CCC Legal Issues Presented in the Full Case Opinion Discussion

Using the full case opinion of Gerber & Gerber, P.C. v. Regions Bank set forth in detail and in your own words the legal issues of this case. The legal issues can be set forth in a list, if you like, but you must include enough information in each listed item that the issue can be clearly identified. You should re-read the entire opinion before beginning this assignment. Do not copy the language of the case opinion. Use the full court opinion, not the abridged opinion in the book. As you only need to list the legal issues here, it will be the shortest of these assignments.

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Review your fellow students’ posts and respond in a substantive way to one or more of those posts. Simple agreement is not enough — you must provide comments and your opinion of their review of the legal issues of the case 3-4 sentence. (I will post later)

Please respond to the classmate post in 2-3 sentence.

The leagal issue I see in this case should G & G be suing Regions Bank for negligenence. Seeing that that Ms Stafford had a passed record of forgery.

Was the bank neglience by accepting the forgery checks or should G & G have been watchful in how deposits were made into there account.

Was Regions Bank acting in due care.

Seeing that Ms Stafford also had an account at the same bank. Should the bank had been careful when accepting the checks from Ms Stafford to go into her account?

I think these re legal issues that should have been discuessed

How to Analyze a Legal Case
A major part of this class involves analyzing cases in the discussion board assignments
and the final paper. You will each be responsible for (1) summarizing the facts, (2)
setting forth the legal issue(s), and (3) summarizing the court’s analysis and ruling on
each issue. You must also (4) state in a coherent way your opinion of the court’s ruling
by answering the question “did the court correctly apply the law to the facts?”
Each case contains distinguishable parts.
1. The first lines above the body of the case contain the case citation, the case
name, the case citation, and the court that issued the opinion and the year (or
date) in which it was issued. Not necessarily in that order.
2. Sometimes publishers, like FastCase or West, include “Summaries” of cases.
These are not part of the case and should not used or be relied on in conducting
a case analysis for this class.
3. There is also frequently an area below the case name and citation where the
parties’ lawyers are listed.
4. The court’s opinion is usually preceded by the name of the judge or justice who
wrote the main opinion for the court. This may state, for example: “JUSTICE
FREEMAN delivered the judgment of the court, with opinion.”
5. The opinion of the court almost always begins with a summary of the facts, which
can be long or short, depending on how complicated they are. This section may
be headed by “Background” or “Facts” or something like that, but not necessarily.
6. Once the court discusses the facts of the activities that occurred before the
lawsuit was filed, the court usually discusses the facts related to the filing of the
lawsuit and what the parties argued and the lower court(s) decided. If the opinion
is not an appeal, the opinion will usually just cover what the plaintiff argued in
their complaint and what the defendant argued in response. This section may
end with the words “This appeal followed,” or something similar.
7. The section following the facts usually contains the law and possibly the analysis
of the court issuing the opinion. This section may be called “Analysis” or
something similar. Often, the court will address each legal issue separately, first
setting forth the issue, the parties’ arguments, the law related to it, then the
court’s ruling on that issue. Other times, the court will list all of the issues before
it, then go directly into the law and its opinions on each of the issues.
8. Often the court will end its opinion with a short section titled “Conclusion” or
something similar. After this section, it will list its holding, such as “Reversed and
remanded for further proceedings,” “Affirmed,” etc.
9. If any judge has issued a concurring or dissenting opinion, that opinion (which
generally does not have much, if any, precedential value) will be set forth below
the final decision of the court after a listing of the names of the judges that have
concurred or dissented.
To summarize, court cases usually start by setting forth the facts of the case and the
activity related to the case in the trial court (and any lower appeals court). For our
purposes, all of this information should be included in your Facts.
