00-2029 United Catholic Parish School of Beaver Dam Educational Association v. Cards Services Center and First Financial Bank

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“Here, the affidavit of Valentine Glytas establishes the uncontroverted fact that First Financial took the checks at issue in payment of Gittus’s outstanding credit card balances…. Glytas avers that First Financial had no reason to suspect there was any problem with collecting payment on the checks when it accepted them, as they appeared to be authentic, did not have any facial irregularities and were accepted to pay Gittus’s credit card debts. First Financial supports these factual assertions by arguing that Gittus’s paying her credit card debt with a UCPS check could have been a legitimate reimbursement for purchases she had made for UCPS on her credit card. UCPS has submitted no affidavit to counter either of these facts or First Financial’s argument that it did not know that Gittus was defrauding UCPS by writing the checks. We also note that the checks were drafted over a seven-year period, without any complaint from UCPS that Gittus had no authority to write them to pay her credit card debt. Therefore, we conclude that under the undisputed facts of record, First Financial took the checks in good faith.”

Further, the bank’s evidence established that it had no notice or knowledge that the checks were overdue, dishonored or that there was an uncured default or that anyone had any claim in recoupment or otherwise in regard to the checks.

“Financial had no way to know the checks were unauthorized, especially since there were thirty-seven of them written over an extended period of time and there could have been legitimate reasons for them. Furthermore, the policy underlying Wisconsin’s commercial code is to promote certainty in commercial transactions and to place the loss on the party in the best position to prevent it.”

Finally, where UCPS submitted no proof that First Financial had actual knowledge that Gittus was a fiduciary of UCPS when these transactions occurred, the evidence is insufficient to establish the bank’s actual knowledge of such a relationship.”

Reversed and remanded.

Recommended for publication in the official reports.

Dist IV, Dodge County, McMonigal, J., Roggensack,, J.

Attorneys:

For Appellant: Patrick J. Hodan, Milwaukee; Colleen Ball, Milwaukee

For Respondent: William H. Gergen, Beaver Dam