ACCEPTED
01-15-00210-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
10/23/2015 3:29:52 PM
CHRISTOPHER PRINE
CLERK
Case No. 01-15-00210-CV
FILED IN
1st COURT OF APPEALS
IN THE FIRST COURT OF APPEALS HOUSTON, TEXAS
HOUSTON, TEXAS 10/23/2015 3:29:52 PM
CHRISTOPHER A. PRINE
Clerk
Francisco Calleja-Ahedo, Appellant
v.
Compass Bank, Appellee
From Cause No. 2014-22168
55th Judicial District Court, Harris County, Texas
Appellee’s Brief
HIRSCH & WESTHEIMER, P.C.
By: /s/ Michael D. Conner
Michael D. Conner
State Bar No. 04688650
mconner@hirschwest.com
William P. Huttenbach
State Bar No. 24002330
phuttenbach@hirschwest.com
1415 Louisiana, 36th Floor
Houston, Texas 77002
Telephone: (713) 220-9162
Facsimile: (713) 223-9319
Attorneys for Appellee, Compass Bank
Appellant requested oral argument. Appellee also request to be heard.
930505.20140273/2253328.1
TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................... iii
Statement of the Case.................................................................................................1
Appellant’s Issues [Restated].....................................................................................2
Statement of Facts ......................................................................................................2
Standard of Review ....................................................................................................7
Summary Judgment ................................................................................................7
A. Generally .......................................................................................................7
B. Traditional Summary Judgment ....................................................................7
C. Evidentiary Rulings .......................................................................................8
D. Contract Interpretation ..................................................................................8
E. Harmless Error ............................................................................................10
Summary of Argument ............................................................................................10
Argument and Authorities........................................................................................13
I. Appellant’s Failure to Inquire for 18 Months Is Negligent
as a Matter of Law ...............................................................................13
II. The Deposit Contract and Section 4.406.............................................22
The February 2012 Deposit Agreement Governs the Account. ..........24
Compass Bank made statements available in accordance with the
contract. ...............................................................................................27
III. As Prevailing Party Compass Bank is Entitled to Recover
Attorneys’ Fees....................................................................................32
IV. Appellant Failed to Conclusively Establish Entitlement to
Summary Judgment .............................................................................36
i
Conclusion ...............................................................................................................38
Prayer .......................................................................................................................40
Certificate of Compliance ........................................................................................41
Certificate of Service ...............................................................................................41
Appendix ..................................................................................................................42
ii
TABLE OF AUTHORITIES
Cases
Aetna Life & Casualty Co. v. Hampton State Bank
497 S.W.2d 80 (Tex. Civ. App.—Dallas 1973, no pet.) ......................................20
Am. Airlines Employees Fed. Credit Union v. Martin,
29 S.W.3d 86 (Tex. 2000).............................................................................. 31, 33
Am. Tobacco Co., Inc. v. Grinnell,
951 S.W.2d 420 (Tex. 1997) ..................................................................................8
Bank of Tex. v. VR Elec., Inc.,
276 S.W.3d (Tex. App.—Houston [1st Dist.] 2008, pet. denied) ..... 16, 19, 20, 22
Barfield v. Howard M. Smith Co. of Amarillo,
426 S.W.2d 834 (Tex. 1968) ......................................................................... 10, 14
Berry v. Encore Bank
2015 WL 3485970
(Tex. App.—Houston [1st Dist.] June 2, 2015, no. pet. h.)..............................7, 38
Canfield v. Bank One, Tex., N.A.,
51 S.W.3d 828 (Tex. App.—Texarkana 2001, pet. denied) .................................21
Carpenter v. Cimarron Hydrocarbons Corp.,
98 S.W.3d 682 (Tex. 2002).....................................................................................8
Cathey v. Booth,
900 S.W.2d 339 (Tex. 1995) ..................................................................................8
City of Laredo v. Montano,
414 S.W.3d 731 (Tex. 2013) ................................................................................35
Coker v. Coker,
650 S.W.2d 391 (Tex. 1983) ..................................................................................8
iii
Coleman v. Bhd. State Bank,
3 Kan. App. 2d 162, 592 P.2d 103 (1979) ............................................................15
Compton, Ault & Co. v. Marshall,
88 Tex. 50, 29 S.W. 1059 (Tex. 1895) .................................................................21
Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n,
462 S.W.3d 128 (Tex. App.—Houston [1st Dist.] 2015, no pet.) ................. 21, 22
Derr Constr. Co. v. City of Houston,
846 S.W.2d 854 (Tex. App.—Houston [14th Dist.] 1992, no writ) .......................9
Downer v. Aquamarine Operators, Inc.,
701 S.W.2d 238 (Tex. 1985) ..................................................................................8
E.I. Du Pont De Nemours & Co. v. Shell Oil Co.,
259 S.W.3d 800 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) .................35
El Apple I, Ltd. v. Olivas,
370 S.W.3d 757 (Tex. 2012) ........................................................................ 35, 36
El Paso Field Services, L.P. v. MasTec N. Am., Inc.,
389 S.W.3d 802 (Tex. 2012) ............................................................................9, 31
Fullick v. City of Baytown,
820 S.W.2d 943 (Tex. App.—Houston [1st Dist.] 1991, no writ) .......................27
Gramen Farm, LLC v. Huyen Nguyen,
01-13-00569-CV, 2014 WL 4374120
(Tex. App.—Houston [1st Dist.] Sept. 4, 2014, no pet.) ......................................31
HECI Exploration Co. v. Neel,
982 S.W.2d 881 (Tex. 1998) ................................................................................14
Highland Capital Mgmt., L.P. v. Ryder Scott Co.,
402 S.W.3d 719 (Tex. App.—Houston [1st Dist.] 2012, no pet.) ..........................8
iv
Howard v. Faberge, Inc.,
679 S.W.2d 644 (Tex. App.—Houston [1st Dist.] 1984, writ refused n.r.e.) ......10
Italian Cowboy Partners v. Prudential Ins. Co.,
341 S.W.3d 323 (Tex. 2011) ..................................................................... 9, 10, 31
J.M. Davidson, Inc. v. Webster,
128 S.W.3d 223 (Tex. 2003) ................................................................................31
Kennamer v. Estate of Noblitt,
332 S.W.3d 559 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) ...............7, 8
Khalilnia v. Fed. Home Loan Mortg. Corp.,
01-12-00573-CV, 2013 WL 1183311
(Tex. App.—Houston [1st Dist.] Mar. 21, 2013, pet. denied)..............................27
K-Mart Corp. v. Honeycutt,
24 S.W.3d 357 (Tex. 2000).....................................................................................8
Leax v. Leax,
305 S.W.3d 22 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) .....................8
Long v. Griffin
442 S.W.3d 253 (Tex. 2014) ......................................................................... 35, 36
Lyle v. Jane Guinn Revocable Trust,
365 S.W.3d 341 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) .................10
McCraw v. Maris,
828 S.W.2d 756 (Tex. 1992) ................................................................................10
Mid-Century Ins. Co. v. Ademaj,
243 S.W.3d 618 (Tex. 2007) ..................................................................................7
Miller v. Raytheon Aircraft Co.,
229 S.W.3d 358, 365-66 (Tex. App.—Houston [1st Dist.] 2007, no pet.) ..........26
v
Myrick v. Nat'l Sav. & Trust Co.,
268 A.2d 526 (D.C. 1970) ....................................................................................15
RGS, Cardox Recovery, Inc. v. Dorchester Enhanced Recovery Co.,
700 S.W.2d 635, 638 (Tex. App.—Corpus Christi 1985, writ ref’d n.r.e.) ...........9
Rogers v. Rogers,
01-90-00852-CV, 1991 WL 179620
(Tex. App.—Houston [1st Dist.] Sept. 12, 1991, writ denied)...............................9
Schlumberger Tech. Corp. v. Swanson,
959 S.W.2d 171 (Tex. 1997) ................................................................................14
Seagull Energy E & P, Inc. v. Eland Energy, Inc.,
207 S.W.3d 342 (Tex. 2006) ................................................................................31
Sonerra Resources Corp. v. Helmerich & Payne Int’l Drilling Co.,
01-11-00459-CV, 2012 WL 3776428
(Tex. App.—Houston [1st Dist.] Aug. 30, 2012, no pet. h.) ...........................9, 10
Stauffer v. Henderson,
801 S.W.2d 858 (Tex. 1990) ................................................................................31
Stucki v. Noble,
963 S.W.2d 776 (Tex. App.—San Antonio 1998, pet. denied)............................26
Terry v. Puget Sound Nat. Bank,
80 Wash. 2d 157, 492 P.2d 534 (1972) ................................................................15
Tex. Workers’ Comp. Comm’n v. Patient Advocates,
136 S.W.3d 643 (Tex. 2004) ............................................................................7, 38
Union Planters Bank, Nat. Ass'n v. Rogers,
912 So. 2d 116 (Miss. 2005) .................................................................................15
Valence Operating Co. v. Dorsett,
164 S.W.3d 656 (Tex. 2005) ..................................................................................8
vi
Vega v. Compass Bank,
04-13-00383-CV, 2014 WL 953466
(Tex. App.—San Antonio Mar. 12, 2014, no pet.) ...............................................35
Via Net v. TIG Ins. Co.,
211 S.W.3d 310 (Tex. 2006) ................................................................................14
Wagner & Brown, Ltd. v. Horwood,
58 S.W.3d 732 (Tex. 2001)...................................................................................14
Waite v. BancTexas-Houston, N.A.,
792 S.W.2d 538 (Tex. App.—Houston [1st Dist.] 1990, no writ) .......................26
Westport Bank & Trust Co. v. Lodge,
164 Conn. 604, 325 A.2d 222 (1973) ...................................................................15
Whitney Nat. Bank v. Baker,
122 S.W.3d 204 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ........................31
Statutes
Tex. Bus. & Com. Code § 1.201(b)(20) ..................................................................21
Tex. Bus. & Com. Code § 3.406 (a) ................................................................ passim
Tex. Bus. & Com. Code 4.103(a) ..................................................................... 23, 28
Tex. Bus. & Com. Code 4.406 ......................................................................... passim
Tex. Bus. & Com. Code §§ 3.101–605 ....................................................................22
Tex. Civ. Prac. & Code § 37.009 .............................................................................36
Tex. Civ. Prac. & Code § 38.001 .............................................................................36
vii
Tex. Fin. Code Ann. § 34.302 (a) ..................................................................... 24, 25
Tex. Fin. Code § 34.301 (a) ........................................................................ 14, 29, 31
Rules
Tex. R. App. P. 44.1.................................................................................................10
Tex. R. App. P. 9.4(e) ..............................................................................................41
Tex. R. App. P. 9.4(i) ...............................................................................................41
Tex. R. Civ. P. 166a (c) .............................................................................................7
Tex. R. Evid. 902(10)........................................................................................ 26, 27
Other Authority
Black’s Law Dictionary 284 (7th ed. 2001) ............................................................35
viii
Statement of the Case
Nature of the Case Appellant Calleja-Ahedo sued Compass Bank because
it did not refund payment of an allegedly forged check
that Appellant did not report to Compass Bank for
more than 18 months
Trial Court 55th Judicial District Court, Harris County, Texas, the
honorable Jeff Shadwick presiding
Course of Proceedings The case was decided in favor of Compass Bank on
cross motions for summary judgment
Trial Court’s Disposition In its Final Summary Judgment On All Claims By and
Between Plaintiff and Compass Bank signed
December 8, 2014 (CR735-37) the trial court entered
a take nothing judgment on all of Appellant’s claims
and awarded judgment in favor of Compass Bank for
attorneys’ fees, contingent attorneys’ fees, costs and
expenses.
