No. 01-014 iK ;Ti-!E SIJPREhZECOURT OF THE STATE OF \/IONTliA 200%21T 152
'rrARBRO,L.TD., a Ncvada corporation, dibja LAKE .MEAD RADIOlLOGlSTS, Plaintiff and Pippellant, \. RIISSOUI.,A FEDERAL CREDIT UNIOX: a Montana Banking Corporation, DOE INDIVLDUALS I-X, ROE CORPORATIONS I-X, Defendants and Respondents.

APPEAL FIIOM: District Court of the Fourth Judicial District: In and for the County oSMissoula, l.Ionorable John Larson, Judge Presidiiig COUNSEL. OF RECORD: For Appellant: Jolin F. \;elk, Blakely & Velk, Missoula, Montana Cl-rarles I. Lybarger, Lybarger, Burrin & Bunin, Las Vegas, Ncvada For Respondent: Ronald A. Bendcr, 12'0rdct1, TI~aile & ilaines, P.C., blissoilla, ;\/lor~lana

Submitted on Briefs June 7, 2001 Dccrdcd July 3,2002Justice Jim Rice cieii\-cred ilie Opinion ni'thc 

### Court. 

### *; 1 iipppcil:inr Yar13rot 

### 1-rd., db:a L;iice ticiid Radiologists (l';irbro). iipp-~~is ficirI~ ;hi: order ofthe Fo~irllr Juciiciaf District ('oilit. Miss(>i,il:i ('(jiirly g~~itin? ~~t~n~iiy\-i"tdgri~c!~i iii 

### hvorof Rcspoxdcnr \fisso~ili:f'eciesal C'reiiit Ljnion (Z11:C'!..:j aild 

### denying Yiirbro's :~?criiori for 

### a cllangc af venac. We aff'firm. 

### '2 The following issilcs ar-edisposiiivc: 

### 3 

### 1. Whether t!ic District Coiirt erred in granting surniiiziryjudg~neiit to 

### kd\/LFC1; 011 Yarbro's conversion claiin onthe groundsthat the claim wasbarred

### by the applicable statute 

### of limitations. 7j4 

### 2. L$Tl~el'i~er the District Co~11.t erred in gran~iiig sumrnaryjudgrncnt to 

### tlFCl, on Yarhro's hreach of win-i-anty claini on the grounds that Yarbro \vas rcsponsib!e for tlic acts of its own ctiiployccs. 

### 'I5 3. Whether thc District Court crrcd in cicnying Ynrbro's motion fbr a changc 

### of

venue. 

### FAC'l-l.J.41. r\h'l> Pf<OCE[>I.!R:11. 

### t3;\<,'K(iROl..YD, 0 31 Yarbro 

### is a racliologisr 

### firm operated as 1.akc %lead Radiolagisis 

### in Ilerrdcrson. 

### Ncvada. ICathryn Velean(Mci.canj

### was employed byVarb!-ofrom

### Jar!u;:r-y of 11193tlirough .June of' 1906. %tcl,can's rcsponsibilities iticluclcd tl:ira ci~ii-y. filing, posting payinents, processing accounts rci.ci\rablc, sending oiit statenicnts;billing anti ;ic~oiintiiig. 

### During the cotiric 

### of 11cr employmcnr, blcl.ca~n forged signi!!:~!-cs oil o\.crn 

### i~andrcii checks and iiloncy 

### orders. *cleI,eitnwoi~lci ntcrccpt cl1ecksjnid on patient accc!ilnts \\,hich ~verc pnqablc either ? 

## -to [Lakehfeaiiorto 

### indiviciutlic1itcto1-s; shewouiilcndorscihcci~ecks 

### on hehalfof 

### i.ake Mecad
or il;e injj\i:iual doctors and makc them pa~hli: to !~ziselC T!~crr, ?vf~i.~;iii ~oi!?d cridors;: tl:c cl?echsin her name and mail them to 

### fLIFC'l-: fbr ileposil into her-personal :recount ti~ere. 'l'hc iast deposit to McL.ekin' 

### ClFC'L; account was :made 

### on JLLIIC 

### 7;ILjcii>. Tl~c vaiiic oftlhc forged checks and money orders exceecied S00,000.00. "i On JutieOi l"lO'i: Yarbro filed a complaint against 

