accounts they if any of those accounts have checking it checking options or the ability to get a check to write money against it the proposition of the law that has been established by the district record would allow a bad actor to come in right purely fraudulent check against that account cash it receive the money for it and there be absolutely nothing you could do about it if you did not buy a special program that the bank offered that disclosed on page positive pay or reverse positive pay the bank has described this as being a program that would enable it to determine whether or not the the checks were fraudulent written or not in fact the bank says in this case that the checks that were processed through our our client's account a could have been triggered would have been triggered as fraudulent had our client purchased this particular program that they had in the bank is arguing because our client did not purchase this particular program that the bank has no obligation to to even begin to think about or look at whether or not it's passing fraudulent checks cashing them through this through through their customers accounts this goes to the article for which is the big  argument in the parties the baseline code the baseline statute as adopted by a higher it's uniform commercial code is everywhere united states is that the banks that banks have an obligation to ensure that catch checks they cash are properly payable that means are not fraudulent it means that the the entity that owns the account the person or business whatever it is is is actually the one writing the check or authorizing the check to be paid out of their account the l places that obligation as the baseline on banks it makes sense banks are the ones with the resources the knowledge the systems the databases the size in order to ensure these things are properly payable you see started years ago when everything was hand written and it was their obligation to make sure that those even the signatures matches we have the signature cards they match against so that's sort of the baseline requirement for banks and yet  do you know due to the facts show here when these apparently fraudulent checks were cashed how how that occurred was it at a teller window of yes the perpetrator our clients in columbus the perpetrators in cleveland he doesn't have any clue any idea who this is she was this is what's really amazing about this she goes into huntington branch several different branches for different checks equal four thousand dollars she presents the check right to there the teller here's here's what here's the reason that i'm asking the question seemed to think that it's unreasonable to require a customer to purchase this added protection because banks have the means and the ability to detect fraudulent checks and they have a duty to do so under ohi law that's basically yeah now we're not talking about some sort of sophisticated scanner computer program here we're talking about a crook going up to a teller window and handing a check to a tell huntington cash a check with cash right there without any opportunity for a client complaint they ask for your id some right ok now you seem to say this had a hologram and it had a different color and a different need numbering sequence or something like that in the bank should have no how should the bank well i'm not saying this key bank should've known i'm saying the obligation is on the bank to figure that out in the liability associated with with cashing that check the code says the law says it's on the bank so it doesn't really matter from from the customer's perspective how the bank should or could it woulda the code the law says it's on that bank it's the law of the bank could work out some other system the bank that's it well that's that's what the district court that is the question right so that is the key is that we know that that is the baseline obligation the question is what can be the how can it be very this is this is precedent setting this is this limit this is not litigated very heavily the issue with this particular contract is that the section there's there's two things that go on of the contract the client agreement and there's one area over here this is the parties are going to be reasonable the banks can reasonably you know work on their health reasonably  through the checks payments all this stuff there's this one section dealing with ford we're dealing with this very specific issue that says if our client does not pay money to the bank then the bank has to to process these checks correctly then the bank's liability is zero there is none it's either black or white and what's amazing about that and what's really important about this is that the bank is attempting to shift its statutorily obl over to the consumer and not only shift that bird over the consumer but ask the consumer for money to do it to change to switch it back so the bank is literally so which you're basically arguing for strict liability standpoint on banks that can't possibly be i'm well i'm not arguing about strict liability what i'm arguing is that you're saying that you can't do that they have the duty and here's you believe it they're trying to limit their their their shall not be these are the classes of things that we're not going to be responsible for if the you know this or that or the other thing you know happens then that's off the side the bank is not doing that bank is not being reasonable bank is saying  zero black white that's it let's not ciro black white that's it this disclaimer doesn't apply if the basis of the fraud was something that wouldn't be covered by the check protection service so that alone means that it's not a blanket disclaimer the kind of what the agreement does if that's exactly what there is no there is it says everything it says that it is not liable if there is a service that's available that would have caught the fraud and you didn't pay for it suggests that there are other types of fraud that wouldn't be caught by this for which they are liable well that that is that is a that is a blanket liability as a blanket absolut of any responsibility to to properly ensure that the checks are cash and by the way this is not part of our complain this is a motion dismissed stage on what what is and what does not covered by the program there's no description in the the implications you know there the reasonable miss yes the statute the statute has the baseline requirement that is the bank's responsibility the bank cannot just slash out the u direct the initial portion of my argument to council for appellants opening pathetically to this court which was that you will likely have checking accounts people in this room have checking accounts those would be consumer checking accounts that is not what this case is about this case is about too sophisticated commercial entities that entered into a contract whereby the contract agreed to vary the default rules provided by the u c c is there a difference focused on the agreement that governs commercial accounts that will but might it might make a difference might might it not with respect to reasonable