Espresso Roma Corp. v. Bank of America, N.A.

Espresso Roma Corporation, Pacific Espresso Corporation, and David S. Boyd doing business as Hillside Residence Hall (appellants) appeal from a judgment dismissing their complaint alleging several causes of action against Bank of America, N.A. (Bank), based upon its payment of forged checks drawn on appellants’ accounts by one of their former employees. The court entered judgment in favor of the Bank after it granted the Bank’s motion for summary judgment on the ground that appellants were precluded by California Uniform Commercial Code section 4406, subdivisions (d) and (e) from asserting any claims against the Bank for unauthorized payment of checks drawn on their accounts. We shall affirm the judgment.

Facts

David S. Boyd is the president of Espresso Roma and Pacific Espresso Corporations and also runs Hillside Residence Hall. All three businesses had checking accounts with the Bank.

From late 1996 through April 1999, appellants employed Joseph Montanez, who eventually assumed certain bookkeeping responsibilities, learned how to generate company checks on the computer, and had access to blank checks. Starting in October 1997, Montanez downloaded company computer…