Siecinski v. First State Bank of East Detroit

• Decision Date: 21 March 1995
• Docket Number: Docket No. 165921
• Parties: , 26 UCC Rep.Serv.2d 666 Margaret SIECINSKI, Personal Representative of the Estate of Earl Hosten, Deceased, Plaintiff/Appellant/Cross-Appellee, v. FIRST STATE BANK OF EAST DETROIT, Defendant/Appellee/Cross-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 768

531 N.W.2d 768

209 Mich.App. 459, 26 UCC Rep.Serv.2d 666

Margaret SIECINSKI, Personal Representative of the Estate of Earl Hosten, Deceased, Plaintiff/Appellant/Cross-Appellee, v. FIRST STATE BANK OF EAST DETROIT, Defendant/Appellee/Cross-Appellant.

Docket No. 165921.

Court of Appeals of Michigan.

Submitted Jan. 17, 1995, at Lansing.

Decided March 21, 1995, at 9:20 a.m.

Released for Publication May 24, 1995.

Cummings, McClorey, Davis & Acho, P.C. by Ronald H. Greve, Roseville, for plaintiff.

Bodman, Longley & Dahling by Kay E. Malaney, Troy, for defendant.

Before MARK J. CAVANAGH, P.J., and HOLBROOK and MARKEY, JJ.

PER CURIAM.

Plaintiff appeals as of right from the circuit court's grant of summary disposition for defendant pursuant to MCR 2.116(C)(7) and (10). Defendant cross appeals from the court's denial of its motion for sanctions. We affirm.

According to the complaint, the decedent, Earl Hosten, sustained a closed head injury on December 7, 1989, and remained in a semicomatose state until his death on January 15, 1990.

On January 12, 1990, a person named Dorothy Jackson presented to defendant First State Bank of East Detroit a document purporting to be a power of attorney signed by Hosten on January 8, 1990, and withdrew $30,500 from Hosten's savings account. On January 16, 1990, Jackson withdrew the balance remaining in the account, $145,617.59.

On May 21, 1990, Jackson presented for probate a will dated January 8, 1990, apparently signed by Hosten, which left all of Hosten's property to Jackson. Jackson was appointed temporary personal representative of Hosten's estate.

The beneficiaries under Hosten's previous will initiated a will contest, which was settled in April, 1991. Pursuant to the settlement agreement, the January 8, 1990, will was declared null and void, and the previous will was admitted to probate. Plaintiff, Margaret Siecinski, was then appointed personal representative of Hosten's estate.

At some time after her appointment as personal representative, plaintiff discovered Jackson's withdrawals from Hosten's savings account. Claiming that Hosten's signature on the power of attorney was forged and the withdrawals were unauthorized, plaintiff first demanded that the bank restore the funds and then filed suit against the bank, alleging breach of contract, negligence, conversion, and violation of the Uniform Commercial Code, Bank Deposits and Collections, M.C.L. § 440.4101 et seq.; M.S.A. § 19.4101 et seq.

Defendant moved for summary disposition, asserting that the claim was barred under the time limit of former M.C.L. § 440.4406(4); M.S.A. § 19.4406(4). The court agreed, granted the motion, and dismissed the case. This appeal and cross appeal followed.

I

Plaintiff's first issue on appeal is whether the court properly granted summary disposition of the UCC count.

Former M.C.L. § 440.4406(4); M.S.A. § 19.4406(4), ¹ in effect at the time in question, provided as follows:

Without regard to care or lack of care of either the customer or the bank a customer who does not within 1 year from the time the statement and items are made available to the customer (subsection discover and report his unauthorized signature or any alteration on the face or back of the item ... is precluded from asserting against the bank such unauthorized signature or ... such alteration.

That provision has been held to bar a company's action against a bank after the bank paid company checks that lacked one of two required signatures and the company did not notify the bank of the unauthorized signature within one year. King of All Mfg., Inc. v. Genesee Merchants Bank & Trust Co., 69 Mich.App. 490, 245 N.W.2d 104 (1976).

Plaintiff urges that King of All is factually distinguishable from the present case, arguing that a literal construction of the statute in this case produces the absurd result of barring plaintiff's cause of action before any person was in a position to discover the forgery and assert the decedent's rights against the bank. In support of her argument, plaintiff cites Benge v. Michigan Nat'l Bank, 341 Mich. 441, 67 N.W.2d 721 (1954), where the Court held that a depositor who had no opportunity to detect forged checks because her bank statements were intercepted by the forger, her husband, could recover from the bank even though she did not notify the bank of the forgery within the statutory period.

Benge does not control the instant case because Benge was decided on the basis of a former statute that was repealed upon enactment of the UCC, and that appeared to require that the depositor actually receive bank statements and items such as cancelled checks. The repealed statute provided:

No bank shall be liable to a depositor for the payment by it of a forged or raised check unless within 3 months after the return to the depositor of the voucher of such payment such depositor shall notify the bank that the check so paid is forged or raised. [M.C.L. § 487.661; M.S.A. § 23.371.]

Under the UCC, however, it is no longer necessary for the bank to mail statements and items to the customer: it may also hold them pursuant to the customer's request, or "otherwise in a reasonable manner make them available to the customer." Benson v. Comerica Bank, 177 Mich.App. 517, 521, 442 N.W.2d 284 (1989). Thus, actual receipt of the items is no longer required. Moreover, the present statute allows the customer a full year in which to notify the bank. We conclude that the pre-UCC statute at issue in Benge differs from § 4406(4) to such an extent that Benge is inapposite here.

On the other hand, we do not believe that the fact that plaintiff was not in a position to assert the decedent's rights until after the one-year period had expired is sufficient to render inapplicable the holding of King of All, supra.

The primary goal of statutory interpretation and construction is to effectuate the intent of the Legislature without harming the plain wording of the act. Lorencz v. Ford Motor Co., 439 Mich. 370, 377, 483 N.W.2d 844 (1992). When a statute is clear and unambiguous, judicial construction or interpretation is unnecessary and, therefore, precluded. Id. at 376, 483 N.W.2d 844. However, courts should avoid a literal construction of a statute that would produce an absurd and unjust result clearly inconsistent with the purposes and policies of the statute. Rowell v. Security Steel Processing Co., 445 Mich. 347, 518 N.W.2d 409 (1994); Salas v. Clements, 399 Mich. 103, 109, 247 N.W.2d 889 (1976).

There is no dispute that the meaning of § 4406(4) is clear. It is true that the result of construing the subsection literally is unfortunate in this case. However, we do not believe that it is sufficiently absurd and unjust, or contrary to the purposes of the statute, to justify an interpretation of the subsection that is at odds with its clear and explicit language.

Courts of other jurisdictions have held that the subsection is not a limitation statute subject to tolling under compelling circumstances but is a statutory prerequisite of notice that absolutely bars a customer's right to make a claim against the bank after one year without regard to the care or lack of care of either the customer or the bank. Jensen v. Essexbank, 396 Mass. 65, 66, 483 N.E.2d 821, 41 UCCRep. 1366 (1985); Space Distributors, Inc. v. Flagship Bank of Melbourne, 402 So.2d 586, 589, 32 UCC Rep. 517 (Fla.App.1981); Indiana Nat'l Corp. v. FACO, Inc., 400 N.E.2d 202, 29 UCC Rep. 194 (Indiana App.1980). We agree with that analysis and conclude that plaintiff's failure to notify the bank within one year, even though she was not then in a position to do so, bars her claim against defendant. King of All, supra at 492, 245 N.W.2d 104. We note that plaintiff is not without recourse against the alleged wrongdoer, Jackson.

Accor...