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Triffin v. Wachovia Bank, N.A.

A-5244-07T1 (N.J. Super. App. Div. 2010) (Unpublished)

CHECKS — Substitute checks are simply replacements for negotiable instruments and are treated as legally identical to the original checks so long as they contain critical information from the original checks.

A regular buyer of dishonored checks purchased a set of them and asserted his rights as an assignee in two suits against two banks. He claimed he had standing to sue for violations of regulations that govern a bank’s use of substitute checks. According to the buyer, information on sixteen checks was obliterated by the bank stamps that were used to indicate why the checks had been dishonored. Substitute checks are simply replacements for negotiable instruments. They contain critical operative information from the original checks and are provided by a bank in lieu of the originals. Under law, they are treated as legally identical to the original check. Governing regulations provide for a cause of action by anyone harmed by a bank’s failure to provide a usable substitute check.

As to these two lawsuits, the lower court found that the buyer lacked standing to pursue his claims of breach of warranties as to the substitute checks because such claims, allegedly arising from a breach of a statutory duty, were not assignable to him. According to the lower court, the buyer, as an assignee, also lacked standing because he was not harmed by the bank’s use of substitute, truncated, duplicate checks. Although the buyer had acquired right to sue the maker of these checks to recover the face value of the checks, the check cashing establishment that assigned the right to him was required to keep all the information that the businessman alleged was obscured and could have provided the businessman with that information. On appeal, the Appellate Division affirmed the lower court’s ruling.


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