ROBERT J. TRIFFIN v. TD BANKNORTH

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4104-04T54103-04T5

ROBERT J. TRIFFIN,

Plaintiff-Appellant,

v.

TD BANKNORTH., Successor in

Interest to HUDSON UNITED BANK,

Defendant-Respondent.

DOCKET NO. A-4104-04T5

ROBERT J. TRIFFIN,

Plaintiff-Appellant,

v.

WACHOVIA BANK, N.A., Successor

in Interest to FIRST UNION

NATIONAL BANK,

Defendant-Respondent.

 

Argued: June 13, 2006 - Decided June 28, 2006

Before Judges Stern and Fall.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Camden County, Docket Numbers DC-16402-04 and DC-72-05.

Robert J. Triffin, appellant, argued the cause pro se in both appeals.

Joseph M. Cerra argued the cause for respondent Hudson United Bank in A-4103-04T5 (Forman Holt & Eliades, attorneys; Mr. Cerra, on the brief).

John D. North argued the cause for respondent Wachovia Bank, N.A. in A-4104-04T5 (Greenbaum, Rowe, Smith & Davis, attorneys; Mr. North, of counsel, and John B. Nance, on the brief).

PER CURIAM

In these back-to-back appeals, consolidated for opinion purposes, plaintiff Robert J. Triffin, the assignee of two dishonored checks drawn on First Union National Bank, the predecessor of defendant Wachovia Bank, N.A., and six dishonored checks drawn on defendant Hudson United Bank, the predecessor of TD Banknorth, appeals from orders entered in the Special Civil Part on March 7, 2005, granting summary judgment in favor of Wachovia Bank and Hudson United Bank, dismissing his complaints. The following factual and procedural history is relevant to our consideration of the arguments advanced on appeal.

In A-4103-04T5, on December 6, 2004, plaintiff filed a small claims action in the Special Civil Part against Hudson United Bank, seeking to recover on six documents purporting to be checks issued and drawn on accounts in Hudson United Bank by FJD Fast Food Corp. to Mercedes Dominguez and Marisa Marrero, on various dates between February 27, 2004 and March 8, 2004, in the total amount of $2,013.02. All six checks were cashed by Francisco Armendariz Check Cashing and subsequently dishonored by Hudson United Bank on the basis that the checks were forgeries. Thereafter, plaintiff and Armendariz entered into separate assignment agreements under which plaintiff purchased all of Armendariz's right and interest in said dishonored checks.

In A-4104-04T5, on December 23, 2004, plaintiff filed a small claims action in the Special Civil Part against Wachovia Bank, as successor in interest to First Union, seeking to recover on two documents purporting to be checks issued on accounts in First Union, one issued by J.P. Mascaro & Son to Tiara Vanleer dated June 30, 2003 in the amount of $3,541, and another issued by Laborers' District Council to Conrad Hughes in the amount of $986.17. Both checks were cashed by Currency One, Inc., and subsequently dishonored by First Union on the basis that these checks were forgeries. Thereafter, plaintiff and Currency One entered into separate assignment agreements, under which plaintiff purchased all of Currency One's right and interest in said dishonored checks.

In both complaints, plaintiff alleged that First Union and Hudson United Bank had wrongfully dishonored and charged back the referenced checks against the assignors' depository accounts after the expiration of the statutory midnight deadline set forth in N.J.S.A. 12A:4-104(10). Plaintiff contended that, pursuant to N.J.S.A. 12A:4-302, Wachovia Bank, as successor to First Union, and Hudson United Bank were strictly liable to plaintiff for the amounts of those checks, together with pre-judgment interest, costs and processing fees.

In each action, Wachovia Bank and Hudson United Bank moved for summary judgment, contending that plaintiff had purchased the checks from Currency One and from Armendariz with full knowledge that the checks had been forged and then dishonored. In support of their motions, they relied upon our holding in Triffin v. Bridge View Bank, 330 N.J. Super. 473, 474 (App. Div. 2000), "that an assignee who purchases the check with notice of the dishonor lacks standing to bring the action."

In separate written opinions dated March 7, 2005, Judge Lee B. Laskin adopted the reasoning in the Bridge View Bank case, and granted summary judgment in favor of each defendant, issuing orders on that date memorializing his decision.

