Edward Fineman Co. v. Superior Court

In Edward Fineman Co. v. Superior Court (1998) 66 Cal.App.4th 1110, a bank moved for summary adjudication on certain checks, contending recovery was barred by the issue-preclusion effect of Commercial Code section 4406 and the three-year limitation period of Commercial Code section 4111. (Fineman, supra, at p. 1115.) The Fineman court held that Commercial Code section 4406 precluded the plaintiff from pursuing its claim because it failed to report unauthorized signatures on the checks to its bank within the one-year period. ( Fineman, supra, at p. 1125.) The court also noted that the three-year limitation period of Commercial Code section 4111 had expired. ( Fineman, supra, at p. 1125.) The Court of Appeal affirmed a summary adjudication motion directed to some, but not all, of the checks at issue in the litigation. The plaintiff had sued Bank of America for honoring 83 company checks signed by only one of two required signatories. Bank of America moved for summary adjudication on the ground that claims as to 23 of the checks were time-barred. The trial court granted the motion; and the Court of Appeal affirmed, holding that, for purposes of section 437c, subdivision (f), payment of each of the checks constituted a "separate and distinct wrongful act" under Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848. (Fineman, at p. 1118.) In sum, in Edward Fineman Co. v. Superior Court (1998) 66 Cal.App.4th 1110, a business maintained a payroll checking account at Bank of America. Under the terms of the account, two signatures were required for certain withdrawals. Over the course of five years, between 1991 and 1996, Bank of America honored and paid 83 checks in violation of the two-signature requirement. The Court of Appeal held that the trial court properly applied the three-year statute of limitations found in Commercial Code section 4111 to bar the plaintiff's claims as to 23 of those checks. (Fineman, at pp. 1125-1126.)