Story Road Flea Market, Inc. v. Wells Fargo Bank, N.A.

Defendant Wells Fargo Bank, N. A. honored more than a hundred forged checks against plaintiff’s account. Plaintiff did not discover the forgeries until more than a year after defendant began honoring these checks. Defendant refused to credit plaintiff’s account for any of these unauthorized checks, and plaintiff filed suit against defendant. Plaintiff alleged causes of action for negligence, breach of contract and common counts and asserted a cause of action for money damages for defendant’s alleged violation of California Uniform Commercial Code section 4406. Defendant’s demurrer to plaintiff’s negligence, breach of contract and common counts causes of action was sustained without leave to amend on the theory that California Uniform Commercial Code section 4406 displaced all other actions based on these forged checks. Defendant’s motion for summary judgment on the California Uniform Commercial Code section 4406 cause of action was granted after defendant established that its system for reviewing checks was consistent with general banking usage and that it had utilized that system with respect to these checks. On appeal, plaintiff claims that summary judgment was improper…