1
Appellant’s Issues [Restated]
In eight issues Appellant argues that, despite the undisputed fact that
Appellant did not examine statements or inquire into his bank account for more
than eighteen months, Compass Bank was not entitled to summary judgment, was
not entitled to the attorneys’ fees awarded, and that Appellant rather than Compass
Bank should have been granted summary judgment on Appellant’s claim against
Compass for declining to reimburse him.
Statement of Facts
This dispute involves an allegedly forged check and subsequent transactions.
Appellant claims these transactions were not authorized and resulted in charges
against a deposit account (#------3759) with Compass Bank. (The “Account”).
Appellant did not report any unauthorized activity to Compass Bank for more than
18 months.
In 1988, Appellant opened an Account with Compass. CR50, 230.
Appellant, his wife, Elizabeth Haller de Calleja, and his father, Francisco Calleja
Cajigas, all were signatories on the Account from its opening to its closing in 2014.
CR46, 50. Sra. de Calleja and Sr. Cajigas are not parties to this suit and neither
gave testimony or other evidence. See, e.g., CR420, et seq. The Account signature
card, signed by all three owners, includes Appellant’s Mexico City address. CR50,
230.
2
At all times from 1988 to 2014, Account statements were available upon
request at any Compass Bank branch and, since long before 2012, Account
statements were accessible on-line. CR397. For four out of the more than 24 years
of the relationship, Compass Bank also mailed monthly statements of the Account.
According to Appellant, for convenience and security because he lives in a “suburb
of Mexico City” (CR 46), “prior to July 2012, [he] directed the bank statements for
the Account be mailed by the Bank to the address of [his] brother” in The
Woodlands, Texas. CR46.
The statement for May 2012 activity is the last statement mailed to
Appellant’s brother’s address. At the request of someone who provided sufficient
identifying information regarding Appellant’s account to identify himself as
Appellant, Compass Bank mailed the statement for the period May 31 through
June 28, 2012 to an address in Cupertino, California. CR246. The next several
statements were mailed to Sacramento (CR249-57) and, thereafter, to an address in
Georgia. CR 258, et seq. Although Appellant claims he did not tell Compass Bank
to change the mailing address (see, e.g., CR46), Appellant presented no affidavit
testimony or other evidence from the other two owners of the Account.1 And, there
1
Co-signatories on the Account, Ana Elizabeth Haller de Calleja and Francisco Calleja
Cajigas, each also had the right to change the mailing address. See CR202, CR212; see also
CR412, et seq. (Compass’s motion to strike); CR685 (Order at ¶ 6, overruling Compass’s
objection).
3
is no evidence that anyone—not Appellant, either of the other Account owners, or
Appellant’s brother—ever contacted Compass Bank to notify it that Account
statements were no longer being received at the Texas address.
On June 26, 2012, the account was debited $33.23 for checks – this charge
appeared on the June statement. CR246. Appellant alleges that this charge was
unauthorized. On July 30, 2012, a check in the amount of $38,700.00 was paid
from the Account. CR249. The transaction appears on the July statement. Id. From
July 30, 2012 until January 2014, Compass received no notice that Appellant had
any complaint with his Account.
Eighteen months later, in January 2014, Appellant alleges he “discovered a
problem” when “an acquaintance” to whom he had written a check told him that
check was returned marked “account closed.” CR47. When Appellant finally
contacted Compass Bank in the last week of January 2014, he was shown a copy of
the $38,700.00 check (id.) posted to the Account and listed on the Account
statement a year and one-half earlier. CR71. For the first time, he claimed the
check was forged. CR47. When asked by Compass what he did to monitor the
Account after January 2012 (6 months before the alleged forgery), Appellant
answered under oath, “There was no need to ‘keep track’ of banking information
because no authorized checks (except perhaps two checks described in response to
Interrogatory No. 10) would be shown in statements after May 2012.” CR321-22.
4
Plaintiff failed to provide any evidence or other testimony that he regularly
reviewed his account statements as required by the deposit agreement.
The deposit agreement applicable to the Account (CR202, 205, et seq.)2
provides, “If we have a deliverable address on file for you, we will mail or deliver
to you periodic statements for your account at approximately monthly intervals
….” CR212. These materials “may be mailed to … the address shown in our
records.” Id. “Our records regarding [the Account] will be deemed correct unless
you timely establish with us that we made an error.” Id. The agreement also
instructs Appellant to “Notify us promptly if you do not receive your statement by
the date you normally would expect to receive it.” Id. The agreement further
provides:
… We may make statements, cancelled checks (if applicable to your
account), notices or other communications available to you by holding
all or any of these for you or delivering all or any of these items to
you in accordance with your request or instructions. If we hold
statements or notices to you at your request or because you fail to
provide us with a current address, they will be deemed delivered to
you when they are prepared (for held statements), mailed (for returned
mail) or otherwise made available to you.
2
Appellant disputes that the February 2012 edition of the deposit agreement applies. The
2008 deposit agreement (the one Appellant advocates) permits amendment and provides
Compass will notify Appellant of amendment of the agreement by either mailing notice to “the
last address shown on our records” … “or by posting the amendment in our offices.” CR68. The
2008 agreement also provides: “By continuing to maintain your account or obtaining services or
products relating to this Agreement or your account after the amendment becomes effective, you
agree to the amendment of this Agreement.” Id. The 2012 deposit agreement includes
substantially similar language. CR219. There is no dispute that Appellant maintained the
Account after February 2012. See CR228.
5
Id. Appellant did not report any unauthorized transactions, nor did he inform
Compass Bank he was not receiving mailed monthly statements, at any time before
January 2014.
The deposit agreement includes Appellant’s (and the other account owners’)
promise to “carefully examine each account statement ….” CR212. It includes the
owners’ “agree[ment] to act in a prompt and reasonable manner in reviewing your
statement or notice and reporting any exceptions to us.” Id. “This means that, if
you do not report exceptions to us within thirty (30) days after we send or make the
statement or notice available to you, we will not reimburse you for any such
disputed amounts or any loss you suffer, including, but not limited to, any amounts
lost as a result of paying any unauthorized, forged, or altered item ….” Id.
Compass Bank paid a check on July 30, 2012. Appellant waited 18 months
to tell Compass Bank he believed the check was forged. Likewise, Appellant did
not tell Compass Bank for 18 months that statements sent to his brother’s address
every month for four years stopped showing up after June of 2012. Appellant made
no effort to obtain copies of statements from any Compass Bank branch, via the
internet or otherwise, at any time between July 2012 and January 2014. See
CR397.
6
Standard of Review
Summary Judgment
A. Generally
The standard of review for summary judgments is “de novo.” Mid-Century
Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007).
