Opinion ID: 1918982
Heading Depth: 2
Heading Rank: 2

Heading: whether rogers' delay in detecting the forgeries barred suit against union planters.

Text: ¶ 13. The relationship between Rogers and Union Planters is governed by Article 4 of the Uniform Commercial Code, enacted in Miss.Code Ann. §§ 75-4-101 through -504 (Rev.2002).Section 75-4-406(a) & (c) [5] provide that a bank customer has a duty to discover and report unauthorized signatures; i.e., forgeries. [6] Section 4-406 of the UCC reflects an underlying policy decision that furthers the UCC's objective of promoting certainty and predictability in commercial transactions. The UCC facilitates financial transactions, benefitting both consumers and financial institutions, by allocating responsibility among the parties according to whomever is best able to prevent a loss. Because the customer is more familiar with his own signature, and should know whether or not he authorized a particular withdrawal or check, he can prevent further unauthorized activity better than a financial institution which may process thousands of transactions in a single day. Section 4-406 acknowledges that the customer is best situated to detect unauthorized transactions on his own account by placing the burden on the customer to exercise reasonable care to discover and report such transactions. The customer's duty to exercise this care is triggered when the bank satisfies its burden to provide sufficient information to the customer. As a result, if the bank provides sufficient information, the customer bears the loss when he fails to detect and notify the bank about unauthorized transactions. See, e.g., Am. Airlines Employees Fed. Credit Union v. Martin, 29 S.W.3d 86, 92 (Tex.2000).
¶ 14. The court admitted into evidence copies of all Union Planters statements sent to Rogers during the relevant time period. Enclosed with the bank statements were either the cancelled checks themselves or copies of the checks relating to the period of time of each statement. The evidence shows that all bank statements and cancelled checks were sent, via United States Mail, postage prepaid, to all customers at their designated address each month. Rogers introduced no evidence to the contrary. We therefore find that the bank fulfilled its duty of making the statements available to Rogers and that the remaining provisions of § 75-4-406 are applicable to the case at bar. See Whitney Nat'l Bank v. Baker, 122 S.W.3d 204, 208 (Tex.Ct.App.2003) (bank's duty under § 4-406 is satisfied when bank sends regular monthly statements to customer). ¶ 15. In defense of her failure to inspect the bank statements, Rogers claims that she never received the bank statements and cancelled checks. Even if this allegation is true, [7] it does not excuse Rogers from failing to fulfill her duties under § 75-4-406(a) & (c) because the statute clearly states a bank discharges its duty in providing the necessary information to a customer when it  sends . . . to a customer a statement of account showing payment of items. See Miss.Code Ann. § 75-4-406(a) (emphasis added). See also Stowell v. Cloquet Co-op Credit Union, 557 N.W.2d 567 (Minn.1997) (once bank statements placed in mail, account holder bears risk statements will be lost or intercepted). The word receive is absent. The customer's duty to inspect and report does not arise when the statement is received, as Rogers claims; the customer's duty to inspect and report arises when the bank sends the statement to the customer's address. A reasonable person who has not received a monthly statement from the bank would promptly ask the bank for a copy of the statement. Here, Rogers claims that she did not receive numerous statements. We find that she failed to act reasonably when she failed to take any action to replace the missing statements.
¶ 16. A customer who has not promptly notified a bank of an irregularity may be precluded from bringing certain claims against the bank: (d) If the bank proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by subsection (c), the customer is precluded from asserting against the bank: (1) The customer's unauthorized signature. . . on the item, if the bank also proves that it suffered a loss by reason of the failure; . . . Miss.Code Ann. § 75-4-406(d)(1). ¶ 17. Also, when there is a series of forgeries, § 75-4-406(d)(2) places additional duties on the customer: (2) The customer's unauthorized signature. . . by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature . . . and after the customer had been afforded a reasonable period of time, not exceeding thirty (30) days, in which to examine the item or statement of account and notify the bank. Id. A bank may shorten the customer's thirty-day period for notifying the bank of a series of forgeries, and here, Union Planters shortened the thirty-day period to fifteen days. The statute states that a customer must report a series of forgeries within a reasonable period of time, not exceeding thirty (30) days, . . The 30-day period is an outside limit only. However 30 days is presumed to be reasonable and the bank bears the burden of proving otherwise. Lawrence's Anderson on the Uniform Commercial Code § 4-406:19, at 423 (3d ed.2000); see also Flagship Bank of Seminole v. Complete Interiors, Inc. 450 So.2d 337 (Fla.Dist.Ct.App.1984). ¶ 18. Although there is no mention of a specific date, Rogers testified that she and her son began looking for the statements in late May or early June of 2001, after her husband had died. Her son felt that it was prudent to consolidate some of the five bank accounts. When they discovered that statements were missing, they notified Union Planters in June of 2001 to replace the statements. At this time, no mention of possible forgery was made, even though Neal, Jr., thought that something was wrong. In fact, Neal, Jr., had felt that something was wrong as far back as December of 2000, but failed to do anything. Neal, Jr., testified that neither he nor his mother knew that Reese had been forging checks until September of 2001. [8] Courts in Louisiana and Texas have held that, under similar circumstances, a customer's claims against a bank for paying forged checks are without merit. See Marx v. Whitney Nat'l Bank, 713 So.2d 1142 (La.1998); Ju-Nel Homes, Inc. v. White Rock Bank of Dallas, 632 S.W.2d 648 (Tex.Ct.App.1982). ¶ 19. Rogers is therefore precluded from making claims against Union Planters because (1) under § 75-4-406(a), Union Planters provided the statements to Rogers, and (2) under § 75-4-406(d)(2), Rogers failed to notify Union Planters of the forgeries within 15 and/or 30 days of the date she should have reasonably discovered the forgeries.