Compass Bank v. Francisco Calleja-Ahedo

FILED 17-0065 12/20/2017 6:03 PM tex-21421836 SUPREME COURT OF TEXAS BLAKE A. HAWTHORNE, CLERK No. 17-0065 In the Supreme Court of Texas Compass Bank, Petitioner v. Francisco Calleja-Ahedo, Respondent On Petition for Review from the First Court of Appeals in Houston, Texas Case No. 01-15-00210-CV Petitioner’s Brief on the Merits HIRSCH & WESTHEIMER, P.C. Michael D. Conner mconner@hirschwest.com State Bar No. 04688650 William P. Huttenbach State Bar No. 24002330 phuttenbach@hirschwest.com 1415 Louisiana, 36th Floor Houston, Texas 77002 Telephone: (713) 223-5181 Facsimile: (713) 223-9319 Attorneys for Petitioner, Compass Bank 930505.20140273/2851932.1 Identity of the Parties and Attorneys Petitioner: Counsel: Compass Bank William P. Huttenbach, trial and appellate counsel State Bar No. 24002330 phuttenbach@hirschwest.com Michael D. Conner, counsel in the Court of Appeals State Bar No. 04688650 mconner@hirschwest.com H IRSCH & W ESTHEIMER , PC 1415 Louisiana, 36th Floor Houston, Texas 77002 Telephone: (713) 223-5181 Facsimile: (713) 223-9319 Respondent: Counsel: Francisco Calleja-Ahedo Michael C. O’Connor, trial and appellate counsel State Bar No. 15187000 moconnor@oconnorcraig.com Lesley C. O’Connor, trial and appellate counsel State Bar No. 24086952 loconnor@oconnorcraig.com O’CONNOR & CRAIG 2825 Wilcrest Drive, Suite 261 Houston, Texas 77042 Telephone: (713) 266-3311 Facsimile: (713) 953-7513 930505.20140273/2851932.1 i Table of Contents Identity of the Parties and Attorneys ............................................................................ i Index of Authorities......................................................................................................... vi Statement of the Case ....................................................................................................... 1 Statement of Jurisdiction................................................................................................. 3 Issues Presented................................................................................................................ 6 Issue 1: The Court of Appeals improperly construed and applied Texas Business and Commerce Code section 3.406 without discussing and, thereby, rendering judgment in conflict with cited authorities from other jurisdictions in contravention of Texas Government Code section 311.028 and Business and Commerce Code section 1.103(c). ............................................................................... 6 Issue 2: The Court of Appeals’ decision conflicts with this Court’s decision in Martin where this Court concluded that the customer bears the risk of non-receipt of bank statements. ................................................... 6 Issue 3: Other courts have interpreted the term “made available” as it applies to Texas Business and Commerce Code section 4.406, and the Court of Appeals’ construction of section 4.406 differs from other courts when it determined that Compass had not made the bank statements “available” per section 4.406, which is likely a matter of first impression under Texas law. ................................................. 6 Issue 4: There are strong policy reasons for the Texas Supreme Court to decide this case and affirm the trial court’s judgment. .......................................... 6 930505.20140273/2851932.1 ii Issue 5: The Court of Appeals exceeded its authority by finding or impliedly finding facts necessary to its disposition which facts are not supported by or are contrary to evidence in the summary judgment record. See Texas Nat. Bank v. Karnes, 717 S.W.2d 901, 903 (Tex. 1986)................................................... 6 Issue 6: The Court of Appeals improperly analyzed summary judgment evidence and/or applied a different standard to Compass’ evidence as movant than that applied to Calleja’s evidence as cross-movant. .......... 6 Issue 7: To support its disposition, the Court of Appeals construed plain language in the trial court’s order granting summary judgment in a manner that effectively eliminated summary judgment evidence that otherwise supports the trial court’s judgment.................... 7 Issue 8: Even if this Court determines that the 2008 Deposit Agreement should apply, Section 4.406 still bars Calleja’s claims because Calleja did not timely report the alleged unauthorized disbursements. ............ 7 Statement of Facts ............................................................................................................ 7 The Account and transactions. ........................................................................... 7 The contract between Compass and Calleja. .................................................. 11 Summary of Argument .................................................................................................. 14 The Court of Appeals impermissibly found facts in support of its decision. (Issues 5 and 4) ......................................................... 15 930505.20140273/2851932.1 iii The Court of Appeals applied one standard for Compass’ custodian’s affidavit and a different standard for Calleja’s. (Issues 6 and 4) ............................................................. 16 Business and Commerce Code section 3.406. (Issue 1) ............................... 16 Business and Commerce Code section 4.406. (Issues 2 and 3) .................. 16 The 1988 signature card is a part of the parties’ contract, which the Court of Appeals erroneously failed to give effect. (Issue 8)............................................................................. 17 The Court of Appeals took expressly inclusive language in the trial court’s order and, without justification, called it exclusive. (Issue 7) ................................................................................ 18 Argument & Authorities ............................................................................................... 18 A. The Court of Appeals exceeded its authority by finding facts necessary to support its conclusions. (Issues 5 and 4) ....................................................... 18 B. The Court of Appeals failed to properly analyze competing summary judgment affidavits. (Issues 6 and 4).... 22 C. Calleja’s claims are precluded by Texas Business and Commerce Code section 3.406. (Issue 1) ................................. 29 D. Calleja’s claims are precluded under Business and Commerce Code section 4.406. (Issues 2, 3, and 8)........ 42 E. Other courts have interpreted the term “made available” as it applies to Texas Business and Commerce Code section 4.406, and the Court of Appeals’ construction of section 4.406 differs from other 930505.20140273/2851932.1 iv courts when it determined that Compass had not made the bank statements “available” per section 4.406, which is likely a matter of first impression under Texas law. (Issue 3) ............................... 59 F. There are strong policy reasons for the Court to decide this case and affirm the trial court’s judgment. (Issue 4) ................................................. 63 G. Without the 2012 agreement and without the 2008 agreement, there is only one writing material to the parties’ agreement in the record, the 1988 signature card. (all issues) ............................................ 65 H. The Court of Appeals improperly construed plain language in the trial court’s order. (Issue 7) .................... 66 Conclusion ....................................................................................................................... 69 Prayer ................................................................................................................................ 70 Certificate of Compliance ............................................................................................. 71 Certificate of Service ...................................................................................................... 71 Appendix to Petitioner’s Brief on the Merits ............................................................ 72 930505.20140273/2851932.1 v Index of Authorities Texas Cases 1/2 Price Checks Cashed v. United Auto. Ins. Co., 344 S.W.3d 378 (Tex. 2011) ............................................................................... 37, 38 American Airlines Employees Federal Credit Union v. Martin, 29 S.W.3d 86 (Tex. 2000) ....................................................................................passim Apache Indus. Painting v. Gulf Copper & Mfg. Corp., No. 01-08-00812-CV, 2010 WL 1611450 (Tex. App.—Houston [1st Dist.] Apr. 22, 2010, no pet.) ................................... 49 Avery v. LPP Mortgage, Ltd., No. 01-14-01007-CV, 2015 WL 6550774 (Tex. App.—Houston [1st Dist.] Oct. 29, 2015, no pet.) ................................... 24 Barfield v. Howard M. Smith Co. of Amarillo, 426 S.W.2d 834 (Tex. 1968) ................................................................................passim Calleja-Ahedo v. Compass Bank, 508 S.W.3d 791 (Tex. App.—Houston [1st Dist.] 2016, pet. filed) .............passim Castilla v. Citibank (S. Dakota), N.A., No. 05-11-00013-CV, 2012 WL 762822 (Tex. App.—Dallas Mar. 9, 2012, no pet.) ............................................................. 24 Childers v. Advanced Found. Repairs, L.P., No. 13-04-00193-CV, 2007 WL 2019755 (Tex. App.—Corpus Christi July 12, 2007, no pet.) ........... 23 City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) ............................................................................... 26, 66 930505.20140273/2851932.1 vi CBM Engineers, Inc. v. Tellepsen Builders, L.P., 403 S.W.3d 339 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) ..................................... 27, 29 Coastal Plains Development Corp. v. Tech-Can Corp., 531 S.W.2d 143 (Tex. Civ. App.—Houston [1st Dist.] 1975, writ ref ’d n.r.e.) ................................. 48 Compass Bank v. Nacim, 459 S.W.3d 95 (Tex. App.—El Paso 2015, no pet.) .......................................passim Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462 S.W.3d 128 (Tex. App.—Houston [1st Dist.] 2015, no pet.) ...................... 23 Cross Creek Investments, Inc. v. First State Bank, No. 03-00-00439-CV, 2001 WL 459177 (Tex. App.—Austin May 3, 2001, no pet.) ...................................................... 43, 55 E.I. Du Pont De Nemours & Co. v. Shell Oil Co., 259 S.W.3d 800 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) ............... 26 El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802 (Tex. 2012) ...................................................................................... 67 FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) ........................................................................................ 49 Gellatly v. Unifund CCR Partners, No. 01-07-00552-CV, 2008 WL 2611894 (Tex. App.—Houston [1st Dist.] July 3, 2008, no pet.) ....................................... 24 Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003) ...................................................................... 20, 50 930505.20140273/2851932.1 vii Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227 (Tex. 1986) ............................................................................... 48, 49 HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998) ...................................................................................... 31 Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118 (Tex. 1996) ...................................................................................... 51 In Matter of Estate of Downing, 461 S.W.3d 231 (Tex. App.—El Paso 2015, no pet.) ........................................... 66 In re Estate of Berry, 280 S.W.3d 478 (Tex. App.—Dallas 2009, no pet.).............................................. 46 Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) ...................................................................................... 54 Jefferson State Bank v. Lenk, 323 S.W.3d 146 (Tex. 2010) ........................................................................... 4, 46, 59 Johnson v. Bethesda Lutheran Homes & Services, 935 S.W.2d 235 (Tex. App.—Houston [1st Dist.] 1996, writ denied)............... 23 Kachina Pipeline Co., Inc. v. Lillis, 471 S.W.3d 445 (Tex. 2015) ............................................................................... 53, 54 Kennamer v. Estate of Noblitt, 332 S.W.3d 559 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) ........ 26, 66 Levine v. Steve Scharn Custom Homes, Inc., 448 S.W.3d 637 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) ........ 20, 50 930505.20140273/2851932.1 viii Lewis v. Aurora Loan Services, No. 01-15-00362-CV, 2016 WL 887176 (Tex. App.—Houston [1st Dist.] Mar. 8, 2016, no pet.).................. 21, 28, 49, 65 Miller v. Raytheon Aircraft Co., 229 S.W.3d 358 (Tex. App.—Houston [1st Dist.] 2007, no pet.) ...................... 25 Morrison v. Chan, 699 S.W.2d 205 (Tex. 1985) ...................................................................................... 56 Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) .................................................................. 21, 28, 49, 65 Okonkwo v. Washington Mutual Bank, FA, No. 14-05-00925-CV, 2007 WL 763821 (Tex. App.—Houston [14th Dist.] Mar. 15, 2007, no pet.)....... 43, 55, 56, 59-60 Rizkallah v. Conner, 952 S.W.2d 580 (Tex. App.—Houston [1st Dist.] 1997, no writ) .........23, 25, 26 Ryland Group, Inc. v. Hood, 924 S.W.2d 120 (Tex. 1996) ...................................................................................... 23 Schiro v. Texas Community Bank, 68 S.W.3d 55 (Tex. App.—Dallas 2001, no pet.) .............................. 43, 55, 56, 60 Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) ...................................................................................... 31 Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471 (Tex. 2017) ............................................................................... 49, 50 Sw. Bank v. Info. Support Concepts, Inc., 149 S.W.3d 104 (Tex. 2004) ................................................................................passim 930505.20140273/2851932.1 ix Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184 (Tex. 2007) ...................................................................................... 49 Texas Nat. Bank v. Karnes, 717 S.W.2d 901 (Tex. 1986) ........................................................................... 6, 20, 50 Trico Techs. Corp. v. Montiel, 949 S.W.2d 308 (Tex. 1997) .........................................................................27, 28, 29 Tyler v. Henderson, 162 S.W.2d 170 (Tex. Civ. App.—Fort Worth 1942, writ ref’d w.o.m.)........... 67 Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278 (Tex. 1994) ...................................................................................... 56 Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. 2006) .........................................................................31, 37, 41 Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001) ................................................................................. 31, 41 Waite v. BancTexas-Houston, N.A., 792 S.W.2d 538 (Tex. App.—Houston [1st Dist.] 1990, no writ) ...................... 25 Non-Texas Cases Bank of Nichols Hills v. Bank of Oklahoma, 196 P.3d 984 (Okla. Civ. App. 2008) ................................................................... 40, 67 Borowski v. Firstar Bank Milwaukee, N.A., 579 N.W.2d 247 (Wis. Ct. App. 1998) ............................................................. 58, 62 Dominion Const., Inc. v. First Nat’l Bank of Maryland, 315 A.2d 69 (Md. 1974) ............................................................................................. 67 930505.20140273/2851932.1 x First Citizens Bank of Clayton County v. All-Lift of Georgia, Inc., 555 S.E.2d 1 (Ga. Ct. App. 2001).............................................................................. 46 Gast v. Am. Cas. Co. of Reading, Pa., 240 A.2d 682 (N.J. Super. Ct. App. Div. 1968) ..................................................... 68 General Petroleum Products, Inc. v. Merchants Trust Co., 160 A. 296 (Conn. 1932)............................................................................................ 63 John Hancock Fin. Servs., Inc. v. Old Kent Bank, 346 F.3d 727 (6th Cir. 2003) ..................................................................................... 34 Kaplan v. JPMorgan Chase Bank, N.A., No. 14-C-5720, 2015 WL 2358240 (N.D. Ill. May 12, 2015).............................. 