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the unauthorized payment, the customer must promptly notify the bank of the relevant facts.
La. R.S. 10:4–406(c).
Asserting that Brooks failed to exercise reasonable promptness in examining her account statements and did not
(2) the customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good
faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized
signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding thirty
days, in which to examine the item or statement of account and notify the bank.
* * *
substantially contributed to the loss.” Marx v. Whitney Nat. Bank, 1997–3213 p. 4, (La.7/8/98), 713 So.2d 1142,
1145.
It is clear from Brooks' deposition that she did not exercise reasonable care in handling her brokerage account.
She did not look at any financial statements for five years. It was not until sometime after December 19, 2004, that
Brooks realized that Tingstrom had taken money from her brokerage account by forging Brooks' name on checks
However, the U.C.C. broadly defines “bank” as “a person engaged in the business of banking.” La. R.S. 10:1–201(4)
and 10:4–105(1).
[4] Only one Louisiana case has addressed the U.C.C. definition of a bank. The first circuit in Asian Interna-
tional, Ltd. v. Merrill Lynch, Pierce, Fenner and Smith, Inc., 435 So.2d 1058 (La.App. 1st Cir.1983), found La. R.S.
10:4–205(1), which concerns depositary banks as holders, applicable to Merrill Lynch even though it was “not a
© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.
rill Lynch provided its customer with both general securities and a checking account. The court likened these ser-
vices to those provided by a depositary bank and analogized Merrill Lynch's relationship with its customer to that of
a bank and its depositing customer. The Asian International opinion suggests that the services offered or functions
performed by a business entity must be examined to determine whether it is a “person engaged in the business of
banking.”
(a) to simplify, clarify and modernize the law governing commercial transactions;
(b) to permit the continued expansion of commercial practices through custom, usage and agreement of the par-
ties;
(c) to promote uniformity of the law among the various jurisdictions.
account program in connection with a bank. As in the case sub judice, the checking account program allowed the
plaintiff to draft checks against the assets in her brokerage account. The plaintiff's husband forged her signature on
various checks and other instruments to make unauthorized withdrawals from the brokerage account. When the
plaintiff sued the defendant to recover the money she lost, the defendant moved for a partial summary judgment on
the ground that her claim was precluded due to her failure to timely notify it of the forgeries.
laws to define what is a “bank” under the U.C.C. We observe that the same reasoning would apply in this state. The
general definition statutes of both the Louisiana Banking Law, La. R.S. 6:2, and the U.C.C., La. R.S. 10:1–201, in-
dicate that the definitions provided are for use in their respective provisions.FN3
FN3. La. R.S. 10:1–201(a) states, “Unless the context otherwise requires, words, or phrases defined in this
Section, or in the additional definitions contained in other Chapters of this Title that apply to particular
evidence establishes that Brooks did not examine the account statements sent by Pershing for the months in 2003
and 2004 when the unauthorized checks were presented and paid. She did not notify Pershing of Tingstrom's forger-
ies before adding Pershing as a defendant in March 2007. Therefore, under La. R.S. 10:4–406(d) and (f), Brooks is
La.App. 2 Cir.,2011.
Brooks v. Transamerica Financial Advisors
57 So.3d 1153, 73 UCC Rep.Serv.2d 714, 45,833 (La.App. 2 Cir. 2/2/11)
END OF DOCUMENT
© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.
rill Lynch provided its customer with both general securities and a checking account. The court likened these ser-
vices to those provided by a depositary bank and analogized Merrill Lynch's relationship with its customer to that of
a bank and its depositing customer. The Asian International opinion suggests that the services offered or functions
performed by a business entity must be examined to determine whether it is a “person engaged in the business of
banking.”
(a) to simplify, clarify and modernize the law governing commercial transactions;
(b) to permit the continued expansion of commercial practices through custom, usage and agreement of the par-
ties;
(c) to promote uniformity of the law among the various jurisdictions.
account program in connection with a bank. As in the case sub judice, the checking account program allowed the
plaintiff to draft checks against the assets in her brokerage account. The plaintiff's husband forged her signature on
various checks and other instruments to make unauthorized withdrawals from the brokerage account. When the
plaintiff sued the defendant to recover the money she lost, the defendant moved for a partial summary judgment on
the ground that her claim was precluded due to her failure to timely notify it of the forgeries.
laws to define what is a “bank” under the U.C.C. We observe that the same reasoning would apply in this state. The
general definition statutes of both the Louisiana Banking Law, La. R.S. 6:2, and the U.C.C., La. R.S. 10:1–201, in-
dicate that the definitions provided are for use in their respective provisions.FN3
FN3. La. R.S. 10:1–201(a) states, “Unless the context otherwise requires, words, or phrases defined in this
Section, or in the additional definitions contained in other Chapters of this Title that apply to particular
evidence establishes that Brooks did not examine the account statements sent by Pershing for the months in 2003
and 2004 when the unauthorized checks were presented and paid. She did not notify Pershing of Tingstrom's forger-
ies before adding Pershing as a defendant in March 2007. Therefore, under La. R.S. 10:4–406(d) and (f), Brooks is
La.App. 2 Cir.,2011.
Brooks v. Transamerica Financial Advisors
57 So.3d 1153, 73 UCC Rep.Serv.2d 714, 45,833 (La.App. 2 Cir. 2/2/11)
END OF DOCUMENT
