Simmons v. Lennon

In Simmons v. Lennon, 139 Md. App. 15, 773 A.2d 1064 (2001), the Court rejected a drawer's claim that a payee negligently failed to detect that the check had been forged by the drawer's employee, Ms. Campbell. See id. at 40-41. The drawer, Simmons, was a lawyer who employed Ms. Campbell as his secretary. The drawee, Lennon, was a retired police officer who worked as a private process server for Simmons, and was a friend of Campbell. When Lennon agreed to sell an automobile to Campbell for $ 22,000, Campbell paid for the vehicle, in part, with a $ 13,000 check, payable to Lennon, drawn on an escrow account Simmons held at a bank. Campbell forged Simmons's signature on the check. Lennon cashed the check, as well as another check from Campbell, and transferred title to the vehicle to her. More than fifteen months later, Simmons discovered that Campbell, in concert with his outside bookkeeper, had been embezzling funds from his accounts for over two years, and had taken $ 109,362 in total. Simmons sued Lennon, asserting conversion and negligence based on his cashing the $ 13,000 check. He contended that Lennon "knew or should have known" that the $ 13,000 check was forged because the words "escrow account" were printed on the check, and because Lennon was familiar with Simmons's signature. The circuit court granted Lennon's motion for summary judgment on the negligence count because Lennon owed Simmons no duty to warn him that Campbell had forged an escrow check. On appeal, the Court affirmed that ruling. Judge Salmon distilled the following from the cases addressing the Maryland economic damages rule: The common denominator of the Maryland cases, where no contractual privity existed but nevertheless a tort was found, is that in each case the relationship of the litigants was close enough that the defendant knew that the plaintiff was likely to take some action based on what the defendant said or did. No such relationship existed here. Simmons made no showing that he ever relied upon Lennon to spot forgeries of his signature or that he otherwise relied on Lennon in regard to the checks that were paid from his accounts. Id.