Dalton Point, L.P. v. Regions Bank, Inc.

• Court: Georgia Court of Appeals
• Writing for the Court: Barnes
• Citation: Dalton Point, L.P. v. Regions Bank, Inc., 651 S.E.2d 549, 287 Ga. App. 468 (Ga. App. 2007)
• Decision Date: 10 September 2007
• Docket Number: No. A07A1275.,A07A1275.
• Parties: DALTON POINT, L.P. v. REGIONS BANK, INC.

287 Ga. App. 468

651 S.E.2d 549

DALTON POINT, L.P. v. REGIONS BANK, INC.

No. A07A1275.

Court of Appeals of Georgia.

September 10, 2007.

Avrett, Ponder & Withrock, Robert M. Withrock, Dalton, for appellant.

Womble, Carlyle, Sandridge & Rice, Adam S. Katz, Atlanta, for appellee.

BARNES, Chief Judge.

Dalton Point, L.P. sued Regions Bank, Inc., seeking reimbursement for money its bookkeeper, Patricia Page, had embezzled from the limited partnership's bank account over a four-year period. Dalton Point contended the bank was liable because it had notice that the bookkeeper breached her fiduciary duty to the company. The bank denied liability and filed a third-party complaint against Page. The trial court denied summary judgment to the company and granted it to the bank, and Dalton Point appeals. For the reasons that follow, we affirm the trial court.

On appeal we review the trial court's grant of summary judgment de novo to determine whether the evidence, viewed in the light most favorable to the nonmoving party, demonstrates a genuine issue of material fact. Summary judgment is proper only when no issue of material fact exists and the moving party is entitled to judgment as a matter of law. Ford v. Bank of America Corp., 277 Ga.App. 708, 627 S.E.2d 376 (2006). When reviewing the grant or denial of a motion for summary judgment, this court conducts a de novo review of the law and the evidence. Wachovia Bank v. Moody Bible Institute etc., 283 Ga.App. 488, 489, 642 S.E.2d 118 (2007).

So viewed, the record shows that, when Dalton Point opened its account with Regions Bank, the signatory card was signed by limited partner Ronald Ralston and by bookkeeper Page. A Certificate of Resolution signed by Ralston and Page and filed with the bank contained the following language:

RESOLVED, that all drafts, checks and other items for the payment of money from the accounts identified above shall be signed by any 1 of the following: Ronald G. Ralston, Limited Partner; Patricia H. Page, Bookkeeper.

* * *

RESOLVED, that the Bank is authorized to honor all drafts, checks, or other items or instructions for payment or transfer from a deposit account even though drawn, endorsed or otherwise payable to a person identified above, and whether presented for cash or for credit to the account of that person or another person, or in payment of an individual obligation of that person or another person, and the Bank need make no inquiry concerning such withdrawals or dispositions of the money, items or credit given therefor.

Dalton Point owed monthly payments of $23,089.86 to Regions Bank for a bank loan. Page owed monthly payments of $900 to the bank for a personal loan. From 2001 to December 2005, Page wrote a total of 48 monthly checks to Regions Bank on Dalton Point's checking account, each one for either $23,889.86 or $23,989.86 and presented them to one of twenty different Regions Bank tellers. The teller then gave Page a cashiers check for $23,089.86, the amount due on Dalton Point's loan, and either cash or a second cashiers check for the remaining $800 or $900. Page used the first check to make the payment on Dalton Point's loan and usually used the second cashiers check to make the monthly payment on her personal loan. Dalton Point discovered in 2006 that Page was using its funds to pay her loan and sought repayment of that money from the bank. The bank declined to pay because Page was an authorized signatory on the account.

Dalton Point filed suit seeking $66,627.75 and attorney fees. The bank responded that, besides Page being a signatory on the account, Dalton Point's Certificate of Resolution specifically gave the bank permission to take the actions it took. Dalton Point moved for summary judgment, attaching the affidavit of limited partner Ronald Ralston in which he stated that neither he nor the company ever gave Page permission to pay her personal loan from the company funds. Regions Bank also filed a motion for summary judgment, introducing the Certificate of Resolution, its vice president's affidavit, and numerous business records, including copies of the checks and monthly statements. The trial court granted the bank's motion. It held that Dalton Point's claims were barred by the express language of its Certificate of Resolution and the signature card, and also by the provisions of OCGA § 11-4-406, which addresses the timing of a bank customer's duty to discover and report unauthorized signatures or alterations.

1. Dalton Point contends that the trial court erred in ruling that the Certificate of Resolution barred its claim, arguing that the bank took the checks subject to the company's claim to the proceeds under OCGA § 11-3-306¹ because it was not a "holder in due course" as defined in OCGA § 11-3-302. Subsection (a) of that statute provides that the holder of an instrument is holding "in due course" if: (1) the instrument is not apparently forged, altered, irregular, or incomplete "as to call into question its authenticity," and (2) the holder took the instrument for value; in good faith; and without notice that the instrument was overdue, dishonored, contained an unauthorized signature, was subject to claims as set forth in OCGA § 11-3-306, or was subject to defenses or recoupment under OCGA § 11-3-305(a) (infancy, duress, fraud,...