COCHRAN INV. CO., INC. v. Bank of America

CHARLES S. VOGEL, P.J.

Cochran Investment Company, Inc. (Cochran) appeals from a summary judgment in favor of Bank of America (Bank) on Cochran's cause of action against Bank under California Uniform Commercial Code section 3307 (hereafter section 3307) (taking instrument from a fiduciary with notice of breach of fiduciary duty). [1] We reverse. We hold that Cochran's cause of action satisfies the language of section 3307 and is not barred by the statute of limitations, because a late discovery rule applies to the accrual of the cause of action.

Ronald Henry Minkin was executor and sole beneficiary of the estate of his deceased mother. [2] In March 1996, Cochran loaned $60,000 to Minkin. Minkin executed a promissory note and, as security for the loan, Minkin assigned his beneficial interest in the estate to Cochran. [3] The loan was to be repaid out of the final distribution of the estate's assets.

Minkin as executor sold the subject real property of the estate. The escrow company issued a check for the proceeds of the escrow, more than $196,000, to "Ronald Henry Minkin, Executor, Estate of Rose Minkin Sabia, Deceased." The check was dated July 23, 1996. The following day, July…