` NO. 07-03-0406-CV IN THE COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TE XAS

AT AMARILLO PANEL C DECEMBER 20, 2004

______________________________ BANK OF AMERICA, N.A., Appellant

v. AMARILLONATIONA L BANK, Appellee

_________________________________ FROM THE 108 TH DISTRICT COURT OF POTTER COUNTY; NO. 86,711-E; HON. ABE LOPEZ, PRESIDING

_______________________________

Opinion

_______________________________ Before JOHNSON, C.J., and QUINN and REAVIS, JJ. Bankof America (BOA) ap peals fro m a final summary judgment awarding Amarillo National Bank (ANB) damages. The d amages purportedly arose from BOA’s alleged breach of

a warranty accompanying the presentation of a check. It is undisputed that the instrument presente d to and paid by ANB wascounterfe it or a fo rgery. Fi ve issue s are before us; however, we need only consider the first and last for they are dispositive of the appeal. And, thro ugh them, we must determine whether a counterfeit or fake check is an alter ed ins trument for purposes of the warranties encompassed in §4.208 of the Tex as1 Of note is t hat ANB also h onored t he $522,00 0 check pay able t o Megadoor. So, bot h Surber and

Megadoor were pai d. 2 Business and Comm erce Cod e. We con clude th at it is n ot, reverse the summary ju dgment, and remand the cause for further proceedings. Background A ch eck in the amount of $500,000 purportedly drawn by Western Builders and made payable to Robert L. Surber was deposited i nto Surber’s account at BOA. At the time, Western m aintaine d an acco unt w ith ANB. Furthermore, it is undisputed that
someone ot her than personne l at Weste rn created and sig ned the S urber ins trument. Indeed, itwas of a different size than Western’s checks. So too was the paper on which itwas print ed differen t than that of Western’s. Nonetheless, Western’s account number with ANB appeared on the item, as did Western’s name. Additionally, ANB contended that itwas a copy of an actual check numbered 0 36830, issued byWestern, dated 4/15/99, and made payable to Megadoor, Inc., in the amount of $522,00 0. The face of the copy reflected a check numbered 36830, payable to R. L. Surber in the amount of $500 ,000, and dated 4/27/99. Once Surber d eposited the chec k, BOA for warded i t to ANB, and the latter pa id it. 1 When Western o btained its bank statement, itnoted the $500,000 debit and informed ANB th atthe Surb er check was a for gery. AN B then cr

edited We stern’s a ccount for th e $500,000 and attempted to obtain an equal sum from BOA and Surber. Only $324,096.33
was recovere d, howev er. There after, ANB sued BOA , contend ing that BOA breac hed its presentment warranty under §§3.417 and 4.208 of the Uniform Commercial C ode.2 Though ANB mentioned both §§3.417 and 4.208 of the Business and Comm erce Code in it s li ve

plea ding , only 4 .208 wa s m entio ned in its m otion for sum ma ry judg me nt. 3 Issue was joined, and both parties moved for summary judgm ent . The tri al court granted t hat of AN B. Issue One – Alteration In its first issue, BOA contends that because the check wasnot altered, it could not have breached any warranty imposed by §4.208 of the Code. 2 Thus, ANB was not entitled to summary judgment; instead, BOA was. We sustain the issue. The Law and Its Application Both traditional and no evidence motions for su mmary judgment were filed by the parties. The standards applicable to reviewing each are well settled and need not be reiterated. Instead, we cite the parties to Kimber v. Sider is, 8 S.W.3d 6 72, 6 74-75 (Tex. App.–Amarillo 1999, no pet.) for their explanation. Additionally, when both sides move for summary

judgment and the trial court grants one motion and denies the other, we review the evidence pr esented by both movants and determine all dis positive questions presented. Bradley v. State e

x rel. Whi

te, 990 S.W.2 d 245, 24 7 (Tex. 1 999). Next, ac cording to §4.208of the Bu siness a nd Commer ce Code,

. . . If an unaccepted draft is presented to the drawee for payment . . . and the drawee pays . . . the draft, (i) the person obtaining payment . . ., at th e time of presentment, and (ii) a previous transferor of the dra ft, at the time of transfer, warrant to the drawe e that pa ys . . . thedraft in good fai th that: * * * (2) the dr

aft has no t been al tered . . .

