Daniel Druso v. Bank One of Columbus
| Decision Date | 23 October 1997 |
| Docket Number | 97-LW-4213,71801 |
| Parties | DANIEL DRUSO, ET AL., Plaintiffs-Appellants v. BANK ONE OF COLUMBUS, ET AL., Defendants-Appellees CASE |
| Court | Ohio Court of Appeals |
Civil appeal from Court of Common Pleas, Case No. 297693.
For Plaintiffs-Appellants: KENNETH P. FRANKEL, ESQ., AMY M DeCOLIBUS, ESQ., Smith & Smith, 110 Moore Road, P.O. Box 210 Avon Lake, Ohio 44012.
For Defendant-Appellee Bank One of Columbus: STEPHEN M. BALES, ESQ., Ziegler, Metzger & Miller, 2020 Huntington Building, 925 Euclid Avenue, Cleveland, Ohio 44115-1441.
For Defendant-Appellee First National Bank of Ohio: LINDA B. KERSKER, ESQ., JOE WASHINGTON, ESQ., Brouse & McDowell, 500 First National Tower, Akron, Ohio 44308-1471.
For Defendant-Appellee Morganstern, MacAdams & DeVito Co., L.P.A., STANLEY MORGANSTERN, ESQ., TIMOTHY L. McGARRY, ESQ., Morganstern, MacAdams & DeVito Co., L.P.A., 1406 West Sixth Street, Cleveland, Ohio 44113.
Plaintiffs-appellants Daniel Druso and Thomas Unik, Jr. appeal from summary judgment entered in favor of defendants-appellees Bank One of Columbus, First National Bank of Ohio and Morganstern, MacAdams & Draper Co., L.P.A. on plaintiffs' claims that defendants honored a check on a forged Endorsement and converted plaintiffs' interests in the check. Plaintiffs claim that summary judgment was wrongfully entered against them and should have been entered in their favor as a matter of law. We find merit to the appeal and affirm in part and reverse and remand in part for the reasons hereinafter stated.
In early 1992, Martin Sarcyk loaned Daniel Druso $20,000 for remodeling of the Brass Rail, a tavern that CWD Bar & Grille, Inc. was purchasing from Gerald Franz. CWD was owned by Druso's wife. Druso was to repay this loan to Sarcyk after the liquor license transferred from Franz to CWD. Thomas Unik, who was financing CWD's purchase of the Brass Rail, guaranteed the repayment of the loan by Druso. When the purchase closed, Unik was to repay Druso's debt to Sarcyk, with Druso thereafter owing Unik for both the purchase price and the remodeling costs.
On November 3, 1992, Unik delivered two checks to Attorney Richard Damiani respecting the transaction. One was made payable to Sarcyk for $20,000 and one was made payable to Gerald T. Franz and Morganstern, MacAdams and Draper, L.P.A., Franks lawyers, in the amount of $59,500, the purchase price of the tavern. Both checks were drawn on Bank One. Damiani was representing CWD and Druso in the purchase of the tavern and the attendant loans and was acting as escrow agent. Damiani was to hold the check payable to Sarcyk until the liquor license transferred and then deliver same to Sarcyk. Instead, Damiani forged Sarcyk's endorsement on the $20,000 check and presented it to Morganstern, MacAdams & Draper, L.P.A. ("Morganstern") for payment. Morganstern deposited the check in its IOLTA account at First National and disbursed the funds to Damiani. The only documentation that Morganstern required from Damiani to disburse these funds was a handwritten explanation of the disbursement of funds, which was partially written by Pam MacAdams, and the rest by Damiani.
Morganstern presented the check to its bank, First National, for payment which in turn presented the check to the drawee bank, Bank One. Both banks paid the check over the forged Endorsement of Sarcyk's signature. On or about April 3, 1993, Damiani admitted to Druso and Sarcyk that he had forged the check, cashed it and taken the money. In June 1993, Druso and Sarcyk notified Morganstern that the check had been forged. Sarcyk signed a forgery affidavit August 21, 1994, which Unik forwarded to Bank One on August 26, 1994. Bank One refused to re-credit Unik's account. Sarcyk assigned his claim to Druso pursuant to the following instrument:
In consideration of the sum of $20,000.00, and other good and valuable consideration, the receipt of which is acknowledged, the undersigned, Martin J. Sarcyk, does hereby irrevocably assign all my right, title, and interest in and to a certain instrument (a copy of which is attached hereto) in any and all claims that I may have against Morganstern, MacAdams & DeVito Co., LPA and any attorney there individually; Bank One; Merrill Lynch; First National Bank of Ohio; and/or Richard Damiani as a result of the forged indorsement of a the above-mentioned check written to me, dated Nov. 3, 1992 and negotiated Nov. 3, 1992 to Dan Druso.