56 LaSalle Bank Nat’l Ass’n v. Sleutel, 289 F. 3d 837 (5th Cir. 2002) ............................................................................. 56, 60 McMickle v. Girard Bank, 515 A.2d 16 (Pa. Super. Ct 1986) ............................................................................. 62 Myrick v. Nat’l Sav. & Trust Co., 268 A.2d 526 (D.C. 1970)....................................................................................passim Putnam Rolling Ladder Co., Inc. v. Manufacturers Hanover Tr. Co., 546 N.E.2d 904 (NY 1989) ..........................................................................35, 37, 42 Stowell v. Cloquet Co-op Credit Union, 557 N.W.2d 567 (Minn. 1997) .................................................................................. 61 Tatis v. U.S. Bancorp, 473 F.3d 672 (6th Cir. 2007) ..................................................................................... 57 Terry v. Puget Sound Nat. Bank, 492 P.2d 534 (Wash. 1972).................................................................... 31, 32, 37, 40 930505.20140273/2851932.1 xi Thompson Maple Products, Inc. v. Citizens Nat’l Bank of Corry, 234 A.2d 32 (Pa. Super Ct. 1967) ............................................................................. 39 Westport Bank & Tr. Co. v. Lodge, 325 A.2d 222 (Conn. 1973) ....................................................................................... 63 Wetherill v. Putnam Investments, 122 F.3d 554 (8th Cir. 1997) ..................................................................................... 62 Woods v. MONY Legacy Life Ins. Co., 641 N.E.2d 1070 (N.Y. 1994).................................................................................... 62 Statutes Tex. Bus. & Com. Code § 1.103 .............................................................. 4, 4, 6, 36, 38 Tex. Bus. & Com. Code § 1.201(b)(36) ...................................................................... 46 Tex. Bus. & Com. Code § 3.406 ............................................................................passim Tex. Bus. & Com. Code § 4.406 ............................................................................passim Tex. Civ. Prac. & Rem. Code § 33.001 ....................................................................... 34 Tex. Estates Code § 351.102 ........................................................................................ 46 Tex. Fin. Code § 34.301(a) ...............................................................................30, 53, 65 Tex. Fin. Code § 34.302 ................................................................................................ 30 Tex. Gov’t Code § 22.001(a) .......................................................................................... 3 Tex. Gov’t Code § 311.028 ............................................................................3, 6, 37. 38 930505.20140273/2851932.1 xii Rules Tex. R. App. P. 9.4(e) .................................................................................................... 71 Tex. R. App. P. 9.4(i) ..................................................................................................... 71 Tex. R. Civ. P. 166a(c) ................................................................................................... 27 Tex. R. Civ. P. 166a(f) ............................................................................................ 23, 24 Other Authorities Black’s Law Dictionary 284 (7th ed. 2001) ................................................................ 26 930505.20140273/2851932.1 xiii Statement of the Case Nature of the Case Bank customer, Calleja, sued Compass for paying unauthorized items. Compass asserted various defenses, including defenses under the deposit agreement, and under sections 3.406 and 4.406 of the Business and Commerce Code. Calleja argues he had no duty to notify Compass that he was no longer receiving his account statements. The parties also disagree as to whether bank statements were otherwise “made available” and whether Calleja timely reported the alleged unauthorized disbursements after not reporting same for 18 months. Trial Court 55th District Court, Harris County, the Honorable Jeff Shadwick presiding Trial Court Disposition On cross motions for summary judgment the trial court granted Compass’s motion and denied Calleja’s. Court of Appeals First Court of Appeals, Houston; Justice Evelyn V. Keyes authored the opinion for the panel also including Chief Justice Sherry Radack and Justice Laura Higley Court of Appeals Opinion Calleja-Ahedo v. Compass Bank, 508 S.W.3d 791 (Tex. App.—Houston [1st Dist.] 2016, pet. filed). 930505.20140273/2851932.1 1 Court of Appeals Disposition The Court of Appeals reversed and rendered judgment in favor of Calleja. Both parties moved for rehearing. The court of appeals denied both motions, but withdrew its original opinion (see No. 01-15-00210-CV, 2016 WL 2342758 (Tex. App.—Houston [1st Dist.] May 3, 2016)), and issued its superseding opinion. 930505.20140273/2851932.1 2 Statement of Jurisdiction This case present questions of law which are important to the jurisprudence of the state. Tex. Gov’t Code § 22.001(a). This case involves the issue of whether a bank customer’s failure to protect himself after previously experiencing bank fraud, identity theft, and failure to monitor his account for an extended period constitutes a “failure to exercise ordinary care,” which “substantially contribute[d]” to the making of a forgery under section 3.406 of the Texas Business and Commerce Code. See Tex. Bus. & Com. Code § 3.406(a). Construction and application of section 3.406 appears to be a matter of first impression for the Court. It is important to Texas jurisprudence that construction and application of uniform statutes, e.g., sections 3.406 and 4.406 of the Texas Business and Commerce Code, be construed to effect the general purpose of such uniform acts to make uniform the law of this state with the law of those other states that have adopted them. Tex. Gov’t Code § 311.028; Tex. Bus. & Com. Code § 1.103(c). This case presents a question of law of importance to Texas jurisprudence within the “statutory scheme reflect[ing] an underlying policy decision that furthers the Uniform Commercial Code’s (“UCC”) objective of promoting 930505.20140273/2851932.1 3 certainty and predictability in commercial transactions’ [citations omitted] … by allocating responsibility among the parties according to who is best able to prevent a loss.” American Airlines Employees Federal Credit Union v. Martin, 29 S.W.3d 86, 92 (Tex. 2000). This case presents the question whether “the risk of non-receipt of account statements”—applied by the Court in Martin—also applies beyond the 4.406 context. See Martin, 29 S.W.3d at 90; Tex. Bus. & Com. Code § 1.103. This case presents a question of law of importance to Texas jurisprudence regarding the meaning of the phrases “makes available” and “made available” in section 4.406 of the Texas Business and Commerce Code. See Tex. Bus. & Com. Code § 4.406(a), (c), (f). The Court has addressed the issue, in part, in such cases as Martin, 29 S.W.3d at 92 (where there was no dispute that statements were mailed to customer’s correct address), and Jefferson State Bank v. Lenk, 323 S.W.3d 146, 149-50 n.6, n.7 (Tex. 2010) (addressing making statements available when the customer is deceased). This case presents the opportunity to address the meaning and application of “makes available” and “made available” in the context of the broader statutory scheme, including section 1.103(a) of the Texas Business and Commerce Code. See Tex. Bus. & Com. Code § 1.103(a)(1), (2). 930505.20140273/2851932.1 4 This case also includes the fundamentally important legal issue of the limitations on a reviewing court’s authority to make original findings of fact in support of its disposition. These questions of law will likely recur. The Court’s resolutions of the questions presented in this case, including construction and application of statutory and decisional language, are important to the jurisprudence of the state. 930505.20140273/2851932.1 5 Issues Presented Issue 1: The Court of Appeals improperly construed and applied Texas Business and Commerce Code section 3.406 without discussing and, thereby, rendering judgment in conflict with cited authorities from other jurisdictions in contravention of Texas Government Code section 311.028 and Business and Commerce Code section 1.103(c). Issue 2: The Court of Appeals’ decision conflicts with this Court’s decision in Martin where this Court concluded that the customer bears the risk of non-receipt of bank statements. Issue 3: Other courts have interpreted the term “made available” as it applies to Texas Business and Commerce Code section 4.406, and the Court of Appeals’ construction of section 4.406 differs from other courts when it determined that Compass had not made the bank statements “available” per section 4.406, which is likely a matter of first impression under Texas law. Issue 4: There are strong policy reasons for the Texas Supreme Court to decide this case and affirm the trial court’s judgment. Issue 5: The Court of Appeals exceeded its authority by finding or impliedly finding facts necessary to its disposition, which facts are not supported by or are contrary to evidence in the summary judgment record. See Texas Nat. Bank v. Karnes, 717 S.W.2d 901, 903 (Tex. 1986). Issue 6: The Court of Appeals improperly analyzed summary judgment evidence and applied a different standard to Compass’ evidence as movant that applied to Calleja’s evidence as cross-movant. 930505.20140273/2851932.1 6 Issue 7: To support its disposition, the Court of Appeals construed plain language in the trial court’s order granting summary judgment in a manner that effectively eliminated summary judgment evidence that otherwise supports the trial court’s judgment. Issue 8: Even if this Court determines that the 2008 Deposit Agreement should apply, section 4.406 still bars Calleja’s claims because Calleja did not timely report the alleged unauthorized disbursements. Statement of Facts The Court of Appeals correctly stated the nature of the case. The following is offered for clarification and to further illuminate the context in which the case arises and the importance of the legal issues it implicates. The Account and transactions. This dispute involves allegedly unauthorized transactions from a regular deposit account at Compass Bank (“Compass”). Respondent, Francisco Calleja- Ahedo (“Calleja”), had previously had his banking information compromised, and Calleja had previously suffered a loss due to bank fraud. Subsequently, in this matter, more than 18 months after the first allegedly unauthorized transaction, a $33.23 charge for blank checks (CR246), Calleja claimed various transactions and withdrawals from his account (#****3759; the “Account”) were also unauthorized. 930505.20140273/2851932.1 7 Calleja, a citizen and resident of Mexico, opened the Account in Texas. CR50, 230 (1988 signature card). Calleja, his wife, and his father all were signatories on the Account until it was closed in 2014. CR46, 50. The wife and the father are not parties to this suit and neither gave testimony or other evidence. See, e.g., CR420, et seq. The Account signature card includes on the address line “Hold All Correspondence”: CR50; CR230. Paragraph 22 of the signature card, above, requires the customer to “notify Bank in writing of any change in the information given to” Compass. CR50; CR230. (A more legible copy of the signature card is attached as Tab 1 for the Court’s convenience.) From 1988 until the Account was closed in 2014, Calleja’s statements were available upon request at any Compass branch. CR397. Since before 2012, Account statements were available on-line had Calleja so chosen. CR397. 930505.20140273/2851932.1 8 For at least four out of the 24-plus years of the relationship, Compass also provided monthly Account statements by mail. According to Calleja, because he lives in a suburb of Mexico City, “prior to July 2012, [Calleja] directed the bank statements for the Account be mailed by the Bank to the address of [his] brother” in The Woodlands, Texas, where Calleja would “retrieve” the statements “from time-to-time.” CR46. The appellate record contains no evidence that Calleja’s “direct[ion]” to Compass (see id.) was in writing. See CR50; CR230. Compass accommodated the request. Nevertheless, the record contains no evidence of any writing informing Compass “of any change in the information given to the Bank” in 1988. CR50; CR230; see also CR65; CR212. The statement for May 2012 activity is the last statement mailed to the brother’s Woodlands address. Similarly accommodating the request of someone possessing sufficient information to identify the Account and to identify himself as Calleja (and having his banking information), Compass mailed the Account statement for the period from May 31 through June 28, 2012, to an address in Cupertino, California. CR246. Subsequent statements were mailed to Sacramento (CR249-57) and, later, to Georgia. CR 258, et seq. Although Calleja claims he did not personally request these changes (see, e.g., CR46), he presented 930505.20140273/2851932.1 9 no affidavit or other evidence from the other two Account owners.1 There also is no evidence that Calleja, another owner, or Calleja’s brother contacted Compass to notify it that Account statements were no longer being received in The Woodlands.2 Calleja admits that he did nothing to monitor the bank account for over 18 months, even though he had previously been the victim of bank fraud. On June 26, 2012, the Account was debited $33.23 for new checks; this charge appeared on the June statement. CR246. On July 30, 2012, a $38,700.00 check was paid from the Account. CR249. The debit appears on the July statement. Id. From June 2012 until January 2014, Compass received no notice from Calleja (or his wife, his father, or brother) of any complaint regarding the Account. After ignoring his bank account for 18 months, Calleja alleges he “discovered a problem” in January 2014, when “an acquaintance” to whom he had written a check reported it as returned, marked “account closed.” CR47. When Calleja finally contacted Compass in the last week of January 2014, he was 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. CR65; CR212; see also CR412, et seq. (Compass’s motion to strike); CR685 (Order at ¶ 6, overruling Compass’s objection). 2 The lack of such evidence is significant under terms of the 2012 (or the 2013) deposit agreement. See CR212 (2012 deposit agreement at p. 6: “Notify us promptly if you do not receive your statement by the date you normally would expect to receive it.”). 930505.20140273/2851932.1 10 given information including 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. He claimed the check was forged. CR47. When asked what he did to monitor the Account after January 2012 (6 months before the first allegedly unauthorized transaction), Calleja 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. Calleja’s brother who he had entrusted to receive his statements either told Calleja that he was no longer receiving statements after May 2012 (and Calleja did not care) or Calleja’s brother failed to tell Calleja that he was no longer getting statements (and again Calleja did not care to get his bank statements). The contract between Compass and Calleja. In the trial court, the parties argued that distinct editions of Compass’ deposit agreement should apply during the relevant period.3 In addition to the 1988 signature card (CR230), Compass offered the 2012 edition of the deposit agreement described by its representative and records custodian as “the written 3 The respective deposit agreements in the record are poor copies. An accurate, more legible copy of the 2008 edition of the deposit agreement is appended at Tab 2 for the Court’s reference. An accurate, more legible copy of the 2012 edition of the deposit agreement is appended as Tab 3. 