Florida/Georgia Personal Injury & Workers Compensation

...Therefore, the Court concludes that MSB is liable for the face amount of the £ 20,253 bill. 2. Second Bill of Exchange As to the second bill, MSB was a payor bank. The liability of a payor bank for late return of an item is set forth in Florida Statutes § 674.302: Payor Bank's Responsibility for Late Return of Item....

...notice of dishonor until after its midnight deadline; or (2) any other properly payable item unless within the time allowed for acceptance or payment of that item the bank either accepts or pays the item or returns it and accompanying documents. Subsection 674.302(1) does not apply in this case because the bill is a documentary time draft rather than a " demand item other than a documentary draft." See, e.g., Union Bank of Benton, Arkansas v. First National Bank in Mt. Pleasant, Texas, 621 F.2d at 794. However, the provisions of subsection 674.302(2) are applicable if the bills are "properly payable." Id.; Memphis Aero Corporation v....

...The dispute between Pan Aqua and Kwik Blast which ultimately resulted in dishonor of both drafts involved the fitness of the goods rather than a lack of funds. Based upon these factors and the totality of the evidence produced at trial, the Court concludes that the second draft was a "properly payable" item. Under § 674.302(2), MSB was obligated "within the time allowed for acceptance or payment ... [t]o either accept[] or pay[] the item or return it and accompanying documents." The Court must next determine whether MSB's failure to either accept or return the second bill for over three months was a failure to act within the time allowed. Section 674.302(2) does not define "time allowed," and the cross reference to § 674.301 in the official comment is of little assistance since § 674.301 does not specify the time allowed for payment of documentary drafts by payor banks....

...he time allowed for acceptance or return under the Union Bank analysis of timely handling. The Court concludes that regardless of which mode of analysis is applied, MSB returned the bill in an untimely manner. Therefore, MSB is strictly liable under § 674.302(2) for the face amount of the £ 29,851 second bill of exchange....

...Itek Corporation, 721 F.2d 1317, 1320-1321 (11th Cir. 1983); Town of Longboat Key v. Carl E. Widell & Son, 362 So.2d 719, 723 (Fla. 2d DCA 1978); Fort Pierce Toyota, Inc. v. Wolf, 345 So.2d 348, 349 (Fla. 4th DCA 1977); Pre-judgment interest has consistently been awarded on UCC 4-302 (§ 674.302) claims in other jurisdictions....

...other property. See, e.g., Kittel v. Kittel, 210 So.2d 1 (Fla.1968). Of these three theories, the only arguable basis for an award of attorney's fees is that the legislature intended to include authorization for attorney's fees in § 674.103(5) and § 674.302....

...e former Fifth Circuit in dictum indicated that § 674.103 "arguably contemplate[s]" awards of attorney's fees. Perkins State Bank v. Connolly, 632 F.2d at 1313. Courts in other jurisdictions have refused to award attorney's fees under UCC § 4-302 (§ 674.302)....

...Based upon the statute, official comment and analogous case law, the Court concludes that under Florida law attorney's fees are not included in consequential damages under § 674.103(5). Furthermore, an award of attorney's fees would not be appropriate in this case because MSB did not act in bad faith. Upon review of § 674.302, and the official comment, the Court concludes that attorney's fees also are not available as an element of damages under that section....

...is obligated to accept. He may be liable in tort or upon any other basis because of his representation that he has accepted, or that he intends to accept. The section leaves unaffected any liability of any kind apart from the instrument. Fla. Stat. § 674.302 provides: In the absence of a valid defense such as breach of a presentment warranty (§ 674.207(1)), settlement effected or the like, if an item is presented on and received by a payor bank the bank is accountable for the amount of: (1) A...

...For one thing, the title was transferred to Wise's customer a week after the draft was presented to the appellant bank, and by the time the bank acted the property was beyond the reach of Bob Lincoln, Inc. Basically the case is one of failure to comply with Fla. Stat. § 674.302, F.S.A., for which the bank was properly held responsible....

...We described the instrument in our original opinion as a sight draft, to make the distinction clear. It was a "draft" as that word is defined in Fla. Stat. § 673.104(2) (1971), F.S.A., and a "demand item other than a documentary draft" within the meaning of Fla. Stat. § 674.302 (1971), F.S.A....

...§ 674.103(5) (1993); U.C.C. § 4-103(5) (1990). Second, Bufman claims that, as a depositary and payor bank, Bank M is accountable for the amount of the checks because the bank failed to pay the checks or give him notice of dishonor. See Fla.Stat.Ann. § 674.302(1)(a) (1993); U.C.C....