. T EX
. B US
. & C OM
. C OD E A NN
. §4 .208(a)(2 ) (Vernon 2002). A NB conte nded tha t BOA breached this war ranty because the Surb er check a ltered th e origin al check payableto4

Megadoor

. BOA asserted otherwise. Our task is to determine the meaning of “altered” for if the Surber item was not an alteration of the Mega door chec k, §4.208 (a)(2) is irreleva nt. According to the Busines s and Co mmerce Co de, an “a lteration ” consists of 1) “an unauthorized change in an instrument that purports to modify in any respect the obligation of a p arty” or 2) “an unauthorized addition of words or numbers or other cha nge to an incomple te instrume nt relati ng to the obli gation of a party.” Id. §3.407(a)(1)&(2). As can be readily seen, the idea of alter ing a n instrument presupposes the existence of an instrumen t. Charter Bank N orthwest v. Evanst on Ins. Co., 791 F.2d 379, 383(5 th Cir. 1986). Without a preexisting instrument, there ca n hardly be something to change or complete

. So too does

this def inition connote a changeto, or on, t hat preex isting d ocument. Not only is this evinced through the interpretation accorded the word “alteration” by such legal publicat ions such as Black’s Law Dictionary but al so by judicial opinion. Under the former, an alteration is “[a]n act done to an instrument , after its executi on, where by its meaning or langu age is ch anged.” B LAC K ’ S L AW D I CTIONARY 85 (8 th ed. 2004) (emphasis added). If change is being done “to an in strument,” reason suggests that the physical instrument itself undergo change, not some other document. For

instance, there is but one “Mona Lis a.” While it may be subject to alteration, one does not do so by making a co py of the masterpiece and then changing the confident smile of the woman appearing in the copy. Moreover, this very idea lay at the heart of the opin ions in Charter Bank Northwest
v. Evans ton Ins. Co., 791 F.2d 379 (5 th Cir. 1986) and Firstar Bank, N.A. v. Wells Farg o Bank, N.A., No. 02-C- 186, 200 4 U.S. Di st. L EXIS 10767 (N.D. Ill. June 14, 2004). In each, the court rejected the argument that creating a document equated the alter ation of it.5

Charter Bank No rthwest v. Evanston Ins. Co., 791 F.2d at 383 ; Firstar Bank, N.A. v. Wells Fargo Ba nk, N.A., 2004 U.S . Dist. L EXIS 10767 a t 21-22. Given the foregoing authorities, we conclude that before §4.208(a)(2) applies, any alteration must appe ar or be m ade on th e body of th e original i nstrument, as oppos ed to appearing simply on a copy of the original . Yet, he re, the ch eck prese nted by S urber to BOA was not an actual check issued by Western. No one disputes that. Ra ther, it was one created by Surber

or someone else and made to look like a Western check. So, because
we deal with a different physical document (and even though it may look like another) our situation likens to that before the courts in Chart er Bank and Firstar Bank. That is , a preexisting document is not being physically modified or completed, but rather, a new one is being made tha t contain s differe nt terms. In short, an d akin to

the “MonaLisa,” there was but one check issued by Western, numbered 036830, and madepayableto Megad oor, I nc., in the amount of $522,000. Neither Surber nor his compatriot (if any) altered it by copying the i tem and then changing the terms ap pearing on the face of the copy. He or they si mply made another, sepa rat e instrumen t. And, in making a separatecheck, the individual who created the fake i tem did notalter the original, as contemplated by §3.417 or §4.208 of the Business and Commerce Co de. Consequently, and as a matter of law, BOA cou ld not have been held liable fo r breachin g warrant ies that arise wh en passi ng an al tered che ck.

Issue Fiv

e – Summa ry Judgment on Cou nterclaim In the final issue thatwe need to addre ss, i.e. issue five, BOA contends that the trial court erre d in dis posing of its coun terclaim sua spon te . We sustain the issue.6

Neither party mov ed for sum mary judgment on the co untercla im filed by BOA againstANB. Since the trial court cannot enter summary judgment upon a cl aim which was notencompas sed by th e motion for summary judgment and that occurred here, see Kimber
v. Sideris, 8 S .W.3d at 675 (stating that all theories in support of or in opposition to a motion for

summary judgment must be presented to the trial court in writing), the trial co urt erred. Having sustained issues one and five, it is un necessary for us to address the others. Accordingly, we reverse the summary judgment of the trial court, enter

judgment declaring that ANB take

nothing from BOA

upon its claim of breached warranty

under §4.208 of the Business and Commerce Code, and remand the cause for further proceedings.

Brian Quinn Justice