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Bank’s Duty With Respect to Negligent Dishonoring of a Cashier’s Check 

The plaintiff’s sued in negligence based on the defendants’ dishonoring of a cashier’s check.  The Second Department affirmed the dismissal of the negligence counts:

The plaintiff’s first three causes of action were premised upon the theory that it suffered damages as a result of the defendants’ negligence. “To establish a cause of action sounding in negligence, a plaintiff must establish the existence of a duty on defendant’s part to plaintiff, breach of the duty and damages” (. As relevant here, “[t]he duty of a payor bank . . . to a noncustomer depositor of a check is derived solely from UCC 4-301 and 4-302” … . In this case, where the defendants were together alleged to be the payor bank (see UCC 4-105[b]) that was not also the depository bank (see UCC 4-105[a]), they were accountable for paying the amount of the cashier’s check, whether properly payable or not, if they “retain[ed] the item beyond midnight of the banking day of receipt without settling for it” (UCC 4-302[a]), or, if after authorizing a timely provisional settlement, they failed to revoke such settlement prior to making final payment and before the “[m]idnight deadline” (UCC 4-104[1][h]), by either returning the check, or sending written notice of dishonor or nonpayment (see UCC 4-301, 4-302). Thus, the only duty which the defendants owed to the plaintiff was to pay the check, return the check, or send notice of dishonor … . As the complaint failed to allege that, upon the defendants’ failure to pay the check, they breached their duty to either return the check or send notice of dishonor, the Supreme Court properly granted those branches of the defendants’ motion which were to dismiss the first three causes of action, all of which sounded in negligence.  Kenin Kerveng Tung, PC v JP Morgan Chase & Co, 2013 NY Slip Op 02223, 2011-11371, 2012-040089, Index No 11885/11, 2nd Dept, 4-3-13

 

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