Next the court will state the legal issue(s) being presented and the rule(s) of law that are
being applied to the facts in the case. These rules of law will be either common law or
statutory law. After setting forth the law, courts generally discuss legal precedent, that
is, other cases, and/or statutes and regulations involving the legal issue, particularly
where that issue had been previously been discussed or decided, and determine
whether this precedent is applicable to the present case. The court may also discuss
public policy and the legislative history of any statute that may be under consideration
by the court. These are the Issues that you must identify.
After determining the law applicable in the case, court opinions then turn to the
application of the law to the facts of the case, including the decisions of any lower
courts, arguments of the parties, and which argument the court agrees with (if any). In
the last paragraph(s) of the section of the opinion where a particular legal issue is
discussed, the court will set forth its decision, called a “holding,” on the issue in the
case. This information should be included in the Court Analysis portion of your
analysis
If the court is considering multiple issues in the same opinion, the analysis of each issue
will usually be separated into sections by different headings, which should give a clear
idea of which issue the court is analyzing in each section.
The Procedural Nature of Cases
Given that all of you will be reading and analyzing cases in this class, some explanation
of the procedural background of the judicial opinions in each chapter (called “cases”)
will be helpful.
First, court cases start at the trial court level. The trial court can be a state court or a
federal district court and usually only one judge will preside over the case. At the trial
level, the plaintiff(s) files the complaint and the defendant(s) can either file a motion to
dismiss or an answer to the complaint. If the court grants the defendant’s motion to
dismiss, the case is over unless the defendant appeals to the appellate court. If the
case is not dismissed or the defendant answers the complaint, the court will allow the
parties to gather evidence in support of their arguments, and the case may or may not
go to a trial, either before a jury or before the judge alone (this is called a bench trial).
After the court or the jury make a final decision on the case, the case is over, and the
trial court’s decision is final. However, either or both of the parties can file an appeal.
Appeals are initially brought in what are usually called “courts of appeal” or “appellate
courts.” There are courts of appeal in both state court systems and the federal court
system. If the case starts in the state court, it is appealed through the state court
system, and if the case starts in the federal court, it is appealed through the federal
court system. The appellate court must hear all properly filed appeals from the trial court
level. On appeal, the appellate court, which usually consists of a panel of three justices,
will consider the evidence gathered and admitted in the trial court, the rulings of the trial
court, and the appellate briefs filed by the parties. The appellate court will not hold
another trial – the only consideration is whether the trial court or jury properly decided
the case below.
Once the appellate court decides the case, one of the justices will be assigned to write
the court’s opinion on the case. One or more of the other justices may decide to write a
concurring opinion, or a concurrence, if they agree with the majority opinion, but want to
stress other parts of the law or facts. If the justices disagree with each other on the
outcome of the case, the majority opinion (by 2 of the justices) will be written by the
justice to whom it is assigned, and the dissenting justices may choose to write a dissent
setting forth why she doesn’t agree with the other justices. Once the appellate court has
issued its decision, one or more of the parties to the case may decide to appeal it again.
If no one appeals within the time period allowed, the decision is final.
If the appellate ruling is appealed, it is heard by the state supreme court or the U.S.
Supreme Court. (Sometimes in some states, the state’s highest court is named
something else, though.) The state supreme courts are often required to hear all
properly filed appeals from the state appellate courts, depending on the state’s
constitutional requirements. The U.S. Supreme Court, however, has discretion whether
to hear an appeal or not. Appeals to the U.S. Supreme Court are submitted in part
through petitions for certiorari. Then the Court decides whether or not to “grant cert.” on
any given case. If it does grant cert., the Court will hear the case. If it does not, the
appellate decision will be final.
Appeals to the supreme courts are generally handled the same way that appeals to the
appellate courts are handled. However, most cases are heard by the entire supreme
court, rather than just a panel of three judges. The U.S. Supreme Court has a total of
nine justices. The Illinois Supreme Court, for example, has seven justices. One of the
justices is assigned to write an opinion on the case, other justices can write
concurrences (opinions agreeing with the majority, but usually stressing different legal
issues or facts) or dissents (opinions disagreeing with the majority).
