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Anthony J. Sylvester and Caitlin T. Shadek secure a win in the New Jersey Supreme Court for firm client TD Bank, and pave the road for limiting future claims against banks. The New Jersey Supreme Court, in a unanimous decision, reinstated the trial court’s decision dismissing claims against TD Bank, and reversed the Appellate Division’s decision permitting the plaintiffs to amend their complaint to add a claim under New Jersey’s Uniform Fiduciaries Law (”UFL”).

The plaintiffs sought to bring claims against TD Bank based on checks containing forged endorsements. The plaintiffs’ claims under New Jersey’s Uniform Commercial Code were admittedly time-barred and no “special relationship” existed to permit a common law claim. Yet, the Appellate Division permitted the plaintiffs to bring a claim under the UFL, potentially opening the flood gates to limitless claims against banks on forged endorsements. The New Jersey Supreme Court found, in a matter of first impression, that the plain language of the UFL does not provide for an affirmative cause of action against a bank and was instead designed solely as an affirmative defense intended to protect banks from the onerous task of monitoring fiduciary accounts. Additionally, permitting a UFL claim would undermine the UCC’s comprehensive framework in the check cashing arena. 

A copy of the opinion can be found here:   https://njcourts.gov/attorneys/assets/opinions/supreme/a_92_18.pdf?c=q6H