### LIFCC in %fissoula County seeking damagesin rhe amountofthe fbrgeclchecksand moricy orders, allegingunlalvkrl 

### conversion of negotiable inst~~iments 

### by MFClJ, tinder 

## 3 30-3-41'4. ?+\;1C.',1\ 

### JUC'C

## 5 3-419). and breach oftransfer warranties, under 

## 3 30-3-207, 

### MC.4 

### (I.IC'C

## 3 4-207). 

### On July

### 3;21100; ,!4ppe?lanr moved for a cliange of venue, asserting iliat, because k~lonor:ibleEdward klct.can, 

### ajudge of the Fourth Judicial ISistrict. is tile uttcle of McLean, an iinpai-tiai trial couid not 

### hi: conductecl ill Misso~ila 

### County. 011 

### July 0, 2000; 

### hZF('l..T tiled a rnotioii for summary judgment, argiiing Varhro's con\-ersion claim was barred by statute of ii~nitations. that Yarbro's brcach of warmnty claiin was barred becati~e Yarbro is responsible for the acts of its own eniployees. and iitrtlier, that V:irbro could not bring :i claim 

### for l?rcacli of transfer warranties against k!I'vZl'C'i:. 011 Septeinhel-

### 5.Zi)O(i, the i)isirict ('cii1i.t. iioiiorable Julli? YC. Larson presiding. deniccl Yarbro's motion for change of venue and granted siimrnary jucigntcnt in 

### fhvor of 

### b1CIFC'U. FI-or11 that judgment and order, Yarhro appeals. S7':%"L:I)ARD

### OF KEVlEM; 

### 78 Summary .jutigmeni is tippropi-iatc when rite pleadings. discovery and ai'iidaviis establish that tlzere 

### is 

### no geniline issue as to any maierit~i fact atid that tlie moving itirre 

### is

## . . 

### i.r!>ting sijmrnar> jiidgmcnt 

### dc iio;:o. by iipi?iyil?~ liie iiiilli' e~i:iliiiilc)!l1:553d On iiui: 

### 56,

~d M.R.C'iv.l'.. as &st!-ictcoiirt. 

### .Sciiiir~?iri~ki~r r.

### ;lfei.itiiii;: 

### Oil i't,.. iO"1 

### 8'1' 

### 70.4; ?4.

### 388 Mont. 

### 217_ 

### 7: 13, 050 P.2d 1370,*j 14. 0 li l'he moving parry ni~~st demonstrate that 

### no genuine issues of marerial tkct itxist. Then the burden shifts to the non-iiioving party 

### to provc, by more tliaii mere dci~ial 

### and speculation,that a genuine issue does exist. 

### Reli & 

### :L.lnrt.cr, 

### I'I.LC v..Sz~l/iviit?, 200(, b1'T 200, 

### * 25?300 Viotit. 530,

# rj 25, 6 P.3d 965, 

### rj 25. If tlie court dcternlines that genuine issi~es 

### of Fact do not exist, the court must then dcteinninc ~vl~etlicr :he moving party is ci~titlcd to judgment as a inattcr 

### of Ian. Uell, !j 25. '1-his Court i.evicix;s a district coiirt's 

### legal co~lclusions to detertninc iftlrcy 

### are correct. 

### Hell. ";5. 7ilO The party opposing suintnary judgrncilt cannot rely on mere allegations in thc pleadings, but 111nstpresent its eviilence raising gcn~iinc issrzes 

### of material fict in the ibiai ofaffidavits orother s~orll testiinoliy. 

### .Schfi~nili;kei.. 

## g; 15: seealso

### Kiwi; I,. T(iii'ii i~[C'~z.vciiijC' (19971,284Mont. 167,943

### P.2~1 1262. LVhile this 

### Court rcsolves ally infcrciices draw11 from the iactual record in favor of the party opposirig sunitnary judgmctit, mere cicniiii, speculation,orconclusory state~i~ents arcins~ifficiciltto raiseaycnuinc issiieiif i-i~aterial hzt. 