When both parties move for summary judgment and the trial court grants
one motion and denies the other, this Court determines all questions presented and
renders the judgment that the trial court should have rendered. See Berry v. Encore
Bank, 01-14-00246-CV, 2015 WL 3485970, at *4 (Tex. App.—Houston [1st Dist.]
June 2, 2015, no. pet. h.) (citing Tex. Workers’ Comp. Comm’n v. Patient
Advocates, 136 S.W.3d 643, 648 (Tex. 2004)).
B. Traditional Summary Judgment
The moving party bears the burden of showing both no genuine issue of
material fact and entitlement to judgment as a matter of law. Tex. R. Civ. P. 166a
(c); Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997);
Kennamer v. Estate of Noblitt, 332 S.W.3d 559, 563 (Tex. App.—Houston [1st
Dist.] 2009, pet. denied). In deciding whether there is a genuine issue of material
fact, the Court takes evidence favorable to the non-movant as true and, all
reasonable inferences benefit and all doubts are resolved in favor of the non-
movant. Am. Tobacco Co., Inc. v. Grinnell, supra; Kennamer v. Estate of Noblitt,
7
332 S.W.3d at 563 (citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661
(Tex. 2005)).
Summary judgment for a defendant is proper if the defendant disproves at
least one element of each of the plaintiff’s claims or affirmatively establishes each
element of an affirmative defense to each claim. Kennamer v. Estate of Noblitt,
supra (citing Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995)).
C. Evidentiary Rulings
The admission or exclusion of summary judgment evidence is reviewed for
abuse of discretion. Highland Capital Mgmt., L.P. v. Ryder Scott Co., 402 S.W.3d
719, 747 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (citing K-Mart Corp. v.
Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000)). A trial court abuses its discretion
when it acts without reference to guiding rules or principles. Id. (citing Carpenter
v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 687 (Tex. 2002). If the trial
court acts in an arbitrary or unreasonable manner, it abuses its discretion. See Leax
v. Leax, 305 S.W.3d 22, 32 (Tex. App.—Houston [1st Dist.] 2009, pet. denied)
(citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex. 1985).
D. Contract Interpretation
The interpretation of an unambiguous contract is properly the subject of a
motion for summary judgment. See, e.g., Coker v. Coker, 650 S.W.2d 391, 393-94
(Tex. 1983); Derr Constr. Co. v. City of Houston, 846 S.W.2d 854, 862 (Tex.
8
App.—Houston [14th Dist.] 1992, no writ) (citing RGS, Cardox Recovery, Inc. v.
Dorchester Enhanced Recovery Co., 700 S.W.2d 635, 638 (Tex. App.—Corpus
Christi 1985, writ ref’d n.r.e.)); Rogers v. Rogers, 01-90-00852-CV, 1991 WL
179620 (Tex. App.—Houston [1st Dist.] Sept. 12, 1991, writ denied) (not
designated for publication).
When interpreting unambiguous contracts courts are bound to “ascertain the
true intentions of the parties as expressed in the writing itself.” Italian Cowboy
Partners v. Prudential Ins. Co., 341 S.W.3d 323, 333 (Tex. 2011); see also
Sonerra Resources Corp. v. Helmerich & Payne Int’l Drilling Co., No. 01-11-
00459-CV, 2012 WL 3776428,*4 (Tex. App.—Houston [1st Dist.] Aug. 30, 2012,
no pet. h.) (mem. op.). The Court construes the contract as a whole in order to
“harmonize and give effect to all the provisions of the contract so that none will be
rendered meaningless.” El Paso Field Services, L.P. v. MasTec N. Am., Inc., 389
S.W.3d 802, 805 (Tex. 2012) (citing Italian Cowboy Partners, Ltd. v. Prudential
Ins. Co. of Am., supra).When a contract is unambiguous, courts may not consider
the parties’ interpretations or extraneous evidence to determine the meaning of the
instrument. Italian Cowboy Partners v. Prudential Ins. Co., supra; Sonerra
Resources Corp. v. Helmerich & Payne Int’l Drilling Co., supra.
9
In reviewing a summary judgment ruling that interprets a contract, the
Court’s review is de novo. See Lyle v. Jane Guinn Revocable Trust, 365 S.W.3d
341, 350 (Tex. App.—Houston [1st Dist.] 2010, pet. denied).
E. Harmless Error
In the event this Court determines the trial court committed an error of law,
this Court should reverse the judgment only if “the error complained of: (1)
probably caused the rendition of an improper judgment; or (2) probably prevented
the appellant from properly presenting the case to the court of appeals.” Tex. R.
App. P. 44.1. The test is not a “but for” test, nor is it one of mere possibility;
rather, this Court’s inquiry is whether the error probably caused rendition of an
improper judgment. See McCraw v. Maris, 828 S.W.2d 756, 758 (Tex. 1992)
(citing Howard v. Faberge, Inc., 679 S.W.2d 644, 648 (Tex. App.—Houston [1st
Dist.] 1984), writ refused n.r.e.)).
Summary of Argument
The material facts in this case are undisputed. First, Compass Bank paid a
check on July 30, 2012. Despite agreeing to report any unauthorized activity within
thirty days, Appellant waited 18 months to inform Compass Bank he believed the
check was forged. Likewise, Appellant failed to notify Compass Bank for 18
months that he and/or his brother were no longer receiving bank statements.
Appellant made no effort to obtain copies of statements from any Compass Bank
10
branch, via the internet or otherwise, at any time between July 2012 and January
2014. See CR397.
This Court should affirm the trial court’s judgment that Appellant recover
nothing against Compass because the undisputed facts demonstrate as a matter of
law that (1) Appellant failed to exercise the required diligence by waiting more 18
months to examine or inquire into the status of his account, and (2) at all times,
Appellant’s account statements were “made available” to him had he requested
them from Compass.
First, based on the lapse of time from July 30, 2012, when a supposedly
forged check was cashed, until January of 2014, when Appellant first reported the
alleged fraud, the trial court concluded that, “as a matter of law Plaintiff has failed
to exercise diligence in protecting himself from fraud regardless of any
shortcomings in sending bank statements.” CR735. The conclusion is based on
undisputed facts and supported by Compass Bank’s Business and Commerce Code
article 3 arguments. See CR193-98.
Additionally, based on uncontroverted evidence, much of it from Appellant
himself, that Appellant ignored his Account for 6 months before and 18 months
after the alleged forgery, the trial court also determined that “Plaintiff’s focus on
the word ‘sends’ as used in section 4-406 of the Texas Business and Commerce
11
Code is too exclusive and ignores the equally important and relevant ‘or makes
available’ language of that section.” Id.
These determinations, the operative contract between Appellant and
Compass Bank, and the terms of sections 3.406 and 4.406 of the Business and
Commerce Code preclude Appellant’s claim.
Properly applying rules of contract construction and giving effect to all parts
of the written agreement in evidence, the trial court correctly concluded that the
periodic statements of the Account were “made available.” The trial court correctly
applied the law, e.g., Business and Commerce Code section 4.406 and the written
contract, to conclude that Appellant failed to timely report any problem revealed
on available Account statements. Accordingly, Appellant’s claim was precluded.
The contract includes a signature card in which Appellant agreed to be
bound by the agreement and all amendments. By terms of the agreement as
amended, and consistent with statute, Compass Bank complied with its obligation
to make statements of the Account available to Appellant.
Appellant failed to comply with his corresponding obligation to timely alert
Compass Bank that he was no longer receiving monthly account statements. He
failed to comply with his statutory and contractual duties to timely notify Compass
Bank of any exception to activity reflected on statements of the Account.
12
Accordingly, the trial court’s judgment in favor of Compass Bank should be
affirmed.
Similarly, the trial court’s denial of Appellant motion for summary judgment
should be affirmed. Appellant did not conclusively prove payment of the check or
any other transaction was unauthorized. Neither of two co-owners of the Account
gave evidence. And, Appellant failed to conclusively prove his satisfaction of
conditions precedent to any right to recover.
Finally, the trial court’s award of attorneys’ fees to Compass Bank pursuant
to the contract between the Parties should be affirmed.
Argument and Authorities
I. Appellant’s Failure to Inquire for 18 Months Is Negligent as a
Matter of Law.
It is undisputed that Appellant failed to examine his bank statements or
otherwise inquire into the status of his bank account for more than 18 months.
Because this fact was not disputed, the trial court concluded that, “as a matter of
law Plaintiff has failed to exercise diligence in protecting himself from alleged
fraud ….” CR735. No reasonable person could disagree: failure to reconcile bank
statements for months on end is unreasonable; failure to look at an account
statement month after month is unreasonable; failure to even alert the bank that
statements have stopped showing up when and where expected is unreasonable.
13
The 2012 deposit agreement provides that Appellant (and the other Account
owners) “agree(s) to act in a prompt and reasonable manner in reviewing your
statement or notice and reporting any exceptions to us.” CR212. Further, the
deposit agreement directs Appellant to “[n]otify us promptly if you do not receive
your statement by the date you normally would expect to receive it.” Id. It is
undisputed that Appellant neither reviewed the status of his account nor notified
Compass that he had not received statements for at least 18 months. CR47.
The deposit contract between Compass Bank and Appellant is “a contract in
writing for all purposes.” Tex. Fin. Code § 34.301 (a). As the Texas Supreme
Court has written:
Contracting parties are generally not fiduciaries. See Schlumberger Tech.