On each appeal, plaintiff presents the following arguments for our consideration:

POINT ONE

THE TRIAL COURT'S ORDER OF DISMISSAL CONSTITUTES AN ADVISORY OPINION AND IS VOID AS BEING IN CONTRAVENTION OF THE NEW JERSEY SUPREME COURT'S BAN ON ADVISORY OPINION AND DECISIONS.

POINT TWO

THE TRIAL COURT COMMITTED REVERSIBLE ERROR WHEN IT MISAPPREHENDED: THAT THIS COURT'S MELLON PSFS MAJORITY ASSIGNABILITY HOLDINGS MIRROR ARTICLE 1, SECTION 1, OF THE NEW JERSEY CONSTITUTION, AND THE NEW JERSEY SUPREME COURT'S EXPLANATION OF THE SCOPE OF ARTICLE 1, SECTION 1'S, GUARANTEE OF EVERY PERSON TO ACQUIRE AND DISPOSE OF PERSONAL PROPERTY UNDER THE NEW JERSEY CONSTITUTION.

After analyzing the record in the light of the oral and written arguments presented by the parties, we affirm substantially for the reasons articulated by Judge Laskin in his written decisions dated March 7, 2005. We add the following.

In Bridge View Bank, supra, in ruling that an assignee who purchases a check with notice of the dishonor lacks standing to bring the action, Judge Coburn expressed this court's agreement with the weight of authority in other jurisdictions adopting the position

that when the payor bank has dishonored a check after the midnight deadline, an assignee of the dishonored check may not enforce the statutory liability created by [N.J.S.A. 12A:4-302], the benefits of which are intended solely for the payee, others who may have received the check before dishonor, and collecting banks.

[330 N.J. Super. at 477 (emphasis added).]

Judge Coburn cited with approval the reasoning contained in American Title Ins. Co. v. Burke & Herbert Bank & Trust Co., 813 F. Supp. 423, 428 (E.D. Va. 1993), aff'd o.b., 25 F.3d 1038 (4th Cir. 1994), that 4-302 of the Uniform Commercial Code "confers standing to sue on a limited class comprised of those involved in the collection and payment of the check at issue who may be directly harmed (but are not necessarily actually harmed) by the failure to the payor to adhere to the . . . midnight deadline." Ibid. In expressing agreement that a payee has standing to bring suit for the payor bank's failure to pay or return the check in a timely fashion because of the payee's potential reliance on the payor bank's prompt action, and to the proposition that standing arises where the original payee of a check assigns or transfers its rights in the instrument to another entity prior to its presentment for payment, Judge Coburn stated:

That view is sound because the assignee steps into the shoes of the original payee and is entitled to the statute's protection once it initiates the collection process. It is the potential reliance on payor bank action that arises once a check is actually presented that provides the basis for standing to sue under 4-302. . . .

But where the plaintiff becomes the holder of the check, as well as the assignee of all rights arising from that instrument after its untimely return and with full knowledge of its dishonor, it has no "vested interest in the timely payment or return of these checks." [quoting American Title Insurance, supra, 813 F. Supp. at 428-29].

* * * *

Any argument to the contrary would misconstrue the nature of an enforcement action under this section. It is a cause of action for breach of a statutory duty, not an action for collection on a negotiable instrument.

[Id. at 478 (emphasis in original).]

In Triffin v. Mellon PSFS, 372 N.J. Super. 3 (App. Div. 2004), Judge Fisher expressed disagreement with the Bridge View Bank rationale. Writing for the majority view, Judge Fisher concluded

that a claim based upon a breach of the midnight deadline is assignable, that the assignee may sue in his own name, and that the assignee's knowledge of dishonor or defects in the instrument is irrelevant; it is only what the assignor knew at the time of presentment and not what the assignee later learned, which is relevant to the claim.

* * * *

We also detect nothing in the Code provisions relating to the midnight deadline which would suggest a restrictive approach to standing. Indeed, the Code does not attempt to describe who the proper claimants might be, thus giving no reason to doubt that it would permit a suit by anyone damaged by a bank's failure to its midnight deadline.