Once the U.S. Supreme Court has issued a decision on a case, the case is over and the
decision is final. If a state supreme court issues a decision in a case and the decision
involves a constitutional issue or another issue over which the U.S. Supreme Court has
jurisdiction, the parties may be able to seek certiorari on that decision with the U.S.
Supreme Court. As in appeals coming from the federal circuits, any decision issued by
the U.S. Supreme Court on an appeal from a state supreme court is final.
There are very limited instances when the U.S. Supreme Court has “original jurisdiction”
over a case. There is some information in the book about this; however, this involves so
few cases, that it is not discussed here.
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596 S.E.2d 174 (2004)
266 Ga. App. 8
GERBER & GERBER, P.C.
v.
REGIONS BANK.
Regions Bank
v.
Gerber & Gerber, P.C.
Nos. A03A1952, A03A1953.
Court of Appeals of Georgia.
February 13, 2004.
Reconsideration Denied March 3, 2004.
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*175 Shivers & Associates, Terry L. Strawser, Alpharetta, for appellant.
Parker, Hudson, Rainer & Dobbs, William J. Holley II, James S. Rankin, Jr., Ryan K. McLemore, Atlanta, for appellee.
MILLER, Judge.
Over a period of two years, an employee of the Gerber & Gerber, P.C. law firm (G&G) stole from G&G some cashier’s
checks (endorsed in blank) and some checks payable to G&G (on which she forged G&G’s endorsement) and deposited
the checks into her personal account at Regions Bank, where G&G also maintained its accounts. Alleging that Regions
Bank had acted negligently in accepting the checks for deposit, G&G sued the bank to recover the money lost. The court
entered summary judgment in favor of Regions Bank on the cashier’s checks but held material issues of fact precluded
summary judgment on the forged checks. Both parties appeal the portions of the judgment adverse to their interests.
Discerning no error, we affirm.
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*176 “Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to
judgment as a matter of law. OCGA § 9-11-56(c).” Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d
684 (1997). We review the grant of summary judgment de novo, construing the evidence in favor of the nonmovant. Id.
Construed in favor of G&G, the evidence showed that Cynthia Stafford worked for a law firm as a real estate closing
secretary. She stole money from that firm through forging the firm’s endorsement on checks made payable to the firm
(received at the real estate closings) and depositing them into her personal account. When the forgery was discovered,
she confessed and worked out an arrangement to continue at the firm at a reduced salary to repay the stolen money.
She then stole a second time and the firm closed. The aggregate amount stolen was about $130,000.
Prior to the firm closing, its principal had merger discussions with G&G, during which the principal disclosed some of
Stafford’s theft and forgery to Sanford Gerber of G&G. Nevertheless, when the merger talks failed, the principal
recommended that G&G hire Stafford because of her competency as a real estate closing secretary and because she
had rehabilitated. Mr. Gerber interviewed Stafford and felt also that she had reformed. He hired her but warned her that
he knew of her prior theft and that if she stole from G&G, he would make sure she went to jail.
Stafford worked as a real estate closing secretary at G&G for over two years. During this time, she stole 29 cashier’s
checks received by G&G during real estate closings, which checks the payees had endorsed in blank during the
closings. She then endorsed these checks herself and deposited them into her personal account at Regions Bank. She
also stole ten checks made payable to G&G, which she endorsed in blank on behalf of G&G (forging Sanford Gerber’s
signature). She then endorsed the forged checks in her own name and deposited them into her personal account at
Regions Bank. Throughout this time, G&G had its escrow and other accounts at Regions Bank and deposited thousands
of checks amounting to $150 million to $200 million into those accounts every year. G&G would endorse each deposited
check with a rubber stamp for deposit into the G&G account.
