Citibank v. Trump Taj Mahal

1996 WL 640860 (1996)

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Citibank v. Trump Taj Mahal

United States District Court for the Southern District of New York
1996 WL 640860 (1996)

  • Written by Brett Stavin, JD

Facts

Citibank (plaintiff) employed Yota Kalikas as an operations manager at one of its branch banks. Between April 1988 and April 1993, Kalikas embezzled approximately $2.5 million from Citibank. Kalikas was also a frequent gambler at the Trump Taj Mahal (Trump) (defendant). During a routine audit by the New Jersey Division of Gaming Enforcement, it was discovered that Kalikas repeatedly presented Trump with cashier’s checks from Citibank, signed by Kalikas, as payment of gambling debts or as casino credit. Citibank filed an action against Trump in federal district court to recover $565,000 in cashier’s checks that Citibank had previously honored. Citibank argued that Trump was negligent in cashing the checks because they were so irregular on their face as to call their validity into question. It was undisputed that Trump had some policies and procedures in place intended to verify check deposits. Because Kalikas typically presented the checks to Trump during nonbanking hours, Trump’s cashiers waited until regular banking hours to call Citibank’s toll-free number and verify that the account held sufficient funds. Trump did not, however, take steps to verify whether Kalikas was authorized to present the checks for her own use. Trump moved for summary judgment on the basis that it was a holder in due course, and because holder-in-due-course status precluded negligence liability. Citibank cross-moved for summary judgment, arguing that Trump could not be a holder in due course because it accepted the checks in bad faith.

Rule of Law

Issue

Holding and Reasoning (Patterson, J.)

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