The midnight deadline was designed to contribute to the goal of having checks act, as closely as feasible, like cash. It deters banks from simply holding a check and using a drawer's money as long as possible, . . . by imposing liability for a delay in processing regardless of whether the check was "properly payable or not[.]" . . . This underlying purpose demonstrates that standing to sue ought to be broadly construed. Banks normally charge back their customers, pursuant to deposit agreements or other provisions of the Code. See N.J.S.A. 12A:4-214. Accordingly, it would appear that persons or entities who have paid on, or were drawers of, such checks are likely suitors when a midnight deadline has been breached. The full assignability of such claims, therefore, is in better accord with N.J.S.A. 2A:25-1 and is more likely to secure compliance with the deadline, since it would provide, for example, a single injured party, through the assignment to a person or entity in the business of suing on such checks, a remedy in instances, as here, where it might otherwise not be worthwhile to sue on a small check or checks.

[Mellon PSFS, supra, 372 N.J. Super. at 7, 8-10 (other citations omitted).]

Notwithstanding, the court affirmed the dismissal of the plaintiff's claim against the bank because the plaintiff had produced no evidence to support his claim that the bank had violated the midnight deadline. Id. at 5.

In a concurring opinion, Judge Coburn agreed with the result, concluding that the majority's disagreement with the court's ruling in the Bridge View Bank case constituted dictum. Id. at 12-13. The plaintiff's motion for reconsideration on the ground, inter alia, that Judge Coburn's concurring opinion should be labeled as a dissent, was rejected. Triffin v. Mellon PSFS, 372 N.J. Super. 221, 226-27 (App. Div. 2004).

We are not persuaded, by the dictum expressed in the Mellon PSFS, supra, 372 N.J. Super. at 7-10, that we should depart from this court's holding in Bridge View Bank, supra, 330 N.J. Super. at 477-78, and we affirm the grant of summary judgment in favor of the defendants in both appeals based upon the reasoning and analysis of Judge Coburn in Bridge View Bank, supra, 330 N.J. Super. at 477-78. We agree that an assignee who has purchased a dishonored check after it has been dishonored, with full knowledge that the check has been forged and dishonored, has no standing to bring a "late return" claim against the drawee bank under N.J.S.A. 12A:4-302 because standing to initiate such an action is limited to the class of those parties exposed to harm by virtue of the late action by the drawee bank. Here, because he purchased the dishonored checks after their dishonor, with that knowledge, plaintiff was not exposed to any such risk and thereby lacked standing. Moreover, public policy favors this result because an assignee of a statutory claim who receives the instrument with full knowledge that it has been dishonored as a forgery is not a holder in due course. See N.J.S.A. 12A:3-302.

On the other hand, there is some appeal to plaintiff's position that persons who are victims of forged and dishonored instruments, and who have remedies under N.J.S.A. 12A:4-302, need not expend their time and resources to pursue the remedy in court, if they would prefer to assign their rights to a third party interested in pursuing them. The question then becomes whether the assignee should have standing to pursue a remedy based on the assignor's rights when the assignee has notice of the prior dishonor. If they do not, the assignor could not in effect make an assignment. Although an interesting issue, we adhere to our opinion in Bridge View Bank, supra, 330 N.J. Super. at 474, which establishes the present prevailing policy on the subject. See Hellwig v. J.F. Rast and Co., Inc., 215 N.J. Super. 247, 254-55 (App. Div. 1987) (Stern, J.A.D., concurring), aff'd, 110 N.J. 37 (1988). With respect to the difference between Parts on the standing issue, we repeat the words of the concurring opinion in Hellwig:

I emphasize that a conflict between decisions of this court constitutes an express ground for certification, see R. 2:12-4, and the Supreme Court can expeditiously settle the disparity or conflict between decisions.

[Hellwig, supra, 215 N.J. Super. at 255.]

We also reject, as lacking sufficient merit to warrant discussion in this opinion, plaintiff's contention that the decisions of the Law Division dismissing his claims constitute advisory opinions. See R. 2:11-3(e)(1)(E).

Affirmed.

 

At argument, the parties stipulated to amending the caption to reflect the fact that Hudson United Bank has merged with TD Banknorth.

(continued)

(continued)

11

A-4103-04T5

June 28, 2006