...364, 369 , 54 L.Ed.2d 376 (1977) (holding that a judgment may be affirmed on any ground supported by the law and the record that does not expand the relief granted). 33 Bufman's second claim for check mishandling is not facially meritless under Florida law. Section 674.302 states the responsibilities of a payor bank when it is presented with an item: 34 (1) If an item is presented to and received by a payor bank, the bank is accountable for the amount of: 35 (a) A demand item, ......

...king day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline .... 6 36 Bufman alleges all of the elements of a claim under § 674.302: that he presented the checks to Bank M, that the checks were demand items, that Bank M was the payor and depositary bank with respect to these checks, and that the bank failed to pay the checks or return them or give notice of dishonor by the midnight deadline. Because Bufman's § 674.302 claim is not facially groundless, we will decide whether it is barred by D'Oench....

...'s account for the balance due on the Bufman note. The FDIC argues that the claim is based on an agreement, the transmittal letter, that was not included in the bank's records, and is related to the Bufman note. Bufman disagrees, contending that his § 674.302 claim is based on state law, and is unrelated to the transmittal letter....

...ceipt for his alleged deposit, Bufman lent himself to a scheme likely to mislead bank examiners. See D'Oench, 315 U.S. at 460 , 62 S.Ct. at 681 . But even if Bufman had taken this precaution, which is not a prerequisite to the bank's liability under § 674.302, the bank's record of the transaction would not necessarily satisfy the requirements of § 1823(e). In any case, this argument fails because Bufman's claim is not based on any agreement that is not part of the bank's records. 39 Bufman's § 674.302 claim is based on a routine agreement that is part of the bank's records: the contract of deposit that established his checking account with Bank M....

...See Fla.Stat.Ann. § 674.103(1). 8 One of the terms of this contract that is implied by Florida law is the obligation of the depositary bank, when it is also the payor bank, to take timely action following the presentment of a demand item. Fla.Stat.Ann. § 674.302....

...This rule encourages the acceptance of checks as a method of payment, because it assures that any insufficiency of the drawer's funds will be promptly communicated to the payee. WHITE & SUMMERS, UNIFORM COMMERCIAL CODE, § 17-2 at 719 (3d ed. 1988). Because Bufman's § 674.302 claim is based on state law and an agreement that is in the bank's records, it is not barred by D'Oench....

...Capital City First National Bank v. Lewis State Bank, 341 So.2d 1025, 1034 (Fla.Dist.Ct.App.1977), cert. denied, 357 So.2d 186 (Fla.1978). The district court did not reach the issue of whether summary judgment was appropriate on the merits of Bufman's § 674.302 claim, and the court did not make any factual finding as to whether a valid presentment occurred....

...Bufman's payment defense is closely related to his claim that the bank failed to give him timely notice after dishonoring the checks. According to Bufman, when Bank M failed to give him notice of dishonor by its midnight deadline, the bank became "accountable" for the amount of the checks under § 674.302....

...51 Bufman's argument that the Bufman note was satisfied before the FDIC acquired it is flawed because, even if he can show on remand that the bank was accountable under Florida law for the value of the unreturned checks, this accountability did not extinguish his obligation on the Bufman note. Under § 674.302, a payor bank is accountable for the amount of a check, assuming the absence of a valid defense, if it does not pay, return, or give notice of dishonor of presented checks....

...11 52 Because Bufman's defense to the FDIC's suit on the Bufman note lacks merit, summary judgment for the FDIC/Corporate was not error. IV. CONCLUSION 53 For the foregoing reasons, we affirm the grant of summary judgment for the FDIC/Receiver on all of Bufman's claims except his § 674.302 claim and his civil theft claim. We hold that the § 674.302 claim against the FDIC/Receiver is not barred by D'Oench, and that the FDIC failed to meet its burden on its motion for summary judgment on the civil theft claim....

...("SCADIF"), has sued First Union National Bank ("First Union"), alleging that First Union is strictly liable to SCADIF in the amount of $3,215,083 because First Union failed to pay or return a check for that amount before the midnight deadline imposed by section 674.302, Florida Statutes....

...During a six-day bench trial, which began on December 13, 2001, this Court heard the evidence, considered the law and the arguments before it, and now finds that SCADIF sent the check for collection rather than for payment and that the midnight deadline rule contained in section 674.302 does not apply to this transaction....

