able to verify the reliability of the check and that the bank had done so.
The UCC generally defines “ordinary care” as
observance of reasonable commercial standards, prevailing in the area in
which the person is located, with respect to the business in which the person is
engaged. In the case of a bank that takes an instrument for processing for
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collection or payment by automated means, reasonable commercial standards do
not require the bank to examine the instrument if the failure to examine does not
violate the bank’s prescribed procedures and the bank’s procedures do not vary
unreasonably from general banking usage not disapproved by [article 3] or article
4. [MCL 440.3103(1)(g); MCL 440.4104(3).]
A collecting bank like plaintiff is considered to exercise “ordinary care” in presenting an
instrument or transmitting notice of dishonor by “taking proper action before its midnight
deadline following receipt of an item, notice, or settlement.” MCL 440.4202. However,
plaintiff’s alleged communication, which could have induced defendant to rely on an ostensibly
expert affirmation that the funds were valid and available for use, took place well before any
event giving rise to a “midnight deadline” occurred. Unless a provision of the UCC specifies
otherwise, general principles of law and equity remain applicable. MCL 440.1103; Conagra, Inc
v Farmers State Bank, 237 Mich App 109, 131; 602 NW2d 390 (1999).
I believe plaintiff would have been entirely within its rights to take as long as necessary
to determine the reliability of the check. Instead, plaintiff allegedly sought out defendant and
induced her to believe that the check was reliable when, in fact, it was not, only to notify her two
weeks later that the check had actually been dishonored. Under general principles of law and
equity, I believe this raises at least a possibility that plaintiff did not act reasonably and did not
fulfill its duty of care; moreover, plaintiff may have breached its standard of care well before the
propriety of its notice of dishonor became an issue.
I understand that this issue is only an allegation at this stage of proceedings, and no
evidence or argument has been taken on the matter. I write only to emphasize the lead opinion’s
observation that the issue of plaintiff’s exercise of due care has not been resolved in the trial
court. In all other respects, I concur.
/s/ Alton T. Davis
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