# FILED June 6, 1997 Cecil Crowson, Jr. App ellate C ou rt Clerk I N THECOUR

TOFAPPEALS

FI R STTENNES SEEBANK, NATI ONAL ) HAM

I LTON C

HANC ER Y AS S OC I ATI ON, ) C. A . N O . 03A 01- 9701- C

H

- 00014 ) ) Pl a i ntif f

- A pp e lle e ) ) ) ) ) ) vs . ) HON. R. VANN OW ENS ) C HANC ELLOR ) ) ) ) ) J ES SEO. QUI LLI AN, ) AFFI R M ED AND R

EM ANDED ) D

e f e nda nt - A

ppe l l a nt )

RI CH A RD A . FI SH ER , Loga n, Thom

ps on, M

i l l e r , Bi l bo, Thom ps on & Fi s he r , P . C. , C

l e v e l a n d , for A

pp e lla nt . THOM ASL. N. KNI GHT, Gr i s h a m , Kni g ht &

Ho ope r , C

ha t t a nooga , f or A pp e l l ee.

O PI N I O N

Mc Mur r a y , J .2

Thi s c a s e or i gi na t e d a s a n a c t i on t o c ol l e c t m oni e s due unde r t he t e r m

s of a pr om

i s s or y not e e xe c ut e d byt he de f e nda nt t o t he p l a i ntif f Fi r s t Te nn e s s ee Ba nk , N a t i ona l A

s s oc i a t i on. A

n a ns w e r wa s f ile dby t he de f e nda nt a dm i t t i ng t he e xe c ut i on of t he not e a nd t h a t t he r e w

a s a n out s t a ndi ng ba l a nc e t he r e on. H e a l s of ile da c ount e r c l a i m

i n w hi c h he s ought a s e t of f a nd da m a ge s f or f or ge d c hecks dr a w

n on hi s a c c ount a nd pa i d by t he ba nk. The t r i a l c our t onm ot i on of t he pl a i nt i f f , e nt e r e d a s um m a r y j udgm

e nt a ga i ns t t he de f e nda nt on t he or i gi na l c om pl a i nt a nd di s m

i s s e d t he c ount e r c l a i m . A j udgm e nt i n t he a m

ount of $34, 399. 24 w a s e nt e r e d a ga i ns t t he de f e nda nt . Thi s app eal r e s u l t e d . W e af f i r m

t he j u dgm

e nt of t he t r i a l c o ur t .

The de f e nda nt c ha l l e nge s t he pr opr i e t y of t h e t r i a l c o ur t ' s act i o ni n gr a nt i ng t he pl a i nt i f f ' s m ot i on f or s um

m a r y j udgm

e nt . The pr i m

a r yt hr us t of t he a r gum e nt put f or t h by t he de f e nda nt i s t h a t t he ba nk w

a s ne gl i ge nt by f a i l i ng t o e xe r c i s e or di na r y c a r e a ndtoa c t w

ithco m

m e r c i a l r eas o n a b l e ne s s i ndeal i n gw i t ht he de f e nda nt ' s a c c ount .
Un de r t he undi s put e d f a c t s i n t he c a s e , t he de f e nda nt ' s bookke e pe r ha d, f or a pe r i od o f y ear s ( 1992- 1995) , f or ge d t he de f e nda nt ' s n a m

e o na l a r g e num

b e r o f checks , cas he dt he checks and us e dt he m

f or he r be ne f i t . Sh e i s now unde r i ndi c t m

e nt f or e m b ezzl e m

e nt . The de f e n d a nt a dm its th a t it w

a s the pr act i c e of hi s3

o ffi c e f or hi m

t o s i gn c he c ks pa ya bl e t o c a s h a n d ha ve t he bookke e pe r t a ke t he m t o t he ba nk, c a s h t he m f or hi m

a nd gi ve hi m t he cas h . The bo okke e pe r a ppa r e nt l y f or ge d s e ve r a l c he c ks m a de pa ya bl e t o c a s h, c a s he d t he c he c ks a nd c onve r t e d t he f unds t o he r ow nus e . She f ur t he r w r ot e c he c ks t o ot he r s i n pa ym e nt of he r pe r s ona l obl i ga t i ons . The re c or dfur t he r r e f l e c t s th a t the ba nk ha d s e nt s t a t e m e nt s of t he de f e nda nt ' s a c c ount , i nc l udi ng cancel e dchecks , t ohi m at t he pr ope r a ddr e s s e ve r y m ont h. The de f e nda nt a dm i t s r e c e i vi ng t he s t a t e m e nt s a nd t ha t he di d not r e vi e w t he c a nc e l e d c he c ks nor r econ c i l e hi s a c c ount dur i ng t he pe r i odw i t hi nw

