Crossman v. RBS Citizens
| Docket Number | 23-CV-01836 |
| Decision Date | 16 August 2023 |
| Citation | 2023 Vt Super 081601 |
| Parties | Paul Crossman, Plaintiff v. RBS Citizens, National Association, Defendants |
| Court | Superior Court of Vermont |
DECISION ON MOTION
Plaintiff Paul Crossman has filed this action for damages against Defendant RBS Citizens, National Association ("Citizens") asserting claims for violation of Vermont's Uniform Commercial Code ("UCC") breach of contract, and unjust enrichment. Plaintiff is represented by Tristan C. Larson, Esq. Defendant is represented by Jacqueline A. Crockwell, Esq. Mr. Crossman alleges that in 1992, he was issued four cashier's checks totaling $20,000 from Marble Bank upon closing his account there. Mr. Crossman put the four checks in a safety deposit box and forgot about them until 2022. By that time, Marble Bank had merged into Citizens. When Crossman attempted to cash the checks, Citizens refused to honor them. Pursuant to Rule 12(b)(6) of the Vermont Rules of Civil Procedure Citizens moves to dismiss the Complaint, arguing Crossman's UCC claim is barred by the applicable statute of limitations and the breach of contract and unjust enrichment claims are displaced by the UCC.[1] Crossman opposes the motion, asserting that under the UCC, the limitations period did not begin to run until presentation of the checks and that his common law claims remain viable despite the provisions of the UCC. For the reasons discussed below Defendant's motion to dismiss is GRANTED IN PART and DENIED IN PART.
In reviewing a motion to dismiss, the Court accepts "all facts alleged in the complaint as true and in the light most favorable to the nonmoving party." Coutu v. Town of Cavendish, 2011 VT 27, ¶ 4; see also Winfield v. State, 172 Vt. 591, 593, 779 A.2d 649, 652 (2001) (when considering a motion to dismiss under Rule 12(b)(6) the court must "assume that all well pleaded factual allegations in the complaint are true, as well as all reasonable inferences that may be derived therefrom"). However, to the extent a party asserts "conclusory allegations or legal conclusions masquerading as factual conclusions," the Court is not required to accept them as true. Rodrigue v. Illuzzi, 2022 VT 9, ¶ 33 (quotation omitted). "The purpose of a motion to dismiss for failure to state a claim upon which relief can be granted is to test the law of the claim, not the facts that support it." Samis v. Samis, 2011 VT 21, ¶ 9. "Thus, when considering a Rule 12(b)(6) motion, the Court's attention is directed toward determining whether the bare allegations of the complaint constitute a statement of a claim under V.R.C.P. 8(a)." Bethel v. Mount Anthony Union High Sch. Dist., 173 Vt. 633, 634, 795 A.2d 1215, 1217 (2002) (quotation omitted). Dismissal is proper when there is no set of facts and circumstances alleged in the complaint which, if proved, would entitle the plaintiff to relief. Samis, 2011 VT 21, ¶ 9.
Citizens argues that under the version of the UCC in effect in 1992 (when the cashier's checks were issued), Crossman's claim is time-barred because the cause of action accrues on the date of issue, and any claim must be brought within six years of that date. Crossman counters that his claim is timely because it is asserted "against a drawer of a draft" and thus, the cause of action accrues when the check is presented and dishonored.
As an initial matter, the Court must determine not only which statute of limitations applies, but which version of the UCC applies. Vermont's UCC was amended, effective in 1995. The new version, still applicable today, clearly provides that an "action to enforce the obligation of . . . the issuer of a teller's check, cashier's check, or traveler's check must be commenced within three years after demand for payment is made." 9A V.S.A. § 3-118(d) (2011 repl. ed.). If this provision governs Crossman's claim, then the instant action is timely as having been filed within the three-year limitations period.