Corp. v. Swanson, 959 S.W.2d 171, 177 (Tex. 1997). Thus, due diligence
requires that each protect its own interests. See Barfield v. Howard M.
Smith Co. of Amarillo, 426 S.W.2d 834, 840 (Tex. 1968) (“As a party to
arm’s length business transactions, respondent had a duty to use
ordinary care for the protection of its own interests”). Due diligence
may include asking a contract partner for information needed to
verify contractual performance. See [Wagner & Brown, Ltd. v.
Horwood, 58 S.W.3d 732 (Tex. 2001)] at 736; [HECI Exploration Co. v.
Neel, 982 S.W.2d 881 (Tex. 1998)] at 886. If a contracting party
responds to such a request with false information, accrual may be delayed
for fraudulent concealment. Wagner & Brown, 58 S.W.3d at 737; HECI,
982 S.W.2d at 886. But failing to even ask for such information is not
due diligence. See Wagner & Brown, 58 S.W.3d at 736; HECI, 982
S.W.2d at 886.
Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006) [emphasis added].
14
In this case, it is undisputed that Appellant failed to even inquire about his
account for more than 18 months. Id.; see also, e.g., Union Planters Bank, Nat.
Ass’n v. Rogers, 912 So. 2d 116, 122 (Miss. 2005) (A 4.406 case in which the
court said, “A reasonable person who has not received a monthly statement from
the bank would promptly ask the bank for a copy of the statement.”).3 Thus, apart
from Appellant’s obligations pursuant to 4.406 (see infra), Appellant’s admitted
and unjustified failure to have discovered irregularities in the Account because
“[t]here was no need to ‘keep track’” (CR321) precludes his claims. 4 Assuming
without conceding that an imposter was involved, Appellant’s failure to “keep
track” permitted the alleged imposter to access and make use of Appellant’s
account information. Had Appellant routinely reviewed the account activity, he
3
See also, e.g., Myrick v. Nat'l Sav. & Trust Co., 268 A.2d 526, 528 (D.C. 1970)
(unjustified failure to inquire as to lack of receipt of monthly statements and cancelled checks
held negligent as a matter of law); Coleman v. Bhd. State Bank, 3 Kan. App. 2d 162, 169, 592
P.2d 103, 111 (1979) (citing Myrick); Westport Bank & Trust Co. v. Lodge, 164 Conn. 604, 611-
12, 325 A.2d 222, 226 (1973) (reasonably prompt and careful examination of the altered
statements would have disclosed the forgeries many months before they ultimately were
discovered and that the lack of effort on the part of the defendants to make such examination
constituted negligence.); Terry v. Puget Sound Nat. Bank, 80 Wash. 2d 157, 159-60, 492 P.2d
534, 535 (1972) (Monthly statements were intercepted by wrongdoer and not received by
plaintiffs; plaintiffs did not inquire of the bank nor discuss between themselves this unusual
absence of statements; and, only after they received notice that the account was overdrawn did
they go to the bank and discover forgeries, such “facts constitute substantial evidence of
negligence on the part of the plaintiffs.”).
4 It appears that Appellant is arguing, without citation to authority, that an exception
should apply to his obligation to monitor the Account if he does not use the Account for some
period. There should be no such exception. Even if a depositor does no banking for an extended
period, when he fails to monitor the account, he opens the door for a fraudster to engage in
unauthorized activity without detection.
15
would have discovered the allegedly unauthorized charge of $33.23 for new checks
(CR246), thereby alerting him to the potential for the alleged unauthorized activity
that appeared on subsequent statements. But, his failure to monitor the Account
for more than 18 months permitted the alleged imposter to purchase blank checks
with Account funds and to then use those checks undetected. Assuming the truth of
Appellant’s allegations, the alleged imposter’s forgery (using check stock
Appellant claims he did not purchase) was made possible by Appellant’s negligent
failure to examine Account statements—or even to inquire about them—for 6
months before and 18 months after the alleged forgery. 5 See Tex. Bus. & Com.
Code § 3.406 (a).
In addition to the 4.406 arguments discussed below, Compass Bank moved
for summary judgment pursuant to section 3.406. 6 Tex. Bus. & Com. Code §
3.406; CR193-98. Section 3.406(a) provides:
5
Rewarding Appellant’s admitted lack of diligence would undermine the UCC’s “discrete
fault scheme, specifically allocating responsibility among parties to a banking relationship” and
create untold uncertainty. See Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671, 683 (Tex. App.—
Houston [1st Dist.] 2008, pet. denied). A customer could willfully ignore his accounts, have a
third person conspire to change the address and drain the account then months or years later sue
to hold the bank liable.
6
Compass also argued section 3.405 but does not advance any 3.405 arguments here,
except by analogy. For example, Appellant entrusted his brother with responsibility to receive
and hold statements in Texas. The brother failed for 18 months to inform Appellant that
statements were no longer arriving as they had. Appellant is responsible for his brother’s failure
to discharge the responsibility he was given, just as if the brother had been Appellant’s
employee.
16
(a) A person whose failure to exercise ordinary care substantially
contributes to an alteration of an instrument or to the making of a
forged signature on an instrument is precluded from asserting the
alteration or the forgery against a person who, in good faith, pays the
instrument or takes it for value or for collection.
Tex. Bus. & Com. Code § 3.406 (a).
The trial court correctly concluded that, as a matter of law, Appellant failed
to exercise ordinary care. See CR735. That failure substantially contributed to the
making of the claimed forged instrument. See Tex. Bus. & Com. Code § 3.406.
Appellant testified about his routine for examining bank statements. For at least
four years before the alleged forgery and 18 months after, rather than receiving or
requesting statements for review personally, Appellant expected account
statements to be sent to his brother’s apartment in Texas, even though his brother is
not an Account owner. See CR46; CR 50; CR230-31; CR320. Appellant testified
he visited his brother “from time-to-time and retrieve[d] bank statements ….”
CR46. Although Appellant made it a point to say he kept statements in a “locked
drawer” in Mexico City, he offered no evidence that his brother in Texas kept the
statements in a locked drawer or that his brother’s multi-unit apartment complex
and mailbox were safe and secure. CR47. Appellant’s testimony conclusively
establishes his “from time-to-time” visits to Texas did not include any visit during
the period from July 2012 until January 29, 2014. Id. He did not disclose when,
prior to July 2012, he had last come to Texas to retrieve bank statements. In fact, in
17
answer to an interrogatory asking what he did to monitor the Account after January
2012 (6 months before the alleged forgery), Appellant answered under oath,
“There was no need to ‘keep track’ of banking information because no authorized
checks (except perhaps two checks described in response to Interrogatory No. 10)
would be shown in statements after May 2012.” CR321-22.
It is undisputed that Appellant was not requesting or reviewing account
statements in 2012 or 2013. Appellant’s admitted, willful ignorance of the activity
in his Account allowed the alleged theft to go undetected and unreported for more
than 18 months. Thus, even if Compass Bank had continued to send statements to
the brother’s apartment, Appellant still would not have discovered and reported the
alleged forgery prior to 2014. Appellant’s own testimony negates any connection
between the non-receipt of statements and his admitted inattention to Account
activity, i.e., his negligence contributing to an alleged interloper’s forgery. Tex.
Bus. & Com. Code §3.406(a). Appellant willfully left his banking information
outside his control for extended periods of as much as two years. And, his no need
to keep track rationale ignores the very basis for a customer’s duty to examine
account statements: to ensure that activity reflected on each statement is authorized
activity.
Appellant also offered no explanation why his brother, whom he trusted to
receive copies of his bank documents, never told him statements of the Account
18
were no longer arriving as they had for four years. See CR46-47. Based on
undisputed evidence—mostly Appellant’s sworn statements—the trial court
concluded:
In particular, but not the sole reason for [the October 28, 2014 order
granting Compass Bank’s motion for summary judgment; CR539-40],
the Court noted that where the check at issue was cashed on July 30,
2012, and the Plaintiff did not notify the bank until January 29, 2014, as a
matter of law Plaintiff has failed to exercise diligence in protecting
himself from alleged fraud regardless of any shortcomings in sending
bank statements. … Further, duties found in the deposit agreement
attached to Compass Bank’s Motion for Summary Judgment which
include a requirement that the depositor “act in a prompt and reasonable
manner” relating to his account statements are also important and weigh
against Plaintiff’s position.
CR735-36. Appellant’s decision to forgo any diligence regarding his Account —
ignoring the Account altogether for months before and after July 2012 (see CR321-
22)—at a minimum, substantially contributed7 to the alleged forgery as a matter of
law. Tex. Bus. & Com. Code § 3.406 (a). Accordingly, the trial court’s judgment
should be affirmed.
Appellant does not directly attack the trial court’s conclusion that, as a
matter of law, he failed to exercise diligence in protecting himself. Taking a wholly
different tack, Appellant misreads this Court’s opinion in Bank of Texas v. VR
Elec, Inc., 276 S.W.3d 671 (Tex. App.—Houston [1st Dist.] 2008, pet. denied). See
7
“The ‘substantially contributes’ test is meant to be less stringent than a ‘direct and
proximate cause’ test. Under the less stringent test the preclusion should be easier to establish.”
Tex. Bus. & Com. Code § 3.406, Cmt 2.
