The plaintiff in this case is a resident of South Sudan who attended Princeton University from September 2007 to 2011. She opened an account with Bank of America while she was a student and deposited money she earned while working as a student into the account. Altogether, the plaintiff left an account balance of $55,000 upon her graduation. Plaintiff went back to South Sudan after graduating.
Between 2011 and July 2014, Plaintiff was able to access her Bank of America account online without any problems. However, Plaintiff lost access to her account around August 2014 despite knowing the correct username and password. Plaintiff was locked out of her account after being unable to complete a secondary authentication measure.
Plaintiff called Bank of America but was told she would have to change the personal information linked to her account or visit a Bank of America branch in person. Plaintiff was unable to change the personal information because she was locked out of her account and there were no Bank of America branches in Sudan. Seeing no alternative, Plaintiff decided to close the account and transfer the remaining funds from Bank of America.
To close the account, Plaintiff had to travel to the US Embassy in Uganda to obtain a notarized letter and send it to Bank of America. On September 2014, after confirming receipt of the letter, Bank of America closed the account and sent a cashier’s check to Plaintiff’s uncle’s address in Uganda.
In January 2015, Plaintiff filed a complaint with the CFPB after numerous attempts to glean from Bank of America what happened to the check as it had never arrived at her uncle’s address. The check was intercepted in transit and the funds were instead deposited to an account at Deustche Bank.
In August 2015, Plaintiff filed two complaints against Bank of America and Deustche Bank. Deustche Bank responded it had already returned the total amount of the check to Bank of America upon Bank of America’s request. Plaintiff subsequently flew to the United States and retained a lawyer to discuss the matter with Bank of America.
While Bank of America issued a second cashier’s check to Plaintiff, Plaintiff filed federal complaint, alleging wrongful dishonor of a check under the UCC, breach of contract under New Jersey common law, and violation of the NJCFA. Plaintiff sought damages for money and time spent traveling to Uganda to obtain notarial services at the US Embassy there, overseas phone calls, cost of visa services, travel, and lodging in the United States, and for emotional distress.
DISTRICT JUDGE THOMPSON: In resolving a motion for summary judgment, a district court considers the facts drawn from “materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials[.]” The court must determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Summary judgment must be granted against any party “who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.”
Defendant first moves for summary judgment on Plaintiffs claim under UCC § 4-402, wrongful dishonor of a check. Defendant argues that Plaintiffs allegations are inapposite to the factual circumstances recognized by wrongful dishonor, “where a drawee bank dishonors a check presented to if for payment against which there are sufficient funds on deposit to pay the item.” In her Complaint, Plaintiff concedes that her allegations are not a textbook case of wrongful dishonor, but she asserts that Defendant’s conduct amounts to “the equivalent of wrongful dishonor of a check, as it resulted in a complete denial of Plaintiffs right to access her Funds for eighteen months.” Plaintiff cites Buckley v. Trenton Savings Fund Society for the proposition that “[w]rongful dishonor is not limited to dishonor of a check presented to a bank for payment. The Buckley court cited with approval several out-of-state cases applying the principle to situations in which a bank froze, closed, placed a hold on, or made a setoff against a customer’s bank account.” Plaintiff overstates the Buckley court’s reasoning.
The cases cited were collected in reference to the viability of a claim for punitive damages in connection with fraud or wrongful dishonor, finding punitive damages appropriate “when the wrongful dishonor reflects actual malice by a bank officer toward the customer.” The Buckley court did not cite the cases to extend the factual circumstances which can amount to wrongful dishonor under New Jersey law, but to note when other courts had found actual malice.
In the present case, it is undisputed that Bank of America issued Plaintiff a cashier’s check in October 2014 which was intercepted by a foreign entity through no fault of either party, washed, and cashed via Deutsche Bank. Unaware of the interception or forgery, Bank of America paid the cashier’s check presented to it by Deutsche Bank through interbank channels. After Plaintiff made a claim of fraud in February 2015 and Bank of America initiated a fraud investigation, Deutsche Bank returned the entire amount to Bank of America in May 2015. In March 2016, Bank of America issued a replacement cashier’s check to Plaintiff.
Plaintiff summarizes this set of events by arguing that the bank withheld her funds for almost 20 months without justification. However, whatever wrongdoing, dilatory conduct, or fraud Plaintiff alleges transpired in the bank’s return of her account funds, it does not meet the statutory elements of wrongful dishonor.
Defendant failed to issue a new cashier’s check for a period of more than a year after discovering the fraud, but ultimately did issue and honor a second check.
Defendant did not dishonor an item within the meaning of UCC § 4-402.
CRITICAL THINKING:
Section 12A:4-402

(a) of New Jersey’s Revised Statutes contains the states equivalent to UCC 4-402. The section states, “Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.” Based on this statute, can a bank dishonor a cashier’s check?
ETHICAL DECISION MAKING:
Based on its reasoning that the Buckley case cited by the plaintiff was not applicable to this case, what values and shareholders did the court uphold?