Peregrine Homes, Inc. v. Jefferson Bank and Trust
| Decision Date | 19 September 1985 |
| Docket Number | No. 84CA0371,84CA0371 |
| Citation | 713 P.2d 1342 |
| Parties | 41 UCC Rep.Serv. 1364 PEREGRINE HOMES, INC., and Donald Chad Goldy, Plaintiffs-Appellants, v. JEFFERSON BANK AND TRUST, Defendant-Appellee. . I |
| Court | Colorado Court of Appeals |
Powers Professional Corp., William Powers, Littleton, for plaintiffs-appellants.
Norton & Miller, Dale E. Miller, Golden, for defendant-appellee.
Plaintiffs, Peregrine Homes, Inc., and Donald Chad Goldy, brought suit against defendant, Jefferson Bank and Trust (the Bank), for breach of a deposit contract. At the conclusion of trial, the jury returned a verdict for plaintiffs in the amount of $10,928.34 for checks improperly paid. Plaintiffs appeal the judgment, alleging that the trial court erred in excluding evidence of consequential damages. We affirm.
Plaintiffs' claims arose from a checking account maintained by Peregrine at the Bank. The Bank honored a series of checks bearing only the signature of Diane W. Dunkirk, secretary of Peregrine. After it became evident that much of this money had been misappropriated, Peregrine, and Goldy, who was personally liable on some of the debt created by the misappropriation, brought suit against the Bank alleging that the Bank had violated the deposit agreement by honoring checks bearing only Dunkirk's signature. Plaintiffs alleged that under the deposit agreement both Dunkirk's and Goldy's signatures were required on Peregrine checks. However, the signature card which listed Goldy's and Dunkirk's signatures did not specify that both signatures were necessary, and several checks had been negotiated which were signed by Goldy alone.
At trial, the court ruled that evidence of consequential damages would not be admitted until plaintiffs had established a prima facie case of bad faith on the part of the Bank. At the conclusion of the plaintiffs' case, the court directed a verdict on the issue of consequential damages, finding that plaintiffs had failed to meet this threshold requirement.
Plaintiffs contend that the trial court erred in its determination that they failed to establish a prima facie case of bad faith on the part of the Bank. We disagree.
Absent a showing of bad faith, § 4-4-103(5), C.R.S., limits the liability of a bank for improper payments against an account as a result of failure to exercise due care to "the amount of the item reduced by an amount which could not have been realized by the use of ordinary care." See Isaac v. American Heritage Bank & Trust Co., 675 P.2d 742 (Colo.1984). If bad faith is...
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