hi c ht he em

b ezzl e - me nt t o okp l ace. R a t he r , he de l e g a t e dt ha t dut y t o hi s bookke e pe r wh oi s c ha r ge d w i t h e m be z z l e m

e nt . The de f e nda nt di s c ove r e d t he f or ge r i e s s om

e t i m e i n 1995 a nd r e por t e d t he m t o t he ba nk on A pr i l 6, 1995.

ST ANDARD O

FRE VI E W

Our s t a nda r d of r e vi e w i n c ons i de r i ngt he pr opr i e t y of s umma r y j udgm e nt i s a s f ol l ow

s :

The s t a nda r ds gove r ni ng a n a ppe l l a t e c our t ' s r e vi e w of a t r i a l c our t ' s a c t i on on a m ot i on f or s um

m a r y j udgm e nt a r e w

e ll s e ttle d . S i nc e our i nqui r y i nvol ve s pur e l y a que s t i on of l a w , no pr e s um

pt i on of c or r e c t ne s s a t t a c he s t o t he t r i a l c our t ' s j udgm e nt , a nd our t a s k i s c onf i ne dt o r e vi e w i ng t he r e c or d t o de t e r m i ne w he t he r t he4

r e qui r e m

e nt s of Te nn. R. C i v. P. 56 ha ve be e n m e t . C ow de n v. Sovr a nBa nk/ C

e nt r a l Sout h , 816 S . W . 2d741, 744 ( Te nn. 1991) . Te nn. R. C i v. P. 56. 03 pr ovi de s t ha t s um m a r y j udgm e nt i s onl y a ppr opr i a t e w he r e : ( 1) t he r e i s no ge nui ne i s s ue w

i t h r e ga r d t ot he m a t e r i a l f act s r e l e v a nt t ot he c l a i m

or de f e ns e c ont a i ne d i n t he m ot i on, Byr d v. Ha l l , 847 S . W

. 2d 208, 210 ( Te nn. 1993) ; a nd ( 2) t he m ovi ng pa r t y i s e nt i t l e d t o a j udgm e nt a s m

a t t e r of l a w ont he undi s put e d f a c t s . A nde r s on v. St a nda r d R e gi s t e r Co . , 559 ( Te nn. 1993) . The m ovi ng pa r t y ha s t he bur de n of pr ovi ngth a t its m o tio ns a tis f i e s the s e r e qui r e m e nt s . D o w n e nv . A

l l s t a t e I n s . C

o . , 524 ( Te nn. 1991) . The s t a nda r ds gove r ni ng t he a s s e s s m e nt of e vi de nc e i nt he s um

m a r y j udgm

e nt c o nt e xt ar e al s ow e l l es t a b

l i s he d. C

our t s m

us t vi e w

t he e vi de nc e i n t he l i ght m os t f a vor a bl e t o t he nonm ovi ng pa r t y a nd m us t a l s o dr a w

a l l r eas o n a b l e i nf e r e nc e s i n t he nonm ovi ng pa r t y' s f a vor . Byr d , 847 S . W

. 2da t 210- 11. C

our t s s houl d gr a nt a s umma r y j udgm e nt onl y w

he n bot h t he f a c t s a nd t he c onc l us i ons to be dr a w

n fro m t he f act s p e r m

i t a r eas o n a b l e p e r s o nt o r e a c h onl y one c onc l us i on. I d. Ca r v e ll v . Bo tto m s , 900 S . W

