Charmglow Products v. MITCHELL STREET STATE BANK
| Decision Date | 10 June 1988 |
| Docket Number | Civ. A. No. 86-C-1207. |
| Citation | 687 F. Supp. 448 |
| Parties | CHARMGLOW PRODUCTS, INC., Plaintiff, v. MITCHELL STREET STATE BANK, First Wisconsin Northwestern National Bank of Milwaukee, and Hambro, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Fred A. Erchul, II, Lichtsinn, Haensel, Bastian, Erchul & Crocker, Milwaukee, Wis., and Donald Flayton, Wildman, Harrold, Allen & Dixon, Chicago, Ill., for plaintiff.
Thomas L. Shriner, Jr., Brian W. McGrath, Foley & Lardner, Milwaukee, Wis., for First Wisconsin Northwestern Nat. Bank.
Randall L. Nash, Smith & O'Neil, Milwaukee, Wis., for Mitchell Street State Bank.
Michael J. Cramer, Cunningham, Lyons, Steele & Cramer, Milwaukee, Wis., for Hambro.
Plaintiff Charmglow Products, Inc. ("Charmglow") alleges that defendant First Wisconsin Northwestern National Bank ("FWN") of Milwaukee has converted the proceeds of certain checks in violation of Wis.Stats. § 403.419. FWN has moved for summary judgment and Charmglow has opposed the motion. The court has considered the parties' positions and will deny defendant FWN's motion for summary judgment.
The facts relevant to consideration of this motion are undisputed. In 1985, Johnson Energy Systems, Inc. was in the business of manufacturing and selling woodburning stoves. On or about August 2, 1985, Charmglow purchased the assets of Johnson Energy Systems, Inc., and Charmglow acquired the name Johnson Energy Systems. Johnson Energy Systems, Inc. changed its name to JES Inc. On or about August 7, 1985, JES Inc. opened a new checking account at FWN for a new company, Hambro, Inc. Hambro did business as The JES Co.
FWN was aware that negotiations were taking place between Charmglow and Johnson Energy Systems; however, FWN did not know what was sold to Charmglow or when it was sold (Deposition of Errol Hohmann, pp. 31-32). The old account for Johnson Energy Systems at FWN remained open after the sale.
Charmglow, pursuant to its right to use the name Johnson Energy Systems, began doing business formerly done by Johnson Energy Systems under the name Johnson Energy/Charmglow. Charmglow notified the customers of Johnson Energy Systems of the change in ownership, and purchase invoices displayed the company's new name. However, Charmglow's customers did not immediately adjust to the change and, as a result, several checks intended to pay Charmglow were received and cashed by The JES Co. (Motion for Summary Judgment, Exhibit F).
Charmglow's claim against FWN involves 23 checks written between October 9, 1985 and January 24, 1986. Four checks have not been produced. Of the remaining nineteen checks, eleven are made payable only to Johnson Energy Systems and eight are made jointly payable to Johnson Energy Systems and Charmglow. Nine of these checks were never delivered to Charmglow. All of the checks were endorsed by The JES Co. and deposited into The JES Co.'s account (Opposition to Summary Judgment, Exhibit 6, Motion for Summary Judgment, Exhibit D). The owners of The JES Co. were Howard, Arlyn and Melvin Johnson who were long-standing customers of FWN. Prior to the sale of the assets of Johnson Energy Systems to Charmglow, Johnson Energy Systems used a logo with the acronym JES. FWN states that it viewed JES and Johnson Energy Systems as interchangeable (Affidavit of Errol Hohmann, ¶ 8, Affidavit of Arlyn Johnson).
FWN argues that Charmglow does not have standing to sue for conversion for the nine checks that were delivered to Johnson Energy Systems and not to Charmglow. FWN argues that with regard to the remaining checks, it was commercially reasonable for FWN to cash the checks as endorsed and that the checks which Charmglow has not produced to date should not be considered. FWN also argues that Charmglow should be estopped from asserting its claim because Charmglow did not notify FWN of its claim for six months after the last check was cashed.
Charmglow argues that it has standing to sue for conversion on all of the checks because delivery is not a prerequisite for a suit for conversion. Charmglow further argues that it was not commercially reasonable for FWN to cash the checks as endorsed. Finally, Charmglow contends that it is not estopped from suing for conversion and that Charmglow can still sue for conversion on the checks it has not yet produced because FWN retains copies of these checks and their production has been sought.
This court must first determine...
To continue reading
Request your trial
-
State v. Barclays Bank of New York, N.A.
...[S.D.N.Y.].4 The only other cases cited by plaintiff are distinguishable or do not support its contention: Charmglow Prods. v. Mitchell St. State Bank, 687 F.Supp. 448 [E.D.Wis.1988] [checks given to a nonagent third party either in its capacity as sole payee with intended delivery to plain......
-
Lund v. Chemical Bank
...as plaintiff's copayee." Id. at 539 n. 4, 561 N.Y.S.2d at 700 n. 4, 563 N.E.2d at 14 n. 4 (distinguishing Charmglow Products v. Mitchell St. State Bank, 687 F.Supp. 448 (E.D.Wis.1988)). As regards this factor, Rubin was neither the payee nor co-payee of the Check, and LI has presented no ev......
-
Florida Nat. Bank v. Isaac Industries, Inc.
...question is still present as to whether the bank breached the commercially reasonable standard. See Charmglow Prods., Inc. v. Mitchell St. State Bank, 687 F.Supp. 448, 450 (E.D.Wis.1988). As to Isaac's appeal, the trial court properly dismissed with prejudice the negligence counts against t......