### .Sci~~imcicitei-~ 

## (1 15. 

### D1SCL;SSION "1 I 1 i. 

### Dici the Ilisrrict 

### Coiilt en- 

### in graiztiiig suiiiniaryjudg~~ie~lt oil ihi' gro~!ii(?s that Yiirhro's conversion clai~~ls were ha]-rcii 

### by the app!ictib!c sl;rtutc ui'lirnitatinris? 4811 

## -

5 iil Count i 

### oi-its Compiaint, Yarbro 2illeg~:l ui11awl;ii i:~iivcrsioi! of negotiabla:
grt3ntcti suml~?;ry,juifgn~e~it tti XiFC'L,' on this counf.lindijrg rhci.!:n 

### ..?-as timebi:i-rcii tinder rhe applicable statute of lin~itations. a 11oldingwhich 

### J'arhrii ci)l~tc!iils \v:is CISO~C~LIS 

## "i 3 When 

### interpreting the Llnifonii Coniincrciai C'utie, wc bear in rnii-idits purposes itilci objectives. I'hcse obicctivcs include thc uniform application ofcoi~~n~ercial law 

### among the v:iriousjurisdictions, the siri~pliiicatiort and tnoderni~arion ofthc 1:iw govcrnirrg cotnrncrciai transztcrions, and thc presumption in favor of predictability anti finality of commercial transactions. See 

### $ 30-1-102, 

### blCA, 

### "Purposes--rules of construction variation by

5,13 The applicable statute of lirnit:ttions for eonvcrsion ofnegiitiablc insti-urncntsis set forth in 

### $ 30-3- 122, MCX. Subsection (7) ststtcs: Llnlcss governed by orhcr law regarding claims for iridc~nnityorcontribution, an action for conversion of an iiistriirnent, ibr money llad anci rcccivcd, or for likc action bascd on conversion: fbrbreach of\vztrranty; or 

### to enforce an obligation. duty. or right arising under this chapter and not governed by this section nltlst bc commenced\vitIiin 

### 3 years afterthe causc of action accrues. Section 30-3-122(7). btCL'+. Tlre Oflicial C.onzments state that tliis silbseciioo covers conversion cases and other actions to cnfoscc obligations or rights arising under Ariiclc 

### 3. andthatthethrcc-year statuteofliii~itations cstahlisbcd

### by, tile statutc"f<!llows iradiiion~ii iu7.i. in statingthat the period runs fiorn the time thc cause of aciii?n accnies.'.. . 

### 7 15 ,iecTlon 

### 57-2-i02: 1I;1('t\, sets forth tile ti.adiric?:zai rule 

### in \vloiiiaria regarding the
(1 ) For puposc; ofstatutes relarirlgto the rimc within wl~ich 311 atlion must be commenced: (a)a claim or cause oi'aition accrucs when ail cien~ei~is oEthc ciaim 

### or causc exist orhave occurred.

(2)Cjnlessothe~wisc prodedby statute,thcper-idoflii~~iiation begins when tile claim or cause of action accrues. Lack otl<nowledgc oi'thc claim or cause of action, or of its accrual,by the party to whom it has accrued do-. bs not postpone the begi~i~iing 

### of the pcriod oflimitaiion. Section 27-2-102(11 and 

### (2), h1C.X 

### I In this case. Yarbro's carlsc ofactiotl against 

### MFCI,' forconversion accrueit for cczch el~eck at the time the check was deposiiect 

### by M~1~car-i in hcr 

### tlfC'I,' account kind LlFCli: credited MeLean's account therefor. It is not disp~itcd that the last cicposii io Mcl_esiii's 

### MFCL account \%as111ailcon June 

### 7. 

### 19%. Becausc the elements 

### of conLetsron for all transactions existed or occurred by then, the three-year siatute 

### of limitations for all claims bcgan to run, at thc latcst, 

### on JLII)~ 

### 8: 1096. Yarbro's complaint was not tjlcd until .lunc 

### 9, 

### !099. li17 Yarbro arguesthc discovei-ydoctrincshould be applied tothe statuteoflimitations for coil-vcrsionin this case. 7'11~ discovery doctril-ieisan cijiiirabic cxccption to the general rule that the statute ofliniitations begins to run as soon asthc causeofaction aicnlcs. ikcorclil~g tit tilediscovcrydoctrine, "the applicable staiiitcoflimitationsbegins tii

### runoncetheplilintifi'

### . . ,. *,. knctv or sirt>ulciillivc knoivir that !a cause ofac-ironexists. ~iii-iwii K;-gier~~, hi(: 1.. Eisisii/~ H/iiik ii,iMiiiitiii~;r(IO'iii). 

