BofA Wiggles Off The Hook For Accepting Forged Check For Deposit; Money Represented Sale Proceeds Allegedly Swiped From Home Seller At Closing Table

In Nassau County, New York, the New York Law Journal reports:

• A man claiming he was swindled out of nearly $42,000 on a real estate deal after his signature was forged on a check cannot sue the bank that accepted the check for deposit for conversion, a New York state judge has ruled. Acting Supreme Court Justice Daniel Palmieri of Nassau County dismissed the suit against the bank, holding that the seller, Walter Wright, never had possession of the check in question.(1)

***

• In March 2006, Wright, who lives in Virginia, sold his Ozone Park, N.Y., home and sent his mother to attend the closing and pick up a $41,841 check for the proceeds from the sale. Named defendants Mitchell Levy and James Boone, representing two mortgage brokers, Myles Mortgage Services and LAC Enterprises, also attended. According to the complaint, Boone took the check payable to Wright and "without the consent of plaintiff ... delivered it to either defendant Levy and/or defendant [LAC]." Five days later, the check, purportedly endorsed only by Wright, was deposited to LAC Enterprises' bank account, cleared and was credited to the account.

• In an interview, Nathaniel Swergold, Wright's attorney, said the broker, through its agent, had "picked up the check that was intended for my client" and "quickly went to the bank and deposited it to [its] own account." [...] Swergold said the decision was consistent with the applicable law but had left his client in the difficult situation of attempting to recoup his loss from the same people alleged to have stolen the money.

For more, see Man Fails in Bid to Hold Bank Liable for Accepting 'Forged' Check.

(1) "[I]t is well settled that a named payee must have actual or constructive possession in order to sue a depositary bank on a forged instrument and here, there is neither an allegation nor any evidence that plaintiff had either," Palmieri wrote in Wright v. Bank of America, 2009 NY Slip Op 52655U; 2009 N.Y. Misc. LEXIS 3515 (NY Sup. Ct. Nassau Cty, December 9, 2009).