mous maybe there's a different standard for reasonable as we get businesses versus consumers i don't know absolutely and in the case law does are you pointing out this is a business ago what difference because commercial entities are held to higher standards when entering into contracts and as to the reasonableness that this court should use to determine whether or not the provisions contained in that contract are in fact reasonable the default rule by your bream and it's specifically allows that it allows that because it recognizes in the comments to the u c c that given the fast paced banking world and the volume of transactions that occur every day the parties need to be afforded flexibility in entering into their remans so here the parties did very that default rule under the u c c and this is a permissible variance he says it's unreasonable because you didn't provide enough information in the you grima as to what this disclaimer met that least that's what i derived out of his argument to begin with so what he said about that the agreement  defined the rights and responsibilities that the party the specific provision that we're dealing with here said that put the appellant on notice that the bank had certain products that were designed to detect and prevent fraud it was incumbent upon the appellant to talk with the bank and figure out what those products were the u c c recognizes that it's unwise to freeze the requirements of commercial contracts because of the ever changing standards and and the fast paced banking world so here if the parties had delineated in the contract itself all of the products that were available when they entered into the contract those products could change the types of fraud prevention products could change the methods of frauds are constantly evolving so it would be unwise to put those in the contract here all the appellant needed to do was reach out to any representative at any huntington bank call the huntington banks number  mentioned this earlier it is a narrow provision that it limits liability and certain transactions in the end i fraud products are designed to detect and prevent so it's not all fraud transactions it's the ones identify that there were duplicative check numbers of checks that have been cashed weeks earlier that is specifically what positive pay is designed to prevent and detect before the checks are passed but let me ask you this the honor i do believe that yes there were prior checks that were cashed that are like the checks that plaintiff using or appellant excuse me was using at the time of these on authorized transactions i'm looking commercial banking transactions it's nearly impossible for banks to catch these sorts of alterations some some people sit on checks for several months before cashing them it would depend on how many checks are written from a particular commercial entities account how quickly the check numbers would would move through so that's why it's so important that commercial entities work with the bank and implement an anti fraud product because contrary to  commercial entities that are in the best possible position to know what is authorized from its account and what are not and that's why the positive pay in reverse positive pay programs are so simple but effective course the bank didn't  the responsibility in certain limited circumstances to the commercial entity where as we have here they're in the best position to know whether or not checks are authorized from their account so the agreement is clear that the bank in limited circumstances won't have liability if and i thought products that were available to the commercial entity were in fact designed to detect and prevent the certain type of fraud that is at issue in this case so to answer your question your honor the the agreement put the responsibility as permitted under the u c c put the responsibility on the commercial entity to bear the risk of that loss if they chose not to both issues that were raised on appeal here can be decided as a matter of law so the it is undisputed fact the checks at issue in this case would have been caught by the end i for products that were available to the appellant it's also complaint the the opponent described or at the time the plaintiff described the fact that there were duplicate of check numbers of checks that had previously been cashed the descriptions of positive pay that are in the record describes the positive pay program so if it would be helpful i can provide some more detail about the program which is outlined in both the cases that we've cited in our brief and that was before the district court  with the district court no all this at the time of the motion to dismiss it did your honor the you're saying the district court found that the particular deficiencies in these fraudulent checks would in fact  the specific details of the program in front of him and in fact as best i can understand this is not just one small specimen products that are available to commercial entities to protect against this sort of fraud the the it was before the district court that the appellant in this case described the type of of alterations in the authorised tax and the court was able to take judicial notice of the descriptions of positive pay from other cases and from from other sources but i have one other question absolutely this paragraph that deals with these services that are available that the bank is relying upon comes u nder standard in this eight page agreement that's kind of in the or something to your customer agreement as ever and it is in fact part of there's a series of agreements that are a part of  what the opponent was provided when he opened his account and that's these might be called the rules and regulations relating to business checking exactly and that's part of the master services agreement and i go to page three which is where this paragraph seems to appear  relative to mr doucet argument so i want him to be aware of this because i would ask him the same question the paragraph it issue in this case is at the end of a long section the heading of which says statements duty to report on authorized transactions in errors and that's a fairly customary section in a banking agreement in my experience that basically says you've got to look at your account statement when you get it and if you don't object that something was fraudulent only paid within thirty days you can't we're not going to reimburse you even if we screwed up that's basically what that says right it's putting the appellant on notice that there are products that will help them out that come from pronto no you got your game in front of you do in fact or the first paragraph doesn't have anything to do with products that are available the first product the first paragraph simply deals with imposing the obligation on your customers to look at the statements when they get it i apologize ron i thought you were focusing on and in that first paragraph even if the bank did violate its duty of care when they paid a check they shouldn't have paid is long as the customer doesn't pick it up and complain about it