Dated this 21st day of August, 1996.
Martin J. Sarcyk
Both Unik and Sarcyk have promissory notes from Druso for repayment of the $20,000 to each of them.
Plaintiffs Unik and Druso filed their complaint against defendants and Damiani on November 1, 1995, to which defendants responded in due course.
The trial court granted Bank One's motion for partial summary judgment on or about May 30, 1996, denying Unik's claim against Bank One in conversion, based on the fact that "Unik cannot maintain an action for conversion under O.R.C. 1303.60(A) as revised 8/19/94." (Journal Entry May 30, 1996). No appeal has been taken from this ruling.
Plaintiffs filed an amended complaint on May 16, 1996 with leave of court to which defendants timely responded.
Deposition transcripts of Druso, Sarcyk and Unik were filed on or about October 1, 1996, when defendants Bank One, Morganstern and First National filed a motion for summary judgment. Plaintiffs filed their opposition on November 25, 1996 along with their own motion for summary judgment. Oral arguments were heard on November 29, 1996. On December 3, 1996, the trial court granted the defendants' motions for summary judgment simply holding there were no genuine issues of disputed fact and defendants were entitled to judgment as a matter of law. The court denied plaintiffs' motion for leave to file their summary judgment as out of rule. On December 16, 1996, a notice of voluntary dismissal of Damiani was filed by plaintiffs and their timely notice of appeal ensued.
Plaintiffs' sole assignment of error states as follows:
There appears to be no dispute that the defendants honored a check dated November 3, 1992 for $20,000 drawn by Unik on Bank One and payable to Martin J. Sarcyk; Sarcyk's signature was forged by an escrow agent, Damiani; Damiani negotiated it by delivery to Morganstern, which deposited it with its bank, First National; which in turn presented it to Bank One, which ultimately paid on the forged endorsement. Sarcyk assigned his rights in the check to Druso. The issue before this Court is whether the defendants have any liability to Unik or assignee Druso on the forged Endorsement.
Under Civ.R. 56, summary judgment is proper when:
(1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the nonmoving party, that conclusion is adverse to the party against whom the motion for summary judgment is made.
State ex rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511; Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327. It is well settled that the party seeking summary judgment bears the burden of showing that no genuine issue of material fact exists for trial. Celotex Corp. v. Catrett (1987), 477 U.S. 317, 330; Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 115. Doubts must be resolved in favor of the nonmoving party. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358-59.
However, the nonmoving party must produce evidence on any issue for which that party bears the burden of production at trial. Wing v. Anchor Media, Ltd. (1991), 59 Ohio St.3d 108, 111; Celotex, supra, at 322-323. In accordance with Civ.R. 56(E), "a nonmovant may not rest upon the mere allegations or denials of his pleadings, but must set forth specific facts showing there is a genuine issue for trial." Chaney v. Clark Cty. Agricultural Soc. (1993), 90 Ohio App.3d 421, 424.
In Dresher v. Burt (1996), 75 Ohio St.3d 280, the Supreme Court of Ohio modified the summary judgment standard as was applied under Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St. 3d 108. Presently, under the new standard, "* * * the moving party bears the initial responsibility of informing the trial court of the basis for the motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of fact or a material element of the nonmoving party's claim." Dresher at 296.
This Court reviews the lower court's granting of summary judgment de novo. Brown v. Scioto Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711 (). An appellate court reviewing the grant of summary judgment must follow the standards set forth in Civ.R. 56(C). Saunders v. McFaul (1990), 71 Ohio App.3d 46, 50; Link v. Leadworks Corp. (1992), 79 Ohio App.3d 735, 741.
Turning first to any recredit rights the drawer of the check, Unik, may have, we agree with the trial court that Unik's claim for Bank One's error in paying on a forged indorsement is barred by former R.C. 1304.29(F) which is applicable.
R.C. 1304.29(F) states as follows:
(F) An action against a bank...
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