u c c can be a legal minefield fraught with esoteric terminology statutory pronouncements subject multiple exceptions and qualifications spanning several sections while a statutory section under these articles may consist of a few short lines the code comments can go on for pages and include multiple case studies as examples this case however is one that can and should determined that a plain reading a plain reading of the one nine hundred ninety two amendments to the u c c over rules established illinois authority on the law and and that the cash equivalency notion of court in this case misapplied that that note approach here finally when the appellate court ruled that mitt america was not entitled to recovery of the cashier's check the court never reached the issue of the recovery of be able to sit in specifically that would say that the cash equivalency approach should apply the appellate courts of illinois second district says the note approach is the the order of the day which we submit is is inappropriate even under the the cases that and treatises that discuss this issue with would you agree that there are code provisions to support user wrote i would submit that there are co provisions that support the notion that a bank may dishonor a cashier's check under certain limited circumstances and i further submit that those circumstances are not present in this case the trial court in this case found that the cashier's check was as good as currency and that charter one was obligated to pay the cashier's check as you sure you're aware that the trial co entered judgment in favor of middle america on the fifty thousand dollars cashier's check there is a critical and uncontested fact which although was recognized by the appellate court is never reconciled as part of this decision and that's part of what i'm getting at justice thomas this case involves the issue of a stop payment place on a kiss years check at the purchasers request that's it the reason for the dishonor was because the customer requests that in other words there was no issue in this case that the figure of charter one to pay the check was solely due to the request of its customer mary crystal to stop payment on the instrument now we know that there is a fairly well established line  prohibits this type of action stopping payment simply stopping payment because the customer requests section four dish three zero three of the code of the current code states that any stop payment order or set off exercised by a payroll bank comes too late to terminate suspend or modify the bank's right or duty to pay an item or to charge its customers account if the bank accept or certifies the item f three days for eleven there was no right to stop payment after certification of address and this is true no matter who or cures the certification the drafters comments to section three days four eleven echo the same view in the case of the case years or certified check they write the bank can safely paper holder of the check despite notice that there may be an adverse claim to the check a debtor has no right to stop payment nevertheless some banks will refuse payment as a as an accommodation to a customer section three days four eleven is designed to discourage this practice these legislative pronouncements were recognize and adopted by the first district appellate court in the able decision the able court also was sensitive to larger policy concerns when it opened that to allow a bank to stop payment would undermine the public confidence in the bank and its checks and their debt thereby defied the kish years check of the essential incident which makes it useful based upon this bright line of authority in illinois prohibiting stop payment orders on cashier's check there appears to be little doubt that charter one stop payment and refusal to pay the cashier's check was wrongful now rather than focusing on the stop payment issue and the precise basis for charter one's dishonoring the two amendments the court indicated that the current version of the code of the code and the plain language of section three dash four twelve supports the notion that cashier's checks are no longer to be treated as the equivalent of cash but rather as a note with all of the defenses to enforcement of a note to be applied in the that the language that the court relied on the appellate court relied on in overruling the cash equivalency notion was identical word for word for that which was contained in the code prior to the am terms at the time it was issued i submit if there's been no change in either the language the legislative announcement in the statute nor has there been any change in any of the code comments more has there been any even indication or in disha from those comments that able was to be overruled i submit that that makes a strong argument that the able decision should stand as good law it's your position mr williams checks were now going to be treated differently than they were in the past i submit that the language of three dish for twelve both pre and post revision being identical identical to the wor in its application in this case now we are well aware that the trial court made a finding that e t i perpetrated a fraud on charter one bank and that the appellate court concluded that that finding was not against the manifest weight of the  we submit that the trial court's finding was against the manifest weight of the evidence since there is no evidence in the record to support the claim that e t i had any contact any contact whatsoever with charter one bank much less the issue its cashier's check well there may have been overwhelming evidence that david at david hernandez the president of e t i stole money