Assignment:
I respectfully dissent from the majority opinion. Chiefly, I disagree that the plaintiffs are entitled to any recovery given the present circumstances. * * * The evidence supports a determination that Bank of Jena made monthly statements available to the plaintiffs * * * . * * * La.R.S. 10:4-406(c) * * * states that "the customer must exercise reasonable promptness in examining the statement * * * to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized." It further provides that, if an authorized payment should have been discovered, "the customer must promptly notify the bank of the relevant facts." As the plaintiffs failed to do so within the period of "reasonable promptness," required by La.R.S. 10:4-406(c) * * * , the plaintiffs cannot recover for the initial forgeries. With regard to subsequent forgeries, La.R.S. 10:4-406 provides: (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: * * * (2) the customer's unauthorized signature or alteration 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 or alteration and after the customer had been afforded a reasonable period of time, not exceeding thirty days, in which to examine the item or statement of account and notify the bank. Again, the plaintiffs failed to notify the bank of the irregularities within this time frame. * * * In short, I conclude that the trial court erred in allowing the plaintiffs to recover any funds paid by the Bank of Jena on the checks forged by Marye Prestridge.
1. LAW. How did the majority in this case respond to the question stated at the beginning of this feature? What was the reasoning behind the response?
2. LAW. Did the dissent agree with the majority's application of UCC 4-406? With what part of the majority's ruling did the dissent disagree? Why?
3. ETHICS. Should a bank that uses outsourced check-collection procedures be absolved of responsibility for verifying the signatures of its customers on items drawn on the bank?
4. TECHNOLOGICAL DIMENSIONS. How has electronic banking affected the relationship between a bank and its customer?
5. IMPLICATIONS FOR THE BUSINESS OWNER. What is the significance of the outcome in this case to a business?