Opinion ID: 793222
Heading Depth: 2
Heading Rank: 2

Heading: Holder in Due Course

Text: 24 Watson's second argument is that a genuine issue of material fact exists as to whether American Express, as a payee, qualifies as a holder in due course. 5 Watson further asserts that even if American Express did qualify for holder-in-due-course status, it failed to meet the requirement of good faith. Again, we review the district court's grant of summary judgment de novo. Nunley, 425 F.3d at 1135. 25 The payee of an instrument can be a holder in due course, but use of the holder-in-due-course doctrine by the payee of an instrument is not the normal situation. 6 Mo. Rev. St. § 400.3-302, cmt. 4; see also Dalton & Marberry, P.C. v. Nationsbank, 982 S.W.2d 231, 235 (1998) (en banc) (explaining that the drafters of the U.C.C. did not categorically exclude a payee from holder-in-due-course status but typically a payee is not a holder in due course). Thus, satisfaction of the requirements of a holder in due course is all that is necessary for a payee to obtain the special protections of a holder in due course. Hartford Accident & Indem. Co. v. American Express Co., 74 N.Y.2d 153, 544 N.Y.S.2d 573, 542 N.E.2d 1090, 1093 (1989) (discussing New York's UCC provision, which is identical to Missouri's statute). A bare assertion by the plaintiff that only in rare circumstances should a payee be regarded as a holder in due course is insufficient to establish how the payee failed to meet the requirements of a holder in due course. Wyckoff v. Commerce Bank of Kansas City, 561 S.W.2d 399, 402 (Mo.App.1977). However, the payee bears the burden of establishing that it meets all the requirements of a holder in due course. United States v. Mark Twain Bank-Kansas City, 771 F.2d 361, 364 (8th Cir.1985) (applying Missouri law). 26 Given the facts in this case, we see no reason that if American Express meets the requirements of a holder in due course, it should not qualify for such status simply because it is also a payee. Watson only challenges American Express's fulfillment of the good faith requirement. `Good faith' means honesty in fact in the conduct of the transaction concerned. Mo. Rev. St. § 400.3-103(4). Because the UFL uses a definition substantially similar to the UCC's definition, and because we have already held that no material factual dispute exists whether American Express acted in good faith under the UFL, we also hold that no factual issue remains whether American Express was a holder in due course.