## Facts

- Dixon, Laukitis & Downing, P.C. (DLD) maintained a client trust (IOLTA) account at Busey Bank.
- On May 25, 2011, DLD deposited a $350,000 check drawn on an Intact Insurance Company account at the Royal Bank of Canada.
- Busey provided provisional credit and made funds available subject to final collection.
- DLD disbursed $270,000 from the trust account to its client (two transfers on June 6 and June 8, 2011) in reliance on the deposit.
- On June 10, 2011, the check was returned unpaid and determined to be counterfeit.
- Busey notified DLD and charged back the $350,000 to DLD’s account under the deposit agreement and the Uniform Commercial Code (UCC).
- DLD sued Busey for common-law negligence, alleging the bank failed to use ordinary care by not detecting the counterfeit, not warning DLD not to disburse funds before final payment, and not providing earlier notice of nonpayment.
- The circuit court dismissed the amended complaint, concluding the claim sought only economic loss barred by the Moorman doctrine and that the UCC and deposit agreement placed the risk of loss on DLD until final settlement.

## Issues

1. Whether a depositary bank owes a common-law duty, independent of the UCC and the deposit agreement, to protect a depositor from losses caused by a counterfeit check deposited into the account.
2. Whether the Moorman economic-loss doctrine bars a negligence claim seeking purely economic damages arising from a bank–customer relationship.
3. Whether the UCC and the parties’ account agreement allocate the risk of loss from an uncollected deposited item to the depositor until final payment, permitting chargeback of provisional credit.

## Decision

- The appellate court affirmed dismissal of the amended complaint.
- DLD’s negligence claim was barred by the Moorman doctrine because it sought recovery for purely economic loss stemming from a contractual relationship.
- The UCC and the deposit agreement treated deposit credit as provisional until final payment and authorized chargeback when the item was not collected.
- The court declined to impose an extra-UCC common-law duty requiring the bank to investigate the check’s origin, detect the counterfeit, or advise the depositor not to disburse funds before final collection.

## Legal Principles

- Under Illinois law, the Moorman doctrine generally bars negligence recovery for purely economic loss arising from contractual relationships, absent personal injury, property damage, or a recognized exception.
- The UCC and a deposit agreement commonly provide that credit for deposited items is provisional and that the depositor bears the risk of noncollection until final settlement.
- A depositor may not reframe losses allocated by the UCC and contract as a broader common-law negligence claim to shift the risk of a counterfeit or uncollectible check to the bank.

## Conclusion

The court held that the depositor’s loss from disbursing funds against a counterfeit check was a purely economic harm allocated by the UCC and the deposit agreement to the depositor until final settlement, and that tort recovery in negligence was barred by the economic-loss rule.


Dixon, Laukitis & Downing, P.C. v. Busey Bank, 993 N.E.2d 580 (Ill. App. Ct. 2013)