Pandol Bros., Inc. v. NCNB Nat. Bank of Florida
| Decision Date | 23 May 1984 |
| Docket Number | No. 83-2004,83-2004 |
| Citation | 450 So.2d 592 |
| Parties | 38 UCC Rep.Serv. 944 PANDOL BROTHERS, INC., a corporation, Appellant, v. NCNB NATIONAL BANK OF FLORIDA f/k/a Gulfstream Bank, N.A., Appellee. |
| Court | Florida District Court of Appeals |
Gary Gerrard of Haddad, Josephs & Jack, Coral Gables, for appellant.
Karen Kantner and Frank J. Sinagra of Britton, Cohen, Cassel, Kaufman & Schantz, P.A., Fort Lauderdale, for appellee.
Pandol Brothers, Inc., appeals from a summary final judgment in favor of NCNB National Bank of Florida (NCNB) permitting recovery for the amount of an overdraft in the account of Pandol Brothers, occasioned by the dishonor of three checks by Commercial Trust Bank, the bank on which the checks were drawn. We reverse.
Pandol Brothers maintained a business checking account with NCNB whereby NCNB agreed to honor demand drafts (checks) drawn upon the account, and Pandol Brothers agreed to make deposits into the account sufficient to cover such drafts. This procedure established what is commonly referred to as a provisional credit.
On January 28, 1982, Pandol Brothers deposited three checks to its account. Those checks were forwarded to Manufacturers Hanover Trust Company for collection through the Federal Reserve System. Manufacturers Hanover caused the checks to be delivered to Commercial Trust Bank where, in due course, they were dishonored. It is unclear from the record whether the checks were initially returned to NCNB on February 3rd, and, while that fact may need to be established in terms of ultimate liability, it is not an essential determination underlying the conclusion we reach based upon the additional facts. The record is clear that the checks were ultimately returned unpaid to NCNB on February 23, 1982, and debited to the account of Pandol Brothers in two installments, one on March 12, 1982, and one on March 18, 1982. These debits created an overdraft of $13,710.38, the amount of the underlying summary final judgment.
The primary issue on appeal is whether NCNB had the right to charge back to the account of Pandol Brothers the amount of the overdraft generated by dishonor of the checks during the process of collection. Whether we reach the substantive issue turns upon the question of whether procedurally the issue has been raised by the pleadings and, if so, whether a genuine issue of material fact remained unresolved on the record before the trial court at the time of the summary final judgment.
The legal issue involved is encompassed by Section 674.212(1), Florida Statutes (1983), which provides:
Right of charge-back or refund.--
(1) If a collecting bank has made provisional settlement with its customer for an item and itself fails by reason of dishonor, suspension of payments by a bank or otherwise to receive a settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer's account or obtain refund from its customer whether or not it is able to return the items if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. These rights to revoke, charge back and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final (ss. 674.211(3) and 674.213(2), (3)).
Pandol Brothers' position on appeal is that NCNB, in failing to send notification of the dishonor by its midnight deadline or within a longer reasonable time, lost the right to charge back its account. This issue was initially raised in paragraph 9...
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