### 242 blont. 

### 155,l00, 7Kii P.2d 

### 567,

### 576. ! 

### 8 Varljro iltrirns it 

### had iio reiis~il 

### to st~spi-ct il::~r 23 cor~vcrsioi: had occiirrcci prior tii?ilni: 

### 10, 1900, lvhcn it first discovcrcd thiit klcl..can !?:id cngagcil in Sriiiidulect iiclivitlc". 

### fFunhcr, Yarlxo asserts it 

### \\.as entitled to obtain copics of the checks in qucsriori fion: 

### MFC'I.; and inspect tile checks to deterniiiie MFCG's involvement in the matter. b1ore:iver; Yarbro claims when itknew or shouldhaveknown ofthe forgeries is a question ofmaterial FLct that needs to be deterniinect, anci thirs, strmrmaryjudgrncrit is inappropriate. 

## 710 Yarbro's assertion thatthediscovery doctrine slio~ild be applied hereisprerniscd 

### up012

'. -<' twoal.guments. First, it cites the 

### CCC statutesoflitlliiatioli sct Forth at 

### 9sr_i-4-207(5), "\1C'!i, anc! 

### $ 30-3-117(4); MCA, both of n:hich provide that ""a cause of action !'or breach of warrant): tinder this section accrucs when the claimant has reason to know of the brc:icl~." I-ioucvcr.by the plain meaning 

## or these ptavisions 

### and ihcir placement witlhin statutes :iddrcssing breach of ~v~trraiity. they arc applicable only to hrcazh of \v;li-i-:iilt:i actions, nor conversion. These statutory provisiotis tllus have no application to Yarbrois cunvcrsiun claim. 320 Secotrdly, Yztrbro cites the eonccalment or\ilcl.e:tn 

### in this maitcr :rnci oris case law's applicatioil ofthe discovery doctrine in certain instances. 'llthougl~ tlic app!icatiiin cifthe disco.. ~ciy 

### . doctrinc to a LC'C conversion case is one 

### of ilrst impression in YItii~ttiri~i~ substar~tia! considerationofd~ issiichasocc~~~~'iil in ori~ercuiins. will?sig~~iticantagrceinec~.. . 

### 4:2 1 ,[ 1, 3

. j ]:.Ztj 

### 1224,the 1edcr:;l circiirr 

### ~oi:rr &ciiiii.d lz,

### PI?!:; rile $isc(j\~ci-;i doctril~c io a I:('( 

## 4 3-41') cmicrsioi~ ciisc slating, "i.'hcrc apart! not engagingin fraudulentconcealiiientassertsthcstarriic oflin1itatiiiriscicfiiiisc.ruc;ir courts have ref;ascd to apply the discoveryrule to negotiable instriirncnts, finding I inimical to UC'C policies of finality aricl negotiability." 

### .2lei1icilini, 995 F.2d at 1230. 

### 7122 

### In .Jl~isker iVercr 

### Co. I>.

### ~GIilIii~silcr SfirteHr~fiii (Iowa lOOO), 300 N.kV.2~1 

### 476, tile iowa Suprcn~e Coutt offered similar reasons for not applying tl3c discovery iioetrinc.to 21 l,yi'i' 

### 3 -3-310 conversion action and reported that otlier statcs are nearly ~ina~?inrous in tlieir rcftisai
to appiy tile discover-y rille in cases of conversion. It siiitcti, "tie 

### firlit thcir 

### IICC~S~OIIS pcrsuasivc arid note that such ai~iiiorityis cntitlcd to cvcn greater. defcrcncc where corrsistcricyaridunifht-mityofapplicationi~r-ecsse~itial cicmcntsoTact>mprchcnsive statutory scl~erne like

. . . the Uniform Cornniercial Coile." 

### Ifztskct. jVci.i;s 

### t,'~.. 460 X.W.2d at 378. 323 'PhcCourtofi\ppeals for the District ofColumbiaC'ircuit alsoendorsetithis approach. 111 

### Kuw(iizdzfirtv~~g~.s C'orj~. 

### v.Ainc~ric,(u~ 

### Set. 13(rtik(L1.C'. Cir. 1980), 

### 800 F.2d 356, the c<jLiri relectcd 

### the application of the discovery rulc to a 

### UCC 

### 9 3-11') action and held that "'the discovery rulc docs not apply to toll thc srati~te of lirnitatlons where a hailk is silcd ibr ccrrr~ersioii o~i a titrgccl endorscriient." rrnlessrhcb21nhtiaiiiiuiei~ril;ccii~cc:iictl theit.:insiiciion. 