930505.20140273/2851932.1 11 contract governing the deposit relationship” and as “the agreement in effect between Plaintiff and Compass Bank.” CR202-03; CR205, et seq. With his affidavit, Calleja submitted the 1988 signature card (CR50) and a 2008 edition of the Compass deposit agreement which he described as, “A true and correct copy of the Agreement pertaining to the Account, which I received from the Bank.” CR438; CR443, et seq.; see also CR51, et seq. Calleja did not say how or when he “received” the 2008 deposit agreement and did not specify how or when it “pertain[ed]” to the Account. CR438-41. The “true and correct copy” Calleja placed in the record bears Compass’ “bates” numbering. CR443, et seq.; CR51, et seq. 4 Thus, the exact copy of the document Calleja “received” from Compass was provided by Compass’ attorney after Calleja filed this lawsuit, well after the facts in dispute occurred. The 2008 and 2012 deposit agreements are similar in several respects. Regarding periodic statements, for example, both editions provide: 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 …. … 4 Calleja also submitted a copy of the 2013 edition of the deposit agreement as an attachment to his counsel’s affidavit. CR 136, et seq. In addition to other revisions distinguishing it from the 2008 edition, the 2013 deposit agreement (like the 2012 edition; CR209) permits the “prevailing party” to recover attorney’s fees. CR139. 930505.20140273/2851932.1 12 [These materials] may be mailed to … the address shown in our records. … Our records regarding [the Account] will be deemed correct unless you timely establish with us that we made an error. … 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. CR65 (2008); CR212 (2012). The 2012 agreement adds to prior editions and specifies that Calleja should “[n]otify us promptly if you do not receive your statement by the date you normally would expect to receive it.” CR212.5 Both the 2008 and the 2012 deposit agreements include Calleja’s (and the other account owners’) promise to “carefully examine each account statement ….” CR65; CR212. They include Calleja’s “agree[ment] to act in a prompt and reasonable manner in reviewing your statement or notice and reporting any exceptions to us.” CR65; CR212. Compass debited the Account in June for new checks (CR246); it paid a check on July 30, 2012. CR249. Calleja did not report any problem or exception 5 While Compass believes that such a statement would be a “common sense” understanding, it nevertheless added such a phrase to its then current version of the deposit agreement. 930505.20140273/2851932.1 13 for over 18 months.6 Likewise, Calleja did not tell Compass for 18 months that statements were no longer being delivered to his brother’s address in The Woodlands. Calleja made no effort to obtain copies of statements from any Compass branch, via the internet, or otherwise, at any time between June 2012 and January 2014. See CR397. Summary of Argument As a predicate matter, the existence of the 1988 signature card together with the absence of pleading or proof that the contractual “Hold All Correspondence” language was ever modified in writing should inform the Court’s disposition. It informs Calleja’s lack of care under 3.406; it informs Calleja’s failure to report under section 4.406. The undisputed language of the signature card supports the concept and permits making account information available other than by mailing. The absence of evidence that the contract was modified informs the Court of Appeals’ errant process of review and illuminates that court’s disparate treatment of competing summary judgment affidavits. 6 Compass takes no position on any claims Calleja may have against his own brother. In other words, Calleja apparently entrusted his brother to receive his bank statements and possibly do other banking activities. If Calleja’s brother was supposed to be monitoring the account and notifying Calleja if the statements were received or not received, such issues would be between Calleja and his brother. 930505.20140273/2851932.1 14 Compass will begin its discussion with the Court of Appeals’ departure from normal review of cross motions for summary judgment. The Court of Appeals impermissibly found facts in support of its decision. When the Court of Appeals wrote, “Both parties agree that the 2008 Agreement was, at least at one point, effective as to Calleja,” the court exceeded its authority. The Court of Appeals either found or impliedly found facts to support its judgment. There is no evidence that the 2008 deposit agreement was “effective” at any time material to this case. There is no evidence that the parties ever agreed as the Court of Appeals said. Compass advocated the 2012 deposit agreement was “in effect and,” Calleja said the 2008 deposit agreement “pertained” to his account. In any event, assuming—as the Court of Appeals did—that the 2008 deposit agreement was effective “at least at one point,” the Court of Appeals’ judgment depends on the erroneous further assumption that the “at one point” was a material point in time. There simply is no evidence of the agreement inferred by the Court of Appeals on which its judgment is necessarily predicated. That judgment should be reversed. 930505.20140273/2851932.1 15 The Court of Appeals applied one standard for Compass’ custodian’s affidavit and a different standard for Calleja’s. The Court of Appeals incorrectly analyzed the competing summary judgment affidavits. First, it determined Compass’ records custodian’s affidavit testimony was conclusory. It is not. But, in any event, Calleja’s affidavit is no less conclusory on the salient point of which (if either) of the two editions of the Compass deposit agreement was in effect at material times. That is, to the extent the Court of Appeals’ analysis of Ms. Mueller’s affidavit is sustainable, the court was obliged to analyze Calleja’s affidavit on equivalent bases. It did not. Business and Commerce Code section 3.406. The Court of Appeals gave only cursory consideration to section 3.406. That court omitted any reference to cited authorities from other jurisdictions holding to the effect that a customer’s inattention to her or his account statements constitutes negligence sufficient under section 3.406(a) to preclude recovery. The Court of Appeals’ failure to consider these decisions contravenes the statutory requirement that uniform acts be interpreted in a uniform manner. Business and Commerce Code section 4.406. The Court of Appeals’ decision conflicts with this Court’s decision in Martin by too narrowly applying this Court’s conclusion that customers bear the 930505.20140273/2851932.1 16 risk of non-receipt of bank statements. By failing to properly allocate this risk, the Court of Appeals failed to apply the underlying policy that furthers the UCC’s objective of promoting certainty and predictability in commercial transactions. The 1988 signature card is a part of the parties’ contract, which the Court of Appeals erroneously failed to give effect. There is only one writing both parties agree was part of the contract, the 1988 signature card, offered as summary judgment evidence by both parties. The Court of Appeals wholly failed to give effect to the unambiguous contractual language in the signature card: “Hold All Correspondence.” Regardless whether the 2012 version of the deposit agreement, the 2008 version, some other version, or no version of deposit agreement at all was “in effect” or “pertained,” the signature card is part of the contract. The Court of Appeals erred by failing to treat it as such. The Court of Appeals further erred by determining, again without evidentiary support, that the signature card was modified. Neither the 2008 nor the 2012 deposit agreement includes language modifying the “Hold All Correspondence” term. To the contrary, both editions of the deposit agreement contemplate the possibility that a customer might ask Compass to hold 930505.20140273/2851932.1 17 statements as Calleja did. The Court of Appeals re-wrote the parties contract, and in doing so, it erred. Its judgment cannot stand. The Court of Appeals took expressly inclusive language in the trial court’s order and, without justification, called it exclusive. The Court of Appeals read an expressly inclusive sentence to be exclusive in order to support its conclusion that Calleja did not substantially contribute to the forgery of the $38,000.00 check. This strained reading of the trial court’s language effectively negated record evidence supporting the judgment and in conflict with the disposition by the Court of Appeals. Argument & Authorities Because the Court may determine this case should be remanded to the trial court for determination of an essential fact—what edition, if any, of Compass’ deposit agreement was in effect at material times, Compass first addresses the Court of Appeals’ impermissible fact finding and its disparate treatment of the parties’ respective summary judgment evidence. A. The Court of Appeals exceeded its authority by finding facts necessary to support its conclusions. There is no evidence that the 2008 deposit agreement was “in effect” at any material time. 930505.20140273/2851932.1 18 As the Court of Appeals correctly stated, where parties both move for summary judgment, and the trial court grants one motion and denies the other, the court reviews both parties’ summary judgment evidence and determines all questions presented. Calleja-Ahedo v. Compass Bank, 508 S.W.3d 791, 797 (Tex. App.—Houston [1st Dist.] 2016, pet. filed) (citations omitted). Having further stated that it “must determine which version of the deposit agreement governed the parties’ relationship,” an inherently factual inquiry, without reference to summary judgment evidence, the Court of Appeals said, “Both parties agree that the 2008 Agreement was, at least at one point, effective as to Calleja.” Id. at 797. The flaw in using this statement as the predicate for reversing and rendering judgment is the utter lack of summary judgment evidence that the 2008 deposit agreement was “effective” at any time material to this case. Even assuming—as the court appeals did—that “at least at one point,” the 2008 deposit agreement was “effective as to Calleja,” the Court of Appeals’ rendition of judgment for Calleja necessarily further assumes there was no 2009, 2010, or 2011 edition of the deposit agreement. The true state of the record is that Compass, as summary judgment movant, attempted to establish that the 2012 deposit agreement was “the written contract governing the deposit relationship” and was “the agreement in 930505.20140273/2851932.1 19 effect between Plaintiff and Compass Bank.” CR202-03; CR205, et seq. Calleja, also as summary judgment movant, described the 2008 edition of the deposit agreement as “the Agreement pertaining to the Account, which I received from the Bank.” CR438; CR443, et seq.; see also CR51, et seq. Contrary to the Court of Appeals’ unsupported “finding,” neither party agreed or conceded that if its version of the deposit agreement was not in effect at material times, then the other party’s version was. Thus, the Court of Appeal’s assumption that it was faced with a binary choice was just that —an assumption. Such an assumption constitutes harmful, reversible error in this case. A court of appeals has no authority to act as fact finder. See, e.g., Levine v. Steve Scharn Custom Homes, Inc., 448 S.W.3d 637, 653 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) (citing Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). “[A] court of appeals cannot make original findings of fact; it can only ‘unfind’ facts.” Texas Nat’l Bank v. Karnes, 717 S.W.2d 901, 903 (Tex. 1986) (citations omitted). The Court of Appeals ran afoul of this established rule by setting up—without factual foundation—its either/or—if not one then necessarily the other—decision.7 This is impermissible fact 7 There is no stipulation and no evidence or other indication that the parties agreed that if the 2012 agreement was not the operative agreement, then the 2008 agreement necessarily must be. 930505.20140273/2851932.1 20 finding: that no other deposit agreement existed between the 2008 and 2012 editions. Calleja did not prove that to be the case. As summary judgment movant, Calleja is not entitled to any such inference in his favor. See Lewis v. Aurora Loan Services, No. 01-15-00362-CV, 2016 WL 887176, at *2 (Tex. App.— Houston [1st Dist.] Mar. 8, 2016, no pet.) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985)). The classic aphorism, the absence of evidence is not evidence of absence, should obtain, especially where the judgment under review is a summary judgment. Calleja’s affidavit does not supply the missing facts. See CR46. In order to be entitled to the rendition of judgment he got in the Court of Appeals, Calleja must have conclusively established with admissible evidence that the 2008 deposit agreement was in effect (or still in effect) at material times after January 2012, the point from which Calleja admitted he paid no attention to his account. He did not. Calleja’s affidavit does not aver that the 2008 agreement was in effect at any material time. See CR46. Calleja says only, “A true and correct copy of the Agreement pertaining to the Account, which I received from the Bank, is attached hereto at Attachment 2.” Id.; CR438; see also CR51-70 (the 2008 agreement). Notably, he did not say when or how he received it. CR46; CR438. As above, “Attachment 2” to the affidavit is a bates-labeled document produced 930505.20140273/2851932.1 21 by Compass during discovery. CR51, et seq.; CR443, et seq. Calleja did not say, moreover, that the 2012 agreement (or some other interim edition) did not “pertain” to the account, and he did not deny “receiv[ing]” the 2012 or any other edition of the deposit agreement. Calleja offered no testimony or other evidence about which edition, if any, of the deposit agreement was in effect at a particular time, or ever. Thus, the Court of Appeals’ assumption—if not the one, then necessarily the other—has no factual support, and rendition of judgment in Calleja’s favor was reversible error. B. The Court of Appeals failed to properly analyze competing summary judgment affidavits. The Court of Appeals stated: “As a threshold issue, we must determine which version of the deposit agreement governed the parties’ relationship.” Calleja-Ahedo v. Compass Bank, 508 S.W.3d 791, 797 (Tex. App.—Houston [1st Dist.] 2016, pet. filed). Compass’ custodian of records, Ms. Mueller, testified by affidavit that, among other things, “the [2012] account agreement evidences the agreement in effect between the Plaintiff and Compass Bank.” CR203, ¶ 8. The Court of Appeals determined Mueller’s affidavit testimony was conclusory. Calleja-Ahedo, 508 S.W.3d at 799. It is not. But in the event the Court agrees with the Court of Appeals, Calleja’s affidavit is no less conclusory; his affidavit is not 930505.20140273/2851932.1 22 evidence, certainly not conclusive evidence, that the 2008 deposit agreement was (or that the 2012 edition was not) in effect at any material time. Mueller’s statement is supported by additional facts, and it is clear, positive, direct, and readily controvertible. Though he could have, Calleja did not controvert the factual statement that the 2012 deposit agreement was “in effect.” See, e.g., Childers v. Advanced Found. Repairs, L.P., No. 13-04-00193-CV, 2007 WL 2019755, at *2 (Tex. App.—Corpus Christi July 12, 2007, no pet.); Johnson v. Bethesda Lutheran Homes & Services, 935 S.W.2d 235, 239 (Tex. App.— Houston [1st Dist.] 1996, writ denied) (Hedges, J., concurring) (stating that logical conclusions based on stated underlying facts are proper in both lay and expert testimony). Affidavits “shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” Tex. R. Civ. P. 166a(f); Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462 S.W.3d 128, 133 (Tex. App.—Houston [1st Dist.] 2015, no pet.). The Court of Appeals relied on the general rule stated in Contractors Source, a case considering expert witness affidavits. Calleja-Ahedo, 508 S.W.3d at 799; see also Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996); Rizkallah v. Conner, 952 S.W.2d 580, 587- 88 (Tex. App.—Houston [1st Dist.] 1997, no writ) (reviewing for “some 930505.20140273/2851932.1 23 support in the record” for factual statements of interested witness). Mueller, a Compass employee, was not offered as an expert; she testified as custodian of records. CR202-03. The Court of Appeals omitted reference to cases stating that an affiant’s testimony establishing her status as a custodian of records and her relationship to the facts of the case satisfies the personal knowledge requirement of Rule 166a(f). See, e.g., Avery v. LPP Mortgage, Ltd., No. 01-14-01007-CV, 2015 WL 6550774, at *2 (Tex. App.—Houston [1st Dist.] Oct. 29, 2015, no pet.); Castilla v. Citibank (S. Dakota), N.A., No. 05-11-00013-CV, 2012 WL 762822, at *6 (Tex. App.—Dallas Mar. 9, 2012, no pet.); Gellatly v. Unifund CCR Partners, No. 01-07-00552-CV, 2008 WL 2611894, at *5 (Tex. App.