Francisco Calleja-Ahedo, a resident
of Mexico, opened an account with Compass Bank in 1988. He may or may not have
signed an account card directing the Bank to hold all correspondence.
Conversely, he may or may not have instructed the Bank to send statements to
his brother in The Woodlands, Texas.
Regardless, the Bank sent monthly statements
c/o Calleja’s brother at the Texas address from 2008 until 2012. Calleja’s
brother routinely ignored all statements, but furnished them to Francisco when
he visited.
In May 2012 the Bank statement
provided that Calleja had a balance of approximately $43,000. This would be the
last statement provided by the Bank to the brother at the Texas address.
Neither Calleja nor his brother nor
the two other signatories on the account (Calleja’s wife and father) complained
to the Bank that statements were no longer being received in The Woodlands.
In June 2012 an unknown person
identified himself as Calleja and instructed the Bank to change the address on
file to a California address. Then, another California address. Later, a
Georgia address. Still later, a new Georgia address.
A forged check for $38,700 was paid
from the account in July 2012. The imposter then drained the account balance
through a series of smaller transactions.
Calleja claims that he first learned
of the change of address and fraudulent activity in January 2014, when a buddy
told him a check from Calleja had been returned marked “account closed.”
Calleja went to the Bank to sign an affidavit disputing the charges and demand
reimbursement.
Calleja sued the Bank when it
refused to pay the unauthorized withdrawals. The Bank’s employee testified
through an affidavit that: (1) Calleja never complained about his brother’s
non-receipt of statements, (2) copies of Bank statements are available at any
branch office, (3) Calleja could have reviewed the statements online, and (4)
all statements have a toll-free number Calleja could have used to get statement
copies or setup online banking for free.
The trial court granted judgment for
the Bank, holding that Calleja failed to exercise diligence by waiting too long
to notify the Bank of the fraud.
Calleja
appealed.
The Texas court of appeals reversed
and rendered judgment for Calleja, concluding that sending statements to the
imposter did not amount to sending the statements to Calleja. The appellate
court further rejected the Bank’s contention that it made statements available
by providing them at its offices, offering free online banking, and providing a
toll free number that Calleja could have used to inquire about his missing
statements and overdrawn account balance.
The
Bank appealed.
The Supreme Court evaluated Texas
laws found in Section 4.406 of the Texas Business and Commerce Code. That
section states that if a bank sends or makes available a statement of account,
the customer must exercise reasonable promptness in examining the statement. If
the customer discovers an unauthorized payment, the customer must promptly
notify the bank.
Further, Texas laws provide that if
a customer fails to promptly notify the bank, the customer is precluded from
asserting claims against the bank for improper payment.
Focusing on the disjunctive “. . . or makes available . . .,” the Court
concluded that Calleja could have used the toll free number to inquire about
his account. Or appeared at any bank branch to review statements. Or used
online banking for the same purposes and verifications. Or asked his brother
why statement delivery had been suspended for 18 months.
The Texas Supreme Court held that
due to Calleja’s failure to exercise reasonable diligence, the Bank could not
be responsible for his losses. Compass Bank wins; Francisco Calleja-Ahedo
loses.
See
Compass Bank v. Francisco Calleja-Ahedo; Texas Supreme Court; Case No.
17-0065; December 21, 2018: https://scholar.google.com/scholar_case?case=12161934202290073619&hl=en&as_sdt=6&as_vis=1&oi=scholarr.
Lessons
Learned / Questions Asked:
1. Most
of us would consider it irresponsible to ignore a $43,000 bank account. And yet
I can envision that an individual, living in a foreign country and likely unaware
of Texas banking laws, may have trusted his USA-resident brother to oversee the
account and review statements mailed to his brother. And press the alert button
when delivery of the statements ended.
2. Texans
are charged with the duty of promptly reviewing banking and credit union
statements (likely brokerage and similar accounts as well), and asking hard
questions if there are errors or improper transactions. Trusting that things
will work themselves out without taking affirmative action could jeopardize a
significant account balance.
3. Past
that, Happy New Year to all my loyal readers. Let me know if there are any
subjects you want me to explore this year.
* Board Certified,
Commercial (1989) and Residential (1988) Real Estate Law,
Texas
Board of Legal Specialization
Licensed
in the States of Texas and New York
Higier
Allen & Lautin, PC
2711
N. Haskell Avenue, Suite 2400
Dallas
Texas 75204
P:
972.716.1888