19
Appellant’s Brief (“Br.”), p. 27. That case acknowledges that for 3.406 to preclude
the customer, a bank “must prove that (1) [the customer] failed to exercise ordinary
care that substantially contributed to the alteration of the check [or the forgery] and
(2) it paid the check in good faith.” VR Elec, Inc., 276 S.W.3d at 678.
Appellant fails to appreciate how “good faith” was established in VR Elec.
After discussing Aetna Life & Casualty Co. v. Hampton State Bank, 8 a Dallas
Court of Appeals case in which “the record ‘failed to show any lack of honesty’”
and “‘contains no evidence tending to show that [the] employee … connived with
the forger or had reason to believe that he check was not genuine,’” the Court
observed in VR Elec that “[n]o evidence was developed at trial suggesting the Bank
knew of the forgery or had reason to believe it was not genuine.” See VR Elec, Inc.,
276 S.W.3d at 679-80. Similarly, Appellant does not direct the Court to any
evidence presented to the trial court suggesting a lack of good faith by Compass
Bank – there is no evidence in the record “tending to show that [Compass] …
connived with the [alleged] forger or had reason to believe that the check was not
genuine.” 9 See id.
8
497 S.W.2d 80, 87 (Tex. Civ. App.—Dallas 1973, no pet.).
9
Like the parties in VR Elec, Appellant “conflate[s] the concepts of good faith and
ordinary care.” Bank of Texas v. VR Elec., Inc., 276 S.W.3d at 679; see also Br., pp. 31-32.
Again citing the Aetna case out of Dallas, the Court explained that “neither ‘failure to exercise
ordinary care [n]or even gross negligence is equivalent to lack of good faith.’” Id. (quoting Aetna
Life & Casualty Co. v. Hampton State Bank, 497 S.W.2d at 87). It is well to note that the deposit
agreement permits payment of checks “mechanically based on the information encoded on the
Footnote continued.
20
As the Court has recently written, UCC “good faith” means “‘honesty in fact
and the observance of reasonable commercial standards of fair dealing.’”
Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462 S.W.3d 128, 135 (Tex.
App.—Houston [1st Dist.] 2015, no pet.) (citing Tex. Bus. & Com. Code §
1.201(b)(20)). As the party alleging lack of good faith, Appellant bears the burden
of proof :
It is well-settled in Texas that “[t]he law presumes, in the absence of
proof to the contrary, that the business transactions of every man are
done in good faith, and for an honest purpose; and any one who alleges
that such acts are done in bad faith, or for a dishonest and fraudulent
purpose, takes upon himself the business of showing the same.”
Compton, Ault & Co. v. Marshall, 88 Tex. 50, 29 S.W. 1059, 1059 (Tex.
1895); see also Canfield v. Bank One, Tex., N.A., 51 S.W.3d 828, 837
(Tex. App.—Texarkana 2001, pet. denied).
Id. Compass Bank’s good faith in paying the subject check is presumed and there
is no evidence rebutting the presumption. See id. Appellant does not direct the
Court to any record reference that shows or raises an issue of fact regarding a lack
of good faith. Compass Bank’s good faith and the trial court’s unchallenged
conclusion that Appellant failed, as a matter of law, to exercise diligence, together
establish the preclusion set forth in section 3.406 (a) of the Business and
Commerce Code. Tex. Bus & Com. Code § 3.406 (a). Appellant’s claims are
Previous footnote continued.
item” and the parties’ agreement that “reasonable commercial standards do not require” visual
review of checks. CR213.
21
precluded and this Court should affirm the trial court’s judgment on that basis
alone.
II. The Deposit Contract and Section 4.406.
Compass Bank also moved for summary judgment pursuant to Business and
Commerce Code section 4.406 and corresponding contract provisions. Tex. Bus. &
Com. Code § 4.406 10; see CR166, et seq. Section 4.406 provides, in part:
(a) A bank that sends or makes available to a customer a
statement of account showing payment of items for the account shall
either return or make available to the customer the items paid or
provide information in the statement of account sufficient to allow the
customer reasonably to identify the items paid. The statement of
account provides sufficient information if the item is described by
item number, amount, and date of payment. …
***
(b) If a bank sends or makes available a statement of account
or items pursuant to Subsection (a), the customer must exercise
reasonable promptness in examining the statement or the items to
determine whether any payment was not authorized because of an
alteration of an item or because a purported signature by or on behalf
of the customer was not authorized. If, based on the statement or items
provided, the customer should reasonably have discovered the
unauthorized payment, the customer must promptly notify the bank of
the relevant facts.
(d) If the bank proves that the customer failed, with respect to
10
The Uniform Commercial Code regulates a bank’s relationship with its customers. See
generally Tex. Bus. & Com. Code §§ 3.101–605 (negotiable instruments); id. §§ 4.101–.504
(bank deposits and collections); Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462
S.W.3d 128, 133 (Tex. App.—Houston [1st Dist.] 2015, no pet.) (citing Bank of Tex. v. VR Elec.,
Inc., 276 S.W.3d 671, 683 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (the UCC creates
“a discrete fault scheme, specifically allocating responsibility among parties to a banking
relationship”)). As the Court also recognizes, the bank/customer relationship may also be
governed in part by the agreement between them. Id. (citing Bank of Tex., 276 S.W.3d at 677).
22
an item, to comply with the duties imposed on the customer by
Subsection (c), the customer is precluded from asserting against the
bank:
(1) the customer's unauthorized signature or any alteration on
the item, if the bank also proves that it suffered a loss by reason of the
failure; and
(2) the customer's unauthorized signature or alteration by the
same wrongdoer on any other item paid in good faith by the bank if
the payment was made before the bank received notice from the
customer of the unauthorized signature or alteration and after the
customer had been afforded a reasonable period of time, not
exceeding 30 days, in which to examine the item or statement of
account and notify the bank.
***
(f) Without regard to care or lack of care of either the customer
or the bank, a customer who does not within one year after the
statement or items are made available to the customer (Subsection (a))
discover and report the customer’s unauthorized signature on or any
alteration on the item is precluded from asserting against the bank the
unauthorized signature or alteration. If there is a preclusion under this
subsection, the payor bank may not recover for breach of warranty
under Section 4.208 with respect to the unauthorized signature or
alteration to which the preclusion applies.
Tex. Bus. & Com. Code § 4.406.
As Appellant correctly states, section 4.103(a) of the Business and
Commerce Code permits a bank and its customer to contractually modify the rights
and duties embodied in section 4.406. Tex. Bus. & Com. Code § 4.103(a).
Appellant concedes the parties did so in this case. See Br., p. 4. Therefore, the
transactions in issue are governed by section 4.406 and the operative deposit
agreement.
23
The February 2012 Deposit Agreement Governs the Account.
In his motion for summary judgment, Appellant sought to recover attorney’s
fees pursuant to the 2012 deposit agreement. CR44 (Appellant’s motion for
summary judgment). Reversing course, Appellant now argues that the 2012
agreement does not apply to this case, but that an earlier, 2008 agreement, applies
instead.
“A bank and its account holder may amend the deposit contract by
agreement or as permitted by Subsection (b) or other law.” Tex. Fin. Code Ann. §
34.302 (a). The signature card includes Appellant’s agreement to any amendments
of the deposit contract. CR50; CR230. The 2008 deposit agreement (the one
Appellant advocates) also contemplates amendment and expressly provides that
notice of the amendment may be mailed or may be posted in Compass Bank’s
offices. CR298-99. 11 The 2008 deposit agreement, “effective August 22, 2008”
(CR51), provides further, “By continuing to maintain your account … after the
amendment becomes effective, you agree to the amendment of this Agreement.”
CR68. The 2012 deposit agreement includes substantially similar terms, i.e., notice
by posting and acceptance of the amendment by continuing to keep the Account.
11
The “Amendments to this Agreement” provision appears at pages 20-21 of the 2008
deposit agreement. As appended to Appellant’s motion for summary judgment, the provision
begins at the lower left of CR69 and is continued beginning at the upper right of CR68. A more
legible copy of the 2008 “Consumer Disclosure” (deposit agreement) is appended at Tab 1 for
the Court’s reference. A more legible copy of the 2012 deposit agreement is appended as Tab 2.
.
24
CR219. Thus, as permitted by statute, as expressly provided in the signature card
and the both deposit agreements in evidence, and because Appellant indisputably
maintained the Account after February 2012—the events about which Appellant
complains all occurred in or after June of 2012—Appellant agreed to the February
2012 amendment. CR228; see also Tex. Fin. Code § 34.302. 12 In fact, Appellant
himself invoked the 2012 deposit agreement in an attempt to recover attorney’s
fees. CR44 (Appellant’s motion for summary judgment). The 2012 deposit
agreement is the operative deposit agreement.
As Compass Bank’s custodian testified, Appellant agreed to be bound by a
deposit agreement; the 2012 deposit agreement governing the relationship is
attached to her summary judgment affidavit; that deposit agreement contains rights
and obligations of the parties; and the attached 2012 deposit agreement “evidences
the agreement in effect between [Appellant] and Compass Bank.” CR202-03. The
trial court’s reference to “the deposit agreement attached to Compass Bank’s
Motion for Summary Judgment” correctly gives effect to the operative contract,
the 2012 deposit agreement.
