Minskoff v. American Express Travel Related Services Co., Inc.

Edward J. Minskoff (plaintiff) was the president and chief executive officer (CEO) of Edward J. Minskoff Equities, Inc. (Equities) (plaintiff). Equities hired Susan Blumenfeld as an office manager and assistant. Blumenfeld was responsible for screening Minskoff’s mail and reviewing credit card statements. Equities had opened an American Express corporate card account, and Blumenfeld, without authorization, requested an additional card in her name. Blumenfeld received the card and charged a total of $28,213.88 personal, unauthorized charges. Blumenfeld received all American Express statements sent to Equities and forged checks from Equities to pay for these charges. Blumenfeld opened an additional platinum account and requested a card in her name. Blumenfeld charged approximately $300,000 in personal, unauthorized charges on this card. Again, Blumenfeld received all of the statements sent by American Express and paid the monthly bills with forged checks from Equities. Equities did not review any of the 28 statements sent by American Express. Equities only discovered the fraud when its bank called to inquire about a check written to American Express. Equities and Minskoff sued American Express, seeking a return of the funds paid in satisfaction of unauthorized charges by Blumenfeld and a declaration that Equities and Minskoff were not liable for the outstanding balance on the platinum account. American Express filed a counterclaim for the outstanding balance on the platinum account. The trial court granted summary judgment to American Express. Equities and Minskoff appealed to the United States Court of Appeals for the Second Circuit.