### Kzlivuii z4irw(~.~,.s 

### C'(II~. , 800 

### F.2~1 at 402; c~uotii?g 

### S(jlii!i~t'c.~f /3(in/c c!i 

### Tr~st <?I. \,. Banker ',< 

### ('orirt~~crcicil 

### Lifi !/is. 

### C,'o. (Texas 107X)? 

### 503 S.'1ir.2d 320. ti24 '1'~voreasons cificn citeii for rejecting the application of ihc discovery iiocuir~c in convcrsion cascs are the neeti for finality in transactions involving negoiiablc instn~rnciiti~ 8

### and the presiiinption that a property olirler knows u-liai 

### and whcrc 

### his property 

### is. i-itisker


## 725 'The facrs 

### in MisXrr leii:s Ci)were similar t(j. 

### bvr cven morc harsh thani those now

the e~rtployer's indorsement on the checks, itnd depositeci tbe checks into his persocniti account. Tlie employee concealed hts ernbc//lemetrt from h~s employer, and the en~plo~ei did not cfiscol-erthe employee's actions until after lon~a's statute of limitaiions hail already

run. \Vhen the defendantbank 

### interposed the statute oflim~tat~ons defenseto the plaintlft's coi~vcr-sion action, the plainxiff stsscrted the discovery doctrine, ciainling the 

### employee's fiaudulcntconccain~entpreventcd itiscotery. Citingthe i.;C'i' objectives ofpreiiictahilityand finality in com~nercial transactions, thc Iowa Supreme 

### Court refiised ti? apply the iiiscoi-ery doctrine to conversion actrons, 1Vc thinic the consicterations of finality and predicbtbility represenred 

### by the majority r~11e are substantial and outweigh the countervailiilg equities which Icd us to apply the discovery rule 

### iri other cases. T1ic strength of our system of commerce depends on a negotiable 

### instrument law that is mechanical in application. 

### . . . 

### In cotlclusion, we hold that the discovery rttle does not apply toconversion actionsunder lovw,a.rodescctioil 554.34iO(l)(c)

### [1:CC 

## 5 3-41 

### 91. 'l'hc plaintifl-s cause of action against the Maliaska State Uank is therefore barrcd by the statute oflirnitations. The decision ofthedistrict court granting the bank's motion 

### for summery judgment is affirmed.

"25 'T'l?c court's rationale it1 SiitviiiiAii-ivitj:~('oip. 

### was that art employer shurr!ci bc abic 10 ciiscover 311 en~pIoyee tvho isforging checks within thc ;ipplic;?blc

### pcriod oi'iiil~itaii~~i by evercisiilg reasonable and prudent business practices. '~'therc in bc no cjucstioii in tiicilisiarri casc that snoriliiia1.y 

### business could iial;c dt.ieciecl ihu sipiliinii~g 

### oiioifmi!s wi!i:iil ;i three-year 

### period 

### (if t1;eir convci-sioin." iiztiiiiii;I!rr;.i~j..s 

### C,'oq?., 

### 890 F.2.d 

### ar 461 9127 Yarbro's attempt to trigger i~ppiicationof ;lie discovery doctrinc by asscrling Vlcl.can's frauiiuicilr concei~lmcnt is not l\:ell founded. biclcaii was Yarbro's cmploycc. 110t biFCU's cniployee;and Yarlxo has not ailcgcd anyconccalrnent on tlzc part of zi1f'C'I.i. \+~c have held that "when defendant's 'iiaudulent conccalr~~cnt' prevents a plaintiff konl discovering a cause of action?the statute of limitations is gcrlcrall) tolled." kllowsto~ic (2>rzfiritr1ce ofriie L'riiteni ,Mc~rilodi.st (%l~r-c/i 1,. 

### [).A.I>c~~;i(i.soii, /PIC.(1987). 228 24ont. 288. 204, 741 

### iJ.2d 794: 798. For frauciuicntconcealrrient to ctccur; "tl~cre must bc art afiir~native act corn~niired by the dclcnciant, and il~e afirl~rativc act must be calciilated to obscure the cuistcnce ofthe cause ofaction." Yc://o\t~.si(>i~c C~o~~j>~.eric~c~ o,f/l!e 

### L!/ii!e(i/L/cr/~o(ii,st C.Imt~~tJi, 228 biont. at 294, 741 P.2d 

### at 798. Yarhro has set hrth no evictence claiini~lg 

### MI;C'I' fraudulently co~lccalcd Mc1,cart's actions or Yarbro's discovery thereof. 728 We decline Yarbro's suggestion 

### to apply thc discovery doctrinc to Yarbro's colivcrsion claim. 'The plain meaning of530-3-122(7),CIC'Al requires commencenleot 

