Opinion ID: 534895
Heading Depth: 1
Heading Rank: 4

Heading: Direct Action

Text: 21 Far West Bank asserts that because it is not entitled to assert the defenses which would be available to Valley Bank, if sued by the plaintiff, and because U.C.C. Sec. 4-213(1) does not impose strict liability on a payor bank, the plaintiff's claim is against Valley Bank, instead of Far West Bank, for improperly charging back its account. Consequently, the defendant maintains, the district court improperly permitted the plaintiff to sue it directly instead of requiring Las Vegas Ice to sue Valley Bank, with Valley Bank then suing Zions Bank and Zions Bank then suing the defendant. 22 The court is not persuaded by the defendant's arguments. 4 The defendant's inability to assert breach of warranty defenses is not a sufficient basis on which to preclude payees from suing payor banks directly. 5 Direct actions have been asserted by payees against payor banks in numerous cases. Eg. Nelson v. Platte Valley State Bank & Trust Co., 805 F.2d 332 (8th Cir.1986); Merrill Lynch, Pierce, Fenner and Smith, Inc. v. Devon Bank, 832 F.2d 1005 (7th Cir.1987), cert denied, 485 U.S. 1008, 108 S.Ct. 1473, 99 L.Ed.2d 702 (1988); Starcraft Co. v. C.J. Heck Co. of Texas, Inc., 748 F.2d 982 (5th Cir.1984); Chrysler Credit Corp. v. First Nat. Bank and Trust Co. of Washington, 746 F.2d 200 (3rd Cir.1984); Whalen & Sons Grain Co. v. Missouri Delta Bank, 496 F.Supp. 211 (E.D.Mo.1980). 6 In the absence of any restriction of the payor bank's accountability in the U.C.C., 7 we decline to adopt the defendant's position and, thus, avoid an unnecessary chain of lawsuits.