Attempting to avoid the very agreement he tried to use as a basis for fees,
Appellant argues that Compass Bank’s custodian’s affidavit was conclusory. See
12
“A bank and its account holder may amend the deposit contract by agreement or as
permitted by Subsection (b) or other law.” Tex. Fin. Code Ann. § 34.302 (a).
25
Br., pp. 7-9. Ms. Mueller identified herself as a Compass Bank employee and
custodian of its records and testified that “in this capacity, I have personal
knowledge of accounts held at Compass Bank.” CR202-03. This “shows how [s]he
gained personal knowledge.” See, e.g., Waite v. BancTexas-Houston, N.A., 792
S.W.2d 538, 540 (Tex. App.—Houston [1st Dist.] 1990, no writ); see also Miller v.
Raytheon Aircraft Co., 229 S.W.3d 358, 365-66 (Tex. App.—Houston [1st Dist.]
2007, no pet.) (“The personal knowledge requirement is satisfied if the affidavit
sufficiently describes the relationship between the affiant and the case so that it
may be reasonably assumed that the affiant has personal knowledge of the facts
stated in the affidavit.”) (quoting Stucki v. Noble, 963 S.W.2d 776, 780 (Tex.
App.—San Antonio 1998, pet. denied)). Ms. Mueller identified Appellant’s
account as a “regular bank account” and governed by the attached 2012 account
agreement governing such accounts. Id. Specifically she said, “Attached as Tab 1
is a copy of the written contract governing the deposit relationship between
[Appellant] and Compass Bank.” CR202. Ms. Mueller properly identified the 2012
deposit agreement as a Compass Bank business record of which she had personal
knowledge and as the agreement “in effect between” the parties. CR203.
Evidence rule 902(10) sets out a form of affidavit to be used with business
records under rule 803(6). Tex. R. Evid. 902(10). The rule also provides that the
form set out is not exclusive. Id. As the Court has written, “An affidavit that
26
substantially complies with the form of affidavit set out in the rule will suffice.”
Khalilnia v. Fed. Home Loan Mortg. Corp., 01-12-00573-CV, 2013 WL 1183311,
at *2 (Tex. App.—Houston [1st Dist.] Mar. 21, 2013, pet. denied) (citing Fullick v.
City of Baytown, 820 S.W.2d 943, 944 (Tex. App.—Houston [1st Dist.] 1991, no
writ)). Ms. Mueller’s affidavit complies with rule 902(10). See CR202-03. 13 That
the 2012 deposit agreement is the operative agreement is conclusively established.
Compass Bank made statements available in accordance with the contract.
The complaint begins with a $38,700.00 check paid from Appellant’s
Account in July 2012.14 See CR420 (First Amended Petition). The questioned
transaction appears on the Account statement for the period June 29-July 30, 2012,
addressed to an allegedly unauthorized address in California. CR249. It is
undisputed that Appellant did not notify Compass Bank of the alleged forgery or
any other exception until more than 18 months later on January 24, 2014. See
CR240; see also CR47 (Appellant’s affidavit). Therefore, if Compass Bank sent or
made Account statements available to Appellant more than 30 days before January
13
Appellant’s argument regarding Ms. Mueller’s second affidavit is unfounded. See Br., p.
8. In her second affidavit Ms. Mueller adds factual basis for her earlier statement that the 2012
document is the agreement that “evidences the agreement in effect between [Appellant] and
Compass Bank.” CR202-03. She explains the revision date in relation to Appellant’s claim that
an imposter appeared after that date and she links the 2012 amendment to the signature card
permitting such amendments. CR396. The testimony provides additional foundation facts.
14
The allegedly unauthorized debit of $33.23 for checks ordered appears on the previous
statement. CR246. Appellant, likewise, did not notify Compass of this debit for more than 18
months.
27
24, 2014, Appellant’s claims in this case are precluded, as a matter of law, under
section 4.406 (in addition to the 3.406 preclusion) just as the trial court determined.
Tex. Bus. & Com. Code § 4.406 (d), (f).
As noted above, a bank and its customer may modify the rights and duties
embodied in section 4.406. Tex. Bus. & Com. Code § 4.103(a). There is no dispute
that the parties did so. See Br., p. 4. Among other things, the parties agreed to the
meaning of “make available.” For example, the 2012 deposit agreement provides
that Compass Bank “may make statements, cancelled checks (if applicable …),
notices or other communications available to you by holding all or any of these
items for you, or delivering all or any of these items to you, in accordance with
your request or instructions.” CR212. The 2012 deposit agreement also provides,
“[i]f we hold statements or notices to you at your request …, they will be deemed
delivered to you when they are prepared ….” CR212. Compass Bank’s Ms.
Mueller testified that copies of statements were available at any branch and were
available on-line for viewing or for ordering copies. CR397.15 Her uncontroverted
testimony was that Compass Bank’s records contain no indication that Appellant
ever called about a missing statement and no indication that Compass Bank ever
15
Appellant suggests that because he was in Mexico he could not simply go to his local
bank. Appellant’s location does not affect and should not alter his obligation to timely notify
Compass Bank. Plus, because, as Ms. Mueller testified, Appellant’s post June 2012 statements
were available on-line, he could easily have accessed them from wherever he was.
28
refused a request to provide copies of any statements. Id. Ms. Mueller also testified
that statements Appellant did receive include several alternative methods for
contacting the bank to alert it to any perceived problem. 16 Id. Thus, as the trial
court correctly concluded on the established facts of this case, Account statements
were “otherwise made available” within the meaning of section 4.406 of the
Business and Commerce Code.
The deposit agreement also provides that statements “may be mailed to you
at the address shown in our records ….” CR212.17 The contract provides and
Appellant agreed that Compass Bank’s “records regarding your accounts will be
deemed correct unless you timely establish with us that we made an error.” CR212.
“Timely” means within 30 days. Id. Appellant said nothing about any error from
July of 2012 until the end of January 2014. Because Appellant admittedly failed to
“keep track” of the Account from as early as January 2012 through January of
2014, the successive addresses “shown in our records” are “deemed correct” as
16
Appellant’s brother got the statements through May of 2012, each of which had, among
other things, a 1-800 number for contacting Compass Bank. When the expected next statement
allegedly did not appear, Appellant (and/or his brother) had more than adequate information to
have timely contacted Compass Bank.
17
The signature card, evidence both parties presented to the trial court, part of the contract
in writing for all purposes (Tex. Fin. Code § 34.301 (a)), and expressly incorporated into the
deposit agreement (CR207; CR735) is Appellant’s “address shown in our records” and did not
change:
CR50; CR230.
29
provided by the clear terms of the deposit agreement. Because Appellant did not
“timely establish with us that we made an error” (CR212), Account statements
were “otherwise made available” within the meaning of section 4.406 of the
Business and Commerce Code.
Appellant failed to make any timely report about the allegedly unauthorized
activity. He did not timely report that his brother was no longer receiving Account
statements, even though the deposit agreement says, “[n]otify us promptly if you
do not receive your statement by the date you normally would expect to receive it.”
CR212. Appellant cavalierly ignored the Account for at least two years. See
CR321-22 (“There was no need to ‘keep track’ of banking information because no
authorized checks … would be shown in statements after May 2012.”). Neither the
Business and Commerce Code nor the deposit agreement places the risk of loss on
Compass Bank for Appellant’s unilateral decision to ignore his financial affairs.
Rather, Appellant had contractual obligations regarding the oversight of his
Account, including the obligation to timely review account activity and report
exceptions. CR212. The summary judgment record conclusively establishes
Appellant’s failure to satisfy these obligations. Accordingly, Compass Bank’s
records are deemed correct, including the records of successive addresses to which
statements were sent. See id.
30
Upon this record, having construed the written contract governing the
Account as a whole, giving effect to all its provisions so that none is rendered
meaningless,18 the trial court correctly and sustainably concluded that Compass
Bank made statements of the Account available and Appellant waited far too long
to report any unauthorized transaction. See El Paso Field Services, L.P. v. MasTec
N. Am., Inc., 389 S.W.3d 802, 805 (Tex. 2012) (citing Italian Cowboy Partners,
Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d at 333); see also Am. Airlines
Employees Fed. Credit Union v. Martin, 29 S.W.3d 86, 94 (Tex. 2000).19 Account
statements were “sent or otherwise made available” within the meaning of the
deposit agreement and section 4.406 of the Business and Commerce Code.
Appellant’s claims in this case are precluded and, the judgment of the trial court
should be affirmed.
18
Both parties submitted the Account signature card as evidence. This Account record
includes the phrase, “Hold All Correspondence” in the address field. Neither party focused on
the import of the term in the trial court. But, in order to construe the deposit agreement, the trial
court (and this Court) must “ascertain the true intentions of the parties as expressed in the writing
itself.” Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex.
2011) (citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003)). This means
examining and considering “the entire writing in an effort to harmonize and give effect to all the
provisions of the contract so that none will be rendered meaningless.” Id.; Seagull Energy E & P,
Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Gramen Farm, LLC v. Huyen
Nguyen, 01-13-00569-CV, 2014 WL 4374120, at *3 (Tex. App.—Houston [1st Dist.] Sept. 4,
2014, no pet.); see also Whitney Nat. Bank v. Baker, 122 S.W.3d 204, 208 (Tex. App.—Houston
[1st Dist.] 2003, no pet.) (“[t]he signature card for a bank account is a type of contract.”);
Stauffer v. Henderson, 801 S.W.2d 858, 869 (Tex. 1990); Tex. Fin. Code § 34.301 (a).
