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COA: Bank could charge back account after check is lost

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A man who withdrew nearly all of the money in a bank account is personally liable to pay back that money to the bank, the Indiana Court of Appeals ruled Thursday. The bank had lost a check deposited into the account and the account holder was unable to help the bank identify the check writer to obtain a replacement check.

James R. Sapp had multiple bank accounts with Flagstar Bank and other banks in and out of state. He deposited $125,000 in late August 2005 into his account referred to as SF7 that was the account of an LLC he had formed. The check was a cashier’s check made up of various amounts from other banks paid to some of Sapps’ businesses as well as some unidentified amount of cash. Almost all of the money was gone from the account 16 days after the deposit; Sapp had deposited $100,000 from the SF7 account into an account to which only he had access.

In November 2005, Flagstar debited $125,000 from the SF7 account and was only able to recover nearly $2,000. This was after the bank pressed Sapp to help it identify who issued the previous check in order to obtain a replacement. In 2007, the bank sued Sapp for breach of contract, theft, conversion and unjust enrichment. The trial court ruled in favor of the bank on its claims and ordered Sapp to pay attorney fees.

The transaction was not final, as Sapp had argued, because the account agreement states that the account holder agrees to be liable for any account shortage resulting from a charge or an overdraft. He chose to withdraw funds from the SF7 account while the provision credit was in place, the COA ruled in James R. Sapp v. Flagstar Bank, FSB, 49A02-1311-PL-935.

“Had Sapp not written any of those checks, the account would still have held the $125,000 provision credit and would not have been overdrawn when that credit was revoked,” Judge John Baker wrote in finding Sapp liable for the shortage in the account.

Sapp argued the bank waited too long to notify him the check had been lost and that the transaction had been “finalized” based on language in the account agreement. The agreement allowed Sapp to withdraw the funds based on the provision credit, but it also put him on notice that he would be liable for any checks deposited in the account that are unpaid.

The judges upheld the order that Sapp pay the bank’s attorney fees, again citing the account agreement. They also remanded for the trial court to decide the amount of appellate attorney fees to which Flagstar may be entitled.
 

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  1. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  2. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  3. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  4. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  5. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

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