However, before 1995, the UCC provided that a "cause of action against a maker or an acceptor accrues . . . in the case of a demand instrument upon its date or, if no date is stated, on the date of issue." 9A V.S.A. § 3-122(1)(b) (1992) (repealed 1995). On the other hand, a "cause of action against a drawer of a draft or an indorser of any instrument accrues upon demand following dishonor of the instrument." Id. § 3-122(3) (). Thus, if § 3-122(1)(b) applies to Crossman's claim, then his cause of action accrued in 1992, and this case would be barred by § 511's general six-year statute of limitations for civil actions. See 12 V.S.A. § 511 (). But if § 3-122(3) applies, then the action would also be timely, because the statute of limitations is not triggered until payment is demanded on the check.[2]
The Vermont Supreme Court has made clear that "retroactive application of limitations law is . . . barred by 1 V.S.A. § 214(b)." Stewart v. Darrow, 141 Vt. 248, 252, 448 A.2d 788, 790 (1982); see also Curran v. Marcille, 152 Vt. 247, 250, 565 A.2d 1362, 1364 (1989) ("[A] statute affecting legally existing rights should not be construed to operate retrospectively.").
Section 214(b) states that the "amendment or repeal of an act or statutory provision . . . shall not: . . . (2) affect any right, privilege, obligation, or liability acquired, accrued, or incurred prior to the effective date of the amendment or repeal." Thus, under § 214(b), only the statute in effect at "the time the plaintiff['s] claim accrued . . . can govern the timeliness of the suit." Stewart, 141 Vt. at 253. Accordingly, the Court must determine whether Crossman's cause of action accrued under the UCC existing in 1992, or after 1995.
The answer to this question turns on whether, in 1992, a cashier's check was treated as a draft or a note (that is, a promise to pay). See 9A V.S.A. § 3-104(2)(b) (1992) (repealed 1995) ("A writing which complies with the requirements of this section is . . . (b) a 'check' if it is a draft drawn on a bank and payable on demand; . . . [or] (d) a 'note' if it is a promise other than a certificate of deposit."). The 1992 UCC gives no clear definition of a cashier's check, unlike the current version, which states: "'Cashier's check'" means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank." 9A V.S.A. § 3-104(g) (2011 repl. ed.). However, the consensus view at the time appears consistent with the current definition. See, e.g., Santos, 451 A.2d at 407 (). While this would appear to fall within the definition of either a draft or a note (promise), § 3-118(a) of the 1992 UCC clears up any ambiguity. It provides: "A draft drawn on the drawer is effective as a note." 9A V.S.A. § 3-118(a) (1992) (repealed 1995). Thus, as the comments to the current UCC confirm, "[f]ormer Section 3-118(a) treated a cashier's check as a note." 9A V.S.A. § 3-103, cmt. 2 (2011 repl. ed.) ( that despite changes in modern banking practice, "it is technically more correct to treat a cashier's check as a promise by the issuing bank to pay rather than an order to pay"); see also id. § 3-412, cmt. 1 ("Under former Section 3-118(a), since a cashier's check or other draft drawn on the drawer was 'effective as a note,' the drawer was liable under former Section 3-413(1) as a maker.").[3]
Having determined that the 1992 UCC treated a cashier's check as a note, the Court concludes that § 3-122(1)(b) applies to Crossman's claim against the maker of the note (Marble Bank, now Citizens). Under that section, his cause of action accrued "on the date of issue" of the cashier's check in 1992. See 9A V.S.A. § 3-122(1)(b) (1992) (repealed 1995). Because Crossman's cause of action to enforce the cashier's checks accrued when he received them in 1992, 1 V.S.A. § 214(b) bars retroactive application of the amended statute of limitations contained in the 1995 version of § 3-118(d). Under § 511's general six-year statute of limitations for civil actions, Crossman's time to assert a claim to enforce the cashier's checks expired in 1998. Therefore, his UCC claim asserted here must be dismissed as time-barred.
Citizens also argues that Crossman's claims for breach of contract and unjust enrichment fail as a matter of law because they are displaced by the UCC. As the Vermont Supreme Court has observed, the UCC See Frangiosa v. Kapoukranidis, 160 Vt 237, 243, 627 A.2d 351, 354 (1993) (citation omitted), superseded by statute on other grounds, Uniform Commercial Code, 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995, as recognized in, Alpine Haven Prop. Owners Ass'n v. Deptula, 2003 VT 51, ¶ 18. Both the current and 1992 version of the UCC generally provide that "[u]nless displaced by the particular provisions of this title, the principles of law and equity . . . supplement its provisions." 9A V.S.A. § 1-103(b) (2011 repl. ed.); 9A V.S.A. § 1-103 (1992) (repealed 1995). However, the law is also clear that "unless a specific provision of the Uniform Commercial Code provides otherwise . . ., [the UCC] preempts principles of common law and equity that are inconsistent with either its provisions or...
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