. 2d 23 ( Te nn. 1995) . The ch a ncel l or i s s u e da s c ho l a r l ym e m or a ndum

opi ni on i n w

hi c h he f ound t ha t t he r e w e r e s om

e di s put e d i s s ue s of f a c t but t h a t t he r e w

a s n og e nui n e i s s u e o f a m a t e r i a l f act w

hi c hr e qui r e dt h a t t he cas e b e t r i e d . The ch a ncel l or not e d t ha t " [ o] ne of t he f unda m e nt a l pr i nc i pl e s of c om m e r c i a l l a w

i s t ha t ' no pe r s on i s lia b l e o n a n i ns t r um e nt unl e s s hi s s i gna t ur e a ppe a r s t he r e on' " c iting K

a l e yv . U

ni o nPl a nt e r ' s N

a t ' l Ba nk , 775 S . W . 2 d607, 609. H

e f ur t he r c or r e c t l y not e d t ha t t he r e a r e e xc e pt i ons t o t hi s ge ne r a l r ul e . The e xc e pt i on upon w hi c h t he c our t ba s e s i t s de c i s i on i s t he pr ovi s i ons of T. C. A . § 4 7

- 4

- 4 0 6 , w

hi c ha t a ll tim e s m a t e r i a l pr ovi de d a s f ol l ow s :5 47- 4- 406, C

us t o m er' s dut yt odi s c o v er andrepo r t unaut ho r i z e ds i gnat ur e or aut hor i z at i on. —( 1 ) W he na ba nk s e nds t oi t s cu s t o m e r s a s t a t e m

e nt o f account accom p a ni e d byi t e m

s pa i d i n good f a i t h i n s uppor t of t he de bi t e nt r i e s or hol ds t he s t a t e m e nt a nd i t e m

s pur s ua nt t oa r e que s t or i ns t r uc t i ons of i t s c us t om e r or ot he r w

i s e i n a r eas o n a bl e m

a nn e r m

a ke s t he s t a t e m e nt andi t e m

s a v a i l a b l e t o t he c us t om e r , the c us t o m

er m us t exerci s e reas o nabl e care andpr om pt ne s s t oexam

i ne t he s t at e m

e nt and i t e m

s t odi s c o v e r hi s unaut ho r i z e d s i g nat ur e o r any al t e r at i o n o n an i t e m and m us t no t i f yt he bank pr o m pt l y af t er di s c o v eryt hereof . ( Em pha s i s a dde d) . ( 2 ) I f t he b a nkes t a b l i s he s t h a t t he cu s t o m e r f a i l e d w ithr e s pe c t t o a n i t e m t o c om pl y w i t h hi s dut i e s i m

pos e d ont he c us t om

e r by s ubs e c t i on ( 1) t he c us t om e r i s pr e c l ude d f r om

a s s e r t i ng a ga i ns t t he ba nk: ( a ) Hi s una ut hor i z e d s i gna t ur e or a ny a l t e r a t i on on t he i t e m

i f t he ba nk a l s o e s t a bl i s he s t ha t i t s uf f e r e d a l os s by r e a s on of s uc h f a i l ur e ; a nd ( b ) Anuna ut hor i z e d s i gna t ur e or a l t e r a t i on by t he s a m e w r ongdoe r on a ny ot he r i t e m pa i d i n good f a ithby t he b a nka f t e r the f i r s t ite m a n d s t a t e m e nt w a s av a i l a b l e t ot he cu s t o m e r f or a r e a s ona bl e pe r i od not e xc e e di ng f our t e e n ( 14) cal e nd a r da ys a nd be f or e t he ba nk r e c e i ve s n o tif i c a tio nf r om t he c us t om

e r of a ny s uc h una ut hor i z e d s i gna t ur e or a l t e r a t i on. ( 3 ) A c us t om

e r w ho doe s not w

i t hi n one ( 1) ye a r f r om t he tim

e the s t a t e m

e nt a n dite m

s a r e m

a d e av a i l a b l e t o t he c us t om

e r ( s ubs e c t i on ( 1) ) di s c ove r a nd r e por t hi s una ut hor i z e d s i gna t ur e or a ny a l t e r a t i on on t he f a c e or b ackof t he i t e m

or doe s not w

i t hi n t hr e e ( 3) ye a r s fro m t ha t t i m

e di s c ove r a nd r e por t a ny una ut hor i z e d e ndor s e - me nt i s pr e c l ude d f r om a s s e r t i ng a ga i ns t t he ba nk s uc h una ut hor i z e ds i gna t ur e or e ndor s e m e nt or s uc h a l t e r a t i on. ( 4) I f unde r t hi s s e c t i on a pa yor ba nk ha s a va l i d de f e ns e a ga i ns t a c l a i m of a c us t om

e r upon or r e s ul t i ng fro m pa ym e nt of a n i t e m

a nd w a i ve s or f a i l s upon r e que s t t oas s e r t t he de f e n s e t he b a nkm a yn o t as s e r t ag a i n s t any c o l l ect i n g ba nk or ot he r pr i or pa r t y pr e s e nt i ng or t r a n s f e rri n gt he i t e m a c l a i m

ba s e d upon t he una ut hor i z e d s i gna t ur e or a lte r a tio ng i vi n gr i s e tothe c us t om e r ' s c l a i m . [ A c t s 1963, c h. 81, § 1 ( 4- 406) l 1991, c h. 52, § 3. ]6

