Chicago Title Insurance v. California Canadian Bank

The present appeal is a successor to a previous decision by this court (Div. Two) in Chicago Title Ins. Co. v. Superior Court (1985) 174 Cal.App.3d 1142 [ 220 Cal.Rptr. 507 ]. In this appeal, we will affirm decisions of the trial court which held (1) California Canadian Bank (the Bank) failed to timely return certain dishonored checks before the relevant “midnight deadline” provided by section 4302 of the California Uniform Commercial Code and applicable regulations; and (2) this failure of timely return renders the Bank “accountable” or strictly liable for the amount of the checks.

I. Facts and Procedural History

As the facts have previously been set out in a prior opinion of this court and related opinions of the federal courts, we will summarize the relevant facts here very briefly. (See, generally, Chicago Title Ins. Co. v. Superior Court, supra, 174 Cal.App.3d at pp. 1144-1146; United States v. Benny (N.D.Cal. 1983) 559 F.Supp. 264 , affd. United States v. Benny (9th Cir. 1986) 786 F.2d 1410 .)

Chicago Title Insurance Company (the Company) acted as escrow agent in numerous transactions initiated by a mortgage broker, Robert Dean Financial (RDF), and its principal…