### of

a conversion action wit1ii11three years ofthe action's accrual. Further, the public \3!ould he poorly served by a rule tha~ effectively shifisthe respo~isihilitv for caref'ulbookkeeping aiild employee supervisioi~ a\vay ii-om rirose in the best position to nio~litor accounts ailc'i employees. The strict applicatiol: oftlie t!?r-ee-yearstatute oi'limitaiions, v-hiiei)re:iicrabiy harsh in sorirc cases, best serves tl~c goals adv::~-rccdby the ilr~ifor-~n Coinrrrcrcia! Code.4;29 

### [lairingdetcrmjncd tbc discoyery doctrine isnor applicahlc 

### in this case. 

### and that the :statute of limitations wris not tolied 

### h:- conzcalr?rcnt, t"ai.hro's argiiineilt that surnrilary juitgmcnt cannot be entered hccausc a questioii off;~ct rcmains regirding ivhen 

### Yi~iliro knew

or should havc kliown 

### of Mc1,can's forgerie rnust fiii. 'The 111ateri;il facts ncccssaq 

### kir determining if sttrnnlaryjudgrnent is appropriate by reason of statute of limitations 

### arc the clirtes ofthe convcrsion and the filing of Yarbro's Complaint. These facts arc noi in dispute, andtherethre, tl?c 1)istriet 

### ('our7 correctly licld that 

### ?VZI;C'I.:is catitledtojudgmc~lt as a illatleiof law 011Yarbro's con\crsion clann "30 :I- 

### 2. Did thc District Court err in granting summary judgment to 

### b1FC;U on Yarbr0.s breach oftvarranty claim 

### on the grounds that Yarbro \+-its responsible for the acts of its own crnployces'? 

### 731 In Count ll of its Complaint, Yarbro alleged that 

### MFCl.! is 

### a eollectirtg beilk and sougllt damages against 

### MFCV for brcacli of transfir marrantics under 

### $ 30-4-207?lilC1. Sectton 

### 30-3-207,

### MC.4, sratcs in part. (1) 

### :I custotner or collecting bank that iransiers iin item and rcccivcs o settlement or other consideration warrants to rlie transferee and to any subsequent collecting bank that: (a)the warrantor is a person elrtitleci to cnhrccthe item; (b) all signatures on the item arc 

### authentic 

### and autlrorizcd; (c) the rtenl has not been dltered; 

### (d)the ircnl is 

### no! subject to a ileknsc 

### or claini iii recoLzplnent stated in 

### 30-3-305(1)of anyparty to 111eitern that call be asserted againstthewarrantor; and(el the warrantor has 110 knowlec!ge of any iiisolveiicy pn>cccdi!ig cotnnicnced with respect to tile maker or acceptor or, in 

### rkcase of an unacceprcd draft*the cirawcr.



### *;?2 The District Co~i1.t granted sutntnary judg~~lcnt 

### ro k4IZ('11 on Varbro's brcach of warranty claim, holding, pursuant to 

## 5 30-3-420, 

### ?/1C.A9that an eiiiployer ~vho entrust an employcc with responsibility 

### tbr processing insti-uments is liable 

### if that cmployec ti-a~tdulcntiy endorses an instrument. except ttt the extent th;tt a party taking the irrstrulneilt for value fails to exercise ordinary care and tltereby contributes to the 

### loss. The Llistrict Court found that Yarbro produced iio cvidence to rctiitc hfFCl;'s factua! :~ssertions that blcL.can was an emplopec ei~lrustcd wiili responsibility ii,r processing instrunlcnts and that '1.IFC'I: had exercised ordinary care in acceptingthe instruniei-itsfor payrncnt. Thcrcfore, 

### it entered sumrnaryjrtcigmcnt on the breach ofwarranty clairn. On appeal, Yarbro argues that blcl..ean's actual or apparent authoritytoprocess instruments and\vhether 

### MFCC cxcrciscci ordinary care, \\ere questiotis of fact which precluded surnmaryjirdg~ncnt. 

### '33 

### VlFC1 argued to tlic District Court, and also to this <'our( on appeal, that while Y;irbro was indeed responsible for thc actions of irs own employees, and illat 'ilii('l; exercised ordinar;. care 

### in taking the instruments for payment, it ivas unnecessary to reach these issties bccausc the law iioes riot provide Yarbro a breach of iiiirrar~tq ren~edy iigainst 