from his wife and mother that he forged documents that he coerced and abused family members there was no evidence that e t i partook in any of this interesting lay no claim was ever made against david hernandez there was ever any judgment ever even entered against him more importantly however is the charter one it's own security officer testified on a quickly that she was never able to determine that e t i was involved in the issuance of the cashier's check were that it caused mary crystal to purchase the check coupled with the additional fact that there was never any pleading alleging any type of fraudulent conduct on the part of d t i there is absolutely no basis to sustain the finding this i submit is one of those very limited circumstances where finding is against the manifest weight of the evidence finally none of the defenses of charter one bank as the obligated or under section three days three zero five are available here since the only reason charter one refused to honor the check was simply the stop payment request by its customer put another way charter one's basis for the dishonor of the cashier's check bears no relationship to the defense enforcement under section three days three zero five there's the dichotomy they stop payment on day one as the customer quest it on day two three four months later they determine a fraud defense that is not that was not the basis of the dishonor that is uncontested and uncontroverted here and the law in the state of illinois both pre revisions both post revision in all of the case authority in all of the case authority of other jurisdictions states that a stop payment order cannot be placed on a cashier's check at the request of its custom period now with respect to the recovery of attorneys fees and interest the trial court held that the negro ness decision barred the award of attorney's fees under section three days for a lot of the appellate court never reached this issue of course since mid of the court found  that that made america was not entitled to enforcement of the instrument charter one offered no argument whatsoever on this on this subject in its brief the operative language under section three days four eleven is that if the obligated bank wrongfully refuses to pay a cashier's check the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment well the negro nest decision did not involve section three days four eleven but rather a contractual provision on collection costs the court recognized that an exception to the prevailing american i think that that this falls squarely within the provisions of four eleven and ended that there was a warm full failure of the bank to pay the case here's check and that expenses the term expenses as will i definitely well i think that this court can make that determination it is true that the appellate court never reached the subject however it seems that that process may be somewhat the bright line of the american rule your honor it's not specifically stated the words attorneys fees don't appear therefore turn attorneys fees since they're not specifically provided by statute or by contract attorneys fees are if the obligated bank wrongfully refuses to pay it is liable to pay for the expenses and loss of interest from the refusal to pay there was no express provision for attorney's fees but attorneys fees are not meant to be necessarily of judicial determination it never got that far quite frankly yes clearly an award of attorney's fees and interest as part of the recovery against the novel gated bank that wrongfully refuses to pay a cashier's check is consistent with the notion that section three dash four eleven is intended to discourage banks from refusing to honor their cashier's checks it also clearly appears to be what the legislator intended although not specifically state even america the fifty thousand dollars which is the amount of the kiss years check than that but denying the attorney's fees in excess of thirty three thousand dollars in collecting that check through contested litigation does not meet the legislative whim of their customers there is no statutory authority or case authority that allowed charter want to stop payment on the fifty thousand dollar cashier's check and it should be held liable to mid america as s n e of the rights of e t i or the payee of the ch distinguished that is on the basis that it could be judged i think in that first of all in that case it was not a stop payment issued by its customer secondly bet that case recognizes that there may be certain limited circumstances under which a cashier's check can have payments stop again not when the customer requests it there are limited circumstances and i submit that there is a line of authority i can't we can't be oblivious to that but there is a line of authority bedwell carvalho certain narrow circumstances those circumstances are not present in this case but in other cases where the bank has been defrauded and i submit that section three dish for eleven has reasonable grounds to believe is available against the person entitled to enforce the instrument or the obligated bank has a reasonable doubt whether the person demanding payment is the person entitle to enforce the instrument so for example the bank is aware that the that the cashier's check has been materially altered should they be allowed to stop payment on a check yes i think there has to be a balance at the end of the day between the notion that we need cashiers check we need the certainty of payment that the kiss years check provide us with the balance that the bank has legitimate concerns in paying these out now we're the court falls on the spectrum it is i guess y interest of the of the public