Legal Question in Personal Injury in Massachusetts
Defamation of Character and banks
I deposited a check for $3,000.00 from a customer that I am doing contract work for. App 2 weeks later my bank notified me that a stop had been placed on the check. I spoke with the client a was assured that this was not so. Another week passed and the check was returned to my bank. I was humiliated as the check had been stamped "lost or stolen." I phoned the customer again and was told that her bank had made a mistake. I went to her bank to cash the this same check as my account was now over drawn $3,000.00 and was treated with disdain. I received a new check from the customer which has cleared and was informed the the bank had made a mistake and I would receive a letter of apology from her branch. My reputation with my suppliers has been tarnished. I did not steal this womans checks and feel that this should not be printed as "lost or stolen" by any bank unless the check was indeed stolen by me. Please advise.
1 Answer from Attorneys
Wrongful Dishonor
From the facts you set forth, it sounds like the bank has failed to honor a properly presented check (though they could have withheld payment if the payor had insufficient funds in their account when you presented the check for payment).
There are a number of defenses the bank can present. Some of them are that the check is improperly dated (stale or post dated), apparent alterations on check, not signed, unauthorized signature, not properly endorsed, illegible, conflict between words and numbers in the amount, death of drawer, insufficient balance (including deposits not available), legal process affecting the payor's account, set off, stop order, no account, or prior notice of adverse claims to the funds.
The governing law in Massachusetts appears to be MGL 106 sec. 4-402, which states that a payor bank is laible to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is to the person who wrote the check, not the person harmed who tried to cash it.
You need to see a lawyer and determine what happened, so as to apply the proper law. You may have a case, or you may not, depending on the determination of facts in the case.
This reply is not legal advice.
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