## Facts

- A Michigan law firm maintained an IOLTA account at a bank.
- A purported client contacted the firm online seeking representation in connection with a drilling-rig sale.
- The firm received what appeared to be a $380,000 cashier’s check payable to the firm, with instructions to wire $200,000 to a third party.
- The firm deposited the cashier’s check into its IOLTA account.
- Before wiring funds, a firm attorney called the bank to ask about the check’s status; a teller checked the account status in the bank’s computer system but did not physically examine the check.
- The attorney testified the teller said the check had “cleared” and the firm was “good to go,” and the firm initiated a $200,000 wire transfer.
- The cashier’s check was later dishonored as fraudulent; the bank attempted to stop/recover the wire, but $58,155.20 was not recovered.
- The firm sued the bank, alleging UCC-based failures of good faith and ordinary care and an actionable misrepresentation about the check’s status.
- The trial court granted summary disposition to the bank under MCR 2.116(C)(10), and the firm appealed.

## Issues

1. Whether the bank failed to act in good faith or with ordinary care under Michigan’s UCC by relying on computer account status when responding to the customer’s inquiry and processing the wire transfer.
2. Whether the teller’s statement that the check had “cleared” created a triable claim for actionable misrepresentation shifting the loss from the depositor to the bank.
3. Whether any genuine issue of material fact existed to prevent summary disposition for the bank.

## Decision

- The Michigan Court of Appeals affirmed summary disposition for the bank under MCR 2.116(C)(10).
- The court held the record did not create a genuine issue that the bank breached UCC duties of good faith or ordinary care.
- The court held the teller’s “cleared/good to go” statement, in context, conveyed that funds were shown as available in the account system, not that final settlement/collection had occurred or that the bank assumed fraud risk.
- The loss from the fraudulent check scheme remained with the law firm; the bank was not liable for the unrecovered $58,155.20.

## Legal Principles

- Summary disposition is appropriate when, viewing the record evidence, there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.
- Under the UCC, absent evidence of bad faith or lack of ordinary care by the bank, loss from a fraudulent check scheme may be allocated to the depositor who initiates payment based on provisional/availability information.
- A bank employee’s informal description of a deposit as “cleared” does not, without more, constitute a binding representation of final payment/irrevocable collection or an assumption of fraud-related loss.
- Account “availability” reflected in a bank’s system may differ from final settlement of the underlying item; liability does not shift without proof the bank inaccurately represented facts in a legally actionable way.

## Conclusion

The court concluded that the bank acted consistently with good faith and ordinary care and that the teller’s statement about the check’s status did not amount to an actionable misrepresentation of final collection; therefore, the bank was entitled to judgment as a matter of law and the depositor bore the unrecovered loss.


Wesseling & Brackmann, PC v. Huntington Bancshares Fin. Corp., No. 334082, 2018 WL 1176334 (Mich. Ct. App. Mar. 6, 2018)