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Robert J. Napleton v. Great Lakes Bank

March 9, 2011


Appeal from the Circuit Court of Cook County. Honorable Anthony L. Burrell, Judge Presiding.

The opinion of the court was delivered by: Justice Quinn

PRESIDING JUSTICE QUINN delivered the judgment of the court, with opinion. Justices Murphy and Steele concurred in the judgment and opinion.


This case arises out of a complaint filed by plaintiff, Robert J. Napleton, seeking reimbursement of $7,500 that defendant, Great Lakes Bank, N.A. (Great Lakes), debited from his checking account when it honored a forged check written on plaintiff's account. The bank refused plaintiff's request for reimbursement on the grounds that he failed to timely notify the bank of the forgery as required by its deposit account agreement (Account Agreement). In response to plaintiff's complaint alleging breach of contract and conversion, defendant filed a motion to dismiss pursuant to section 2-619.1 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619.1 (West 2008)) (Code), which the trial court granted. On appeal, plaintiff contends that the trial court erred in granting defendant's section 2-619 motion to dismiss because defendant failed to present evidence that it suffered a loss as a result of his failure to provide timely notice of the forgery, as required by section 4-406(d)(1) of the Illinois Uniform Commercial Code (UCC) (810 ILCS 5/4-406(d)(1) (West 2008)). Defendant contends that section 4-406(d)(1) does not apply in this case because it is superseded by the terms of the Account Agreement. For the reasons set forth below, we affirm.


The facts in this case are not in dispute. Plaintiff has maintained a personal checking account with defendant bank since 1981. On or about October 31, 2007, an unknown person stole a personal check from plaintiff, made it payable to a third-party company in the amount of $7,500, and presented it to defendant bank for payment. The bank paid the check and debited $7,500 from plaintiff's checking account. Although the forged check appeared on plaintiff's November 2007 monthly bank statement (Monthly Statement), plaintiff did not become aware of the forgery and the payment until March 2008, at which time he notified the bank and asked it to credit his account in the amount of $7,500. On or about May 8, 2008, the bank informed plaintiff that it would not credit his account because plaintiff had failed to timely notify the bank of the forgery pursuant to the terms of the Account Agreement, which provides, in relevant part:

"If your account is a Checking, Interest Checking, Money Market, or Statement Savings account, we will provide you with a periodic statement showing the account activity. You must examine your statement with 'reasonable promptness.' If you discover (or reasonably should have discovered) any unauthorized signatures, alterations, or other discrepancies you must notify us of the relevant facts within 30 days after we mailed or otherwise made the statement available to you. If you fail to notify us, you will have no claim against us. If you do not receive a statement from us because you have failed to claim it or have supplied us with an incorrect address, we may stop sending your statements until you specifically make written request that we resume sending your statements and you supply us with a proper address."

The Monthly Statements sent to plaintiff also mentioned the 30-day notification requirement stating, "Please examine this statement at once. If no error is reported in 30 days, the account will be considered correct. If any discrepancies are noted, please contact our Customer Service Center ***."

Defendant contended that because plaintiff did not notify the bank of the forgery until May 2008, more than 30 days after the November 2007 Monthly Statement was mailed to him, he had no claim against the bank.

Plaintiff filed a complaint against defendant on October 2, 2009, alleging conversion and breach of contract. On November 19, 2009, defendant filed a combined motion pursuant to section 2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2008)), seeking dismissal of plaintiff's complaint. Pursuant to section 2-615 (735 ILCS 5/2-615 (West 2008)), defendant argued that plaintiff's complaint failed to state a claim based on conversion because it did not allege that defendant paid any of plaintiff's funds to itself, as required for a conversion claim, but instead alleged that defendant made an unauthorized payment to an entity that is not a party to this action.

In support of its prayer for involuntary dismissal pursuant to section 2-619(a)(9) (735 ILCS 5/2-619(a)(9) (West 2008)), the motion asserted that plaintiff's failure to notify defendant of the allegedly unauthorized check within 30 days of receiving his Monthly Statement precludes plaintiff's claim for conversion or breach of contract.

On January 11, 2010, plaintiff filed a response to defendant's motion to dismiss arguing that (1) defendant converted the $7,500 for its own use, even if only for a short time, in order to pay the third-party payee; and (2) the bank failed to prove that it suffered a loss as a result of plaintiff's failure to timely notify it of the forgery pursuant to section 4-406(d)(1) of the UCC (810 ILCS 5/4-406(d)(1) (West 2008)).*fn1 On February 24, 2010, after a hearing, the trial court granted defendant's motion to dismiss. On March 25, 2010, plaintiff filed a motion to reconsider, which the trial court denied on June 4, 2010. This timely appeal followed.


This court reviews an order of dismissal pursuant to section 2-619(a)(9) de novo, accepting as true all well-pled facts contained in the complaint and in any uncontradicted affidavits attached to the motion. 1324 W. Pratt Condominium Ass'n v. Platt Construction Group, Inc., 404 Ill. App.3d 611 (2010). A motion to dismiss under section 2-619(a)(9) asserts that plaintiff's claims against the defendant are "barred by other affirmative matter avoiding the legal effect of or defeating the claim." 735 ILCS 5/2-619(a)(9) (West 2008); see also Doe A. v. Diocese of Dallas, 234 Ill. 2d 393, 396 (2009). The question on review is "whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal is proper as a matter of law."1324 W. ...

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