Talbert v. U.S. Bank, N.A.

Debra Talbert (plaintiff) became involved with a man known to her as David Smith. Talbert lent Smith thousands of dollars, and Smith said that he wanted to repay her by check. Talbert received a check for $84,457.57. The payee line read: “Accounts Receivable: Debra Talbert.” Pelican Management, Inc. (Pelican Management) was the drawer of the check, and the drawee-bank was Bank of New York. Talbert deposited the check with U.S. Bank, N.A. (U.S. Bank) (defendant) and expressed concern about the check’s validity. U.S. Bank informed Talbert that she could purchase a protection service for $75, which she purchased. Bank of New York paid the funds to U.S. Bank, and U.S. Bank credited the funds to Talbert’s account. Thereafter, Talbert attempted to wire $74,000 to a bank in Hong Kong for Smith, but U.S. Bank refused, which prompted Talbert to make large-cash withdrawals. Subsequently, a Pelican-Management representative executed an affidavit alleging that the payee line on the check had been changed from a corporation’s name to Talbert’s name. After Bank of New York dishonored the check and a hold that U.S. Bank placed on Talbert’s account had expired, Talbert withdrew most of the remaining funds and closed her account. U.S. Bank repaid Bank of New York, which left an overdraft balance in Talbert’s account of $84,010.53. U.S. Bank sued Talbert for payment of the overdraft balance. Talbert counterclaimed for constructive fraud based on the protection she purchased and alleged assurances by U.S. Bank that the protection would safeguard her. The trial court found that Talbert breached the transfer warranties under the Uniform Commercial Code (UCC), granted summary judgment in U.S. Bank’s favor, and dismissed Talbert’s counterclaim. Talbert appealed and made several arguments seeking to avoid liability.