The de f e nda nt i ns i s t s t ha t i t i s ne c e s s a r y t o l ook t o t he l e gi s l a t i ve hi s t or y of T. C. A . § 47- 4- 406 f or a pr ope r i nt e r pr e t a - t i on of t he e na c t m e nt . W

e a r e of t he opi ni on t ha t t he s t a t ut e i s una m bi guous a nd t ha t t he l e gi s l a t i ve hi s t or y i s i r r e l e va nt .
The m

os t ba s i c r ul e of s t a t ut or y c ons t r uc t i on i s t oas cer t a i nandgi ve e f f e c t t o t he i nt e nt i on a ndpur pos e of the le g i s l a t ur e . W or r a l l v. K

r oge r C

o ., 5 4 5 S . W

. 2 d736 ( Te nn. 1977) . Le gi s l a t i ve i nt e nt or pur pos e i s t o be a s cer t a i n e dpr i m

a r i l y f r om

t he na t ur a l a nd or di na r y me a ni ngof t he l a ngua ge us e d, w i t hout f or c e d or s ubt l e c ons t r uc tio nt ha t w oul d l i m

i t or e xt e nd t he m e a ni ng of t he l a ngua ge . N

a tio n a l G

a s D i s t r i but or s , Inc . v . S t a t e , 804S . W

. 2d 66 ( Te nn. 1991) . W he r e t he l a ngua ge c ont a i ne d w ithi nt he f o ur cor n e r s o f a s t a t ut e i s p l a i n , cl ear , and una m bi guous a n dthe e n a c t m e nt is w

ithi nle g i s l a tiv e c o m p e t e nc y , " t he dut y of t he c our t s i s s i m pl e a nd obvi ous , n a m

e l y, t o s a y s i c le xs c r i p t a , a nd obe y i t . " M ille r v . Childr e s s , 21 Te nn. ( 2 H um . ) 319, 321- 22 ( 1841) . The de f e nda nt a l s o i ns i s t s t ha t t he ba nk i s s ubj e c t t o c o m p a r a t i v e ne gl i ge nc e a s a dopt e d i n M c I nt yr e v. Ba l l e ntine , 833 S . W . 2d 52 ( Te nn. 1992) W e f i nd no a ut hor i t y f or t hi s pr opos i t i on a s the s t a t ut e e xi s t e da t t i m e s m a t e r i a l t othi s di s p ut e . The s t a t ut e w

a s a m e nde d i n 1995. The 1995 a m e ndm e nt a dde d s e ve r a l pr ovi s i ons toT. C. A . § 4 7- 4- 40 6 i nc l udi ng a pr ovi s i on t ha t " [ i ] f t he c us t om

e r pr ove s t ha t t he ba nk di d not pa y t he i t e m i n good f a ith , t he pr e c l us i on unde r s ubs e c t i on ( d) doe s not a ppl y. " The c o mme nt s t o t he of f i c i a l t e xt a f t e r t he 1995 a m e ndm e nt s e e m

t o i n di c a t e t ha t c om pa r a t i ve ne gl i ge nc e m a y now be a c ons i de r a t i on7

unde r thi s s e c t i on of t he c ode . The c om m e nt s , i n pe r t i ne nt pa r t a r e as f o l l o w

s :