...do not fall into the definition of documentary draft set forth in section 674.104(f), Florida Statutes, the Check could only have been recognized under Florida law as a demand item, subject to the midnight deadline and strict accountability rule of section 674.302(1)(a)....

...Inasmuch as an item sent to a bank for collection is not presented to the bank for payment, by operation of the definitional provisions of section 674.105, Florida Statutes, a bank receiving a check for collection is not a payor bank, but rather a collecting bank. Section 674.302(1) specifically *1367 limits its application of the midnight deadline and strict accountability rule to payor banks....

...This Court agrees that the evidence adduced at trial and the applicable law fully support Professor *1368 Clark's opinion that the Check and collection letter together constituted a submission for collection not subject to the midnight deadline rule of section 674.302, Florida Statutes....

...m to a branch bank rather than to First Union's International Operations. I find that SCADIF is bound by the actions of Banque Francaise in transmitting the Check for collection. Therefore, as a matter of law, the midnight deadline rule contained in section 674.302, Florida Statutes, does not apply to this transaction....

...THE CHECK WAS NOT DELIVERED TO THE BRANCH AT WHICH THE ACCOUNT WAS MAINTAINED. There is an alternative, but equally sufficient, reason to hold that the midnight deadline rule does not apply. The midnight deadline rule on its face applies only to payor banks. Even if the Check had been presented for payment, section 674.302 applies only to presentments to a "payor bank." Under Florida law, where a bank has multiple branches, each can be a separate bank for midnight deadline purposes and a branch where the account was not opened or maintained is not a "payor" bank for midnight deadline purposes....

...[21] The effect of Banque Francaise's delivery of the Check to the City Center branch, rather than to the St. Armands branch at which the Ameriplex account was opened and maintained, is to make the City Center branch a collecting bank. § 674.105(5), Fla. Stat. A collecting bank is not subject to section 674.302's midnight deadline and strict accountability rule *1376 which applies only to payor banks [22] Collecting banks have obligations to transmitting banks and the payees of items, but that obligation is found in section 674.202, Florida...

...The evidence established that in Florida (and the United States) a check and collection letter received together in the manner as in the present case, from a foreign bank is a clean check collection to be processed in accordance with the instruction in the collection letter. [10] The midnight deadline rule is codified at section 674.302, Florida Statutes: 674.302 Payor bank's responsibility for late return of item.— (1) If an item is presented to and received by a payor bank, the bank is accountable for the amount of: (a) A demand item, other than a documentary draft, whether properly payable or not,...

...SCADIF's sending the Check for collection from Ameriplex might not have violated the condition under which Ameriplex delivered the Check, but presentment for payment clearly would have; it would constitute a fraudulent presentment, rendered ineffective by application of section 674.302(2), Florida Statutes....

...cedures do not vary unreasonably from general banking usage not disapproved by this chapter or chapter 674. [24] If this transaction were not an international check collection exempt from the midnight deadline and strict accountability provisions of section 674.302, Florida Statutes, the receipt by International Operations could arguably start a new midnight deadline....

...wer; in Count II that the Bank of Miami, by failing to pay or return the checks or to send notice of dishonor before midnight on its next banking day following the banking day on which it received the checks, violated the "midnight deadline" rule, §§ 674.302, 674.104(1)(h), Fla....

...f Miami of any obligation to collect on these particular checks. The judgment as to these counts is therefore reversed. We also reverse the summary judgment on Count II. This count alleges that the Bank of Miami is liable to Banco Beni for violating Section 674.302, Florida Statutes (1979), which provides: "In the absence of a valid defense such as breach of presentment warranty (s....

...Count I alleged that the Bank was liable for the checks that were paid on February 27 and March 6 and returned as forgeries on March 15. FWCC also alleged the Bank was liable for the six checks that were returned on March 7 for insufficient funds. FWCC sued under section 674.302(1), Florida Statutes (1993), which states that a bank is accountable for the amount of a check deposited with it, "whether properly payable or not," if it does not return the check prior to midnight of the banking day of receipt....

...he three checks received by the Bank on March 6 which were returned for insufficient funds because the undisputed evidence showed that these three checks were sent to the address that was not yet operational. The trial court did not err in so doing. Section 674.302(1) states that a bank is accountable for the amount of a check if it "does not ... return the item or send notice of dishonor" by the midnight deadline. Section 671.201, Florida Statutes (1993), contains the general definitions of the Uniform Commercial Code of which section 674.302 is a part....