and the public confidence in cashier's check we have to consider the purpose of the u c c in trying to advance commerce and i submit that the appellate court decision which places  believe that those are clearly within the parameters of the statute and i believe i'm not asking the court to judicially legislate i think that there are provisions in section four desh want to leaven that specifically provide a basis for this court to make that assessment i think i would ask that the decision of the appellate court be reversed and that the case be remanded to the trial court for purposes of consideration of the attorneys fees under section three dash  circumstances under which a cashier's check can be dishonored mr william seem to be a backing up of the position slightly in saying that there should be some type of balance in approach the revisions to the u c c sections four one two and four one one clearly address th question and adapt the sound public policy they at the perpetrator of fraud a thief should not benefit from the thief's wrongdoing in this case e t i was a thief the trial court found  a thief and the wrongdoer should not benefit benefit from the wrongdoing so clearly public policy should not place the burden on an innocent bank that was a victim of fraud the many medical stands in the shoes by believe that the amendments to the u c c for alive and for twelve were specifically designed to cure him to bring into uniformity this split in authority between the note approach and a cash equivalency approach commentators would argue that the able course got it wrong but the u c c always i to kill a demand they did the no approach and that's why there was extensive amendments two sections for eleven for twelve to is insufficient support in the record to support the finding of fraud and we believe the record clearly amply establishes fraud on the behalf of e t i the cashier's check was purchased with a fifty thousand dollars home equity check from david hernandez is closed or insufficient home equity account he intended his mother to deposit that check into made it into child runs account and use those funds to purchase the cashier's check mr hernandez account in the past and fifty two thousand dollars in unrelated checks and somebody's america's account and that's what caused them in america to sustain the loss here not the fifty thousand dollar cashier's check so middle america sues fraud it had institutional hours because of the checks at another someone analyze the account of the instance but certainly the checks were being deposited fifty thousand our personal check was issued by christo  cashier's check was issued so they could have frozen that and issues change but the home equity check was returned for insufficient funds so there was never enough funds real songs in the account to pay for the cashier's check it was  two and four one one what made america fails to address the changes implemented by public eighty seven five eighty two there were two acts that amended the u c c eighty seven one one three five eighty seven one one three five which altered some minor words to those acts for example section four one two was completely revised to adapt what we've called this note approach it impose the same obligations  issuer of a note he has on a cashier's check and thus equated notes and cashier's checks it also provided under the revised for one to that the application of a bank to honor a cashier's check is only owed in this is important to a person entitled to enforce an instrument so you have to analyze whether the person is entitled to an first instrument in this case is made america stand in the shoes of each yeah so revised for one to clearly adapt to the no approach and also force defenses to the the a cashier's check three simple words mark amended in four one two was argued on page seventeen of minimum because the entire section of four one two was replaced the effective january one thousand nine hundred ninety three the limited the provision that certification of a check is acceptance and this tenet is what was your logic by the court in able and the other courts that had adopted the cash equivalency approach in prior years instead the revised language to section three dishware one one expressly allows a bank to assert its own defenses to a cashier's check and imposes liability on a bank only if wrongfully refuses to pay that cashier's check so there has to be some type of analysis as to whether charge of one rightfully or wrongfully dishonored this check contrary to the americas brief reply before page one section three four one one did not contain the word wrongfully in any prior iterations that was completely revised and substituted by the amendments in one thousand nine hundred two and ninety three t revised section three dishwater one one also provides they had no expenses or consequential damages i recover coverable if a bank's refusal to honor a cashier's check is based upon a claim or defense against a person entitle to force the instrument or if the bank in this case tried to one he had reasonable doubt that the person holding him to me had a right to enforce the instrument and certainly try to one under these circumstances had reasonable doubt as to whether min america cashier's check was was prevalent and so this type of situation will not happen very often even according to the commentators so many american iranian sleep rise and only section public eighty seven one one three application of a bank to pay the note or a cashier's check is only owed to a person entitled to enforce the instrument and then allowed for these defenses so i think the confusion is they had we need to look at both public acts that amended