Tuesday, September 7, 2010

FYI: 1st Cir Affirms Ruling in Favor of Bank in 93A Case Involving Lost Bank Check

The U.S. Court of Appeals for the First Circuit recently affirmed a jury verdict and a directed verdict in favor of two banks on several claims arising from a lost bank check.  Among other things, the appellate court affirmed the directed verdict against plaintiff and in favor of the United States bank on plaintiff's state law unfair and deceptive practices act claim, and affirmed the dismissal of the Polish bank defendant for lack of personal jurisdiction.

A copy of the opinion is available at:

Plaintiff purchased an official bank check from a bank in the United States which he then presented to a bank in Poland for collection.  The bank in Poland allegedly sent the check to the U.S. bank for collection but it was never received by the U.S. bank.  Approximately 4 months after the check was presented to the bank in Poland, the banks resolved the matter, and the funds were deposited in plaintiff's account.  Plaintiff then filed this action in state court against both banks to recover alleged consequential losses, the case was removed to federal court, and the federal court denied plaintiff's motion to reverse the dismissal of the Polish bank for lack of personal jurisdiction.  Plaintiff's amended complaint against the U.S. bank alleged, among other things: breach of contract, deceit/intentional misrepresentation, and violation of the Massachusetts state law unfair and deceptive practices act claim (Section 93A).  A combination of a jury verdict on some counts and a directed verdict as to all others in favor of the U.S. bank was entered.

On appeal, plaintiff argued that: (1) the trial court had both general and specific jurisdiction over the Polish bank or, in the alternative the Polish bank waived objections to any lack of personal jurisdiction over it;  (2) the district court erred in: a) excluding admissions of the Polish bank; b) denying plaintiff's motion to serve process and conduct discovery in accordance with the Hague Convention; and c) dismissing plaintiff's Section 93A claims.  The appellate court disagreed with each of plaintiff's assertions and affirmed the jury verdict and directed verdicts. 

As to plaintiff's claims brought under Section 93A, the court held that plaintiff's claim that he should have been apprised of the risk that the bank check could be lost in transit from one bank to another was "simply unavailing. The risk that letters may be lost in the mail is commonly known; [the U.S. bank] did not need to state the obvious."

As to plaintiff's objections to the court's jurisdiction over the Polish bank, the court ruled that the evidence introduced by plaintiff to support general jurisdiction - that 14 individual consumers an 25 corporate customers provided the Polish bank with their Massachusetts address - was not sufficient minimum contacts, and even if it were, there was no evidence in the record that any contacts were purposeful, as required to make a showing that personal jurisdiction should be exercised here.  Additionally, the court held that the Polish bank had not waived a defense of personal jurisdiction.

The court also disagreed with plaintiff's contentions that certain statements by the Polish bank's counsel should be admitted as nonhearsay because they were admissions by a party opponent, holding that "the fact that both banks shared counsel does not change the application of the rules of evidence.  the statements may have been admissible against [the Polish bank] if it were a party to this litigation, but it was dismissed."  Moreover, the court ruled that it was not an abuse of discretion for the trial court to not reopen discovery for plaintiff to take the depositions of the Polish bank representatives pursuant to the Hague Convention, noting that "[t]he procedures of the Hague Convention do not come without a significant time cost." 

Let me know if you have any questions.  Thanks.



Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874




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