Lee v. Bank of America3/13/1990
COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION SEVEN
No. B037851
1990.CA.41022 ; 218 Cal. App. 3d 914; 267 Cal. Rptr. 387
March 13, 1990
HAE WON LEE, PLAINTIFF AND APPELLANT,
v.
BANK OF AMERICA, DEFENDANT AND RESPONDENT
Superior Court of Los Angeles County, No. NCC19166G, Thomas C. Murphy, Judge.
Donald Barnett and Vincent W. Davis for Plaintiff and Appellant.
Harrington, Foxx, Dubrow & Canter, Dale B. Goldfarb and Jennifer N. Pahre for Defendant and Respondent.
Opinion by Woods (Fred), J., with Lillie, P. J., concurring. Separate concurring and dissenting opinion by Johnson, J.
Woods
Does a complaint state a tort cause of action for conversion or breach of the good faith, fair dealing covenant or wrongful dishonor when it alleges these facts: I had a one-person checking account; the bank paid an unauthorized $1,000 check on it; later the bank returned two checks to me requesting two account signatures; I discovered the unauthorized $1,000 check payment and demanded reinstatement; and within thirty days the bank made reinstatement.
Our answer is no. We therefore affirm the trial court's order sustaining the demurrer without leave to amend.
Procedural and Factual Background
On September 14, 1987, appellant filed a complaint against respondent bank alleging two causes of action: breach of the covenant of good faith and fair dealing and conversion. The prayer was for compensatory damages, interest on the unauthorized $1,000 check, $75,000 for emotional distress, and $250,000 punitive damages.
On April 26, 1988, appellant filed a first amended complaint which added a third cause of action, wrongful dishonor, but retained the original prayer.
Respondent demurred, appellant opposed the demurrer, and the court sustained the demurrer without leave to amend.
As alleged, these are the facts. Appellant opened a one-person checking account with respondent bank. On May 25, 1986, the bank paid an unauthorized $1,000 check drawn on appellant's account.
On February 5, 1987, appellant wrote a $37 check payable to Bank of America (respondent) and on February 17, 1987, a $56 check payable to Pacific Bell. On February 18, 1987, the bank sent appellant a letter requesting two new account signatures and returned to her the $37 and $56 checks.
On March 1, 1987, appellant "discovered" the unauthorized $1,000 check payment. Appellant demanded the bank reinstate the $1,000 to her account. Within 30 days the bank did so.
Discussion
The reason given by the trial court for sustaining the demurrer was "the statute of limitation applies." The referent, presumably, was to Code of Civil Procedure section 340, subdivision (3) and California Uniform Commercial Code (Commercial Code) section 4406, subdivision (4), each providing a one-year limit on actions by a customer against her bank arising from payment of an unauthorized check.
The reason was mistaken. The one-year limitation prescribed by these sections applies only to a cause of action based upon warranty. (Sun 'n Sand, Inc. v. United California Bank (1978) 21 Cal. 3d 671, 698 [148 Cal. Rptr. 329, 582 P.
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