19
“[T]he purpose of section 4.406 is to place the burden on those best able to detect
unauthorized transactions so that further unauthorized transactions can be prevented, and this
burden includes the risk of nonreceipt of account statements.”
31
III. As Prevailing Party Compass Bank is Entitled to Recover Attorneys’
Fees.
The 2012 deposit agreement includes the parties’ agreement regarding the
recovery of attorneys’ fees:
Attorneys’ Fees. In any action between you and us in court, the
prevailing party shall be entitled to recover its reasonable attorneys’ fees
expended in the prosecution or defense of the court action from the other
party.
CR209. Because Compass Bank prevailed, it is entitled to recover its reasonable
fees expended.
Appellant concedes the parties’ agreement that the trial court could
determine the reasonableness and necessity of Compass Bank’s fees. See Br., p.
31; CR714. The correspondence referenced at CR714 is memorialized in
[Appellant’s] Supplemental Response to Defendant’s Claim for Attorney’s Fees,
CR698, et seq. “Both parties agreed that an evidentiary hearing would be
unnecessary and that the Court could rule on whether attorney’s fees were
reasonable and necessary based on affidavits and argument.” CR698. Consistent
with the agreement, the trial court’s determination of the recoverability and amount
of fees awarded in favor of Compass Bank was accomplished separately from the
summary judgment hearing on liability. See CR539-40; CR541; CR735. Thus, by
agreement the parties effectively requested and participated in a bench trial on
attorneys’ fees and did so on counsel’s respective affidavits.
32
Despite previously arguing that the 2012 deposit agreement entitled him to
an award of attorneys’ fees, Appellant now argues that the 2012 deposit agreement
was not the deposit agreement in effect. As above, the signature card includes
Appellant’s agreement to any amendments of the deposit contract. CR50; CR230.
The 2008 deposit agreement—Appellant’s preferred agreement—similarly
contemplates amendments to the parties’ agreement. See CR68. Among the
pertinent provisions is that the bank may notify the account owner of an
amendment by mailing notice or by posting notice at the bank. Id.; see also CR219
(2012 deposit agreement); CR50 (signature card). Appellant implicitly argues he
did not “receive” the 2012 deposit agreement. But receipt is not material. By terms
of both the 2008 and 2012 deposit agreements, the successive amendments also
were effective because Appellant continued to maintain the Account after August
2008 and after February 2012. CR68; CR219.20 The 2012 deposit agreement
applies including the agreement that a “prevailing party” in litigation “shall be”
entitled to recover its reasonable fees. CR209.
Appellant next complains that attorney Huttenbach’s first affidavit is
insufficient because the affidavit “states that the Bank is entitled to recover
$28,840.19 of fees and costs, but the attached fee statements only total
20
The agreement enforced by the Texas Supreme Court in Am. Airlines Employees Fed.
Credit Union v. Martin was an amended agreement which customer Martin did not obtain at the
time but, nevertheless, “continued to maintain his account.” See Martin, 29 S.W.3d at 96.
33
$22,722.69.” Br., p. 33. First, the math is incorrect; the invoices attached to the
first affidavit total $25,201.69—Appellant omitted to include the $2,479.00
appearing at CR335.21 Those invoices reflect time spent only through August 28,
2014. See CR361. Second, Mr. Huttenbach’s fee opinion on September 19, 2014
was for “at least” $28,840.19 and he allowed for another 12 hours in the event
there was a reply to prepare or a hearing to attend. CR331. There is no unexplained
discrepancy in connection with the first affidavit.
Appellant argues that all the fee bills attached to the three affidavits “still do
not add up to the $49,186.65 awarded.” Br., p. 34. This is true: the attached fee
bills add to $51,728.05. See CR575; CR579; CR588; CR597; CR602; CR612;
CR619; CR724. Again, Mr. Huttenbach’s testimony was that reasonable and
necessary fees were “at least” $49,186.65, the amount awarded. CR716. Any error
in awarding the amount that counsel opined instead of the sum of all invoices is
harmless—actually beneficial— as to Appellant.
21
Likewise, Appellant’s assertion that “all of his affidavits” state Mr. Huttenbach’s hourly
rate as $345.00 is not consistent with the record. See Br., p. 33. The September 19, 2014 affidavit
recites a $330.00 rate. CR331. The November 21, 2014 and December 5, 2014 affidavits both
recite a rate of $345.00. CR604; CR716. In any event, the parties agreed and expressly requested
the trial court to determine the reasonableness and necessity of Compass’s claim for fees based
on affidavits and argument. See Br., p. 31; CR698, et seq.; CR714.
34
Appellant also suggests the Mr. Huttenbach’s affidavits were “conclusory.”
Br., p. 34. 22 As the Court has written: “The term ‘conclusory’ is defined as
‘[e]xpressing a factual inference without stating the underlying facts on which the
inference is based.’” E.I. Du Pont De Nemours & Co. v. Shell Oil Co., 259 S.W.3d
800, 809 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (citing Black’s Law
Dictionary 284 (7th ed. 2001)). The argument is patently unavailing. Attorney
Huttenbach, an expert witness, gave his opinion. The opinion is based on personal
knowledge, the experience and factors set forth in three successive affidavits, and
is supported by authenticated, attached detailed billings to the client. See CR331, et
seq.; CR604, et seq.; CR716, et seq.
Appellant further argues that Compass Bank’s evidence does not comply
with Long v. Griffin. 23 See 442 S.W.3d 253 (Tex. 2014). The Long case is
distinguishable but Compass Bank’s evidence, nevertheless, surpasses the stated
minimum standard. Not all claims asserted in Long would support an award of
fees; only those on which the Griffins prevailed within the scope of chapters 37 or
22
The Vega case cited does not say any affidavit was conclusory, rather only that the
nonmovant created a fact issue. See Vega v. Compass Bank, 04-13-00383-CV, 2014 WL 953466,
at *3 (Tex. App.—San Antonio Mar. 12, 2014, no pet.).
23
Appellant also cites City of Laredo v. Montano, 414 S.W.3d 731 (Tex. 2013). Montano,
like Long, references the same “basic proof” standard articulated in the El Apple I case (see p.
36, infra). 414 S.W.3d at 736. Compass’s expert provided more than “time estimates based on
generalities.” See id. He offered his qualifications, described certain tasks performed, and
assuming these were mere generalities, attorney Huttenbach referenced the attached pages with
time entries disclosing the dates, the timekeeper and his or her rate, the tasks performed, and
time billed in increments of 1/10th of an hour. See, e.g., CR334-62; CR608-19; CR718-24.
35
38 of the Civil Practice and Remedies Code. Id. at 255; Tex. Civ. Prac. & Code §§
37.009, 38.001. Recoverability of fees in this case is based on the prevailing party
clause in a contract. And unlike Long, Mr. Huttenbach attached redacted invoices
to his affidavits; no such records were presented in Long. See Long, 442 S.W.3d at
255. Quoting its previous decision in El Apple I, Ltd. v. Olivas, the Long court
again described the minimum of sufficient evidence as “evidence ‘of the services
performed, who performed them and at what hourly rate, when they were
performed, and how much time the work required.’” Id. (quoting El Apple I, Ltd. v.
Olivas, 370 S.W.3d 757, 764 (Tex. 2012)). Compass Bank’s invoices include each
of these categories of information. See, e.g., CR334-62; CR608-19; CR718-24.
The trial court’s judgment should be affirmed.
IV. Appellant Failed to Conclusively Establish Entitlement to Summary
Judgment
For the reasons above, the trial court’s judgment should be affirmed.
Nevertheless, Compass Bank addresses Appellant’s argument that he should have
prevailed.
Appellant failed to conclusively prove that he was entitled to summary
judgment on his breach of contract claim. See CR34 et seq. As set forth above,
Appellant did not conclusively establish the terms of “the” contract he alleges was
breached. He omitted to give effect to terms included in the signature card; he
failed to conclusively establish any factual basis for avoiding terms permitting
36
amendments; he argued that the 2008 agreement applies, then tried in the same
motion to take advantage of the 2012 attorneys’ fees provision. On the other hand,
assuming without conceding and for purposes of argument only, that Compass
Bank did not conclusively prove that the 2012 deposit agreement applies, it at least
raised an issue of fact. For example, Ms. Mueller testified as custodian and on
personal knowledge that the 2012 deposit agreement is the correct agreement, in
effect between the parties. CR202.
Even if not conclusively established (Compass Bank maintains it was),
Compass Bank did far more than merely raise a fact issue regarding the preclusion
in 4.406 of the Business and Commerce Code. See CR372, et seq. Compass Bank
made available the Account statements by (1) sending them to addresses of record
“deemed correct” by terms of the deposit agreement, (2) holding the statements
and never refusing any request from Appellant to provide copies, and (3) informing
Appellant of several different methods of contacting the bank to report any
problem, including that statements were no longer arriving as expected. Statements
of the Account were made available and Appellant’s corresponding section 4.406
duties were triggered. CR212; CR230.
