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Harder v. First Capital Bank

July 29, 2002

CHARLES HARDER AND MARSHA HARDER, PLAINTIFFS-APPELLANTS,
v.
FIRST CAPITAL BANK, DEFENDANT-APPELLEE, AND EMERGENCY DAMAGE CONTROL OF CENTRAL ILLINOIS AND JAMES HUGHBANKS, DEFENDANTS.



Appeal from Circuit Court of McLean County-No. 99LM675 Honorable William D. DeCardy, Judge Presiding.

UNPUBLISHED

JUSTICE MYERSCOUGH delivered the opinion of the court: Plaintiffs, Charles Harder and Marsha Harder, filed a complaint against defendant First Capital Bank (Bank) seeking relief for its negligent payment of two checks that did not contain the endorsement of all parties listed as payees. The McLean County trial court dismissed their complaint with prejudice pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 1998)). Plaintiffs' motion for reconsideration was denied, and this appeal followed. Defendants Emergency Damage Control of Central Illinois (EDC) and James Hughbanks (Hughbanks) are not part of this appeal.

I. BACKGROUND

Following fire damage to plaintiffs' home in 1998, plaintiffs contracted with EDC, owned by Hughbanks, for home repairs, restoration services, and storage services designed to rid their furniture and personal property of smoke damage and smell. As of the filing of the complaint in November 1999, EDC had failed to complete the repairs and cleaning services, and EDC had failed to return items taken for the purpose of cleaning.

In April 1999, without plaintiffs' knowledge or consent, Hughbanks, acting on behalf of EDC, obtained possession of two checks from plaintiffs' insurer, St. Paul Insurance. The checks were dated April 6, 1999, and were for the sums of $30,476 and $8,862. The $30,476 check was made payable as follows:

EMERGENCY DAMAGE CONTROL CHARLES AND MARSHA HARDER

BANK OF PONTIAC

The $8,862 check was made payable as follows:

EMERGENCY DAMAGE CONTROL CHARLES AND MARSHA HARDER

Plaintiffs neither indorsed these checks nor authorized anyone to indorse them on their behalf.

On or about April 13, 1999, Hughbanks presented the checks for payment to defendant bank, where Hughbanks maintained an account. The checks were indorsed by Hughbanks alone, and defendant credited the sums to EDC's account. EDC then failed to complete the work it was contracted to perform and refused to return unearned portions of the insurance funds.

Plaintiffs' complaint alleged in count I conversion and negligence by defendant because the checks were made payable in the conjunctive and not the disjunctive and, therefore, required the signatures of all parties listed as payees. Count II stated a cause of action against EDC; and count III was directed against EDC and Hughbanks. Defendant filed an answer and affirmative defenses, which are not included in the record. However, based upon plaintiffs' motion to strike and response to affirmative defenses, its appears defendant argued the checks were ambiguous and the bank owed no duty to plaintiffs. The trial court allowed defendant's first affirmative defense asserting ambiguity of the checks, but the second affirmative defense regarding duty was stricken.

Defendant filed a motion to dismiss pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 1998)), which the trial court granted in July 1999. Plaintiffs filed a motion to reconsider, which was denied, and this appeal, directed only to count I, followed pursuant ...


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