Mueller v. Miller, No. 2004-P-0082.

CourtUnited States State Supreme Court of Ohio
Writing for the CourtWilliam M. O'Neill
Citation162 Ohio App.3d 698,2005 Ohio 4213,834 N.E.2d 862
Decision Date12 August 2005
Docket NumberNo. 2004-P-0082.
PartiesMUELLER et al., Appellants, v. MILLER et al.; FIFTH THIRD BANK, Appellee.
834 N.E.2d 862
162 Ohio App.3d 698
2005-Ohio-4213
MUELLER et al., Appellants,
v.
MILLER et al.; FIFTH THIRD BANK, Appellee.
No. 2004-P-0082.
Court of Appeals of Ohio, Eleventh District, Portage County.
Decided August 12, 2005.

Page 863

Caroline Mueller, Hudson, for appellants.

Jeffrey P. Hinebaugh and Sarah V. Lewis, Cincinnati, for appellee.

WILLIAM M. O'NEILL, Judge.


{¶ 1} This accelerated-calendar appeal, submitted on the record and briefs of the parties, arises from the Portage County Court of Common Pleas. Appellants Matt Mueller and Mueller Tree Inc., d.b.a. Mueller Tree Service, appeal the trial court's entry of summary judgment in favor of appellee, Fifth Third Bank ("Fifth Third").

{¶ 2} Mueller opened a business account at Fifth Third in the name of Mueller Tree Service. Mueller was the sole signatory on the account, and as a regular practice, Fifth Third mailed monthly statements to Mueller that included the return of all canceled checks on the account.

{¶ 3} In the fall of 1999, Mueller Tree Service employed Mark Miller, first as a

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laborer and then as a foreman. Miller was paid a weekly salary of $650 in cash. At no time was Miller given official access to the business bank account, and he was never a signatory on the account. On October 8, 2003, Mueller discovered that Miller had been misappropriating funds belonging to the business by forging Mueller's name on company checks to which he had gained access. On that same date, Mueller went to a Fifth Third branch office to report the forged checks and to request that a hold be placed on the account to prevent the processing of any other forged checks when presented for payment. A hold was placed on the account at that time.

{¶ 4} On December 2, 2003, appellants filed a complaint in the Portage County Court of Common Pleas against defendants, Mark Miller, Stephanie Miller (Miller's wife), and Fifth Third, seeking money damages, a temporary restraining order, and injunctive relief. The complaint alleged that over $100,000 had been embezzled via forged checks over a three-year period.

{¶ 5} On May 24, 2004, Fifth Third filed a motion for summary judgment, contending that the bank was not liable for the loss of funds on the grounds that (1) appellants had not complied with the statutory duties to exercise reasonable promptness to examine the bank statements and promptly notify the bank of any unauthorized payments, (2) appellants had not exercised ordinary care to prevent the forgeries, and (3) appellants had not complied with the contractual provisions of the deposit agreement with the bank, together with the rules and regulations incorporated therein. Appellants filed a brief in opposition, followed by a reply brief by Fifth Third. On August 18, 2004, the trial court granted Fifth Third's motion for summary judgment. Appellants voluntarily dismissed the remainder of their pending claims against the Millers on September 8, 2004, and subsequently filed a notice of appeal with this court.

{¶ 6} Appellants present a single assignment of error on appeal:

{¶ 7} "The trial court erred to the prejudice of the plaintiffs when on defendant FTB's motion for summary judgment, it dismissed the plaintiffs [sic] claims against FTB."

{¶ 8} The thrust of appellants' contention on appeal is that the trial court erred in granting summary judgment in favor of Fifth Third. Appellants further contend that Fifth Third remains statutorily liable for a portion of the embezzled funds.

{¶ 9} We begin by noting that the standard for addressing a motion for summary judgment is set forth in Civ.R. 56(C). In order to prevail, the moving party must establish that (1) no genuine issue of 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 nonmovant.1 Further, a party seeking summary judgment must point specifically to some evidence that affirmatively demonstrates that the nonmoving party has no evidence to support the nonmoving party's claims.2 In response, the nonmoving party must set forth specific facts that demonstrate that there is a genuine

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factual issue to be tried.3 "An appellate court applies a de novo standard of review when determining whether a trial court properly granted summary judgment."4

{¶ 10} In their complaint, appellants alleged that Miller had forged a number of checks over approximately three years in an amount totalling over $100,000. In its motion for summary judgment, Fifth Third cited relevant portions of the Uniform Commercial Code, Sections 3-406 and 4-406, codified as R.C. 1303.49 and R.C. 1304.35, respectively, in support of its contention that it was entitled to judgment as a matter of law.

{¶ 11} R.C. 1303.49 prescribes a duty of ordinary care on both the customer and the bank. A customer whose failure to exercise ordinary care contributes to the forged instrument is precluded from asserting the forgery against the bank; likewise, the bank that fails to exercise ordinary care in paying or taking the forged instrument must bear the loss to the extent that its failure to exercise ordinary care contributed to the loss. The relevant portions of the statute read as follows:

{¶ 12} "(A) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.