for one two and we need to look at it in particular yet public eighty seven five eight to not just public eighty seven one one three five which i think is the source of confusion i think in america is only looking at one one three five to change some minor wording and these statutes were amended jointly by the new public act prior version of section four one one did not address whether the bank could decide of the check and that the new for one one did so and that pride was a proper defense under the revised section four one one in the pre and post amendment  confusion about whether the cash equivalency note approach should be applicable to cashier's check in conclusion public policy grounds cashiers checks will not be greatly impaired if a bank has no defenses to such cashier's checks the floodgates were not open for banks to design of these checks because section four one one imposes significant penalties on wrongful dishonor such as consequential damages and other damages i would like to briefly address the attorney's fees issue there was no finding by the trial court that regarding section four one one about wrongful design or so there's been no finding at the trial court level doubt no question no we should that at the time the payment on the check was stopped charted one had knowledge of no we propriety they chose to issue the cashier's check parity with on collected funds they chose to give mary christo that check furthermore and just as important at the time the payment on the check was stopped it was not stopped because of any perceived impropriety or any perceived lack of funds any perceived check kiting any perceived fraud by e t i david hernandez  i perpetrated a fraud yes i will not dispute that finding by the trial court and as i indicated in my earlier argument that finding was against the manifest weight of the evidence the trial court ruled though that the check based on the able cash equivalency had to be paid it had to be paid and that's where counsel's argument the trial level was well wait a minute there was this fraud that was involved i submit that if there was the fraud but that fraud came after the fact and there was no authority anywhere that says you can build your case later or you can bootstrap if you will a defense to the nonpayment of the instrument when the instrument initially was  instrument is presented for payment for negotiation and what occurred at that time that at that time there was no evidence of any fraud at all and again something that apparently is discounted at the trial in the abominations committed by david hernandez i then forced it upon e t i he ties the pay the instrument what they got for i don't know i can't say but the fact is that this case the facts of this case deal with a very limited issue the propriety of a stop payment order to customers request that is prohibited that is wrongful that is wrongful under section four eleven and section four eleven provides for the payment of costs and attorney's fees when  and quite frankly that the appellate court seems to suggest that there was this massive revision of three eleven for eleven and for twelve it didn't exist i sat down and did a very simple word by word line by line and i don't see it and we have alleged in our brief that we've reviewed the public acts and but there is no difference at all but the language is precisely the same commerce excuse me with the notion of the kiss your check we all know that the cashier's check has importance because of its certainty buying a house buying a car making a major purchase of any kind and i submit that appellate court decision in this case it ends is to say that cashiers checks are now to be treated as as demand notes subject to all of the defenses and that's what it says and that's what we're left with  effectively bring an end to cashier's checks the reason banks are going to get involved in litigation they're going to have to make the determination of the propriety of the of the transaction as part of it and why would they ever want to do that but they are protected now the able court says they can but they can be protected i submit that there is a line of authority in an approach out there that says that that line of authority should be i'm i'm aware of the manifest weight of the evidence notions and i submit though that there's a tendency simply to dismiss then those factual findings because well it's the manifest weight of the evidence i submit that that should not be done here and i submit that that the court should take a very close look at the facts will find it because i think that the trial court was was motivated not in my view not to find or to make that factual finding to support a fraud claim to defeat the cashier's check because of course the court awarded mid america the amount of the case here is check as the yesenia v t i but rather to impose liability against someone just keep in mind hernandez wasn't a party to the suit but then got the real bad guy here was not a party to the suit he was he was never had a claim leveled against him and so i think that there was a need do with the refusal to pay the check and the compensation expenses and focused on the word wrongfully and i don't recall is that a change under the statute or was that in there for one nine hundred ninety two judge that is not a change again  it's somewhat hard mr knoll didn't make these arguments about the substantial revisions those are not contained within his brief we did make the analysis and again i invite you to to to lay them because we have a case where the law of the land not just the law of the state of illinois the law of the way and if you can't stop payment on a case years check period thank you