### blF<:C in the first 

### instance. X2FCl:'s analysis is correct. 7'34 Scction 3(i-4-207(1 j, hlC'A,provides that 

### a ctisti:mer 

### or cc>licciing hank thattra:isfers

an instru~ncnt andreccives consideration thereformakcscertain wal-ranties "to tlictrar'isfcrec 12~ , ~* . and to ;ii~ysubscyiicnt 

### coilccriiig i~iin~.I'hus. rmnsikrors, who ipiaci: ui- r;.arlsCk'i?ian insrri~;nentividlii~ the i of COIII~IICIC~~~~ ir;i:i?i-?ciioi~s 

### i.cpcalciily iccicfia 

### ihi ii~strurncni andpayil~crcon until theinstrun~c!it rcaehcstl1c payor

### bank whicli miik~s ti?,: 

### final payrncni from ihc customer's iiccount, 

### warrant to their transkrccs, who are thoic to vdlhon? they pass the insrrument and from ~vlianl 111ey receive payn~ciit, 

### as folio\?vs: that ti~cy, the aanslerors, are entitlcd to enforce the instrumertt for payment, that rhc signatures on ihc iilstrurnent arc authentic and authori~cd, that the instrument ltas riot 

### beer! aiicrcci. that the instrument 

### is not subject to a dcfensc orclaim ofrecouprnent undcr 

## 5 30-3-305. ?vii';\ :ad that lllc transkror 

### is rtot atvare ofali it~solvcncy proceeding which mayafCeci paylienr on the instrunrent. '4 tra~~sfircc rcceivcs thc instrun~cnt aild 

### rnakcs payntent 

### to the transficror c.in tl:e basis of 

### these m~arra~ities, and is entitled to makc a breiicli of wan-ant? claim against i11c transfer-or

### in the cvcnt the instrunicnr is later determined tohe kaudulcni anti a rcimbnrsing payment to tlic transferee is denied. 

### 735 Clrrder these provisions, and tlic facts liere; Yarbro is not 

### a transt'ercc. It dici not receivethe instru~nents andtltc associated transferwa:-raniies from 

### MFC'II, a11d

### did iiot 

### make pay~ncrit o 

### b1FC'l.i in consideration tbr the insir~imcnts. 

### As i'arhro rcccived no instrument itr t-t-~lnsfer tvarranty from 

### MFi't.'. it is not entitled. undcr thc tcrms oi'the statiitc, to bring 

### a
cause of action forbrcach ofthar vvarral~ty against 

### MFC'I.,. Thc [I('(' proridcs 

### i.clnc.dics to Yarbro forthe losses it sustained. but brcacl~ ofir;inskr ..i.xrrar!ty against \:ti'<'!' 

### is not one
t~l~lll., . ""^ -,() 

### "it"" or?tlic groiinds tiliir 'iilrbri; was rcsponsib!c for h4ci~ian's actiol;.; tinder 

## c: 3~-.>-4;. 

### .. i ii. Altl~ougli !ic basis oi'thc District ('ciiirt's surnmaryjudgi~~c~~t iirdcr was iniorrcit, itriacl~cil

. . ijic COI.I.CCT restilt. ifthc district coui-t is comcct iii 

### its concliisions. It rs ii?n:nii!crial what icasons ucre ;issigned thcrcibr. I,(iiir.ic 1,. 

### M. & 

### L. fic'olti, Ch,li>. (I()??). 15'1 ?ilo~!i. 304. 

### 4081 498 P.2d 1102. 1194. l'he District Cou~n correc!ly concluded that sumrnaryjiidgil~eiit on Yarbri~'~ breach 

### of n.arranty claim against MFCU was appropriate 

### 737 1. Did the District Court err in denying Yarbro's motion for a change of venue? 

### 818 Varbro argues tllat the District Court encd in denying the 

### motion 

### for a cirange 

### of Lenue it filed, asserting tllat because livnorablc Fdi~ard ?i?cl.,ean \vas a potential ~virncs.; in the case, a conflict 

### ofinterestwaspresented

### thatjustified rnovirig thecase to ani,thcrj~iiiiciai district. Section 25-2-201, ill("/\. states wl~cn change of venue is r-ecluircd:

,

, Ihe court or judge ruusr, oilmotion, cliangc the place of trial 

### in the 

### foilo~ving cases: (1) 1~1ll1en the COLIII~~ des~gilated rn the 

### complaint rs not thc proper count): (2)u hen there is reasoli to believc that an irnpa~i~ai tr~al ca11not he had therein; 

