CopyCited 1 times | Published | Florida 4th District Court of Appeal | 2006 WL 1686486
...stitute the following in its place. Raymond Lucas appeals the trial court's entry of summary final judgment in favor of BankAtlantic. We reverse, holding that an issue of fact remains as to whether Lucas "transfer[red]" a check within the meaning of section 674.207, Florida Statutes (2004), [1] so that he is responsible to the bank for the amount of a stolen and altered check, which was deposited into an account that Lucas maintained at the bank....
...Because it was liable to JP Morgan under Florida's Uniform Commercial Code, BankAtlantic paid $65,800 to JP Morgan. This appeal concerns BankAtlantic's attempt to recover this money from Lucas. BankAtlantic filed a three-count amended complaint against Lucas. Count I stated that it was "brought pursuant to § 674.207" and sought recovery for breach of a transfer warranty under the Uniform Commercial Code, Chapters 673 and 674, Florida Statutes (2004)....
...Philippon,
873 So.2d 1280, 1281 (Fla. 4th DCA 2004). Lucas correctly contends that summary judgment was inappropriate because his affidavit raised disputed issues of fact as to whether he was a "customer" who "transfer[red] an item" within the meaning of section
674.207(1), Florida Statutes (2004). Section
674.207(1) provides: (1) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank that: (a) The warrantor is a person entitled to en...
...of any party that can be asserted against the warrantor; and (e) The warrantor has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the drawer. BankAtlantic contends that the section 674.207(1) warranty is solely "activated by the transferor receiving consideration from the transferee;" the bank argues that "[t]he fact that the Check was deposited to and credited to Lucas' Account was sufficient to trigger his obligations" under section 674.207....
...receive "a settlement or other consideration" to activate the statutory warranty. Neither of the two cases cited by BankAtlantic supports the proposition that a customer's receipt of funds in the customer's bank account, without more, activates the section 674.207(1) warranty....
...e, it appears that the customer was also the transferor of the check. First Arlington National Bank v. Stathis, 115 Ill.App.3d 403, 71 Ill.Dec. 145, 450 N.E.2d 833, 840 (1983), applied a version of "section 4-207" with wording different than that of section 674.207(1). [2] Cases enforcing a section 674.207 warranty typically involve a customer who made the deposit of a questionable check into the customer's account....
...Boatmen's First Nat'l Bank of Oklahoma, 958 P.2d 820, 821 (Okla.Civ. App.1998); Kelton Motors, Inc. v. Phoenix of Hartford Ins. Cos.,
522 F.2d 728, 729 (2d Cir.1975). In such circumstances, there is no question that the customer has *1034 transferred an item within the meaning of section
674.207(1)....
...(emphasis added). The trial court's finding of fact, which was binding on the appellate courts, was that Lema had not transferred the check. The Maryland Supreme Court did not rule that this conclusion was legal error. Lema thus supports an interpretation *1035 of section 674.207(1) that requires both a customer's "transfer[ ]" of a check and receipt of "consideration" to trigger the statutory warranty....
...Lucas's defense is almost identical to that of Lema. He claims that he expected a wire transfer and knew nothing of the check and how it came to be deposited in his account. The issue on remand will be whether Lucas can be held responsible for the transfer of the stolen and altered check. Section
674.207(1) refers to the "transfer[ ]" of "an item." The definition of an "item" includes an "instrument." §
674.104(1)(i), Fla....
...Section
673.2031(1), Florida Statutes (2004), provides that "[a]n instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument." We see nothing in the code or section
674.207(1) which requires a customer to be the one who physically delivers or deposits a check into a bank account for the section to be applicable. On remand, BankAtlantic may attempt to tie Lucas to the deposit of the check by agency, conspiracy, or other similar theory. If BankAtlantic proves that Lucas is bound by a section
674.207(1) warranty, then it will establish Lucas's "strict contractual liability" to the bank, as to which the bank's negligence is no defense. Perez, 748 N.Y.S.2d at 393. Reversed and remanded. STONE and MAY, JJ., concur. NOTES [1] In its motion for rehearing, the bank correctly observes that its action in the trial court was based on section
674.207. We should not have relied on sections
673.4041 and
673.4161, Florida Statutes (2004), to decide this case in the original opinion, because the bank did not rely upon these statutes in the circuit court. [2] Section
674.207(1) has also been rewritten. Chapter 92-82, section 25, Laws of Florida, rewrote section
674.207, effective January 1, 1993. See §
674.207, Fla....
CopyPublished | District Court of Appeal of Florida | 59 U.C.C. Rep. Serv. 2d (West) 346, 2006 Fla. App. LEXIS 4967, 2006 WL 862903
...t of the altered check plus prejudgment interest. Lucas contends that summary judgment was inappropriate because his affidavit raised disputed issues of fact as to whether he was a “customer” who “transfer[red] an item” within the meaning of section
674.207(1), Florida Statutes (2004). We do not reach the issue under section
674.207, because the section
673.4161 transfer warranty is applicable under the undisputed facts of this case....
...ive defense. We therefore remand to the circuit court for further proceedings directed at that issue. Affirmed in part; reversed and remanded in part. STONE and MAY, JJ., concur. . The amended complaint stated that Count I was “brought pursuant to §
674.207,” Florida Statutes (2004). Section
673.4161, Florida Statutes (2004), also concerns transfer warranties, and is "virtually identical” to section
674.207. White and Summers, Uniform Commercial Code § 18-7 n. 11 (4th ed. 1995). There are two notable differences between the statutes. First, section
674.207 applies to all "items,” while section
673.4161 applies to "instruments.” Second, section
674.207(2) does not appear in section
673.4161; subsection (2) "places liability on a transferor as if the transferor had indorsed the item, whether or not the transferor actually indorsed the item.” White and Summers, at § 18-7 n....
CopyPublished | Florida 5th District Court of Appeal | 1994 WL 140738
...Any such right terminated when the payor bank made final settlement seven months before. Id. However, Sun Bank is not without a remedy. Although it is precluded from charging back, Sun Bank may still assert a breach of transfer warranty claim against Merrill Lynch under section 674.207, Florida *283 Statutes (1991)....
...Finally, we reject Sun Bank's contention that genuine issues of material fact exist precluding summary judgment. Specifically, Sun Bank asserts the issue of whether Berry's signature is authorized is significant. It argues that, if the existence of a forged or unauthorized signature is immaterial, then section 674.207, Florida Statutes (1991) regarding transfer warranties is meaningless....
...While this action had the effect of eliminating the comment from Florida Statutes Annotated, as previously noted, the same result is reached pursuant to section 674.213(1). [5] This section is the U.C.C.'s counterpart to section 674.212 of the Florida Statutes. [6] Section 674.207, Florida Statutes (1991) provides that when a customer or collecting bank receives payment for an item, the customer or collecting bank warrants to the payor bank that it has good title or is permitted to receive payment, it is unawar...