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The thefts were made possible because G&G did not restrictively stamp the checks immediately at closing but waited
until sometime after the closing, during which interim period the checks were kept in an open file left in an area
accessible to all G&G employees. Also, at times Stafford was allowed to be the person to stamp and account for the
checks. The amount stolen approximated $180,000. Stafford confessed to the thefts, later pleading guilty to criminal
charges and receiving a thirty-year sentence (five years to serve). She claimed to have spent the money.
G&G sued Regions Bank to recover the stolen $180,000, alleging counts of conversion and negligence in that the bank
improperly accepted the forged checks as well as the true-endorsed cashier’s checks into Stafford’s personal account.
Regions Bank moved for summary judgment, arguing that as a matter of law it had acted appropriately under the
Uniform Commercial Code in accepting the checks. The trial court granted the motion insofar as it pertained to the trueendorsed cashier’s checks but found that material issues of fact (particularly regarding the parties’ comparative
negligence) precluded summary judgment as to the forged checks. G&G appealed the partial grant of summary
judgment, and Regions Bank cross-appealed the partial denial of summary judgment.
1. With regard to the blank-endorsed cashier’s checks, the court correctly granted summary judgment in favor of the
bank. Under the applicable portion of OCGA § 11-3-420(a), a bank converts an instrument if the bank “makes or obtains
payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.” The
holder of an instrument is a person entitled to enforce the instrument, even though the person is in wrongful possession
of the instrument. OCGA § 11-3-301. A person is a holder of a negotiable instrument if that person possesses the
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instrument and the instrument is payable to bearer. OCGA § 11-1-201(20). An *177 instrument is deemed payable to
bearer if it is endorsed in blank (i.e., not specially endorsed). OCGA § 11-3-205(b). “When indorsed in blank, an
instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.”
Id.; see OCGA § 11-3-201(b).
Accordingly, when here the payees of the cashier’s checks endorsed the checks in blank, the checks then became
bearer paper and could—similar to cash—be transferred by possession alone. See La Junta State Bank v. Travis, 727
P.2d 48, 51, n. 2 (Colo. 1986); M.G. Sales, Inc. v. Chemical Bank, 161 A.D.2d 148, 150, 554 N.Y.S.2d 863 (1990);
Walcott v. Manufacturers Hanover Trust, 133 Misc.2d 725, 728, 507 N.Y.S.2d 961 (Civ. Ct.1986). Sanford Gerber even
admitted to this well-known fact in his deposition. Thus, Regions Bank quite properly accepted the endorsed-in-blank
cashier’s checks from the person in possession of them and deposited the checks into that person’s account. The court
did not err in granting Regions Bank summary judgment on G&G’s causes of action arising out of these checks.
2. More problematic, however, are the forged checks. Although these were also endorsed in blank, the payee’s
signatures were forgeries and were therefore ineffective as endorsements by the payee. See OCGA § 11-3-403(a).
Accordingly, Stafford was not entitled to enforce the instruments or to receive payment thereunder, and Regions Bank
converted the instruments when it made or obtained payment on them by allowing them to be deposited into Stafford’s
personal account. See OCGA § 11-3-420(a).
Regions Bank argues that G&G failed to exercise ordinary care, which substantially contributed to the making of the
forged signatures. Regions Bank contends that accordingly G&G was precluded under OCGA § 11-3-406(a) from
asserting the forgery against the bank. Indeed, where some evidence shows that the corporate payee acted negligently
in failing to prevent the forgery of its endorsement, a jury should decide whether that negligence substantially contributed
to the making of the forgery—but only if the defendant bank in good faith paid the instrument or took it for value or for
collection. See OCGA § 11-3-406(a); cf. Trust Co. of Ga. Bank, &c. v. Port Terminal, &c. Co., 153 Ga.App. 735,
739-741(1), 266 S.E.2d 254 (1980) (interpreting somewhat similar language found in the predecessor statute to OCGA §
11-3-406(a)). In 1996 the General Assembly amended the applicable definition of “good faith” to mean “honesty in fact
and the observance of reasonable commercial standards of fair dealing.” OCGA § 11-3-103(a)(4); see Ga. L.1996, pp.