—Houston [1st Dist.] July 3, 2008, no pet.). Mueller’s affidavit is based on personal knowledge (CR202, ¶ 1); she is a Compass employee and “[i]n this capacity” has “personal knowledge of accounts held at Compass Bank.” CR202, ¶ 2. Mueller testified that she is “a custodian of records” for Compass, that “Tabs 1 and 2” to the affidavit are “true and correct” copies of bank records, and that “[she is] personally familiar with the records.” CR203, ¶ 8. These are admissible, uncontroverted facts about which Mueller testified. Mueller stated clearly, positively, and directly, “the account agreement [2012] evidences the agreement in effect between the Plaintiff and Compass Bank.” CR203, ¶8. The statement is 930505.20140273/2851932.1 24 her logical conclusion based on stated underlying facts. See Rizkallah, 952 S.W.2d at 588; Bethesda Lutheran Homes & Services, 935 S.W.2d at 239. Calleja could have, but did not controvert the statement. Further, identifying herself as an employee and custodian of Compass’ records (CR202-03) “shows how [Mueller] 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.). She identified Calleja’s account as a “regular bank account.” CR202. She said, “Attached as Tab 1 is a copy of the written contract governing the deposit relationship between [Calleja] and Compass Bank.” Id. Mueller identified the 2012 agreement as a business record of which she had personal knowledge and as the agreement “in effect between” the parties. CR203.8 Mueller’s second affidavit provides additional facts supporting her statement that the 2012 agreement “evidences the agreement in effect between [Appellant] and Compass Bank.” CR396-98; CR202-03. She states that the 2012 agreement has a revision date of February 2012—prior to the events at issue. 8 The words “believe” and “belief” do not appear in this affidavit. CR202-03; see Calleja- Ahedo, 508 S.W.3d at 799. 930505.20140273/2851932.1 25 CR396. That fact “has some support in the record.” See Rizkallah, 952 S.W.2d at 588; see also CR228 (final page of 2012 agreement). Mueller referenced Calleja’s allegation that an imposter changed the account address in the summer of 2012; she referenced the account signature card and its provision regarding amendments to the account agreement. CR396; CR230. Those statements have support in the record. CR46-47, 50 (Calleja’s affidavit recounting his version of events with signature card attached); see Rizkallah, 952 S.W.2d at 588. Mere use of the words believe or belief in the second affidavit does not render the testimony in the first affidavit conclusory. “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)). Reviewing the entire record, there is ample support for Mueller’s statement—without resort to inference—that “the account agreement evidences the agreement in effect between the Plaintiff and Compass Bank.” CR203; see also City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005); Kennamer, 332 S.W.3d at 566. 930505.20140273/2851932.1 26 Further, “summary judgment based on the uncontroverted affidavit of an interested witness is proper if the evidence is clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and could have been readily controverted.” Trico Techs. Corp. v. Montiel, 949 S.W.2d 308, 310 (Tex. 1997); Tex. R. Civ. P. 166a(c); CBM Engineers, Inc. v. Tellepsen Builders, L.P., 403 S.W.3d 339, 346 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (noting that readily controvertible means the factual assertions “could be ‘effectively countered by opposing evidence.” (quoting Trico Techs. Corp., 949 S.W.2d at 310)). Mueller testified that the 2012 agreement was “in effect between” the parties. CR203. On this record, the testimony satisfies all requirements for a summary judgment affidavit. Calleja could have, but did not controvert the testimony. The totality of Calleja’s evidence about the deposit agreement is: “A true and correct copy of the Agreement pertaining to the Account, which I received from the Bank, is attached hereto at Attachment 2.” CR46; CR438; see also CR51-70 (the 2008 agreement). Calleja did not say that the 2012 agreement did not also “pertain” to the account; he did not say he did not “receive” the 2012 agreement; and he did not controvert Mueller’s testimony by saying the 2012 agreement was not in effect or that the 2008 agreement was in effect at any 930505.20140273/2851932.1 27 material time. By his own admission, Calleja was not reviewing communications from Compass in February 2012, when the account agreement was revised. Nevertheless, he could have, but failed to controvert the testimony. See Trico Techs. Corp., 949 S.W.2d at 310. Like the appellee in Trico Techs. Corp., in discovery Calleja could have inquired about, “the meaning of the ‘Al Nova Branches Only.” Compare Trico Techs. Corp., 949 S.W.2d at 310, and Calleja-Ahedo, 508 S.W.3d at 798. Calleja could have inquired about how Compass gave notice of the amendment. See Trico Techs. Corp.. Rather, Calleja relied solely on the statement that a 2008 document “pertain[ed]” to the account, and he “received” a copy from the bank. CR46; CR438. Notably, the “true copy” Calleja relied on bears Compass’ “bates” numbers on each page. Calleja “received” the copy he attached in discovery in this case, undermining any inference 9 or implication that Calleja received the 2008 agreement in the normal course of his banking business but did not receive the 2012 agreement the same way. See CR51-70. Thus, the Court of Appeals’ conclusion that Compass did not establish that the 2012 deposit agreement was “ever effective as to Calleja” is based on its outline of additional, 9 As cross-movant for summary judgment, Calleja is not entitled to any favorable inference. See Lewis v. Aurora Loan Services, No. 01-15-00362-CV, 2016 WL 887176, at *2 (Tex. App.—Houston [1st Dist.] Mar. 8, 2016, no pet.) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985)). 930505.20140273/2851932.1 28 hypothetical evidence that Calleja did not present to controvert Mueller’s factually supported assertion that the 2012 agreement was the agreement in effect between the parties. See Trico Techs. Corp., 949 S.W.2d at 310; CBM Engineers, Inc., 403 S.W.3d at 346. Respectfully, Calleja is not entitled, by judicial fiat, to the benefit of an available litigation strategy that he did not pursue. The Court of Appeals erred by reversing the summary judgment in favor of Compass. C. Calleja’s claims are precluded by Texas Business and Commerce Code section 3.406. A customer’s actions can help prevent bank fraud. Even if a customer has never experienced fraud on a bank account, it is his duty under the law protect his own interests. In this case, Calleja had already been the victim of bank fraud and either knew or should have known that he needed to take care to protect himself. At a minimum, Calleja should have reviewed his monthly statements and kept his banking information protected, as he agreed to do in the Account agreement. Calleja should have asked his brother each month for a copy of the statement that his brother purportedly received on Calleja’s behalf. If Calleja had monitored the Account after January 2012, he would have noticed that his June statement did not arrive as expected. Both the 2008 and the 2012 editions of the deposit agreement provide: “You agree to act in a 930505.20140273/2851932.1 29 prompt and reasonable manner in reviewing your statement or notice and reporting any exceptions to us.” CR65; CR212. This should include noticing a statement does not arrive when expected. The 2012 deposit agreement expressly incorporates this common sense idea: “Notify us promptly if you do not receive your statement by the date you would normally expect to receive it.” CR212. Calleja did not notice the May-June statement never arrived. Therefore, he did not notice or report a $33.23 charge for blank checks (CR246) that he later claimed was not authorized. Likewise, Calleja did not notice the absence of monthly statements until January 2014. CR47.10 Regardless whether the 2008 edition, the 2012 edition, or some other version of the deposit agreement was in effect, the deposit agreement between Compass and Calleja is “a contract in writing for all purposes.” Tex. Fin. Code § 34.301(a). The contract “may be evidenced by one or more agreements, deposit tickets, signature cards,11 or notices as provided by Section 34.302, or by other documentation as provided by law.” Id.; see also Tex. Fin. Code § 34.302. 10 Calleja’s failure to notice that he did not receive statements until late January 2014 is even more egregious since he had already been the victim of prior bank fraud on a different bank account. 11 See CR50. 930505.20140273/2851932.1 30 As the 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). By failing even to ask about the May-June Account statement (or any subsequent statement), Calleja demonstrated a lack of diligence which, under similar facts, the Supreme Court of Washington said was “substantial evidence of negligence” under section 3.406. See Terry v. Puget Sound Nat. Bank, 492 P.2d 534, 535 (Wash. 1972) (per curiam).12 In addition to their failure to “inquire of the bank” about the absence of three successive months of statements, the Terry plaintiffs left blank checks in an unlocked drawer, easily accessible to the bad actor. See id. Similarly, in 12 Terry was tried to a jury. The Washington court reviewed and found sufficient evidence to support submission of the bank’s 3.406 affirmative defense. 930505.20140273/2851932.1 31 addition to failing to inquire of Compass about the absence of at least 18 monthly statements, Calleja, or one of the other account owners, left sufficient personal information unguarded and accessible for an interloper to have Compass redirect Account statements before the first transaction. Calleja failed to discharge his duty to use ordinary care for the protection of his own interests. Barfield, 426 S.W.2d at 840; Tex. Bus. & Com. Code § 3.406(a); Terry, 492 P.2d at 535. Despite Compass’ citation to Terry, the Court of Appeals did not discuss the case. The first transaction Calleja claimed was not authorized was the imposter’s order for blank checks. CR246. The charge appeared on the May-June statement. Id. The statement had been redirected. Calleja did not ask why it did not arrive as expected. The next statement shows a $38,700.00 check paid on July 30, 2012. CR249. Calleja did not contact Compass to ask about this missing statement either. See Terry, 492 P.2d at 535.13 13 Under Calleja’s analysis, if a bank customer such as Calleja instructs the bank to mail statements to a relative, and then the bank complies as requested, there could be scenarios where a bank customer then never has to monitor the account. For example, if that bank customer then intentionally or inadvertently lets their banking information become compromised to allow an imposter to call the bank and have all the necessary information to change the address to which statements are sent, and such future statements are sent to a different address, under Calleja’s analysis, Calleja never has to notice that his account statements are no longer being sent per his direction, and he can simply ignore the account for 18 months. 930505.20140273/2851932.1 32 In Myrick v. Nat’l Sav. & Trust Co., a case from the District of Columbia court of appeals, the customer received only one bank statement and a few cancelled checks over about nine months. See Myrick v. Nat’l Sav. & Trust Co., 268 A.2d 526, 527 (D.C. 1970). The Myrick court affirmed judgment n.o.v. for the bank where “[t]he record is devoid of any evidence justifying [customer’s] failure to inquire of the bank as to her lack of receipt of monthly statements and cancelled checks” and “[held] that Miss Myrick was negligent as a matter of law in not making this inquiry of the bank ….” Id. at 527-28. Quoting its version of 3.406, the court held Myrick’s “‘negligence substantially contribute(d) [sic] … to the making of an unauthorized signature,’” precluding her claim. Id. Despite Compass’ citation to Myrick, the Court of Appeals did not discuss the case. From at least as early as January 2012, six months before someone used his personal and account information to redirect the bank statements, Calleja ignored his account. He said, “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 not “authorized” activity that demands vigilance. See Barfield, 426 S.W.2d at 840 (stating that a party to an arm’s length business transaction has a duty to use ordinary care for the protection of his 930505.20140273/2851932.1 33 own interests and is charged with knowledge of all facts that would have been discovered by a reasonably prudent, similarly situated person). Rather, it is the risk of unauthorized activity which the customer is in the best position to guard against and demands Calleja’s diligence. See Martin, 29 S.W.3d at 92, 94 (noting the UCC’s purpose of allocating responsibility to the person best able to prevent loss and placing the risk of non-receipt of bank statements on the customer in the 4.406 context); Sw. Bank v. Info. Support Concepts, Inc., 149 S.W.3d 104 (Tex. 2004) (resolving perceived tension between Texas Civil Practice and Remedies Code Chapter 33 14 proportionate responsibility and UCC section 3–406’s comparative fault and liability scheme allocating the loss between two negligent—but innocent—parties.); John Hancock Fin. Servs., Inc. v. Old Kent Bank, 346 F.3d 727, 732 (6th Cir. 2003). Calleja willingly accepted the risk that unauthorized transactions could go undetected by asking Compass to mail statements to his brother’s home in The Woodlands then, “from time-to-time,” retrieving them, unopened. CR46; CR152. Calleja claimed he “never signed up for online access and relied completely” on reviewing statements mailed to The Woodlands. CR321; but see CR50. Where Calleja’s complete reliance (CR321) on retrieval of unopened statements “from time-to-time” meant Calleja did not 14 Tex. Civ. Prac. & Rem. Code § 33.001, et seq. 930505.20140273/2851932.1 34 review statements for at least 18 to 24 months (see id.), there was, as the trial court determined, a failure to exercise diligence as a matter of law. CR735; see also, Barfield, 426 S.W.2d at 840. Unlike the trial court, the Court of Appeals focused on Calleja’s inattention to his affairs during the 18 months after the first transaction. As to the six months preceding the first transaction, the Court of Appeals noted, “there is scant summary judgment evidence concerning the circumstances under which the unknown third party obtained Calleja’s banking information and used that information to change the account address, obtain a debit card, order blank checks, and forge Calleja’s signature on several checks.” Calleja-Ahedo, 508 S.W.3d at 806. But scant evidence about how it occurred does not change the undisputed fact that someone obtained and used Calleja’s information. There is no dispute that Calleja’s personal information was allegedly purloined and used to effectuate the fraud.15 Precisely because there is “scant evidence” of how that occurred, section 3.406 is implicated. Without evidence to the contrary, one assumes Calleja and Compass are both “innocent,” if potentially negligent, parties. With “scant evidence” (there is none) how Calleja’s 15 Calleja provided no evidence to the trial court that other signers had not changed the address. In other words, even if Calleja swore that he did not change the address, if another signer on the account had properly changed the address, the bank was doing as an account owner had directed. 930505.20140273/2851932.1 35 personal information was compromised, section 3.406 serves the “important objective” of the UCC “of promoting certainty and predictability in commercial transactions … [b]y prospectively establishing rules of liability that are generally based not on actual fault but on allocating responsibility to the party best able to prevent the loss by the exercise of care ….” Putnam Rolling Ladder Co., Inc. v. Manufacturers Hanover Tr. Co., 546 N.E.2d 904, 908 (NY 1989); Sw. Bank v. Info. Support Concepts, Inc., 149 S.W.3d 104, 109-10 (Tex. 2004). As the trial court recognized, Calleja was that party. Calleja was in the best position to safeguard his personal and account information used by an interloper to telephone the bank and redirect monthly statements. 