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Triffin v. Wachovia Bank, N.A.

406 N.J. Super. 427, 968 A.2d 177 (App. Div. 2009)

CHECKS; SUBSTITUTED CHECKS; ASSIGNEES — An assignee for a dishonored check does not have standing to seek claims under the Check Clearing for the 21st Century Act because those claims are statutory.

An individual purchased dishonored negotiable instruments and then sought collection as the assignee of all rights and interests in those instruments. He claimed that he presented checks to two banks who, after dishonoring the checks, either affixed stamps or other information on the checks which obliterated information on the original checks, or issued substitute checks that lacked all of the information contained in the original checks. The assignee sued the banks, charging that each had breached applicable federal regulations under the Check Clearing for the 21st Century Act..

The lower court dismissed the case, holding that the individual lacked standing: (1) as he was not a payor, payee, drawer or drawee of any of the checks; and (2) that he took his assignment after knowledge that the checks were dishonored. Thus, the lower court found that the assignee did not come under the purview of the protection required by the regulations. The assignee appealed.

The Appellate Division affirmed. It rejected the assignee’s argument that his claims were contractual claims for collection on a negotiable instrument as opposed to statutory claims. It held that an assignee has no vested interest in the timely payment or return of dishonored checks. The Court ruled that the regulatory scheme at issue did not confer on the assignee any contractual rights. The Court stated that a substituted check is the “legal equivalent” of an original check and accurately represents all the information on the front and back of the original check despite the fact that some of the information might have been obliterated.

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