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AMERICAN AUTO. v. FISHMAN

January 5, 1998

AMERICAN AUTOMOTIVE, ACCESSORIES, INC. and EMALFARB INVESTMENT CORP., Plaintiffs,
v.
ALAN FISHMAN, Defendant.



The opinion of the court was delivered by: LEVIN

 Pending is Defendant Alan Fishman's motion for summary judgment. For the reasons set forth below, this court grants the motion.

 FACTS

 Plaintiffs American Automotive Accessories ("American") and Emalfarb Investment Corporation ("Emalfarb") are real estate developers doing business in Illinois. (Def. 12(m) P 1,2; Pls. 12(n) P 1,2.) Defendant Alan Fishman ("Fishman") owns or operates sixteen currency exchanges in Illinois, including the "Loyola 'L' Currency Exchange, Inc." ("Loyola L") located in Chicago. (First Amended Complaint (the "Complaint") and Answer at P 3.) Plaintiffs assert that Fishman conspired with Nicholas Favia ("Favia"), a project manager for some of Plaintiffs' real estate development projects (see Def. 12(m) P 7; Pls. 12(n) P 7), to maintain a check-cashing scheme to cash fraudulent checks through Loyola L.

 The parties agree that, at some point, Favia called his friend, Joe Lewis ("Lewis"), and told Lewis, that he needed to be able to cash a check. (Pl. 12(n) Add. Facts P 6, Ex. C at 16-21; Def. 12(n) Reply P 6.) Lewis, who knew Defendant well through regular business contacts, then called Defendant on or about March 18, 1991 with regard to cashing a single check for Favia. (Pl. 12(n) Add. Facts P 6, Ex. C at 14-15; Def. 12(n) Reply P 6.) Defendant was mainly just concerned "that the checks be good. That's all." (Pl. 12(n) Add. Facts P 6.) Lewis told Defendant he didn't have "to worry about the check," and Lewis vouched for it. (Pl. 12(n), Ex. C at 20-21.) Then, when one of the Loyola L employees spoke by phone with Defendant regarding cashing a check for Favia, Defendant instructed that the employee cash the check. (Pls. 12(n) Add. Facts P 9; Def. 12(n) Reply P 9.)

 Plaintiffs allege that subsequently, through early 1995, Favia obtained checks from Plaintiffs by making repeated misrepresentations that the checks were needed to pay for construction and related expenses incurred in advancing Plaintiffs' construction projects. (Def. 12(m) P 9; Pls. 12(n) P 9.) Favia then repeatedly took Plaintiffs' checks made out to different entities to Loyola L and presented the checks for payment for the amount stated on their face less Loyola L's service fee (which was from 1 to 1.5%). (Def. 12(m) P 10; Pls. 12(n) P 10; Exs. A & B to the Complaint.) According to Defendant (and Plaintiffs presented no contrary facts), these checks were then delivered from Loyola L via private armored carrier service to Lincoln National Bank -- along with other checks cashed at Loyola L -- in the ordinary course of business. (Def. 12(m) P 10; Pls. 12(n) P 10.)

 Although Plaintiffs allege Defendant played an active role in Favia's check cashing scheme, Defendant denies that he gave approval for the cashing of any alleged fraudulent or fictitious checks presented by Favia after Favia's first visit. (Def. 12(n) Reply P 12; Def. Mem., Ex. A.) Defendant further denies any knowledge of, or involvement in, any check cashing scheme with Favia or any other individual at any time. (Id.) Lewis has also signed an affidavit denying having any knowledge of or involvement in establishing a check cashing scheme for Favia or Fishman. (Def. Mem., Ex. B.) At his subpoenaed deposition, Favia asserted his Fifth Amendment privilege against self-incrimination and refused to answer questions regarding the allegations raised in Plaintiffs' complaint. (Def. Mem., Ex. C.)

 Plaintiffs maintain that Fishman's involvement in the scheme is indicated by the fact that normal check cashing procedures at Loyola L were not followed with respect to Favia's checks. Normal check cashing procedures at Loyola L include having a signature card on file for customers who cash checks. (Pls. 12(n) Add. Facts P 10; Def. 12(n) Reply P 10.) A Loyola L employee filled out a signature card for Favia dated February 26, 1992 which mentioned "Libertyville Lumber." (Pls. 12(n) Add. Facts P 15; Def. 12(n) Reply P 15, Ex. D, Dep. Ex. 1.) Nevertheless, Loyola L employees cashed other checks from Favia made payable to other entities without checking Favia's signature card or checking with the employer or company on the check to verify the check's accuracy. (Pls. 12(n) Add. Facts P 12, Ex. D at 49-51, Ex. E at 25-26; Def. 12(n) Reply P 10.)

 Plaintiffs state that around February 1995, Mark Emalfarb, his assistant, and his accountant began to discover that Favia had been requesting checks made payable to unintended and/or fictitious payees. (Pls. 12(n) Add. Facts P 17.) Plaintiffs state that they discovered a total of 16 Emalfarb checks dated from March 1991 through December 1991 totaling $ 27,363.76 and 54 American checks dated from March 1992 through December 1994 totaling $ 156,807.36 made payable to unintended and/or fictitious payees. (Pls. 12(n) Add. Facts P 22.)

 Defendant states that the only sums Loyola L collected from Favia's checks was, at most, $ 2,760.57 resulting from the payment of Loyola L's standard 1-1.5% fee. (Def. Mem., Ex. A P 13.)

 On or about August 24, 1995, Plaintiffs entered into a settlement agreement with Favia. (Pls. 12(n) Add. Facts P 21.) In this settlement, Favia paid Plaintiffs $ 196,528.04. (Pls. Resp., Ex. D at p. 2.) Plaintiffs allege that this settlement did not compensate Plaintiffs for their losses caused by the fraudulent check cashing scheme. Instead, Plaintiffs allege the settlement ...


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