16 Regardless of the circumstances by which it was compromised, Calleja (or one of the other account owners or the brother) failed to protect his own interests by failing to safeguard the information. Barfield, 426 S.W.2d at 840. Further, it was Calleja’s choice to “rel[y] completely” on his sporadic (at best) approach to reviewing statements. CR321. Liberal construction and application 16 If this Court follows Calleja’s logic, one who has experienced bank fraud can notice that he did not receive a bank statement for a month, and under Calleja’s analysis, the law purportedly allows him to do nothing. Under Calleja’s analysis, even a person who has experienced bank fraud on another account does not have to review bank statements for as long as it takes to drain the entire account and then still can make a claim against his bank to recover the entire amount of the loss. Calleja’s argument cannot be reconciled with this Court’s prior determination that a customer is generally in the best position to prevent the loss. 930505.20140273/2851932.1 36 of section 3.406 in service of the purposes and policies of the UCC dictates that Calleja, not Compass, was the party best able to prevent the loss. Tex. Bus. & Com. Code § 1.103(a); Info. Support Concepts, Inc., 149 S.W.3d at 110; Martin, 29 S.W.3d at 93. Having done nothing to keep track of his account since at least January (“there was no need” (CR321-22)), when the May-June 2012 statement did not arrive at The Woodlands address, like the Terry and Myrick plaintiffs, Calleja’s failure to make any inquiry compounded his negligence.17 Consistent with Terry and Myrick, applying the Government Code, and under the same rule employed by this Court in TIG Ins. Co., the Court of Appeals should have affirmed the trial court’s judgment. Tex. Gov’t Code § 311.028; see TIG Ins. Co., 211 S.W.3d at 314; 1/2 Price Checks Cashed v. United Auto. Ins. Co., 344 S.W.3d 378, 391 (Tex. 2011) (“The UCC should be construed to promote uniformity with other jurisdictions.”). In service of the important objectives of the UCC, the Court of Appeals should have affirmed. See Putnam, 546 N.E.2d at 908; Info. Support Concepts, Inc., 149 S.W.3d 104. 17 Had Calleja promptly informed Compass that his May 31, 2012 – June 28, 2012, statement was not received and requested a copy, he would have seen a debit for checks he claims he did not order. Had Calleja exercised a modicum of diligence, the July 31, 2012, transaction could have been prevented or, if not prevented, made known to Compass while viable opportunities for recovering the funds still existed. 930505.20140273/2851932.1 37 Rather than properly applying section 3.406, the Court of Appeals based its decision on the perceived absence of an explicit “operative statutory or contractual[18] provision that required Calleja to notice that he was not receiving statements … and to report those missing statements to the Bank within thirty days.” Calleja-Ahedo, 508 S.W.3d at 805. The court’s reliance on the conjunctive, “to notice” and “to report … within thirty days,” conflates sections 3.406 and 4.406.19 Section 3.406, a comparative negligence statute, recognizes a duty of ordinary care and precludes Calleja if his failure to discharge his duty “substantially contributes … to the making of a forged signature.” Tex. Bus. & Com. Code § 3.406. Thus, contrary to the statement by the Court of Appeals, section 3.406 is the “operative statutory … provision.” Calleja-Ahedo, 508 S.W.3d at 805. It is the operative statutory provision of a uniform law which the Court of Appeals glossed over with no reference to cited decisions of other jurisdictions. See Tex. Gov’t Code § 311.028; Tex. Bus. & Com. Code § 1.103(a)(3); 1/2 Price Checks Cashed, 344 S.W.3d at 391. 18 The 2012 deposit agreement includes the term, “[n]otify us promptly if you do not receive your statement by the date you normally would expect to receive it.” CR212. Both the 2008 and the 2012 deposit agreements require the customer to “report exceptions to us within thirty (30) days after we send or make the statement or notice available ….” CR65; CR212. 19 Indeed, there are two different sections in the UCC for a reason, and in this case, Calleja is trying to avoid both UCC sections and claim he never needed to review a bank statement if an imposter gets his banking information and changes his address. 930505.20140273/2851932.1 38 The Court of Appeals also failed to properly analyze the causation element of 3.406. See Calleja-Ahedo, 508 S.W.3d at 805. The court first erroneously tied Calleja’s duty of ordinary care to the “trigger” of 4.406. Id. It then utilized a questionable textual analysis of the trial court’s order to discount the effect of Calleja’s “from time to time” method of monitoring the Account on the interloper’s ability to drain the Account. Calleja-Ahedo, 508 S.W.3d at 806. The Court of Appeals read an expressly inclusive sentence to be exclusive 20 to support its conclusion. This analysis runs counter to the recognized objectives of the UCC, including certainty, predictability, and allocation of responsibility to the party best able to prevent the loss. See Info. Support Concepts, Inc., 149 S.W.3d at 109-10.21 Comment 2 to section 3.406 explains “what is intended” by use of “substantially contributes” in subsection (a), referencing Thompson Maple Products, Inc. v. Citizens Nat’l Bank of Corry, 234 A.2d 32, 34 (Pa. Super Ct. 1967). See Tex. 20 The trial court’s order states: “In particular, but not as the sole reason for this ruling, the Court rules 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.” CR539. 21 Under the Court of Appeal’s analysis, a bank customer can intentionally or inadvertently allow a third-party to get his bank information and call the bank and change the address. Then, the bank customer can do nothing indefinitely; and, if the bank account is drained, the bank is apparently absolutely liable. 930505.20140273/2851932.1 39 Bus. & Com. Code § 3.406 cmt. 2. As one Oklahoma court explained (in a case not involving bank statements), “Section 3–406 requires less stringent proof than the ‘direct and proximate cause’ test for general negligence. Conduct is a contributing cause of an alteration or forgery if it is a substantial factor in bringing it about, or makes it ‘easier for the wrongdoer to commit his wrong.’” Bank of Nichols Hills v. Bank of Oklahoma, 196 P.3d 984, 986-87 (Okla. Civ. App. 2008) (citations omitted). The summary judgment record supports the trial court’s determination that Calleja’s chosen method of monitoring the Account by relying “completely” on reviewing statements delivered to The Woodlands, which he did not bother to retrieve for at least two years (CR321-22), together with the undisputed fact that some third party gained access to his personal and banking information made it “easier for the wrongdoer to commit his wrong.” Bank of Nichols Hills, 196 P.3d at 986-87. In the Terry v. Puget Sound case mentioned above, the Washington court, relying on section 3.406, precluded the customers’ recovery for their failure to “inquire of the bank” about the absence of three successive months of statements, coupled with leaving blank checks in an unlocked drawer. Terry, 492 P.2d at 535. In the Myrick case, the District of Columbia court affirmed judgment n.o.v. for the bank where “[t]he record is devoid of any evidence 930505.20140273/2851932.1 40 justifying [customer’s] failure to inquire of the bank as to her lack of receipt of monthly statements and cancelled checks” and “[held] that Miss Myrick was negligent as a matter of law in not making this inquiry of the bank ….” Myrick, 268 A.2d at 527-28. Quoting its version of 3.406, the court held Myrick’s “‘negligence substantially contribute(d) [sic] … to the making of an unauthorized signature.’” Id. Despite Compass’ citations, the Court of Appeals did not discuss either case. Ordinary care includes diligence to protect one’s own interests. See Via Net, 211 S.W.3d at 314. Like the customers in Myrick and Puget Sound, Calleja’s “failing even to ask” for information about his account was “not due diligence.” Id. (citing Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 736 (Tex. 2001)). Calleja’s cavalier, “[t]here was no need to ‘keep track’ of banking information because no authorized checks … would be shown” (CR321-22), was “not due diligence.” Via Net, 211 S.W.3d at 314. As between Compass and Calleja, Calleja was in the best position to protect his personal and banking information. Calleja had experienced bank fraud in the past and should have had an even greater motivation to monitor his banking activities. He was in the best position to know if he was not receiving bank statements where and when he would normally expect them. Calleja was the party 930505.20140273/2851932.1 41 best able to prevent the loss by the exercise of ordinary care. Info. Support Concepts, Inc., 149 S.W.3d 104; Putnam Rolling Ladder Co., Inc., 546 N.E.2d at 908. [The Court of Appeals erred by reversing the trial court’s judgment.] D. Calleja’s claims are precluded under Business and Commerce Code section 4.406. While Article 3 of the Texas Business and Commerce Code, “Negotiable Instruments,” governs rights and duties of parties to negotiable instruments like the check at issue here, Article 4, “Bank Deposits and Collections,” governs the relationship between a bank and its customer. In Martin, a live-in girlfriend took funds from Martin’s account without his permission and concealed her fraud by intercepting monthly statements. See Am. Airlines Emps. Fed. Credit Union v. Martin, 29 S.W.3d 86 (Tex. 2000). Martin argued that since he never received the bank statements, he never had a duty to report unauthorized transactions. This Court rejected this argument and explained that the customer’s burden to discover unauthorized transactions “includes the risk of non-receipt of account statements.” Id. at 94. Calleja claims that because the monthly bank statements were sent to the new address, Calleja had no duty to review the statements, report any alleged improper disbursements, or alert the bank that he was no longer receiving statements. Calleja acknowledges that he did nothing to monitor the account for 930505.20140273/2851932.1 42 approximately 24 months and did not notice that funds were taken from the account during this time. CR46-49; CR321-22. Between a customer and his bank, the customer is in the best position to know whether he received his monthly bank statement, and the customer should notify the bank accordingly and request a duplicate copy. This argument ignores the UCC statutory scheme, which “provides for an allocation of responsibility between the customer and a financial institution according to which party is best able to prevent loss.” Okonkwo v. Washington Mutual Bank, FA, No. 14-05-00925-CV, 2007 WL 763821, at *6 (Tex. App.— Houston [14th Dist.] Mar. 15, 2007, no pet.).22 The customer’s duty to exercise reasonable care to discover and report unauthorized transactions is triggered when the bank provides “sufficient information,” which is “statutorily defined as a bank ‘send[ing] or mak[ing] available to a customer a statement of account showing payment of items for the account….’” Okonkwo, 2007 WL 763821, at * 6 (quoting Tex. Bus. & Com. Code § 4.406(a)) (emphasis added); see, e.g., Schiro, 68 S.W.3d at 57. The official UCC comment makes clear that: “[t]he ‘safe harbor’ provided by subsection (a) serves to 22 See also Schiro v. Texas Community Bank, 68 S.W.3d 55, 57 (Tex. App.—Dallas 2001, no pet.); Cross Creek Investments, Inc. v. First State Bank, No. 03-00-00439-CV, 2001 WL 459177 (Tex. App.—Austin May 3, 2001, no pet.). 930505.20140273/2851932.1 43 permit a bank, based on the state of existing technology, to trigger the customer’s duties under subsection (c) ….” Tex. Bus. & Comm. Code § 4.406, cmt. 1 (emphasis added). Compass made “available” to Calleja a statement of account and supplied “sufficient information” identifying the disbursements and checks at issue.23 See CR397. Again, if Calleja did not receive a statement, he should have exercised ordinary care and contacted the bank to request a statement. See CR397. Calleja presented no evidence that he did so. Calleja argues that he had no duty to monitor his monthly banking activity unless and until Compass sent a monthly bank statement. This argument ignores both provisions in the deposit agreement and that section 4.406 is entitled, Customer’s Duty to Discover and Report Unauthorized Signature or Alteration, and that this Court stated as follows: Section 4.406 acknowledges that the customer is best situated to detect unauthorized transactions on his own account by placing the burden on the customer to exercise reasonable care to discover and report such transactions. 23 If a bank customer’s account information becomes compromised, the bank is called with that information, and the address is changed so the customer never receives another monthly statement, under Calleja’s arguments, the customer never has to notify the bank that he has not received statements, and he can recover damages from the bank for an indefinite period of time once the account has been completely drained. 930505.20140273/2851932.1 44 Martin, 29 S.W.2d 86 at 92. Later in its opinion, this Court stated, Further, as we have said, the 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 non-receipt of account statements. Necessarily then, the burden must fall on the customer, the one most familiar with the underlying transaction. Id. at 94 (emphasis added). A bank customer is in the best position to know whether he received a monthly statement, and if not, the exercise of ordinary care requires that he alert the bank. Allowing a customer to avoid a duty to report unauthorized transactions in this situation undermines the reasoning of Martin. Even if the statements were no longer sent to his brother’s address—a situation that apparently neither Calleja nor his brother were monitoring—Calleja could have obtained additional copies of statements. Moreover, Compass made them available in several different ways. See CR397-98. Calleja received statements until the address was changed in 2012. All of the statements Calleja admitted receiving stated, “If you have any questions about your statement, call Customer Service at 1- 800-266-7277.” CR397. Thus, Calleja had information available to contact the bank to inquire about the status of his account. See CR397. Compass did not refuse to make them available. See CR397-98. Calleja could also have visited a bank branch to obtain them. See CR397. Alternatively, Calleja could have reviewed the statements by obtaining online banking for free. See CR397-98. The 930505.20140273/2851932.1 45 Court of Appeals used a strained interpretation of the contract and purported facts to avoid holding Calleja responsible for failing to timely notify the bank. It is settled under section 4.406 that by mailing properly addressed statements to the customer the bank makes them available. See, e.g., In re Estate of Berry, 280 S.W.3d 478, 480–81 (Tex. App.—Dallas 2009, no pet.); Tex. Bus. & Com. Code § 1.201(b)(36); see also Jefferson State Bank v. Lenk, 323 S.W.3d 146, 149 (Tex. 2010). The limits of what else may constitute making bank statements available in particular circumstances are not yet defined. The Court determined in Lenk that when the customer is deceased and no representative appointed, a bank holding statements makes them available. Lenk, 323 S.W.3d at 149 (noting an estate administrator’s authority and duties under the Probate Code—now the Texas Estates Code—including, to “collect and take into possession the personal property … of the estate ….”); see, e.g., Tex. Estates Code § 351.102. The Court distinguished its decision in Lenk from a Georgia Supreme Court case, First Citizens Bank of Clayton County v. All-Lift of Georgia, Inc., 55 S.E.2d 1 (Ga. Ct. App. 2001), on the basis that the customer there was not deceased. Lenk, 323 S.W.3d at 150, n. 7. The Georgia court found “that a bank does not make statements available within the meaning of [4-406] by merely holding statements and doing nothing more.” All-Lift of Georgia, Inc., 555 S.E.2d at 3. The 930505.20140273/2851932.1 46 Georgia court further stated that the bank’s policy of holding statements pursuant to a written request would “probably qualify as making them available within the meaning of [4.406].” Id. But, in that summary judgment case, the bank produced, “at best, only circumstantial evidence” of any such request and, All Lift’s president submitted an affidavit providing direct evidence that the customer never authorized the bank to hold statements. Id. The 1988 signature card states in the “mailing address” blank: “Hold All Correspondence Fuente De Baco #13 Tecamachalco, Mexico D.F.” CR50, CR230. The same document, a part of both Calleja’s and Compass’ summary judgment evidence, provides: “Depositor shall immediately notify Bank in writing of any change in the information given to Bank as appears herein.” CR50; CR230. Unlike the All-Lift case, the record here includes more than mere circumstantial evidence of Calleja’s written instruction to hold bank statements. And, in this case, there is a complete absence of evidence that Calleja ever gave Compass written notice changing the “information given to the Bank” in 1988. CR50; CR230. With no evidence of any written notice, the Court of Appeals credited Calleja’s affidavit testimony that he “directed that the bank statements” be mailed to his brother’s address (CR46), and that neither he nor another signatory “requested or directed the Bank at any time after 2008 to change the address on 930505.20140273/2851932.1 47 the Account … or to retain the Account statements at the Bank.” Calleja-Ahedo, 508 S.W.3d at 803. Upon this affidavit testimony, the Court of Appeals concluded that “the parties contractually limited the ways in which the Bank could make account statements available to Calleja, and both parties are bound by this limitation.” Id. (citing Compass Bank v. Nacim, 459 S.W.3d 95, 108 (Tex. App.