Ohio Casualty Co. v. Bank One
United States District Court for the Northern District of Illinois
1997 U.S. Dist. LEXIS 10974 (1997)
- Written by Douglas Halasz, JD
Facts
David J. Reiner was a supervisor at Elgin Township (Township). Township had deposit agreements with various financial institutions, including Bank One, Chicago National Association (Bank One), and American National Bank and Trust Company of Chicago (ANB) (defendants). Over approximately 20 years, Reiner engaged in check kiting and embezzled more than $1,700,000 from Township-accounts at the various financial institutions, including those at Bank One and ANB. Township assigned all of its claims to these losses to Ohio Casualty Insurance Company (Ohio Casualty) (plaintiff). Ohio Casualty sued Bank One and ANB for breach of the duty of good faith imposed by the Uniform Commercial Code (UCC) for allegedly paying and depositing kited checks. Ohio Casualty’s allegations against ANB did not include an allegation that any ANB employee knew of Reiner’s check kiting or embezzlement. Conversely, Ohio Casualty’s allegations against Bank One included an allegation that a Bank One employee caught Reiner in the kiting scheme. The court considered whether Ohio Casualty stated a valid claim against ANB or Bank One.
Rule of Law
Issue
Holding and Reasoning (Grady, J.)
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