1306, 1340, § 3. Thus, even assuming the evidence established as a matter of law that G&G’s actions substantially
contributed to the making of the forgeries at issue, the question here is whether there is a disputed issue of fact as to
Regions Bank’s good faith (its honesty in fact and its observance of reasonable commercial standards of fair dealing) in
regard to its accepting the forged checks as deposits in Stafford’s account.
Regions Bank has presented evidence that it knew nothing of the possible forgery at the time it accepted the checks.
The first Regions Bank learned of the forgery was from G&G after the fact. G&G has presented no evidence to contradict
this, and thus the undisputed evidence shows Regions Bank’s honesty in fact. Cf. Stebbins v. Ga. Power Co., 252
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Ga.App. 261, 263-264(1)(c), 555 S.E.2d 906 (2001).
However, disputed evidence does exist on the question of whether Regions Bank’s actions were in observance of
reasonable commercial standards of fair dealing. Significantly, reasonable commercial standards of fair dealing are
different from reasonable commercial standards of due care. “Although fair dealing is a broad term that must be defined
in context, it is clear that it is concerned with the fairness of conduct rather than the care with which an act is performed.
Failure to exercise ordinary care in conducting a transaction is an entirely different concept than failure to deal fairly in
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conducting the transaction.” UCC § 3-103, Official Comment 4 (2003);[1] see Maine *178 Family Fed. Credit Union v. Sun
Life Assurance Co. of Canada, 727 A.2d 335, 342(III)(B)(2) (Me.1999).
Although some older Georgia cases define the reasonable commercial standards of due care (see, e.g., Trust Co. Bank
v. Henderson, 258 Ga. 703, 704(1), 373 S.E.2d 738 (1988); Thornton & Co. v. Gwinnett Bank &c. Co., 151 Ga.App. 641,
646-648(4), 260 S.E.2d 765 (1979)), those addressing the newer language of reasonable commercial standards of fair
dealing have not explained it in detail. See, e.g., Stebbins, supra, 252 Ga.App. at 263-264(1)(c), 555 S.E.2d 906;
Charles Evans BMW, Inc. v. Williams, 196 Ga.App. 230, 232-233(2), 395 S.E.2d 650 (1990). The United States Court of
Appeals for the Seventh Circuit referred to this standard as the “[a]voidance of advantage-taking.” State Bank of the
Lakes v. Kansas Bankers Surety Co., 328 F.3d 906, 909 (7th Cir.2003). The Maine Supreme Court struggled at length
with the issue, stating: “The most obvious question arising from the use of the term `fair’ is: fairness to whom? … If a
holder is required to act `fairly,’ regarding all parties, it must engage in an almost impossible balancing of rights and
interests.” Maine Family, supra, 727 A.2d at 343(III)(B)(2). The Maine court then interpreted a different “fairness”
standard of conduct than that required for due care in reaching its result in Maine Family. Id. at 343-344(III)(B)(2). The
court noted that a party may be found to act in good faith—even though negligently—if it acts fairly, but may be found to
have acted not in good faith, i.e., unfairly, even though it complied with commercial standards of due care. Id. at 343; see
Any Kind Checks Cashed, Inc. v. Talcott, 830 So.2d 160, 165-166 (Fla.App.2002). The U.S. Fourth Circuit took a similar
tact, holding that evidence showing a lack of due care did not show a failure to comply with reasonable commercial
standards of fair dealing. Wachovia Bank v. Fed. Reserve Bank of Richmond, 338 F.3d 318, 322-323(II)(A) (4th
Cir.2003). Focusing on the lack of evidence that what the bank did was unfair, the court affirmed summary judgment in
favor of the bank. Id. at 323(II)(A). Nevertheless, whether a party’s conduct meets this “fairness” standard is ordinarily a
question that must be resolved by the factfinder. San Tan Irrigation Dist. v. Wells Fargo Bank, 197 Ariz. 193, 197, 3 P.3d
1113 (Ct.App.2000); see The Bank/First Citizens Bank v. Citizens & Assoc., 82 S.W.3d 259, 263 (Tenn.2002).