—El Paso 2015, no pet.)). Parties, of course, have the power to modify their contracts. See, e.g., Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1986). However, whether a contract has been modified depends on the parties’ intent, a quintessentially factual inquiry. Id. at 228-29 (citing Coastal Plains Development Corp. v. Tech-Can Corp., 531 S.W.2d 143 (Tex. Civ. App.—Houston [1st Dist.] 1975, writ ref ’d n.r.e.)). Here there are no facts to support a modification. By its terms, the signature card requires notice “in writing of any change in the information given to” Compass. CR50; CR230. Calleja presented no evidence or authority that would exclude changing the record “Mailing Address” … “Hold All Correspondence Fuente De Baco #13 Tecamachalco, Mexico D.F.” from the requirement for written notice. CR50; CR230. In order to prove the contract was modified as the Court of Appeals concluded, Calleja had the burden of proving (conclusively as summary judgment movant) that he changed his mailing address of record by the agreed 930505.20140273/2851932.1 48 method, written notice. See Hathaway, 711 S.W.2d at 229. There is no such evidence—certainly no conclusive evidence. There is a complete absence of evidence that Calleja notified Compass in writing or that Compass agreed at any time that mailing statements to Calleja’s brother’s address would be the exclusive method for making statements available.24 Further, as summary judgment movant,25 Calleja is not entitled to an inference that when he “directed” Compass to send statements to his brother’s address that the direction was in writing.26 See Lewis v. Aurora Loan Services, No. 01-15-00362-CV, 2016 WL 887176, at *2 (Tex. App.—Houston [1st Dist.] Mar. 8, 2016, no pet.) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985)). Calleja is not entitled to an inference that by accommodating the 24 Both editions of the deposit agreement include a “nonwaiver” provision: “No departure by us from the provisions of this Agreement … shall constitute a waiver by us of any further right to impose … or enforce the provisions of this Agreement ….” CR70; CR218. Nonwaiver provisions in contracts are binding and enforceable. Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 481 (Tex. 2017). 25 The parties filed cross motions for summary judgment, and the court of appeals reversed the summary judgment entered in favor of Compass (under which it would be proper to grant an inference in favor of Calleja) and instead directed judgment be entered on Calleja’s affirmative motion for summary judgment (under which all inferences should be resolved in favor of Compass, as the non-movant). See, e.g., Apache Indus. Painting v. Gulf Copper & Mfg. Corp., No. 01-08-00812-CV, 2010 WL 1611450, at *2 (Tex. App.—Houston [1st Dist.] Apr. 22, 2010, no pet.) (citing FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192, 199 (Tex. 2007)). 26 Calleja produced no evidence in the trial court that other signatories had also not called Compass or shared the banking information. 930505.20140273/2851932.1 49 request Compass agreed that mailing statements to the brother’s address became the exclusive method of making them available or that it waived the right to rely on the signature card as a component of the written contract. Id.; see also Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 481 (Tex. 2017) (acknowledging nonwaiver provisions in contracts are binding and enforceable); CR70; CR218. The Court of Appeals, moreover, has no authority to find or impliedly find such omitted, necessary facts. See, e.g., Texas Nat’l Bank v. Karnes, 717 S.W.2d 901, 903 (Tex. 1986); Levine v. Steve Scharn Custom Homes, Inc., 448 S.W.3d 637, 653 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) (citing Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). Without proof of those facts, there is a complete absence of support for the Court of Appeals conclusion, as stated, that “the parties contractually limited the ways in which the Bank could make account statements available to Calleja.” Calleja-Ahedo, 508 S.W.3d at 803. There is no evidence that the parties formed the contract the Court of Appeals conclusion necessarily implies. Because the signature card formed a part of the agreement at all times, moreover, any contractual limitation on how Compass could make statements available necessarily includes Compass’ right to “hold all correspondence,” unless and until that “information” was changed by written 930505.20140273/2851932.1 50 notice, regardless whether the 2008 deposit agreement, the 2012 deposit agreement, or neither of them was effective at material times. See CR50; CR230. The passage from the Nacim case quoted by the Court of Appeals is part of the El Paso court’s contract analysis to determine the effect of what it determined was a contractually modified section 4.406 “trigger” date. Nacim, 459 S.W.3d at 107-08. With respect for both courts, the ambiguity analysis in Nacim is inapposite, if flawed,27 and the Court of Appeals reliance on Nacim in this case is misplaced. The deposit agreement language in Nacim and in this case is the same: You agree that you will carefully examine each account statement or notice you receive and report any exceptions to us promptly after you receive the statement or notice. You agree to act in a prompt and reasonable manner in reviewing your statement or notice and reporting any exceptions to us. If you do not report an exception to us within thirty (30) days after we send the statement or notice to you, you agree that we will not be liable to you for any loss you suffer related to that exception. This means that, if you do not report exceptions to us within thirty (30) days after we send the statement or notice to you, we will not reimburse you for any loss you suffer, including, but not limited to, any amounts lost as a result of: paying any unauthorized, forged, or altered item .... 27 “‘A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation.’” Nacim, 459 S.W.3d at 107 (quoting Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996)). Contrary to the El Paso court’s interpretation, the deposit agreement does not “require[]” in the first two sentences quoted above that “the customer report questionable transactions once the customer actually receives the account statement.” Nacim, 459 S.W.3d at 108. Rather, those sentences embody the customer’s agreements to carefully examine and report exceptions after receiving a statement and to act in a prompt and reasonable manner in reviewing statements and reporting exceptions. See id. The two sentences which follow do not create ambiguity; they merely specify when (“after we send the statement”) the agreed, thirty day reporting period begins and what that means to the bank’s liability. 930505.20140273/2851932.1 51 Calleja-Ahedo, 508 S.W.3d at 803 (emphasis by Court of Appeals); Nacim, 459 S.W.3d at 108; see also CR65 (2008 deposit agreement). The El Paso court in Nacim reviewed the contract for ambiguity as to when the agreed, thirty day period to report exceptions began to run. Nacim, 459 S.W.3d at 107. The parties’ agreement that thirty days was the measure of “reasonable promptness” (Tex. Bus. Com. Code § 4.406 (c)) in examining statements was central to the bank’s defense in Nacim where thirty three days elapsed between “sending” and reporting. Nacim, 459 S.W.3d at 104. In this case, Compass’ defenses did not require reliance on a contractually agreed notice period—Calleja did not notify Compass of any exception for over eighteen months. And neither party here suggested ambiguity in any part of the deposit agreement. To the extent the Court of Appeals relied on Nacim to hold that Calleja’s duty to report “never arose under the 2008 Agreement” (Calleja-Ahedo, 508 S.W.3d at 803) based on use of the word “send” (or “receive”) in the above quoted excerpt, Compass and Calleja, nonetheless, agreed on the meaning of “made available” in both the 2008 and the 2012 deposit agreements, and they expressly agreed in the signature card that that Compass would hold all correspondence. Paragraphs (a) and (c) of section 4.406 each use the disjunctive, “sends or makes available”; paragraph (f) uses the past tense, “made available.” Tex. Bus. & 930505.20140273/2851932.1 52 Com. Code 4.406(a), (c), (f). These provisions of the UCC “shall be liberally construed and applied to promote its underlying purposes and policies.” Martin, 29 S.W.3d at 93. Calleja and Compass agreed in 1988 that Compass would “hold all correspondence.” CR50; CR230. They agreed in 1988 that the “Depositor [Calleja] shall immediately notify Bank in writing of any change in the information given to Bank as appears herein.” CR50; CR230. The signature card is part of the agreement between Compass and Calleja. Tex. Fin. Code §§ 34.301(a). Compass and Calleja reiterated in 2008 (and in 2012) their agreement that Calleja would give written notice of any change of address. CR65; CR212. Compass and Calleja agreed in 2008 (and in 2012) that Compass “may make statements … available” by “holding” them or delivering them to Calleja “in accordance with your request or instructions.” CR65; CR212. Neither the 2008 nor the 2012 editions of the deposit agreement amends the terms of the signature card to the effect that Compass can no longer “hold all correspondence.” To the contrary, both writings permit it and expressly provide that by doing so, Compass made such statements available. CR65; CR212. When courts interpret a contract, they are to examine the entire agreement and give effect to each provision so that none is rendered meaningless. See, e.g., Kachina Pipeline Co., Inc. v. Lillis, 471 S.W.3d 445, 450 (Tex. 2015). 930505.20140273/2851932.1 53 To conclude that the language quoted by the Court of Appeals and by the court in Nacim obviates the parties’ express agreement as to what constitutes making statements available is contrary to this basic tenet of contract construction. The agreement that, “We may make statements … 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 instructions” (CR65; CR212), would be rendered meaningless in the context of either deposit agreement. Kachina Pipeline Co., 471 S.W.3d at 450. It cannot have been the “true intention of the parties” (Kachina Pipeline Co., 471 S.W.3d at 450 (quoting Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011)) that an agreement to a specific period in which to report exceptions following receipt of a statement or the sending of a statement means that when a statement is either not received, or is it made available other than by sending, the customer is absolved of all responsibility to monitor his account for all time. Such a result would undermine the UCC’s “carefully considered allocation of responsibility” between a bank and its customer. Info. Support Concepts, Inc., 149 S.W.3d at 107. As the Court stated in Martin: Section 4.406 acknowledges that the customer is best situated to detect unauthorized transactions on his own account by placing the burden on the customer to exercise reasonable care to discover and report such transactions.[] The customer’s duty to exercise this care is 930505.20140273/2851932.1 54 triggered when the bank satisfies its burden to provide sufficient information to the customer. Martin, 29 S.W.3d at 92 (footnote omitted). Section 4.406 permits a bank either to send or to otherwise make available the account information. Tex. Bus. & Com. Code § 4.406(a), (c), (f). As in Martin, when Compass satisfied its section 4.406 burden by making sufficient information available as agreed, i.e., “by holding all or any of these items for [Calleja] in accordance with [his] instructions” (CR65; CR212; see also CR50; CR230), Calleja’s duty to “promptly notify” Compass was triggered. Tex. Bus. & Com. Code § 4.406 (c). As the trial court correctly determined, Calleja failed to discharge that duty. The judgment of the Court of Appeals should be reversed and the judgment of the trial court reinstated. Other Texas courts have recognized and applied the UCC statutory scheme, which “provides for an allocation of responsibility between the customer and a financial institution according to which party is best able to prevent loss.” Okonkwo v. Washington Mutual Bank, FA, No. 14-05-00925-CV, 2007 WL 763821, at *6 (Tex. App.—Houston [14th Dist.] Mar. 15, 2007, no pet.) (citing Martin, 29 S.W.3d at 92); see also Schiro v. Texas Community Bank, 68 S.W.3d 55, 57 (Tex. App.— Dallas 2001, no pet.); Cross Creek Investments, Inc. v. First State Bank, No. 03-00- 00439-CV, 2001 WL 459177 (Tex. App.—Austin May 3, 2001, no pet.). The courts uniformly recognize the disjunctive nature of 4.406, that the customer’s 930505.20140273/2851932.1 55 duty to exercise reasonable care to discover and report unauthorized transactions is triggered when the bank provides “sufficient information,” which is “statutorily defined as a bank ‘send[ing] or mak[ing] available to a customer a statement of account showing payment of items for the account….’” Okonkwo, 2007 WL 763821, at * 6 (quoting Tex. Bus. & Com. Code § 4.406(a)) (emphasis added); see, e.g., Schiro, 68 S.W.3d at 57. In Texas, the “cardinal rule of statutory construction is to ascertain the ‘legislature’s intent,’ and to give effect to that intent. The duty of the court is to construe a statute as written and ascertain the legislature’s intent from the language of the act.” LaSalle Bank Nat’l Ass’n v. Sleutel, 289 F. 3d 837, 839 (5th Cir. 2002) (citing Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278, 280 (Tex. 1994); Morrison v. Chan, 699 S.W.2d 205, 208 (Tex. 1985)). Further informing the legislative intent, the official UCC comment makes clear that: “[t]he ‘safe harbor’ provided by subsection (a) serves to permit a bank, based on the state of existing technology, to trigger the customer’s duties under subsection (c) ….” Tex. Bus. & Com. Code §4.406 cmt. 1 (emphasis added). Existing technology includes on- line access to account statements. See, e.g., Kaplan v. JPMorgan Chase Bank, N.A., No. 14-C-5720, 2015 WL 2358240 (N.D. Ill. May 12, 2015). The plaintiff in Kaplan argued that she had not seen account statements, and this was why she waited 930505.20140273/2851932.1 56 more than a year to report alleged unauthorized disbursements. The bank confirmed that the account statements were made available online each month. Kaplan claimed that she had problems using her online banking access, but the court concluded the statements were made available after reasoning that plaintiff also could have obtained her account statements by going to her local branch by requesting them either in person or by phone. Here, if Calleja—who knew statements were being generated—could have used online banking but chose not to, or he could have called the bank and requested a copy of any monthly statement. See Tatis v. U.S. Bancorp, 473 F.3d 672, 675–76 (6th Cir. 2007) (finding that where Tatis, who knew that monthly statements were generated and originally had elected to have his statements held by the bank, that “the statements were ‘made available’” under Ohio’s version of section 4.406). Like in this case, there was no evidence in Tatis that the bank ever refused to provide any copy or refused to provide online access. CR397; Tatis, 473 F.3d at 675. Plus, the backs of the statements that were mailed to Calleja’s brother’s address had both addresses and phone numbers for Calleja to call to get information from Compass. See CR397. Nevertheless, Calleja never contacted Compass to get a copy of his statement or to inquire why statements were no being received at the Woodlands address. See CR397. Calleja elected not to take 930505.20140273/2851932.1 57 advantage of the existing technology, online banking; he did not visit or contact any Compass branch; Calleja made no effort for eighteen months to review any bank statements.28 See CR397-98. Nor did Calleja ever contact Compass to verify the balance of his account. Calleja wholly failed to monitor the status of his bank account for six months before and eighteen months after the first unauthorized transaction. There is no evidence that he would have reviewed the statements even if the statements had been delivered to his brother’s apartment. Again, if Calleja did not receive a statement, he had a duty of ordinary care and should have contacted Compass to find out why statements were no longer being sent to the Woodlands. Compare Borowski v. Firstar Bank Milwaukee, N.A., 579 N.W.2d 247, 250 (Wis. Ct. App. 1998) (stating where properly addressed statements are intercepted by an interloper, the customer still is not relieved of his or her responsibilities to either examine the statements or find out why they are not coming). Calleja presented no evidence that he made any effort to discharge his responsibility. See Barfield, 426 S.W.2d at 840. 