“In this case, the undisputed evidence showed that Spacemakers hired as a bookkeeper a twice-convicted embezzler who was on probation, then delegated the entire responsibility of reviewing and reconciling its bank statements to her while failing to provide any oversight on these essential tasks.” —Ellington, Judge 

Facts: Spacemakers of America, Inc., hired Jenny Triplett as its bookkeeper. Spacemakers did not inquire about any prior criminal record or conduct a criminal background check of Triplett. If it had taken those steps, it would have discovered that Triplett was on probation for 13 counts of forgery and had been convicted of theft by deception. All convictions were the result of Triplett forging checks of previous employers. Spacemakers delegated to Triplett sole responsibility for maintaining the company’s checkbook, reconciling the checkbook with monthly bank statements, and preparing financial reports. Triplett also handled the company’s accounts payable and regularly presented checks to Dennis Rose, the president of Spacemakers, so he could sign them. Just weeks after starting her job at Spacemakers, Triplett forged Rose’s signature on a check for $3,000 made payable to her husband’s company, Triple M Entertainment Group, which was not a vendor for Spacemakers. By the end of the first full month of employment, Triplett had forged five more checks totaling $22,320, all payable to Triple M. Over the next nine months, Triplett forged 59 more checks totaling approximately $475,000. All checks were drawn against Spacemakers’s bank account at SunTrust Bank. No one except Triplett reviewed the company’s bank statements. Subsequently, a SunTrust employee visually inspected a $30,670 check. She became suspicious of the signature and called Rose. The SunTrust employee faxed a copy of the check to Rose, which was made payable to Triple M. Rose knew that Triple M was not one of the company’s vendors, and a Spacemakers employee reminded Rose that Triplett’s husband owned Triple M. Rose immediately called the police, and Triplett was arrested. Spacemakers sent a letter to SunTrust Bank, demanding that the bank credit $523,106 to its account for the forged checks. The bank refused, contending that Spacemakers’s failure to provide the bank with timely notice of the forgeries barred Spacemakers’s claim. Spacemakers sued SunTrust for negligence and unauthorized payment of forged items. The trial court granted SunTrust’s motion for summary judgment. Spacemakers appealed. 

Issue: Did Spacemakers’s failure to uncover the forgeries and failure to provide SunTrust with timely notice of the forgeries bar its claim against SunTrust? 

Language of the Court: In this case, the undisputed evidence showed that Spacemakers hired as a bookkeeper a twice-convicted embezzler who was on probation, then delegated the entire responsibility of reviewing and reconciling its bank statements to her while failing to provide any oversight on these essential tasks. There is every reason to believe that, if Spacemakers had simply reviewed its bank statements, it would have discovered the forgeries. Accordingly, we find that Spacemakers is precluded as a matter of law from asserting claims based upon the forgeries in this case. 

Decision: The court of appeals held that Spacemakers was barred from recovering the value of the forged checks from SunTrust. The court of appeals affirmed the trial court’s grant of summary judgment to SunTrust. 

Ethics Questions: Did Triplett act ethically in this case? Did Spacemakers act ethically when it sued SunTrust to try to recover its losses caused by the forgeries?