4. Sub s ect i o n( e ) r e p l aces for m e r s ubs e c t i on ( 3) a nd pos e s a m

odi f i e d c om

pa r a t i ve ne gl i ge nc e t e s t f or de t e r - m i ni n glia b ility . S e e the di s c u s s i on on t hi s poi nt i n t he C om m e nt s t o Se c t i ons 3- 404, 3- 405, a nd 3- 406. The t e r m " good f a i t h" i s de f i ne d i n Se c t i on 3- 10 3( a ) ( 4 ) a s i nc l udi ng"ob s e r v a nce o f r eas o n a b l e com m e r c i a l s t a nd a r d s of f a i r de a l i ng. " The c onnot a t i on of t hi s s t a nda r d i s f a i r ne s s a nd not a bs e nc e of ne gl i ge nc e . Si n ce, how

e ve r , t hi s a m

e ndm e nt w a s not en act e dunt i l af t e r the d a t e s m

a t e r i a l tothi s cas e , t he a m e ndm e nt ha s no c ons e que nc e a s t o t he o ut c o m

e he r e . W

e b e l i e v e t h a t t he s a m e r eas o ni n gas app l i e di n V e ndi ngC

ha t t a nooga , I nc . , v. A m e r i c a n N

a t ' l Ba nk &

Tr us t C

o ., 7 3 0 S . W . 2 d624 ( Te nn. 1987) i s a ppl i c a bl e he r e . In V e ndi ng , t he c our t not e d:

I na f or g e r ycas e , w e s t a r t w

i t ht he b a s i c pr e m i s e a nd r ul e of l a w

t ha t be t w

e e n t he c us t om

e r a nd t he ba nk, t he ba nk m

us t be a r t he l os s w he r e m oni e s ha ve be e n pa i d out due t oa t hi r d pa r t y f or gi ng t he c us t om e r ' s s i gna t ur e ona c he c k. Te nn. C ode A nn § 47- 3- 401( 1) , pr ovi de s " N o pe r s oni s l i a bl e on a n i ns t r um e nt unl e s s hi s s i gna t ur e a ppe a r s t he r e on. " The s i gna t ur e of t he dr a w e r i s one of t he es s e nt i a l el e m e nt s t ot he v a l i di t yo f a checkandt he g e ne r a l r ul e i s t he ba nk m us t know

t he ge nui ne ne s s of t he de pos i t or ' s s i gna t ur e . A m e r i c a nN

a tio n a l Ba nkv . M ile s , 18 Te nn. A

pp. 440, 79 S . W

. 2d 47 ( 1935) . Ane xc e pt i on t o t hi s ge n e r a l r u l e i s co nt a i n e di n T. C. A . § 47- 4- 406, w

hi c h, a s pe r t i ne nt he r e pr ovi de s : C us t om e r ' s dut y t o di s c ove r a nd r e por t una ut hor i z e d s i gna t ur e or a l t e r a t i on. - - ( 1) W he n a ba nk s e nds t o i t s c us t om e r a s t a t e m

e nt o f account accom p a ni e db yi t e m

s p a i d i ngood f a i t h i n s uppor t of t he de bi t e nt r i e s or hol ds1This provision was removed by the 1991 amendment. 8 t he s t a t e m

e nt andi t e m

s pur s ua nt t o a r e que s t or in s t r u c - tio n s o f its c us t om e r or ot he r w

i s e i n a r e a s ona bl e m a nne r m a ke s t he s t a t e m

e nt andi t e m

s av a i l a b l e t ot he c us t om e r , t he c us t om

e r mu s t ex e r c i s e r eas o n a b l e car e andpr o m p t n e s s t oex a m

i n e th e s t a t e m

e nt a nd i t e m

s t o di s c ove r hi s una ut hor i z e d s i gna t ur e or a ny a l t e r a t i on on a n i t e m a nd m us t not i f y t he ba nk pr om pt l y a f t e r di s c ove r y t he r e of . ( 2 ) I f t he ba nk e s t a bl i s he s t ha t t he cu s t o m e r f a i l e dw

ith r e s pe c t t o a n i t e m t o c om

pl y w i t h t he dut i e s i m pos e d on t he c us t om

e r bys ubs e c t i on ( 1) t he c us t om e r i s pr e c l ude d f r om a s s e r t i ng a ga i ns t t he ba nk: ( a ) hi s una ut hor i z e d s i gna t ur e or a ny a l t e r - a tio non t he ite m

if the b a nka l s oe s t a b lis he s th a t i t s uf f e r e d a l os s by r e a s on of s uc h f a i l ur e ; a nd ( b ) a n una ut hor i z e d s i gna t ur e or a l t e r a t i on by t h e s a m

