Resh

William F. Resh, M.D., Skin and Skin Cancer Medical Group of San Diego, Inc., a California corporation, (the Payee) appeals the grant of summary judgment in favor of Connecticut National Bank Corporation, N.A., a Delaware corporation (the Drawee). Jurisdiction in the district court was based on diversity of citizenship. The case involves the liability of two banks for the handling of checks carrying the forged endorsement of Resh (the Payee). The checks were all deposited to the forger’s account in the San Diego Trust and Savings Bank (the Depositary) and forwarded by that bank to the Drawee, which honored them and paid the Depositary. As the Payee brought suit against the Depositary, the Payee ratified the payments made by the Drawee. On this basis we affirm the judgment of the district court.

FACTS

The following facts were either stipulated or undisputed: The Payee was engaged in a medical practice in San Diego in which a substantial number of payments were made by Medicare. From 1981 to 1990 the bookkeeper was Rosemary Montooth. She received the checks mailed by Medicare, posted them to the accounting ledgers which included patients’ records and fists of daily and monthly…