### (3)nlren the cou\.enlcnceof a ~tncsscs andthe endsofjust~ce \~cw!d be promoted b>the change Yarbro's motion was based upon 

## 5 25-2-201(2),MC'A. Yarbro assertsthat an impartitil trial cannot hc had 

### in Clissoi~!a C'cxirity because Kathryn M/iri.e.*r: 

### is Judge 

### Mci2enn's iiiccc.iiecal~sc Katltryn Mcl.ca!i 

### is a party "3tiisaction.' aird i~icigc hlci.eiin isajiicigc iir .blissiii!a C'o:jncy. 

### V;rrbro assefls that 

### ii is a conflict 

### cif intcrcsi hr 1-ic>::orabi;- 

### John tV. i.aiion to presidi: aver 

### this mattes*as 

### Judge 

### Larsun and 

### Judge ?Mci,can work ii? thc 

### same courihouse 

### and arejudges 

### in tile samejadiciai district 

### 739 Yarbro filed its motion for change of vcnuc on 

### Jul! 

### 7, Z(iii!). 

### .CZI:CI

# ... ",.

s answer liitd hc~il tileti cln 

### September 10, 1999. 

### A plaintiff must raise zhe issue of 

### i-enur\vithin 

### 20 tkiys of the filing of tile dcfendanr's answer or wlieriever at SOI~C timemorethan 20 days afterthe lastpleading 

### has been filcit an event occurs which thereafier atyords good cause to believe that 

### an inipartiai trial cannor be had under ground 2 of said section 25-2-201, and competent proof is submitted to the court that such cause of impartiality did 

### not exist \vithin the 20-day period aftcr tire last plcadiilg tvas filed, then 

### the court may entertain a niotion to change the place of trial under ground 2 

### of section 25-2-201 within 20 days after that latcr event occurs. Rulc 12(b)(iiif,h1.R.Civ.P. Yarhro's motion for charrgc of venue was not filed within 2(J days 

### of 

### MFC'l.'s ans\vcr. Moreover, Yarbro has not pointed to any evcnt that i>ccurrcd20 days before Yarbro filed its niotion for change of vcnue that establishes good caiisc to be1ici.e that an in~pal-ti;~l trial cannot hc had 

### inklissouia County. To thc contrary, the rccortl ~ctlccts that Yarbro learned oftherclatrc>nshtp hct\\ccci Kathrqn ClcLean andJudge\lei edrl 

### in rbc fall oF lOO9, yet 

### dici not file its motion for chainge of venue until July 

### 3,2000, iong after expiratio11oftlrc 

### 20 days provided by Kr~lc 12,

### \/Z.ii.Civ.P. Bccilrise 

### Yarhro's 

### rnoiion 

### for change ofvei~ue was not tintelq, ihc District Cotit? 

### correctly denied 

### the 

### morion

'i\!t!iough not ilnincii in the captioil, Mcl.ean ~vasJoinci1 iil the action as a third party deiei1iia:;t. 

### 15The IIistrict Court 

### prciperiy granted summary judgmcnt 

### in ht:ar of 

### %.jli:Ci; or1 Yarhro's coi~version and brcaciz ofwarntr~ty clairtls. anti COI-~CCI~~ dl"ilii3d V~lj3i.0~~ iilOlj~i? 

### fix change 

### of venue. itsjudgmcnt is aiiinncd.



### We concur:Justice Tcrry N. 

### I'rie\r;cilcr concurring ffj41 I 

### concur .with 

### thc 111ajority Opinion. 

### 152 i 

### write scparatcly to 

### note that while 

### I agree sith the majority's rcjeciion of 

### thc disco\-ery doctrine as 

### applied to the facts in this case, 

### I would not foreclose possiblc a~plieation ofthat doctrine to conversion actions presented under other circumstances. y43 The discovel-y doctrine is an equitable principle 

### which 

### may depend on the circumstmccs of each case. For example, in 

### spite ofniy great respect forthe state of Iowa: 

### I would not follow 

### Husker !t7erv~7 

### Co.v.:2lirJtush 

### State 

### Bank (Iowa 1090)i 

### 460 N.\V.2d 476. 

### I mcntiort tliat because it is apparently cited with approval in the majority Opinion. 744 Except for this qualificatiorr, I 

### otlrci-wiseagree with thc majorit;' 

### Opinion.