28 Calleja, through his brother who was allegedly receiving the monthly statements, knew or should have known if the statements were, in fact, not being received. See CR306. 930505.20140273/2851932.1 58 E. Other courts have interpreted the term “made available” as it applies to Texas Business and Commerce Code section 4.406, and the Court of Appeals’ construction of section 4.406 differs from other courts when it determined that Compass had not made the bank statements “available” per section 4.406, which is likely a matter of first impression under Texas law. The Appellate Court relied in part on Jefferson State Bank v. Lenk in trying to analyze the “made available” provision in section 4.406. See Jefferson State Bank v. Lenk, 323 S.W.3d 146 (Tex. 2010). In that case, the bank customer had died, and the Court discussed what banks need to do after a customer’s death because the customer was no longer able to receive statements or report purported unauthorized transactions. The present case is distinguishable because Calleja has always been alive throughout this dispute. Calleja simply failed to review any of his bank statements for approximately two years. See CR46-47. There does not appear to be any Texas case that has construed what constitutes “mak[ing] available” bank statements when the customer is alive and never tells the bank that he is not receiving statements or when an alleged imposter causes bank statements to be sent to a new address, and the customer fails to inform the bank he is no longer getting statements. Under section 4.406, “[t]he plain language of the statute [thus] simply require[s] the Bank to ‘send or make available’ account statements.” Okonkwo 930505.20140273/2851932.1 59 v. Washington Mutual Bank, FA, No. 14-05-00925-CV, 2007 WL 763821, at *6 (Tex. App.—Houston [14th Dist.] March 15, 2007, no pet.) (emphasis added); see also Schiro v. Texas Community Bank, N.A., 68 S.W.3d 55, 57 (Tex. App.— Dallas 2001, no pet.). In Texas, the “cardinal rule of statutory construction is to ascertain the ‘legislature’s intent,’ and to give effect to that intent. The duty of the court is to construe a statute as written and ascertain the legislature’s intent from the language of the act.” LaSalle Bank Nat’l Ass’n v. Sleutel, 289 F. 3d 837, 839 (5th Cir. 2002).29 Here, if Calleja had called the bank and requested a duplicate copy of the monthly statement, and the bank had refused to provide a duplicate copy, then this would show that the statements were not made available. The backs of the monthly statements Calleja did receive had several addresses or phone numbers for Calleja to call to get information from Compass. However, Calleja in this matter never contacted Compass to get a duplicate copy. See CR305; CR397. Calleja could have used online banking, visited a branch or done other things to review statements. 30 See CR397-98. Instead, Calleja wholly failed to monitor the 29 Surely the legislature did not intend for a bank customer to never have to notify a bank if they stop receiving bank statements. 30 Calleja, through his brother who was allegedly receiving the monthly statements, knew or should have known if the statements were not being received. See CR306. 930505.20140273/2851932.1 60 status of his bank account. There is no evidence that he would have reviewed the statements even if the statements had been delivered to his brother’s apartment. The Supreme Court of Minnesota analyzed the issue of placing the risk of non-receipt of bank statements on the bank customer as opposed to the bank. See Stowell v. Cloquet Co-op Credit Union, 557 N.W.2d 567 (Minn. 1997). In Stowell, the customer argued that the customer had not received statements and said the statements were not “made available” under the UCC. The credit union mailed duplicate statements, but Stowell claimed not to receive them, likely because they were intercepted by the purported wrongdoer. At no time did Stowell go to the bank branch and ask that a statement be printed or otherwise provided to him. The court explained, “[a]llowing accountholders to avoid their duty to inspect their account statements by denying receipt of the account statements would place unreasonable financial burdens on banks and other financial institutions by forcing them to prove receipt either through the use of certified mail or by individually contacting the customers, or to confirm that they had, in fact, received their account statement. Such measures would often be prohibitively expensive.” Id. at 572 (emphasis added). 930505.20140273/2851932.1 61 Likewise, the court in Borowski confirmed that, even if a customer claimed that the bank was at fault for allegedly not properly sending out the statements, the bank customer is not relieved of his or her responsibilities “to either examine those statements and/or find out why they are not coming.” Borowski v. First Star Bank Milwaukee, 579 N.W.2d 247, 250 (Wis. Ct. App. 1998). In Wetherill, the court explained that for several years, the plaintiff sought never to review the account statements and never contacted the bank to ensure that everything was as it should be. See Wetherill v. Putnam Investments, 122 F.3d 554, 556 (8th Cir. 1997). In Wetherill, the plaintiff argued that the statements were not “properly addressed” because they were mailed to an address other than the one that plaintiff had agreed to for the receipt. Id. at 556. However, the court held that had Wetherill exercised “reasonable diligence”, he would have discovered the forgeries years before he did so. Id. at 557. Similarly, other courts have held that bank statements were “made available” although the depositor did not receive the statements. See Woods v. MONY Legacy Life Ins. Co., 641 N.E.2d 1070 (N.Y. 1994); McMickle v. Girard Bank, 515 A.2d 16 (Pa. Super. Ct 1986) Myrick, 268 A.2d at 527 (holdings that (Myrick) was negligent as a matter of law for failing to inquire with the bank as to her lack of receipt of monthly statements and cancelled checks). 930505.20140273/2851932.1 62 In Westport Bank & Tr. Co. v. Lodge, 325 A.2d 222 (Conn. 1973) the bank depositor failed to receive her bank statements and did not notify the bank. See Lodge, 325 A.2d at 223. Because the fraudster had changed the mailing address on her bank account, Lodge failed to receive bank statements for more than two years. Id. Lodge at no time attempted to reconcile her bank statements or inquire of the bank during the two years, and the court held that the lack of effort to examine the bank statements on the part of Lodge constituted negligence so as to preclude liability of the bank. See also General Petroleum Products, Inc. v. Merchants Trust Co., 160 A. 296, 299 (Conn. 1932). F. There are strong policy reasons for the Court to decide this case and affirm the trial court’s judgment. Because there is a substantial likelihood that similar facts will occur in the future, this Court should continue to interpret and apply the UCC in a way that clarifies that customers are responsible for monitoring their banking activity and are not to be rewarded for their failure to do so. This Court should not excuse Calleja’s admitted, intentional failure to monitor his account for two years (particularly after he had already experienced bank fraud). See CR46-48. If the court’s decision stands, nothing will prevent a bank customer from entrusting oversight of an account to a friend or relative, abdicating all personal responsibility. If the person allegedly monitoring the account has the 930505.20140273/2851932.1 63 customer’s account information and personal information, the person can have the bank change the account address without the customer’s knowledge. Then, by omission or design, that person could fail to mention to the customer that statements are not being received where the customer expected them for six months, eighteen months, or two years. The customer’s willful ignorance would allow a bad actor (or co-conspirator) to drain the account, supposedly without the customer’s knowledge. Accordingly, if the Court of Appeals’ ruling in this case stands, the customer has no duty to discover and to report the “loss” he facilitated by failing to protect his banking information and willfully ignoring his account, leaving the bank liable for the loss. There would be no way for the bank to prevent this type of fraud. Permitting a customer to not report that he did not get bank statements for 18 months and bear no responsibility is an unjust result. The customer is in the best position to monitor his own account activity. Sound policy dictates that there must be some degree of responsibility for a customer to notify the bank if monthly statements stop arriving. 930505.20140273/2851932.1 64 G. Without the 2012 agreement and without the 2008 agreement, there is only one writing material to the parties’ agreement in the record, the 1988 signature card. The only writing both parties agree was part of the contract is the 1988 signature card; both offered the card as evidence. See CR46, 50; CR203, 230. Regardless whether the 2012 version or the 2008 version, or some other version of deposit agreement also might have been “in effect,” the signature card is part of the contract. Tex. Fin. Code § 34.301(a). The card includes the parties’ agreement that Compass was authorized to “Hold All Correspondence”: CR50; CR230. Calleja offered no evidence that he rescinded his agreement authorizing Compass to “hold all correspondence.” As a movant, he is not entitled to any inference in his favor. See Lewis v. Aurora Loan Services, 01-15- 00362-CV, No. 2016 WL 887176, at *2 (Tex. App.—Houston [1st Dist.] Mar. 8, 2016, no pet.) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985)). Calleja offered no evidence or authority that Compass’ subsequent agreement to provide copies of statements to Calleja’s brother necessarily revoked the existing, written agreement authorizing Compass to hold all correspondence. By the clear terms of the only writing in the record which both 930505.20140273/2851932.1 65 parties agree applies, Compass made all statements available at its banking locations as expressly agreed between the parties. Calleja’s claims are precluded by the contract and by section 4.406 of the Business and Commerce Code. CR50; Tex. Bus. & Com. Code § 4.406. H. The Court of Appeals improperly construed plain language in the trial court’s order. The Court of Appeals’ interpretation of the trial court’s statement that Calleja “has failed to exercise diligence in protecting himself from the alleged fraud” as referring only to “Calleja’s lack of diligence post-forgery” is impermissibly narrow. See Calleja-Ahedo, 508 S.W.3d at 806. Rather than “the context of the final judgment itself” (id.), the scope of the context should have been the entire record: “Reviewing courts do not disregard the evidence supporting the motion.” City of Keller v. Wilson, 168 S.W.3d at 824 (Tex. 2005); see also Kennamer v. Estate of Noblitt, 332 S.W.3d 559, 566 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). The Court of Appeals read an expressly inclusive sentence to be exclusive31 to support its conclusion. See In Matter of Estate of Downing, 461 31 The trial court’s order states: “In particular, but not as the sole reason for this ruling, the Court rules 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.” CR539. 930505.20140273/2851932.1 66 S.W.3d 231, 238 (Tex. App.—El Paso 2015, no pet.) (citing El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805–06 (Tex. 2012); see also Tyler v. Henderson, 162 S.W.2d 170, 175 (Tex. Civ. App.—Fort Worth 1942, writ ref’d w.o.m.) (“We must give verity to the judgment of the court having such jurisdiction; we will not construe its language so as to destroy its legal effect ….”). The trial court’s judgment does not exclude or negate reliance on the conclusively established facts that Calleja failed to safeguard his personal and banking information and ignored his account for six months before account funds paid for blank check stock in June (CR246) and before one of those checks was paid in July, 2012 (CR249). See also CR321-22. Had Calleja paid attention, personally or through his brother, he would have noticed when— before any forgery occurred—his bank statement did not arrive at the Woodlands address. See Myrick, 268 A.2d at 527-28. The Court of Appeals’ restrictive reading of the judgment fails to give due effect this material part of the summary judgment record; i.e., Calleja’s lack of diligence pre-forgery, including his obvious failure to safeguard his personal information, making it “easier for the wrongdoer to commit his wrong.” Bank of Nichols Hills, 196 P.3d at 986-87; Tex. Bus. & Com. Code § 3.406(a). 930505.20140273/2851932.1 67 As the Maryland court of appeals stated, “[t]he common thread running through [cases discussing section 3-406] is that the substantial contribution test under the UCC includes negligent conduct on the part of the [person precluded] which previously had been viewed as too remote in the chain of causation to preclude recovery.” Dominion Const., Inc. v. First Nat’l Bank of Maryland, 163, 315 A.2d 69, 73-74 (Md. 1974). The “new” UCC standard replaced proximate cause with the “substantial factor” test. Id. The New Jersey court explained: “[t]he language of [section 3.406] … states plainly that it is the contribution to the forgery rather than the negligence that must be substantial.” Gast v. Am. Cas. Co. of Reading, Pa., 240 A.2d 682, 685 (N.J. Super. Ct. App. Div. 1968). Thus, Calleja’s inattention to his account, the obvious failure to safeguard his personal information and his “failure to inquire of the bank as to [his] lack of receipt of monthly statements,” was “negligent as a matter of law.” Myrick, 268 A.2d at 528. Just like Myrick’s, Calleja’s conclusively proven “negligence substantially contribute(d) … to the making of an unauthorized signature” precluding his claim. Id. (internal quotations omitted). The trial court’s judgment should be affirmed. 