within thirty days after they get the statement the bank absolve itself from liability  honor my if if you fail to notify us appears when the thirty days of the date your statement is mailed or other was made available to you you will have no liability we will have no liability for such years nor be required to reimburse you for them  i do agree with you that that's so the point is in the same bigger paragraph that we're talking about here the bit every bank that i'm aware of disclaims responsibility to the customers if the customers don't look at their statements on a timely basis and report problems so there can be no question that the banks have the ability to limit their duty of care by virtue in this in that paragraph of imposing an obligation on the customer i would distinguish between the duty of care that we're talking about here and processing transactions when they occur versus is limiting the liability after they occur you're so worried that i'm trapping you into something that you're not even listening to the question so i'm not going anywhere the point is paragraph in this agreement disclaimer the bank liability no bank no customers ever successfully challenge that you've just added another paragraph on there that deals with what with additional products that you have so my point is so now properly properly alerted hoping you are listening to that yes i agree with you when you say that they can't disclaim liability clearly they can't and you're not challenging the first paragraph because your guy apparently caught the fact there was fraud within the thirty days right within  hours he called the but yes you're right yes i'm at agree so what's the matter with the second part of it we can't say banks can't disclaim their liability they can it's right in the agreement nobody ever challenges that so why can't they do with the second paragraph says well i think that on the agreement itself it's page three of eight ok so we're on the same page yes so it's probably printed a little booklet is my guess you know is how we gets it and that's where it gets into we have no liability for in transaction i think that your point i mean this is where we really i mean let's look at it in it what it says it starts out by saying in addition in other words in addition to the disclaimer liability above that nobody challenges in addition we also disclaim our liability if you don't purchase products that would have that would have caught the fraud so i am just trying to figure out what's the matter with that matters isn't reasonable what all you've said that it's unreasonable so far is they didn't describe what the fraud might be and or what the agreements might consist of is there anything more to your argument than that i think a big step back is needed when we look at a reasonable case this is just what's you know item one two three four nobody in the public realm whatever dream out there in the community that their bank can completely absolve itself of any responsibility to ensure that they're not doing something to look at banks no customer would ever dream they had a duty to read their consequence within thirty days either unless they actually read the agreement if they read the agreement they'd read the paragraph what i guess the legal standard that's that's consumers it's not open ended it's reasonable in here they're saying we're going to cut this thing you know what's amazing about this really is that two things one was really important was said is that counsel said that these products can vary over time these there's a lot of different products they can vary all the time that's where you have to go to huntington to figure out what product applies this month for this account on this thing protect positive pays not listed on this thing it just says hey we have some stuff come in take a look at it and then you're supposed to go call having to figure out what it is  go to a different bank and if you do but but i mean but that's that is that somewhat the issue is is is that ok is it reasonable to say that because it's going to happen is we all know what's going to happen they they have the product they're doing it they have the ability to do all this they have that they're telling you hey this particular situation we could have figured this out ourselves we're not going to take that step unless you pay us money to do that we can all see the writing on the wall what happens when that's the law all the banks are going to say recourse for their clients to say you guys should a cat because this check i don't think you have actual knowledge of the fraud and here in this contract they're not liable because they have no liability whatsoever if you don't buy their plan this is a this is like under the first paragraph they can have actual knowledge of the fraud if you read it literally and if you don't catch it within thirty days you can't complain we're here our client caught it within a day so here it would seem then that our client claim if that is the porch and when it is be awful because they can pay something knowing it's fraudulent they can already do that in the first paragraph that would be a problem yeah ok we would be unreasonable if they could if they could do that this in these checks would or would not have been caught by the products that were available that your client didn't buy do you concede that i have no idea and no i will not because all the district judges i can't find his opinion in my book in in your brief you have to challenge that portion of the district court order i don't think have you well i think well he didn't say the disregard screwed up because he concluded this and that's wrong we don't concede  i don't i don't know if i don't know that i would go that far because especially because what we're dealing with really is initial legal issue i think what we can see is a legal issue because that makes it clear one way or another on the issue of this is this is also motion dismissed right so this is did we adequately plead we have no idea what these programs where we played this let alone what they cover what they didn't cover what their products did we don't even know if they covered the time period or not specially of counsel saying with programs very i don't know where your c ever seen those program my client is never what ever you or your client ever seeing these programs from the bank that proport it would reduce the risk to my recollection i'm just stunned by this because your guys account is hit for fraudulent checks he notices that he complained bitterly thank you for adding that for the fourth time hard times here guy  catches it he notifies the bank and then there's been extensive efforts here made to complain to i forgot who the regulatory agencies are about how this is unreasonable and you're saying that at no point you ever anybody any lawyer you're the agreements say that they're relying upon that you claim are and we have not asked the bank on what agreements would have been available or products available from the day this account was open two thousand and ten to the present day that actor have not fair enough thank you