e w r ongdoe r on a ny ot he r i t e m pa i d i n go o d f a ithby t he ba nkaf t e r the f i r s t ite m a n ds t a t e - me nt w a s av a i l a b l e t ot he cu s t o m e r f or a r eas o n a b l e pe r i odnot e xc e e di ng f our t e e n ( 14) c a l e nda r da ys a nd be f or e t he ba nk r e c e i ve s not i f i c a t i on f r om t he c us t om e r of a ny s uc h una ut hor i z e d s i gna t ur e or a lte r a tio n . ( 3 ) The pr e c l us i on unde r s ubs e c t i on ( 2) doe s not a ppl y i f t h e c u s t o m e r es t a b l i s he s l acko f or di na r yc a r e on t he pa r t of t he ba nk i n pa yi ng t he ite m ( s ) . 1 The a ppe l l a nt ba nk c ont e nds t ha t t he t r i a l c our t a nd t he C our t of A

ppe a l s w

e r e i n e r r or i n t he a ppl i c a t i on of t he f act s o f t hi s cas e t ot he la w a s c o nt a i ne dinT. C. A . § 47- 4- 406, i nth a t: ( 1 ) p l a i ntif f , V e n di n gC

ha t t a nooga , I nc . , di dn o t ex e r c i s e r eas o n a b l e car e t oex a m i n e i t s ba nkst a t e m

e nt a nd t he e nc l os e d c he c ks i n or de r t o di s c ove r t he una ut hor i z e d s i gna t ur e s of i t s pr e s i de nt on t he f or ge d c he c ks , a nd f a i l e d t or e por t t he f or ge r i e s to t he ba nk a s r e qui r e d by l a w ; a nd ( 2) t he ba nk e xe r c i s e d or di na r y c a r e i n honor i ng t he c he c ks be a r i ng t he f or ge d s i gna t ur e s . Al l f or t y c he c ks i nvol ve d " a n una ut hor i z e d s i gna t ur e or a l t e r a t i on of t he s a m e w r ongdoe r , " a n d t hus t he s p eci a l pr ovi s i on of s ubs e c t i on ( 2) ( b) of T. C. A . § 47- 4- 406c om

e s i nt o pl a y. Thus , i f t he c us t om e r i s f ound not t oh a v e exe r c i s e dr eas o n a b l e car e i nex a m i ni n gt he9

ba nks t a t e m

e nt s , t he ba nk w oul d not be l i a bl e f or f or g e r i e s p a i daf t e r t he f i r s t f or g e dcheckands t a t e m e nt wa s av a i l a b l e t ot he cu s t o m e r f or a r eas o n a b l e p e r i o dnot e x ceedi n gf our t e e ncal e nd a r da ys be f or e t he ba nk r e c e i ve s not i f i c a t i on f r om t he c us t om

e r of t he f or ge r y.

The de f e nda nt r e a di l y a dm i t s t ha t he di d not e xa mi n e t he s t a t e m e nt s of a c c ount a nd c he c ks t ha t w e r e s e nt t o hi m

by t he ba nk. H i s de pos i t i on t e s t i m ony di s c l os e s t he f ol l ow i ng:

* * * * * Q. Al l r i ght. But w ithr e s p e c t to , s a y , th i s p e r i od of ab o ut a y ear anda h a l f , t w oy ear s t h a t s he [t he bookke e pe r ] w

or ke d f or you, how m a nytim

e s do you t hi nkyou w

oul d ha ve l ooke d a t a ba nks t a t e m e nt f r om Fi r s t Te nne s s e e Ba nk on t hi s a c c ount ? A. M a ybe f our or f i ve t i m e s . Q. A l l r i ght . W

a s t he r e a nyt hi ng t ha t you not i c e d on a nyof t hos e f our or f i ve oc c a s i ons t ha t w a s un us ua l ? A. N ot hi ng unus ua l a t t he t i m e . Q. Al l r i ght, s i r . But di dy o un o t a tte m p t tom

a t c h t he checks t h a t w e r e i nt h o s e s t a t e m e nt s w iththe s t a t e m e nt s t he m

s e l ve s , di d you? A. No , s i r . I j u s t accept e di t as a t r u e cop yand w h a t e v e r . Q. But you w