It is undisputed that Appellant did not report any exceptions. He did not
satisfy the condition precedent to maintaining a suit. Without conclusive proof of a
deposit contract that permits Appellant to completely ignore his Account for
37
months on end, Appellant did not and cannot show himself entitled to summary
judgment. Without conclusive proof of a deposit contract that precludes Compass
Bank from relying on its unchallenged and deemed correct records to make
account statements available, Appellant did not and cannot show himself entitled
to summary judgment.
Because the record conclusively proves that Appellant utterly ignored the
Account beginning at least 6 months before the first supposed unauthorized
transaction until 18 months after that transaction, his affirmative claims are also
precluded by section 3.406(a) of the Business and Commerce Code. Appellant was
negligent as a matter of law. That negligence substantially contributed to the
claimed forgery and Compass Bank was and remains entitled to the judgment
granted by the trial court. The judgment should be affirmed.
Conclusion
This case was disposed on cross motions for summary judgment. Therefore,
the Court determines all questions presented and renders the judgment that the trial
court should have rendered. See Berry v. Encore Bank, 01-14-00246-CV, 2015 WL
3485970, at *4 (Tex. App.—Houston [1st Dist.] June 2, 2015, no. pet. h.) (citing
Tex. Workers’ Comp. Comm’n v. Patient Advocates, 136 S.W.3d 643, 648 (Tex.
2004)). The trial court reached the correct result.
38
No reasonable person could possibly find that completely ignoring the
Account from January 2012 through January 2014 was anything other than
negligence, the antithesis of ordinary care. Appellant’s conclusively established
failure to exercise ordinary care for at least 24 months substantially contributed to
the making of the claimed forged signature.
The contract between the parties required Appellant to review his account
information and to timely report all exceptions. Timely is contractually defined as
30 days. The deposit agreement provides that Appellant “[n]otify us promptly if
you do not receive your statement by the date you normally would expect to
receive it.” With the obligation to report exceptions within 30 days, Appellant
waited over 18 months to notify Compass Bank of anything. The agreement and
common sense required Appellant to speak up if he did not receive account
statements when he expected them. The agreement and common sense require that
Appellant keep track of his own financial affairs.
Based on Appellant’s lack of diligence as a matter of law and its correct
interpretation of “make available” under the operative contract and the Business
and Commerce Code, the trial court properly and sustainably determined that
Compass Bank was entitled to summary judgment in its favor.
39
Prayer
For at least the reasons set forth above, Appellee Compass Bank respectfully
asks this Court to affirm the judgment of the trial court.
Respectfully submitted,
HIRSCH & WESTHEIMER, P.C.
By: /s/ Michael D. Conner
Michael D. Conner
State Bar No. 04688650
mconner@hirschwest.com
William P. Huttenbach
State Bar No. 24002330
phuttenbach@hirschwest.com
1415 Louisiana, 36th Floor
Houston, Texas 77002
Telephone: (713) 220-9162
Facsimile: (713) 223-9319
Attorneys for Appellee, Compass Bank
40
Certificate of Compliance
I do hereby certify that the relevant contents of this document consist of
9,797 words, in compliance with Tex. R. App. P. 9.4(i) and this document
complies with the typeface requirements of Tex. R. App. P. 9.4(e) because it has
been prepared in a proportionally spaced typeface using Microsoft Word 2013 in
14 point Times New Roman font, except for footnotes which are in 12-point
typeface.
/s/ Michael D. Conner
Michael D. Conner
Certificate of Service
I hereby certify that on this 22nd day of October, 2015, a true and correct
copy of the foregoing document was served as follows:
Michael O’Connor
O’CONNOR, CRAIG, GOULD & EVANS
2500 Tanglewilde, Suite 200
Houston, Texas 77063
Via Eservice
/s/ Michael D. Conner
Michael D. Conner
41
Case No. 01-15-00210-CV
IN THE FIRST COURT OF APPEALS
HOUSTON, TEXAS
Francisco Calleja-Ahedo, Appellant
v.
Compass Bank, Appellee
From Cause No. 2014-22168
55th Judicial District Court, Harris County, Texas
APPENDIX
Consumer Disclosure (2008 deposit agreement) Tab 1
Consumer Deposit Account Agreement (2012 deposit agreement) Tab 2
42
Ta
GousuMER Dlscr.osuRE
Effeetive August 21 2006
Compass Banlç a member of the BBVA Group
Consumer Disclosure
Highllghts
1. Changes to Consumer Deposit Account Agreement 2
2 Changesto Checking and SavingsAccounb 4
Other Fees and Servlce Charges I
Consumer Deposit Account Agreement 11
1, Definitions 11
2, Account Operations 12
3, Account Statements and Not'ces 13
4, Account Transactions 14
5. Deposits, Colleetions and Payment of ltems 15
6, Wìürdrawals 17
7. Sub"accounts 17
L Arbitration 18
9, \Âhiver of Jury Trial 19
10. Dormant and Abandoned/Unclaimed Accounts 19
11. SetOff t9
12. Waivers 19
13. Other SeMees 1g
'14. lnteres-t¡ lnterest Repoding 20
15. Changes to Account Status 20
16, Applicable Law 20
17. Additíonal Provísions 20
Fund¡ Arailabillty Disdosure 21
Elecironic F¡nd llansfer Dlsclosure St¡tement 22
Tarpaye r ldentlf lcati o n N u m b ers (Bad Payments to nonresident aliens subject to withholding under Section 1441.
> Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner
> Payments of patronage dividends where the amount received is not paid in money.
> Payments made by certain foreign organizations.
> Payments of interest not generally subject to backup withholding include the following:
> Payments of interest on obligations issued by individuals Note: You may be subject to backup withholding if this interest is
$600 or more and is paid in the course of the payers trade or business and you have not provided your correct Taxpayer
ldentification Number to the payer.
> Payments of tax-exempt interest (including exempfinterest dividends under Section 852)
> Payments described in Section 6059bX05)to nonresident aliens.
> Payments on taxÍree covenant bonds under Section 1451
> Payments made by certain foreign organizations.
> lf you are uncertaìn whether you qualify as an exempt recipient, call your accountant or the lnternal Revenue Service
To avoid possible withholding, exempt recipients should complete the form(s) provided by Compass and should check the box captioned
Exempt Reclpients The form should also contain your Taxpayer ldentification Numbel and the certification statement must be signed
The form must then be returned to Compass.
PENALTIES
1. Penalty for Failure to Furnish Taxpayer ldentification Number. lf you fail to furnish your taxpayer identification number to a payer,
you are subject to a penalty of $50 for each such failure unless your failure ìs due to reasonable cause and not to willful neglect.
2. Failure to Report Certain Dividend and lnterest Payments. lf you failto include any portion of an includible payment for interest,
dividends or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a
penalty of 5% on any portion of an underpayment attributable to that failure unless there ls clear and convincing evidence to the
contrary.
3. Civil Penalty for False lnformation With Respect to Withholding. lf you make a false statement with no reasonable basis that results
in no imposition of backup withholding, you are subject to a penalty of 9500
4, Criminal Penalty for Falsifying lnformation. Falsifying certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment
20
IMPORTANT INFORMATION ABOUT YOUR CHECKING ACCOUNT (Check 21)
Substitute Checks and Your Rights
What is a substltute check?
To make check processing faster, federal law permits banks to replace original checks with "substitute checks" These checks are similar
in size to original checks with a slightly reduced image of the front and back of the original check. The front of a substitute check states:
"This is a legal copy of your check You can use
it the same way you would use the original check" You may use a substitute check as
proof of payment just like the original check. Some or all of the checks that you receive back from us may be substitute checks. This
notice describes rights you have when you receive substitute checks from us The rights in this notice do not apply to original checks or to
electronic debìts to your account However, you have rights under other law with respect to those transactìons.
What are mv riohts reoardino substitute checks?
ln certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is
posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money
from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the
amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, NSF fees)
The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is
less. You also are entitled to interest on the amount of your refund if your account is an interest-bearing account lf your loss exceeds the
amount of the substitute check, you may be able to recover additional amounts under other law
lf you use this procedure, you may receive a refund of up to $2,500 or the amount of the substitute check, whichever is less, (plus interest
if your account earns interest) within 10 business days after we received your claim and the remainder of your refund (plus interest if your
account earns interes0 not later than 45 calendar days after we received your claim
We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was
correctly posted to your account
How do I make a claim for a refund?
lf you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please
contact us at:Compass Bank, Attention: Electronic Banking P0. Box 10566, Birmingham, AL 35296 or telephone number 1-BOO-
COIVPASS.
You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the
substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later.
We will extend this time period lf you were not able to make a timely claim because of extraordinary circumstances
Your claim must include -
' A description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect);
. An estimate of the amount of your loss;
' An explanation of why the substitute check you receìved is insufficient to confirm that you suffered a loss: and
' A copy of the substitute check or the following information to help us identify the substitute check: the check number, the name of the
person to whom you wrote the check and the amount of the check
21
Revision Feb,2012. Al Nova Branches Only
BBVA Compass is a trade name of Compass Bank,
a member of the BBVA Group. Compass Bank, Member FDIC.
99-36-2067
Francisco Calleja-Ahedo v. Compass Bank
Combined Opinion