{¶ 13} "(B) Under division (A) of this section, if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to the loss, the loss is allocated between the person precluded under division (A) of this section from asserting an alteration or forgery and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss."

{¶ 14} Division (C) of the statute sets forth the burden to prove a failure to exercise ordinary care, depending on which party — the customer or the bank — is asserting a preclusion.

{¶ 15} R.C. 1304.35 governs a bank customer's duty to discover and report an unauthorized payment and reads:

{¶ 16} "(A) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account...

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4 practice notes
  • Chesler v. Bank, No. 95435.
    • United States
    • United States Court of Appeals (Ohio)
    • April 7, 2011
    ...section, the customer is precluded * * *.” R.C. 1304.35(D). {¶ 30} In addition, this was the analysis applied in Mueller v. Miller, 162 Ohio App.3d 698, 2005-Ohio-4213, 834 N.E.2d 862. The Mueller court stated: “Having failed, as a matter of law, to exercise ‘reasonable promptness' to exami......
  • Jurcisin v. Fifth Third Bank, 2007 Ohio 3000 (Ohio App. 6/18/2007), No. CA2006-10-078.
    • United States
    • United States Court of Appeals (Ohio)
    • June 18, 2007
    ...Jurcisin was in Mexico did not nullify her duty to ensure that her checking account was being managed properly. Cf. Mueller v. Miller, 162 Ohio App.3d 698, 2005-Ohio-4213, {¶17} Jurcisin's case is similar to an illustration given in the official comments to R.C. 1303.49. In that illustratio......
  • Saferin v. Sky Bank, 2006 Ohio 466 (OH 2/3/2006), Court of Appeals No. L-05-1091.
    • United States
    • United States State Supreme Court of Ohio
    • February 3, 2006
    ...Saferin is statutorily precluded from recovery against Sky for losses attributable to the forgery. Mueller v. Fifth Third Bank, 162 Ohio App.3d 698, at ¶ 32. Appellant's fourth assignment of error is found not well {¶ 25} In his third assignment of error, Saferin asserts the trial court err......
  • Chester Twp. Bd. of Trustees v. Bank One, N.A., 2007 Ohio 3365 (Ohio App. 6/29/2007), No. 2005-G-2660.
    • United States
    • United States Court of Appeals (Ohio)
    • June 29, 2007
    ...at 293. 7. Id. 8. Abraham v. National City Bank Corp. (1990), 50 Ohio St.3d 175, 178. 9. R.C. 1301.01, et. seq. 10. Mueller v. Miller, 162 Ohio App.3d 698, 11. Id. 12. Id. at ¶25. 13. R.C. 1304.35(D)(2). 14. R.C. 1304.35(E). 15. R.C. 1304.35(E). 16. R.C. 1304.35(F). 17. R.C. 1304.01(A)(5). ......
4 cases
  • Chesler v. Bank, No. 95435.
    • United States
    • United States Court of Appeals (Ohio)
    • April 7, 2011
    ...section, the customer is precluded * * *.” R.C. 1304.35(D). {¶ 30} In addition, this was the analysis applied in Mueller v. Miller, 162 Ohio App.3d 698, 2005-Ohio-4213, 834 N.E.2d 862. The Mueller court stated: “Having failed, as a matter of law, to exercise ‘reasonable promptness' to exami......
  • Jurcisin v. Fifth Third Bank, 2007 Ohio 3000 (Ohio App. 6/18/2007), No. CA2006-10-078.
    • United States
    • United States Court of Appeals (Ohio)
    • June 18, 2007
    ...Jurcisin was in Mexico did not nullify her duty to ensure that her checking account was being managed properly. Cf. Mueller v. Miller, 162 Ohio App.3d 698, 2005-Ohio-4213, {¶17} Jurcisin's case is similar to an illustration given in the official comments to R.C. 1303.49. In that illustratio......
  • Saferin v. Sky Bank, 2006 Ohio 466 (OH 2/3/2006), Court of Appeals No. L-05-1091.
    • United States
    • United States State Supreme Court of Ohio
    • February 3, 2006
    ...Saferin is statutorily precluded from recovery against Sky for losses attributable to the forgery. Mueller v. Fifth Third Bank, 162 Ohio App.3d 698, at ¶ 32. Appellant's fourth assignment of error is found not well {¶ 25} In his third assignment of error, Saferin asserts the trial court err......
  • Chester Twp. Bd. of Trustees v. Bank One, N.A., 2007 Ohio 3365 (Ohio App. 6/29/2007), No. 2005-G-2660.
    • United States
    • United States Court of Appeals (Ohio)
    • June 29, 2007
    ...at 293. 7. Id. 8. Abraham v. National City Bank Corp. (1990), 50 Ohio St.3d 175, 178. 9. R.C. 1301.01, et. seq. 10. Mueller v. Miller, 162 Ohio App.3d 698, 11. Id. 12. Id. at ¶25. 13. R.C. 1304.35(D)(2). 14. R.C. 1304.35(E). 15. R.C. 1304.35(E). 16. R.C. 1304.35(F). 17. R.C. 1304.01(A)(5). ......

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