...Bank liable for the amount of those checks. The jury also found the Bank liable for checks received by the Bank on February 27 and March 6, later determined to be forgeries, and which the Bank failed to return by the midnight deadline as mandated by section 674.302(1)....

...§ 674.103(5) (1993); U.C.C. § 4-103(5) (1990). Second, Bufman claims that, as a depositary and payor bank, Bank M is accountable for the amount of the checks because the bank failed to pay the checks or give him notice of dishonor. See Fla.Stat. Ann. § 674.302(1)(a) (1993); U.C.C....

...364, 369 , 54 L.Ed.2d 376 (1977) (holding that a judgment may be affirmed on any ground supported by the law and the record that does not expand the relief granted). Bufrnan’s second claim for check mishandling is not facially meritless under Flori *1027 da law. Section 674.302 states the responsibilities of a payor bank when it is presented with an item: (1) If an item is presented to and received by a payor bank, the bank is accountable for the amount of: (a) A demand item, ......

...the banking day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline_ 6 Bufman alleges all of the elements of a claim under § 674.302: that he presented the checks to Bank M, that the checks were demand items, that Bank M was the payor and depositary bank with respect to these checks, and that the bank failed to pay the checks or return them or give notice of dishonor by the midnight deadline. Because Bufman’s § 674.302 claim is not facially groundless, we will decide whether it is barred by D’Oench....

...account for the balance due on the Bufman note. The FDIC argues that the claim is based on an agreement, the transmittal letter, that was not included in the bank’s records, and is related to the Bufman note. Bufman disagrees, contending that his § 674.302 claim is based on state law, and is unrelated to the transmittal letter....

...t for his alleged deposit, Bufman lent himself to a scheme likely to mislead bank examiners. See D’Oench, 315 U.S. at 460 , 62 S.Ct. at 681 . But even if Bufman had taken this precaution, which is not a prerequisite to the bank’s liability under § 674.302, the bank’s record of the transaction would not necessarily satisfy the requirements of § 1823(e). In any case, this argument fails because Bufman’s claim is not based on any agreement that is not part of the bank’s records. Bufman’s § 674.302 claim is based on a routine agreement that is part of the bank’s records: the contract of deposit that established his checking account with Bank M....

...See Fla.Stat.Ann. *1028 § 674.103(1). 8 One of the terms of this contract that is implied by Florida law is the obligation of the depositary bank, when it is also the payor bank, to take timely action following the presentment of a demand item. Fla.Stat.Ann. § 674.302....

...This rule encourages the acceptance of checks as a method of payment, because it assures that any insufficiency of the drawer’s funds will be promptly communicated to the payee. White & Summmers, Uniform Commercial Code, § 17-2 at 719 (3d ed. 1988). Because Bufinan’s § 674.302 claim is based on state law and an agreement that is in the bank’s records, it is not barred by D’Oench....

...Capital City First National Bank v. Lewis State Bank, 341 So.2d 1025, 1034 (Fla. Dist.Ct.App.1977), cert. denied, 357 So.2d 186 (Fla.1978). The district court did not reach the issue of whether summary judgment was appropriate on the merits of Bufinan’s § 674.302 claim, and the court did not make any factual finding as to whether a valid presentment occurred....

...Bufman’s payment defense is closely related to his claim that the bank failed to give him timely notice after dishonoring the cheeks. According to Bufman, when Bank M failed to give him notice of dishonor by its midnight deadline, the bank became “accountable” for the amount of the checks under § 674.302....

...Bufman’s argument that the Bufinan note was satisfied before the FDIC acquired it is flawed because, even if he can show on remand that the bank was accountable under Florida law for the value of the unretumed checks, this accountability did not extinguish his obligation on the Bufman note. Under *1030 § 674.302, a payor bank is accountable for the amount of a check, assuming the absence of a valid defense, if it does not pay, return, or give notice of dishonor of presented checks....

...11 Because Bufman’s defense to the FDIC’s suit on the Bufman note lacks merit, summary judgment for the FDIC/Corporate was not error. IV. CONCLUSION For the foregoing reasons, we affirm the grant of summary judgment for the FDIC/Receiver on all of Bufman’s claims except his § 674.302 claim and his civil theft claim. We hold that the § 674.302 claim against the FDIC/Receiver is not barred by D’Oench, and that the FDIC failed to meet its burden on its motion for summary judgment on the civil theft claim....