930505.20140273/2851932.1 68 Conclusion This Court should not excuse Calleja’s admitted, intentional failure to monitor his account for two years. It should not shift responsibility from Calleja to Compass for Calleja’s failure to properly safeguard his personal and banking information. If the Court of Appeals’ decision stands, nothing will prevent a bank customer from entrusting the receipt of account statements to a friend or relative, abdicating all personal responsibility. The Court of Appeals decision sanctions Calleja’s chosen method of monitoring his account by relying “completely” on reviewing statements delivered to The Woodlands, then not bothering to retrieve a single statement for at least two years. The Court of Appeals’ decision improperly shifts the burden of loss to Compass where Calleja was always in the best position to protect against the loss. It was Calleja’s willful inattention to his own interests and affairs that made it easier for a bad actor to drain the account. If the Court of Appeals decision stands, Calleja will have been absolved of all duty to discover and to report a “loss” he facilitated by failing to protect his banking information and willfully ignoring his account. There will be no way for a bank to prevent this type of fraud. Common sense, sound policy, and the law dictate that an account owner bear a degree of 930505.20140273/2851932.1 69 responsibility for protecting his own interests. The Court of Appeals’ decision absolves Calleja and wrongly places the burden on Compass. Prayer Compass respectfully asks this Court to reverse the decision of the Appellate Court and to affirm the summary judgment in favor of Compass. In the alternative, Compass asks the Court to remand the case to resolve all issue of fact necessary to disposition of this case. Respectfully submitted, HIRSCH & WESTHEIMER, P.C. By: /s/ Michael D. Conner Michael D. Conner mconner@hirschwest.com State Bar No. 04688650 William P. Huttenbach State Bar No. 24002330 phuttenbach@hirschwest.com 1415 Louisiana, 36th Floor Houston, Texas 77002 Telephone: (713) 223-5181 Facsimile: (713) 223-9319 Attorneys for Petitioner Compass Bank 930505.20140273/2851932.1 70 Certificate of Compliance I do hereby certify that the relevant contents of this document consist of 14,956 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 Garamond font, except for footnotes which are in 13 point typeface. /s/ Michael D. Conner Michael D. Conner Certificate of Service I hereby certify that on this 20th day of December, 2017, a true and correct copy of the foregoing document was served via e-service as follows: Michael C. O’Connor moconnor@oconnorcraig.com Lesley C. O’Connor loconnor@oconnorcraig.com O’CONNOR & CRAIG 2825 Wilcrest Drive, Suite 261 Houston, Texas 77042 Telephone: (713) 266-3311 Facsimile: (713) 953-7513 /s/ Michael D. Conner Michael D. Conner 930505.20140273/2851932.1 71 No. 17-0065 In the Supreme Court of Texas Compass Bank, Petitioner v. Francisco Calleja-Ahedo, Respondent On Petition for Review from the First Court of Appeals in Houston, Texas Case No. 01-15-00210-CV Appendix to Petitioner’s Brief on the Merits Signature Card (CR50) Tab 1 Consumer Disclosure (2008 deposit agreement; CR51 et seq.) Tab 2 Consumer Deposit Account Agreement (2012 deposit agreement; CR205 et seq.) Tab 3 930505.20140273/2851932.1 72 Tab I l!l¡ lta {ltr{,J|llñaåtrü'll ridl b|!arl}ltrtrrfûnrot çl¡¡rdlfrl} ÉlrT{$¡rlltilnL$.n¡ln ËÉúû|{¡ rrr+rrt¡!É¡ tl ¡ t,ftlÌt¡¡.t gLcl+ riaalrar hû {t rq}.r f¡x rtr¡t dÈúcr ol al|* f ¡!|l*rrlV FnElttd t ct.|r¡rr l'.t}lü{iff lFxitlhf þtilhflrlüÐllr$¡ti¡drl ÊLren¡l-.ùllr{¡lt,. il{tltçlr¡¡ilollF*}átlLÐÉ¡ lú'rlt$r r !ã¡¡ rr,| fiÈaatat JlX r¡h$ fllt¡ þ !Hü l|S þittr lñ¡ ltttl C lhr ¡i¡lei.il n tt ü atÉ n|'åüll lttûft ,tür Ìt $ slü l¡¡ad {n¡{t' att nÛf dtr¡lltr tfl .lrrr rlÍ! åltlr!È tò t'ltt ll trrÊt lÌ9try r¡¡ {l.&ri|Brr¡¡rñll¡art útltarg alürt.fiûr tg.lfi i{.{#rtrlY ¡{d Ðûlrytr Ûrl tt aø þü! 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Ára,fi¡f tçl.l Êa'1.ñtlrß{¡l'é{fif ö¡a*ll¡Ë¡41 ry¡þpcll lldl 'rd !'F{il - -' Ífn:|¡r¿ltSl'¡¡&EGrdz¡iü-++!<ùrhË-*æ'tsL'"'retüÁ1'fl. lg.rffdu¡Éìr.ltd !r l¡¡ grr*,naìu¡li?tt*tiùtÊrtlr¡clú l6&rê!oñslrÐa afr¡)uttErqarl tßolltr ifi¡mo ¡ln¡n¡¡frl"È. f¡ipmrr æ*r¡al r¡æort¡¡.iåtd¡.r.t*$&lof/rll,{tùr¡&trntl¡t¡l¡ rtnlot*3ltþBt o+t¡ ilñËï'|ú;r u,i sim u *+¡¡r¡r¡¡$¡ ¡nur r.rrrt¡¡rlr¡ tür{ úr¡t$*r¡i ¡¡ $r. r$ rr fofaañfl ¡lnatlxl , üt¡ orptSof tftünl|¡fll¡ôütrÊ¡r*ütr¡srûûlf ôt¡rrxglräñâütlotrÓ¡tû$¡slotlrllrlcË9rmrflr F¡ t l-l¡tijËf *!tlsntraba dr{f tr¡tr.tr d$.FétaÈf Trta äffi 3-I I-Sß mf$ 1 ùfir üuX.d frll Corresp s Fusnte Ðs $sc rrarût¡dËar 'feceuachglco, Flexfco Ð.F* sÊr ñrtt &n - ¡tomlureå-TeçþnglgÂL...- . 5Ë9:2å73 l${nal¡lÉrt D$illrf,¡qnt 6æ-""--:-- --::=:::- tlr¡1.¡ 'l{Êû¡trrr us*.*î;ñii&tI aÍ(trr¡rr*T.rt rrrröxü. r¡f,f 96IÍ? r¡ifl I t¡lãIlllt 16ùö.¡r.r "J4;., i r{'iõ{ì¿rd:,T'' * rr Cal ¡étsurt ¡lhedo çt ltrsnel*co telleJe N'{}'NE; feltftas ör Àn* e gr Frmntc ün Ba*o #17 T*cnnr*+hå,1co, HextÉ.ö t"f . þü¡lÅTl,Xå' * CeL a { {/ Trartcle*c CslleJe C*j J-!*¡,*- .Åna Etlsebeth l{nl-lsr d I J I " *'lltltlt' i,J t f t -a¡Lrl lljlhôarrrd rsÍrlgTb t ¡suüättrà'r$ tt{Ëüf¡rü} Tab 2 CoxsunrrEn DsclosuRE Effeelive August 2e 20Oo Compass Banlç a member of the BBVA Group Consumer Disclosure Highllghts 1. Changes to Consumer Deposit Account Agreement 2 2 Changes to Checking and Savings Accounb 4 Other Fees and Scrvlce Charges I Consumer Depoclt Account Agte€ment 11 1, Definitions 11 2. Account Operations 12 3, Accouni Staiements and Notices t3 4, AccountTransactisns 14 5. Deposits, Colleetlons and Payment of ltems 15 6, Withdrawals 17 Z Sub"accounls 17 L Arbikation '18 9. Whiver of Jury Trial 19 10. Dormant and Abandoned/Unclaimed Accounts 19 11. SetOff 19 .l2. Waivers 19 13. Other Services 10 14. lnterest¡ lnteres't Reporting 2A 1õ. Changes to Account Stah¡s 20 16, Applicable Law 20 17 Additional Provisions 20 Fund¡ Arailabi llty Dlsdosure 21 Elsctronic Ê¡nd ïtan¡fer Olsdosuro St¡tsment 22 Terpayer ldentlllcati on Nu m b ars (Eadtup Witlth oldlng) 24 Gompass Consumer Prir¡ct Dlcdosure 26 lmportant tnfo¡maüon About Your Gheddng Account (Gh€d( 21) 29 Vleao Gltedr Card Agreernent end Dl¡closurê 9tatement 31 HtGHuGl{ï5 Cha n ges to Gons umer Depos it Âccou¡tt Agreem ent This Disclosure Booklet con{ains the terms and condiäons that will govern your consumer deposit accounts at Cornpass Bank beginning August 22,2OA8,4 consumer deposit account includes any Çpe of checkíng,'saving+ monéy market or NOW ectount to which funds may be deposited and that is'used primuily for personal, family ol household purposès. Please qqêfully review tte Conguma.r -11-21 Oapoiît Aø.tnl $ru'cment on pages of this Consumer Disclosure Booklet and keep Ìt forir,¡ù-rre reference, Many terms of yòur Compass account will be difÞrent from those at Taras Staie Bank, including, but not limited to, lhe followfngl f Postlng Onler and Ordêt of Payment At Compass Bank, checks and other debits to your account rnay be posted and/or paid in a ditferent order than at Texas State Bank lf two or more items are piesenied for payment from your account on the same day, we may Pay or clraçe the iterns to yòur account in any order. To avoid olerdrawing your account make surelou have a suffic¡eni available balance-in your account before you write a check use your Check Cârd or authorize an electonic paymenl r rAvailable Balanca, and '¡Posted Ealancal'At Compass Bank, we dislinguish batween the "available balanceo and the 'posted balancen for your accounl The term 'available balance" re{ers to the balance o{ funds in your account that ls avallable for immediate withdrawal. Unlike the posted balancq the avaíaÈle belânce reflects any holds placed on your accounl The term 'posted balance' refers to lhe balance of funds in your account based solely on items that ha,re been posted as credÍts or debits to your accounl Your available balance mqy be more or less Ú¡an the àmount of your posted balancê, but dses not include any cre/it available under any Compass Bank Overdratt Protect¡on Line of Credit you may have, ¡ l{olds lor Chod( Card Tlans¡ctiong. lf we issue a Msa6 Check Card for your account and you use your Ca¡d for cerùa¡n t¡ansactions (including every POS and many Visa transact¡ons), the merihant accepäng your Card may requesl advance aulhorization of that transaction. lf we auihorize a trarrsaction, we may place a temporary 'hold' on your accourtt for {he amount requested by the merchant Ihis hdd ls not payment for an authorized transacüoq and may be placed on yoor account bebre he scàJal fensactlon ls presented to ts fø paymenL Fot more infømdion abor¡t these holdg when they âre ß¡ease{ their effÊct on your sttor¡nt and the authori¿ations rcquested by nerciranfs, please relerlo the Check Card Agreenrent and Discbsure Statamant induded with put new Chedc Card, r Una¡¡llþilzgl llans¡cüo¡¡ t¡d,lot Forgprlo¿ lt ls essantialthat any accounl erorc, una¡thorized bansac{ions, alteratfonq unauthorksd signatr.¡æq foqedq encodlng enors, pocting erorq or any other improper bansac{ons on your âccq¡nt (collcc{ively rebned to æ 'ctceptions) be repoded ùo us as soon as reasonabþ positrb. You must carefulþ acamine eacà accouttt statament or noüce you lece¡ve and eport any orceplions to us pronptly afur you recefue the statemoflt or noüca lf you do rmt report an orcepüon to ug within tñlËy (30) dafs afbr vyg sand he sbtsment or nolice to yor¡ we mây not be liable to you for any bss ¡ou sufror ßlat€d to thet encepüon. Different ruþs may appþ to ilems lhat a¡e eþcbonic fund bursfrß. ¡ Ferolvlng Dis$¡bs Relrted to Your A¡cor¡nt lf a dlspute of any ldnd adses under your account agreement or ¡elales to ¡lour account or any lransaction* involving your acounl, either yor¡ or s/e can choose lo have that dlspute resolvad þ bindlng ubikatlon. ll (0 neither ¡ou nor we seek b compel arbitraüon of any dlspule wå ha\¡ê related b thls Agreemen[your æcunl orany fansactlons lnvolvirg your aocoun! or (10 some or allol the srblbdion prølsion is unenforceûble arrd we are ln a dispute ln a court of bw, üren êaú ol uÊ agreßs to waiva any rþht we may have to a jury bial ùo the artent pennltbd b la¡.lìa ¡rÞtb¡üon ¡nd lü¡y ùlal railergrovùrlonc ln yoqr ¡ccûunt agrÊcmelrt llmit your abillty to litigate dalm¡ ln court rnd your llght io a iury lrial. You should rsvlew lftese pmrlrlons carefully. r Congunar fttlYrcy Dlrrdæurê. Tho Compass Consumer Prfuacy Oisclosun is included in thls tonsumer Oisclosura Booklel. The Frivacy Disclosure conl¿lns information on Compass'sharing prac'tices within lhe Compass lamlþ of companies and provides information on how you may choose to limil markeling S our af{iliales basad on lnforrnglion lhat Cornpass sh¿res with ihern, For informdion on Miscellaneous fues at Compass Elanlq please see pege I of this Booklet. 2 Other differences found in the Consumer Dìsclosure Eooklet include: f . Concumq Deposit AscountÄgreement sectionsl il¡ ACCOUNTOPERATIONS - Fowers of AttorneY - Service Chargesl Other Charges a ACCOUNT STATEMENTS AND NOTICES - Enors, Unauthorized Transactions and Forgedes - Record Retention ,f ACCOUNTTRANSACÏONS - Signatu res; Facsimile Signatures - Wre Transfers - lnstrfficient Balance and Overdrafts - StoP Payment Orders - lnter-Account Transfers - lltegalTransactions g DEPOSITS, COLLECTIONS, At{D PAYMËNT OF ITEMS - Deposits by Minors, Agents or Trustees - Collecäon as Agent - Check Endorsement Standards - Foreign Currencies - ATM Depositories, Night Depositories, Direct Deposìl and Deposits by Mail - Chargebacks - Stale and Postdated Checks;Miscellaneous ¡ WITHDRAWALS ¡r RESTRICTIONS ON WTI-HDRAWAI-S * SË.T OFF u INTERESIi INIEREST REPORTING e CHANGES TO ACCOúNT STATUS - Conversion to Business Accounts ;q AÐDITIONAL PROVISIONS - Closing Your Account Ë APPUCABLEI-AW a AMENÐMENT TO THIS AGREEMENT 2. FundsAv¡¡labi¡tty Disdosure 3, Eleclronlc Fund Tlansfer Þlsclocure Statement 4 Consumer PrlvacY Disdosu¡e 5. lmportånt lnformallon About Your Chedtlng Acoount (Ghed¡ 21) t ¡ I I t I ¡ I I ¡ t 3 t I , Changes to Checking and Savings Accounts ' , Here are highlighls to the changas in tre terms and features of yolr accounts after they ttansfer to : Compass Bank Texas State Bank i CompaesBank Please ilole Changas to These Account Terms and Fsatr¡res Regul ar Ched Payments to partnerships nol engaged in a tr¿de or bus¡ness in the U.S, and wlrich have at leasl one noniesirjent parlner, ) Paymenls of patronage dividends where tlæ arnount recejved is nol paid ¡n money. ) Pâyments made by certain foreign orqanizatiorrs. r Paynents ol interest nol generally subjecl to bâckup wjthho¡diru ¡nclude lhe fOìlowing: > Payments of interest on obl¡gations issued by individuals. Noter YoLI may be suirject to backup wíthholding if thjs interest is $600 or more anci is pä¡d in lhe course of the payers lrade or business and you have not provided your corect Taxpayer ldentificalion Number to the payer > Paynrents of tax'exempt interest (inclLrding exempt-interest dividends under Section 852). ll Payments described in Section 6059bX05) to nonresident aliens > Payments on tax{ree covenant bonds uncjer Section 1451. > Pêymenis made by certain Toreign organizations. > lf you are uncerlain whether you qLnlify as an exenrpt recipienl call your accountant or the Intetnal RevenLle Servce, To avoid possible wilhholding, exempt recipients should complete the fornds) provided by Compass and should check the box captioned Exempt Recipients. The forrn shoulci also conta¡n 1,our Taxpayer ldentification Nunber, and lhe certification stalement Ìrust be signed. The form must then be returned lo Compass. PTNALTIES 1. Penalty for Fallure to Furnish Ïaxpayer ldentification Number. lf you fail to furnish your laxpapr identification number to a payei you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willfll neglect. 2, Failure to Report Certain Dividend and lnterest Payments. lf you faii to include any portion of an includible paymenl ior inlerest, divicJends, or patronage dividends in gross income, such failure will be treated as b€¡ng clue lo neglìgence and will be subjecl to a penalty of 5% on any porlion of an underpayment ättribulable to that failure unless there is 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, Falsilying certifications or affirnlaTions rrìay subjecl you to cr¡miral penalties lncluding fines and/or imprisonment" 20 IMPORTANT INFORMATION ABOUT YOUR CHTCKING ACCOUNT (Check 21) Subslitute Checks and Your Rights What is a substìtute check? To make check processing fasler, federal law permits banks to replace original checks with 'substilute checks," These checks are similar in size Ìo original checks with a slightly reduced image of the front and back of the ûriqinal check. The f¡ont of a sLrbsUtute check states: "This ìs a legal copy of your check. You can use il lhe same way you would r,se the original check" YoLl may use a sulrstitule check as proof of payment just like the onginal check. Some or all of the checks that you receive back from us may be substitute checks. This notice describes riQhts you have when you receive substitute checks lrom us The righls in this notice do not ðpp,y to original checks or to electronic debìts to your account. Howevet, you have rights under other law with respecl to those transactìons. What are nrv riohts reoarciino substitute checks? ln cerlain cases, federal law provides a special proceCtre thal allows yau to request a refunci for lmses you suffer if a substilute check is posted to your accounl ffor example, ¡t you ihink that u¡e wilhdrew the wrong amount flom your account or ihat we wilhcrew money fron your account more than once for the same check). The losses you may attempl to recover under this procedure may include tne amounl that was withrlrawn from youi account alrd fees that were clnrged as a result of the withdrawal (for example, NSF fees) The amount of your refund under this prccedure is limited to the amount of your loss or ihe amount of lhe sL¡bstitute check. whichever is less. You also are entltled to interest on the amount of your i'efund if your accoLnl is an interesL-bearing account lf your ioss exceeds ihe amounl of the substitute check, you may be able io recover addiiional amounls ilnder other law if you use this procedure, you may receive a refund ol up to $2.500 or the ¡mount of the sullsiiillle check, wh'chever is less, (plus interest if yolr account earns interesÙ within 10 business days afler we receìved your clairn and lhe remainder of your refund (plls interest il your accounl earns interest) not iater than 45 calencla¡ days af ter we received your claim, We may reverse the refund (including any ¡nterest 0n the refund) ìf we later are able to clemonstrate that the substitute check was correctly postecl to.vour accourrt. How do I make a ciairy for a refunci? lf you bclìeve ihal you have suffered a ioss relalÍng to a substitute check that you received and that was posied to your account, please contact us aL Compass Bank, Allention; Electfon¡c Banking P0. Box 10566, Birminçham, AL 35296 or lelephone number l-800- COI\¡PASS. You musl contact us within 40 calendar days of the date thal we mailed (or olherwise delivered by a means to which yoLi agreerl) lhe substitute check in qLrestion or the account siatement showing that the substitute check was posted to your account whichever is later We will exlend tltis time perlod ¡l you were not able to make a timely claim because of exvaordinary circunlstances. Your claim must inclucie - ' A descrìption ol why you have suflered a loss (for example, you thìnk the arnounL wiLhdrawn w¿s incorrect): . An estimate of the amount of your loss; ' An explanation of wliy the subslitute chcck you receivecJ is insLrf icient lo confirm lhat you sLffered a loss; and ' A copy of the substitLtte check or the following ìnformation to help us identify the substilute check: the check numbet the name of the person to whom you wrote the check and the amount 0f the check 21 Revision Feb2012. Al Nova Branches Onty BBVA Compass is a trade name of Compass Bank, a member of the BBVA Group. Compass Bank, Member FDIC 99-36-2A67