oul d be a w

a r e of t he f a c t t ha t t he be s t w a y or e a s i e s t w

a y t o de t e c t a f or ge r y w oul d be t o c om pa r e t he c he c k i t s e l f w i t h t he e nt r y on t he s t a t e m e nt, c or r e c t, s i r ? A. Th a t ' s cor r ect . Q. A l l r i ght . I n ot he r w or ds , you l ooke d a t num e r ous c hecks he r e a f e w m i nut e s a go a nd c oul d t e l l us e a s i l y w

hi c h w e r e not f or ge r i e s , r i ght ?10

A. W e ll, I l ooke d a t t he s e a t l e ngt h a n hour or t w o a go. I di dn' t s t udy t he one s t ha t c a m e t hr ough a s c l os e l y a s I di d t he s e t oda y. Q. M y poi nt i s , D

r Q ui l l i a n, ha d you l ooke d a t t he c hecks w

he n t he ycam

e i neachm

o nt h , eachandev e r y m ont h, m

ont h i n a nd m

ont h out , y o u c oul d ha ve de t e c t e d w

hi c h w e r e your s i gna t ur e s a nd w hi c h w e r e f or g e r i e s ? A. I f I ' d be e n a l e r t , a l e r t e nough t o, I w oul d ha ve , but I ha d no i de a t ha t a nyt hi ng w a s w r ong. Q. O ka y. But I ' m

not a s ki ng you, a nd I w oul d a s ko r r e que s t t ha t you a ns we r m y que s t i on. H

a d you l ooke da t t hos e c he c ks , you c oul d h a v e d e t ect e d w hi c h one s w

e r e f or ge r i e s , c oul d you not ? A. I c oul d. I ha ve done s o t oda y.

* * * * *

Si m p l ys t a t e d , t he de f e nd a nt f a i l e dt oex e r c i s e r eas o n a b l e car e a nd di l i ge nc e i n di s c ove r i ng t he f or ge r i e s a nd di d not t i m e l y not i f yt he ba nk. " . . . a de pos i t or m us t be he l d c h a r g eab l e w ith know l e dge of a l l t he f a c t s t ha t a r e a s ona bl e a nd pr ude nt e xa m i na - tio nof t he r e t ur ne d ba nk s t a t e m e nt s w oul d ha ve di s c l os e d ha d i t b eenm a de by a pe r s on on t he de pos ito r ' s b e ha l f w ho ha d not p a r t i c i p a t e dinthe f or g e r i e s . " V e ndi ng C

ha t t a nooga , s upr a .
I nc onc l us i on, w

e c onc ur w

i t h t he f i ndi ngs of t he t r i a l c our t t h a t t he r e ar e n om a t e r i a l i s s u e s i nt hi s cas e w hi c hr e qui r e a t r i a l . W

e a f f i r m

the ju dg m

e nt o f the tr i a l c o ur t ina ll r e s p e c t s .11

C o s t s o f t hi s cas e ar e as s e s s e dt ot he de f e nd a nt . Thi s cas e i s r e m a nde d t o t he t r i a l c our t .

______________________________ D on T. M

c M ur r a y, J udge

CONC UR:

___________________________________ H e r s c he l P. Fr a nks , J udge

___________________________________ C ha r l e s D

. Sus a no, J r . , J udgeI N THECOUR TOFAPPEALS

FI R STTENNES SEEBANK, NATI ONAL ) HAM

I LTON C

HANC ER Y AS S OC I ATI ON, ) C. A . N O . 03A 01- 9701- C

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- 00014 ) ) Pl a i ntif f

- A pp e lle e ) ) ) ) ) ) vs . ) HON. R. VANN OW ENS ) C HANC ELLOR ) ) ) ) ) J ES SEO. QUI LLI AN, ) AFFI R M ED AND R

EM ANDED ) D

e f e nda nt - A

ppe l l a nt )

JUDG M E NT Thi s a ppe a l cam

e o nt o be he a r d upon t he r e c or d f r om t he C h a ncer yC

our t of H

a m i l t on C

ount y, br i e f s a nd a r gum e nt of c ouns e l . U ponc ons i de r a t i on t he r e of , t hi s C our t i s of opi ni on t ha t t he r e w a s no r e ve r s i bl e e r r or i n t he t r i a l c our t . We a f f i r m

the ju dg m

e nt o f the tr i a l c o ur t ina ll r e s p e c t s . C o s t s o f ar e as s e s s e dt ot he de f e nd a nt . Thi s cas e i s r e m a nde dt o t he tr i a l c o ur t .13

PER CU RI A M