First Nat. Bank of Cape Canaveral v. Keshishian

• Decision Date: 23 February 1983
• Docket Number: No. 81-1411,81-1411
• Parties: 35 UCC Rep.Serv. 1250 FIRST NATIONAL BANK OF CAPE CANAVERAL, a corporation doing business in the State of Florida, and Insurance Company of North America, a corporation doing business in the State of Florida, Appellants, v. Roobik KESHISHIAN, Appellee.
• Court: Florida District Court of Appeals

Page 313

427 So.2d 313

35 UCC Rep.Serv. 1250

FIRST NATIONAL BANK OF CAPE CANAVERAL, a corporation doing business in the State of Florida, and Insurance Company of North America, a corporation doing business in the State of Florida, Appellants, v. Roobik KESHISHIAN, Appellee.

No. 81-1411.

District Court of Appeal of Florida Fifth District.

Feb. 23, 1983.

Joe Teague Caruso, of Wolfe, Kirschenbaum, Caruso, Mosley & Kabboord, P.A., Cocoa Beach, for appellants.

Gary F. Large, Titusville, for appellee.

SHARP, Judge.

The lower court entered a final summary judgment in favor of Keshishian against the First National Bank of Cape Canaveral for accepting for payment two forged checks drawn on Keshishian's account. We reverse because we think the record shows there were material questions of fact as to the Bank's defenses under sections 673.406 and 674.406 of the Florida U.C.C. ¹

Keshishian, an Iranian citizen, first met two Brevard County residents, Masterson and Moon, when they were in Iran in 1977. They discussed starting a business and forming a corporation in Florida. Keshishian came to Brevard County in November of 1977 and further explored the idea of starting a business. He opened a personal bank account at the First National Bank and deposited $35,000 into that account. He directed the bank to send his newly ordered checks and the bank statements to 7001 Astronaut Boulevard, Suite 100, Cape Canaveral, Florida. This was apparently Moon's and Masterson's address, and it was the proposed site for the new business.

Moon and Masterson opened a bank account at First National about the same time under the name American Irano Enterprises, Inc. Keshishian did not know about their account. Masterson was listed as president and Moon as vice president, and both were listed as signatories. Keshishian was designated as a signatory, but he never signed the signature card.

Keshishian decided he needed more time to think about the business proposition, and he left for Iran within three or four days after opening his account. He knew the checks and bank statements would be mailed to the local address. He expected Masterson would bring the checks to him in Iran and forward the bank statements. When Masterson arrived in Iran a few weeks later, he told Keshishian the checks had not yet been received.

Moon forged a check for $20,000 to American Irano Enterprises, Inc. on Keshishian's account. On February 17, 1978, the Bank charged Keshishian's account and transferred the funds to the account of American Irano Enterprises, Inc. A statement showing this transaction, together with the cancelled check, was mailed to Keshishian on February 17, 1978, at the Cape Canaveral address. Keshishian never received the statement or the check.

Similarly, on February 28, 1978, a $13,500.00 check drawn on Keshishian's account (also forged by Moon) was charged by the Bank. These funds also went into the American Irano Enterprises, Inc. account. A bank statement, together with the cancelled check, was mailed to the local address. Again Keshishian received neither one.

Keshishian decided not to go into the business with Moon and Masterson. In May 1978, he telephoned the Bank to make arrangements to put his funds into savings to earn interest. It was then he learned the funds had been withdrawn from his account; he put the Bank on notice the checks had been forged.

Keshishian confronted Moon and Masterson, and Moon admitted he had taken the money for some personal needs. ² Fortunately for Moon, and perhaps Masterson, Keshishian did not report them to the Iranian authorities, whose treatment of thieves is much more severe than this country's. Moon promised repeatedly to replace the funds, but he never did. Eventually he was convicted of forgery in this country.

Appellee deposed Doris McIntosh, an officer for Appellant. She testified that, at the time the forgeries happened, when funds were transferred from one account to another within the Bank, as occurred here, the bookkeeper would compare the signature on the check with the signature on the card. McIntosh noted that the forged signatures on the two checks at issue were "so good" she was certain Keshishian had signed them when she was first called upon to investigate this matter.

The rule in Price v. Neal, 3 Burr. 1354, ³ has been complicated somewhat by sections 673.406 and 674.406, Florida Statutes (1977). These statutes shift the loss from the drawee bank to the customer when the bank pays a forged item drawn on its customer's account and the customer, by his negligence, "substantially contributes" to the forgery. The bank is also protected if the customer fails to exercise reasonable care in examining his bank statement and checks, and this failure causes a loss or a subsequent loss on an item forged by the same wrong-doer after the customer has had the statement for 14 days. Both of these defenses were raised by appellant as affirmative defenses in its amended answer, and the pre-trial order stated (although somewhat inaccurately) that an issue for trial would be the "comparative negligence of the plaintiff."

In this case, looking at the record in the light most favorable to the Bank, ⁴ it appears there is a question of fact as to whether Keshishian's handling of his personal account contributed to Moon's forgeries. Also, it appears unresolved by this record as to whether Keshishian's failure to promptly report the forgeries after the statements were mailed caused the Bank's losses from the first or second forgery. Had the first been promptly reported, perhaps the second could have been prevented or the transferred...