Cheese & Grill Restaurant v. Wachovia Bank

• Decision Date: 24 October 2007
• Docket Number: No. 3D06-2672.,No. 3D06-1286.,3D06-2672.,3D06-1286.
• Citation: 970 So.2d 372
• Court: Florida District Court of Appeals
• Parties: CHEESE & GRILL RESTAURANT, INC., etc., Appellant, v. WACHOVIA BANK, N.A., etc., et al., Appellees.

970 So.2d 372

CHEESE & GRILL RESTAURANT, INC., etc., Appellant, v. WACHOVIA BANK, N.A., etc., et al., Appellees.

No. 3D06-2672.

No. 3D06-1286.

District Court of Appeal of Florida, Third District.

October 24, 2007.

Rehearing Denied November 21, 2007.

Manzini & Associates and Nicolas A. Manzini, for appellant.

Ruden, McClosky, Smith, Schuster & Russell and John H. Pelzer, Robin F. Hazel and Matthew S. Nelles, Ft. Lauderdale, for appellees.

Before COPE, RAMIREZ and SALTER, JJ.

SALTER, J.

Appellant, Cheese & Grill Restaurant, Inc. (Restaurant) sued Washington Mutual Bank (WAMU) and Wachovia Bank (Wachovia) in separate circuit court lawsuits for checking account losses sustained in a fraud by the Restaurant's bookkeeper. In the case against WAMU, the trial court granted WAMU's motion for summary judgment and a final order of dismissal, and the Restaurant appealed. In the later case against Wachovia, the same trial court dismissed with prejudice the Restaurant's complaint against Wachovia, and the Restaurant appealed. The two appeals were consolidated here under the latter case number.

We affirm each of the judgments below, finding that: (1) the conceded cause of the losses was the Restaurant's own bookkeeper; (2) the Restaurant failed to detect and report the misapplications within the time period mandated by the applicable Florida Uniform Commercial Code provision and the agreements between the Restaurant and WAMU; and (3) as to WAMU, the Restaurant failed to establish that any genuine issue of material fact precluded summary judgment. In the case against Wachovia, that bank was merely the collecting bank and was not subject to direct claims by the Restaurant as drawer.

In a nutshell, the Restaurant never established any genuine issue of material fact that its losses were anything other than an "inside job" by the Restaurant's own trusted bookkeeper.

I. The Fraud

The undisputed facts, as detailed in the Restaurant's complaints and forgery affidavit, establish that the Restaurant opened an account with WAMU in 1995. Between May 14, 1999, and March 22, 2002, checks were prepared by the bookkeeper and were represented by him to be payments for the Restaurant's payroll and sales taxes. They were signed for the maker by an authorized Restaurant signatory, not the bookkeeper.¹ The forgery affidavit further discloses that the bookkeeper was known or suspected to have committed the theft or unauthorized use of the checks, and that "he is in charge of the accounting records, accounts payable, and payroll." The Restaurant first became aware of the misapplications on July 10, 2002, upon hiring another accountant to perform an independent review, and that review established that the purported payroll and sales tax checks "were not applied to our account." The forgery affidavit identified the checks used by the bookkeeper in the embezzlement scheme by check number, payment date and dollar amount.

II. The Complaints Against WAMU

The Restaurant filed a complaint and amended it three times before the motion for summary judgment was filed. All were unverified and told a more complicated tale than the forgery affidavit. Paragraph Six of the third amended complaint claimed, for example, that the losses occurred as a result of WAMU's "carelessness and/or negligence and/or lack of ordinary care and/or through the intentional participation of one or more of its agents, employees or representatives acting as confederates of other tortfeasors, third parties (Plaintiff's former bookkeeper/accountant)...." No further specifics were provided, nor were any such specifics obtained by the Restaurant from the deposition of WAMU's fact witness on March 13, 2006, after WAMU filed a motion for summary judgment.

WAMU's motion for summary judgment established that monthly checking account statements were sent to the Restaurant during the periods in question, and that those statements showed the payment date, check number, and amount of each of the checks. WAMU's motion and affidavit also authenticated the WAMU "account disclosures and regulations" applicable to the account, setting forth the Restaurant's duties to retain control over all checks and "to promptly discover and report if any of them are missing in time to prevent misuse." The Restaurant also agreed to review the monthly statements and to report any error, forgery, alteration, unauthorized transaction, or other problem to WAMU within thirty days. The Restaurant agreed to assert any claim relating to any such matter within six months of the mailing of the statement reflecting the problem, and the Restaurant assumed "full responsibility for monitoring and reviewing the activity of [the Restaurant's] account and the work of [the Restaurant's] employees, agents, and accountants ... whether or not the statements/reports contain the items bearing an unauthorized signature or alteration."

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