52 So. 3d 313
La. Ct. App.2010Background
- IHS alleges 108 fraudulent checks drawn on Chase were cashed at Abe's Grocery and then deposited to Jeff Davis Bank for collection and paid from Chase.
- Jeff Davis Bank moved to dismiss claiming no cause of action against a depositary/collecting bank under Louisiana law.
- UCC displacement applies to negligent acceptance/payment/presentment of forged checks and displaces traditional negligence claims against banks.
- Plaintiff argues Jeff Davis Bank owes a presentment warranty under La.R.S. 10:3-417 and seeks related relief.
- Court held the petition fails to state a presentment warranty claim and that the negligence-based relief is displaced by the UCC; dismissal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a presentment warranty claim under La.R.S. 10:3-417 against Jeff Davis Bank? | IHS seeks warranty relief for presented checks. | Bank disputes applicability; no presentment against a drawee/drawer under the cited sections. | No; petition lacks necessary allegations (drawee dishonor or presentation to drawer) for presentment warranty. |
| Does the UCC displacement bar IHS's negligence-based claims against Jeff Davis Bank? | Negligence-based claims survive notwithstanding older law. | UCC displacement displaces negligent acceptance/presentment claims against a depositary/collecting bank. | Yes; negligence claims are displaced by the UCC; no actionable claim against Jeff Davis Bank. |
Key Cases Cited
- Louisiana Paddlewheels v. Louisiana Riverboat Gaming Com'n, 646 So.2d 885 (La. 1994) (peremptory exception of no cause of action tests whether law provides a remedy)
- Barrie v. V.P. Exterminators, Inc., 625 So.2d 1007 (La. 1993) (de novo review of a ruling on no cause of action)
- Finova Capital Corp. v. IT Corp., 774 So.2d 1129 (La.App. 2 Cir. 2000) (displacement principles under UCC)
- Colonial Bank v. Marina Seafood Market, Inc., 425 So.2d 722 (La. 1983) (bank liable for forged instrument against customer)
- Marx v. Whitney Nat. Bank, 713 So.2d 1142 (La. 1998) (fraudulent alteration remedies and payor bank responsibilities)