## Facts

- Hauser Contracting Company (Hauser) used a payroll-check system that printed its president’s facsimile signature on checks.
- A series of counterfeit payroll checks, drawn on Hauser’s account at Somerset Valley Bank (the bank), circulated and were cashed by multiple check-cashing agencies and individuals.
- The counterfeit checks bore a facsimile signature in the name of Hauser’s president that was identical in appearance to the authorized facsimile signature used on legitimate Hauser payroll checks.
- Hauser’s president asserted he did not sign the checks and did not authorize the signatures or issuance of the counterfeit items.
- Hauser executed affidavits reporting the checks as stolen/forged and stopped payment; the bank thereafter dishonored and returned the items unpaid. The bank reportedly received more than eighty similar checks totaling about $25,000.
- Robert J. Triffin purchased eighteen dishonored checks (totaling $8,826.42) from several check-cashing agencies after the checks were returned unpaid.
- The agencies provided affidavits stating they cashed the checks for value, in good faith, without notice of claims or defenses, without knowledge that any signature was forged or unauthorized, and expecting payment upon presentment to the drawee bank.
- Triffin filed suit (naming the bank, Hauser, and individual payees/endorsers). Hauser, as defendant/third-party plaintiff, also brought a third-party claim against Automatic Data Processing, Inc. (ADP), a payroll services provider.
- The trial court granted Triffin summary judgment against Hauser on the checks, concluding the record showed no fact issue defeating the agencies’ holder-in-due-course status and Triffin’s right to enforce as assignee.
- Hauser appealed, challenging the summary judgment and arguing (including for the first time on appeal) that Triffin lacked standing.

## Issues

1. Whether Triffin, as assignee of the check-cashing agencies that took the checks, was a person entitled to enforce the dishonored checks against Hauser.
2. Whether Hauser could avoid liability on the instruments by asserting the checks were counterfeit and unauthorized where the checks bore an identical facsimile signature and appeared regular on their face.
3. Whether the summary-judgment record created a genuine dispute about the agencies’ good faith, the value given, or notice of defenses that would defeat holder-in-due-course treatment (and thus Triffin’s assigned enforcement rights).

## Decision

- The Appellate Division affirmed the grant of summary judgment in favor of Triffin.
- The court rejected Hauser’s standing challenge and treated Triffin’s documented assignments from the check-cashing agencies as sufficient to permit enforcement of the checks.
- Relying on the agencies’ affidavits and the absence of contrary proofs, the court agreed there was no genuine issue of material fact that the agencies took the checks for value, in good faith, and without notice of claims, defenses, or unauthorized signatures.
- Because the checks appeared genuine and Hauser did not produce evidence that the takers had notice of invalidity, Hauser failed to defeat enforcement at the summary-judgment stage.

## Legal Principles

- Under New Jersey’s UCC Article 3, a person entitled to enforce an instrument may recover from the drawer, subject to defenses that can be limited by holder-in-due-course rules.
- Holder-in-due-course status generally requires taking the instrument for value, in good faith, and without notice of specified claims, defenses, or unauthorized signatures.
- An assignee of a holder in due course may enforce the instrument with the assignor’s rights when the assignment is shown and the assignee’s claim is based on the assignor’s due-course status.
- When an instrument appears regular on its face, a party resisting payment must come forward with competent evidence creating a fact issue that the taker had notice of a defense or did not act in good faith; unsupported assertions of counterfeit issuance are not enough to defeat summary judgment.

## Conclusion

The Appellate Division held that Triffin, having purchased the dishonored Hauser checks by assignment from check-cashing agencies that took the checks for value, in good faith, and without notice of defenses, could enforce the instruments against Hauser even though Hauser claimed the payroll checks were counterfeit; because the checks bore an identical facsimile signature and Hauser produced no evidence that the agencies had notice of invalidity or acted in bad faith, summary judgment for Triffin was affirmed.


Triffin v. Somerset Valley Bank, 777 A.2d 993 (2001)