The Dallas Court of Appeals‘ opinion in In re Berry leaves more questions than answers.
This is an appeal from probate court action in which Sue Berry brought suit against Comerica, H&R Block, Washington Mutual Bank and the executrix of Eugene Berry’s estate for wrongful payment of checks. Comerica filed a motion for summary judgment contending that the claims against it were barred because Ms. Berry did not report the unauthorized signatures within one year after the statement or items were made available to her, as required by Section 4.406(f) of the Texas Business and Commerce Code. The trial court granted Comerica’s motion for summary judgment and all other claims were dismissed without prejudice. Ms. Berry appealed the summary judgment.
What is unclear from the opinion is why Ms. Berry sued Comerica and what its relationship was to H&R Block. The opinion recites that the forged instruments related to an investment account Sue Berry and Eugene Berry maintained with H&R Block and that H&R Block sent statements of the account to the Berrys. The opinion does not reflect what Comerica’s involvement, if any, was.
In any event, the court of appeals, in reliance on Section 4.406, upholds the summary judgment in favor of Comerica because Ms. Berry did not report the fraudulent checks to Comerica within one year of the date H&R Block made the statements available to Ms. Berry. Because the opinion does not reflect the relationship of Comerica to H&R Block, one reading of the court’s holding is that the statements of one financial institution may be used to trigger the one-year reporting requirement under Section 4.406 for purposes of a claim against a second financial institution.
The court’s opinion may be found at this link.