Wilson, Elser, Moskowitz, Edelman & Dicker L. L. P. (Constantine A. Despotakis of counsel), for defendant.
Stern, Levy & Pellegrino, L. L. P. (Joel S. Stern of counsel), for plaintiff.
Carol R. Edmead, J.
Defendant Fleet Bank (Fleet) moves for an order granting it
summary judgment dismissing plaintiff Interbank of New York's (Interbank) complaint. This case of first impression considers whether a notation " verbally authorized by your depositor" qualifies as a signature on a check.
Interbank commenced this action against Fleet to recover on four drafts in the total sum of $3,361.16, paid out by Interbank from the account of its customer, Dimitrios Tasoulis (Tasoulis).
Two of the drafts were issued by and made payable to Sprint PCS (Sprint), and two of the drafts were issued by and made payable to Bell Atlantic Mobile, Inc. (Bell).
These drafts are known commonly in the banking industry as " pre-authorized drafts" or " telechecks." These drafts are created when a consumer has agreed to pay for goods or services by allowing the subject vendor to prepare and issue a pre-authorized check drawn on the consumer's account at the consumer's designated financial institution. The consumer provides the vendor with the necessary account number and bank at which it is maintained, and the vendor then issues a check drawn on the consumer's account.
In this case, Sprint and Bell issued drafts on the account of Tasoulis to pay for telephone services. The drafts contained the typed notation " verbally authorized by your depositor." Bell and Sprint deposited the drafts in their respective accounts at Fleet. [*] The drafts were ultimately paid by Interbank.
Thereafter, Tasoulis advised Interbank that he never authorized Bell or Sprint to issue the drafts. Tasoulis executed an affidavit of forgery with respect to each draft, in which he stated that he had never authorized the drafts to be issued. Interbank seeks to recover on the forged drafts.
It is Fleet's position that the pre-authorized checks herein should be treated like any other check, and that in accordance with the Uniform Commercial Code, a depository bank such as Fleet cannot be liable for accepting a check on which the signature of the drawer is forged, unless it knew that the signature was forged.
Interbank's position is that a pre-authorized check cannot be treated as an ordinary check and is ...