2014 IL App (1st) 133645
Ill. App. Ct.2015Background
- Aliaga Medical Center v. Harris Bank N.A. involves bank honoring a check labeled void after 90 days under a deposit-account agreement.
- Aliaga opened accounts in 2003 and 2010; agreements required stop payments with specific information, deadlines, and fees.
- Aliaga did not issue a stop-payment order or timely dispute the payment.
- The December 2010 statement showed the check had been honored; Aliaga did not notify within 60 days or sue within one year as required by the agreement.
- The trial court dismissed the amended complaint under section 2-619 for contract and UCC-based defenses; the appellate court affirmed.
- The central issue is whether the bank properly paid on a stale/void-notated check given the agreement terms and timing requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether stop payment provisions control the outcome | Aliaga argues UCC controls, not the agreement | Harris Bank relies on the agreement's explicit stop-payment requirements | Yes; stop-payment terms in the agreement control |
| Whether the “void after 90 days” language overrides the agreement | Aliaga asserts notation negates payment duty | Bank may honor without stop payment due to agreement terms | No; void notation ineffective absent proper stop order |
| Whether the 60-day notice requirement bars suit | Aliaga claims UCC tolerance; not bound by 60 days | Agreement-modified notice period governs | Yes; untimely under the 60-day provision |
| Whether the one-year limitation in the contract precludes the suit | Aliaga argues UCC 4-111 should apply | Agreement one-year limit applies and bars suit | Yes; suit untimely under one-year term |
| Whether the agreement is unconscionable under 4-111 | Aliaga claims procedural unconscionability | No evidence of unconscionability; terms reasonable | No; agreement enforceable; not unconscionable |
Key Cases Cited
- Napleton v. Great Lakes Bank, N.A., 408 Ill. App. 3d 448 (2011) (bank customer’s timely notice requirement modified by agreement; dismissal affirmed)
- Kinkel v. Cingular Wireless, LLC, 357 Ill. App. 3d 556 (2005) (unconscionability requires both procedural and substantive elements)
- Symanski v. First National Bank of Danville, 242 Ill. App. 3d 391 (1993) (bank-customer relationship governed by express contract)