In determining whether the conduct of Regions Bank complied as a matter of law with reasonable commercial standards
of fair dealing, we note that Henderson, supra, 258 Ga. at 704(1), 373 S.E.2d 738, upheld a jury verdict finding that a
bank did not comply with reasonable commercial standards of due care when it accepted checks payable to a firm, which
were endorsed in blank by a firm employee and deposited in his personal account at the bank. The firm had its account
at the same bank, and “established practice for the negotiation of checks payable to this account was through the use of
a restrictive endorsement stamp.” Id. This irregularity should have caused the bank to inquire as to the propriety of the
endorsements when the checks being deposited by the firm employee into his personal account were payable to the firm
and had been endorsed in blank. Id.; see Inventory Locator Svc. v. Dunn, 776 S.W.2d 523, 527-528 (Tenn.App.1989).
“Where endorsements are irregular on their face, and when the draft is offered for deposit into the account of one not the
payee, the bank has a duty to inquire to ascertain the authority of the depositor to endorse and deposit the payee’s
check. [Cit.]” Tifton Bank &c. Co. v. Knight’s Furniture Co., 215 Ga.App. 471, 474(1)(b), 452 S.E.2d 219 (1994). The
Kansas Court of Appeals even held: “Barring exceptional circumstances, the general rule is that failure of a bank to
inquire when an individual cashes a check made payable to a corporate payee and puts the money in his personal
179
account is an unreasonable commercial banking practice as a matter of law. [Cits.]” (Emphasis supplied.) Aetna *179
Casualty &c. Co. v. Hepler State Bank, 6 Kan.App.2d 543, 551(III), 630 P.2d 721 (1981).
In light of these cases, we hold that it is at least a fact question whether Regions Bank violated the reasonable
commercial standards of fair dealing when it violated known commercial banking practices by accepting checks made
payable to G&G into Stafford’s personal account. Since Regions Bank also serviced G&G’s business accounts and
therefore knew that G&G normally placed a restrictive endorsement stamp on checks made payable to G&G, Regions
Bank was on heightened notice of the irregularity of the endorsements on the checks deposited by Stafford and therefore
could be held to have dealt with G&G unfairly by not making inquiry into the legitimacy of those endorsements. Thus,
whether Regions Bank acted in good faith in this matter is a question to be resolved by the jury, which means that its
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defense under OCGA § 11-3-406(a) cannot be resolved on summary judgment.
Regions Bank also argues that it was a holder in due course under OCGA § 11-3-302 and therefore entitled to summary
judgment on the claims asserted in the complaint. For Regions Bank to be a holder in due course, this statute requires
that the bank have taken the instruments at issue “[i]n good faith.” OCGA § 11-3-302(a)(2)(ii). Since the same definition
of good faith discussed above applies to this statute (see OCGA § 11-3-103(a)(4)), the same disputed issues of fact also
discussed above preclude Regions Bank on summary judgment from conclusively establishing its status as a holder in
due course on the forged checks.
The trial court correctly denied Regions Bank summary judgment on the ten forged checks.
Judgment affirmed in both cases.
SMITH, C.J., and RUFFIN, P.J., concur.
[1] “To determine the legislature’s intent in enacting [a] provision [of the UCC], we consult the official comments accompanying the
UCC….” (Footnote omitted.) Sun v. Mercedes Benz Credit Corp., 254 Ga.App. 463, 465, 562 S.E.2d 714 (2002); see also Warren’s
Kiddie Shoppe v. Casual Slacks, 120 Ga.App. 578, 580(1), 171 S.E.2d 643 (1969) (official comments of the UCC should be given due
consideration in determining the intent of the General Assembly in enacting the provisions verbatim).
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