ROBERT J. TRIFFIN VS. HMSHOST TOLLROADS, INC. (DC-021816-18, ESSEX COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1058-19
ROBERT J. TRIFFIN,
Plaintiff-Appellant,
v.
HMSHOST TOLLROADS,
INC., d/b/a HMS HOST and
PAUL MAMALIAN,
Defendants-Respondents,
and
ANDREW GARCIA,
Defendant.
___________________________
Argued July 27, 2021 – Decided September 13, 2021
Before Judges Rothstadt and Enright.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. DC-021816-18.
Robert J. Triffin, appellant, argued the cause pro se.
Erica A. Barrow argued the cause for respondents
(Baker & Hostetler LLP, attorneys; Erica A. Barrow,
on the brief).
PER CURIAM
Plaintiff appeals from the September 27, 2019 order granting summary
judgment to, and dismissing his complaint against, defendants HMSHost
Tollroads, Inc. d/b/a/ HMS Host (Host) and Paul Mamalian.1 We affirm.
We glean the following facts from the motion record. Host issued a
payroll check, dated July 7, 2016, to Andrew Garcia in the amount of $459.03.
The check, drawn on Host's Citibank account, was electronically deposited by
Garcia on July 7 with First Essex Bank, which has since merged with Santander,
N.A. (collectively, Santander). Garcia did not indorse the check prior to
depositing it with Santander.
On July 8, 2016, Citibank honored Garcia's check to Santander and
withdrew the full amount from Host's account. On July 13, 2016, the same
payroll check was presented to a check cashing facility, Ali's Check Cashing,
Inc. (Ali's). Garcia indorsed the check presented to Ali's. Citibank dishonored
the check to Ali's because it was previously honored to Santander. Ali's
subsequently assigned the check to plaintiff, who filed this action.
1
Defendant Andrew Garcia did not participate in this appeal.
A-1058-19
2
After Host filed an answer, it moved for dismissal of plaintiff's complaint
under Rule 4:6-2, or in the alternative, for summary judgment. At oral argument
held on September 27, 2019, plaintiff argued Host was not entitled to relief
because: it failed to identify the bank (and individual) that honored the check
deposited with Santander; and the certification it presented from Hampton A.
Young, an assistant vice president for Citibank, amounted to hearsay and should
not be considered. Young's certification stated the check at issue was
dishonored on July 13, 2016 due to the fact it was honored to Santander on July
8, 2016. Young's certification was corroborated by a second certification from
John R. DiCalogero, Host's assistant general counsel.
Judge Bahir Kamil found plaintiff "failed to produce any evidence that
would rebut Young's certification," adding that "when . . . viewed in a light most
favorable to the plaintiff," no reasonable fact finder could find he was entitled
to payment on the dishonored check. Accordingly, the judge granted summary
judgment and dismissed plaintiff's case.
On appeal, plaintiff raises the following argument for our consideration:
THE TRIAL JUDGE COMMITTED PREJUDICIAL
ERROR WHEN HE DISREGARDED N.J.S.A. 12A:3-
201(b)'s, and 12A:3-203(c)'s REQUIREMENTS FOR
NEGOTIATION, TRANSFER, AND INDORSEMENT
OF CHECKS
A-1058-19
3
We are not persuaded.
We begin by identifying our standard of review. Motions to dismiss are
governed by Rule 4:6-2 and focus on the pleadings. Accordingly, under Rule
4:6-2(e), a complaint can be dismissed if the facts alleged in the complaint do
not state a viable claim as a matter of law. The standard for determining the
adequacy of plaintiff's pleadings is "whether a cause of action is 'suggested' by
the facts." Green v. Morgan Props., 215 N.J. 431, 451-52 (2013) (quoting
Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)).
Here, because the parties submitted material outside the pleadings and the judge
considered and relied on this additional material, including Young's
certification, the judge effectively treated Host's motion as one for summary
judgment. See R. 4:6-2; R. 4:46.
The standard for summary judgment is whether the moving parties have
established that there are no genuine disputes as to any material facts, and, if so,
whether the facts, viewed in the light most favorable to the non-moving party,
entitles the moving parties to judgment as a matter of law. R. 4:46-2(c); Davis
v. Brickman Landscaping, Ltd., 219 N.J. 395, 405-06 (2014); Brill v. Guardian
Life Ins. Co. of America, 142 N.J. 520, 540 (1995).
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When reviewing orders concerning motions to dismiss for failure to state
a claim or motions for summary judgment, we use the same standard as the trial
court and review the decisions de novo. Davis, 219 N.J. at 405; Smerling v.
Harrah's Entm't, Inc., 389 N.J. Super. 181, 186 (App. Div. 2006). Moreover, in
considering questions of law, our review is plenary. Ben Elazar v. Macrietta
Cleaners, Inc., 230 N.J. 123, 135-36 (2017). Applying these standards, we
conclude Judge Kamil properly granted summary judgment.
This matter is governed by New Jersey's version of the Uniform
Commercial Code (the Code), namely Article 3, which addresses negotiable
instruments, N.J.S.A. 12A:3-101 to - 605, and Article 4, which addresses bank
deposits and collections, N.J.S.A. 12A:4-101 to - 504.
Under the Code, a "check" is a draft, N.J.S.A. 12A:3-
104(f); a "drawer" is the person who signs a draft
ordering payment from [his or her] account (i.e., the
person who wrote the check), N.J.S.A. 12A:3-
103(a)(3); and a "depository bank" is "the first bank to
take an item," such as a draft. N.J.S.A. 12A:4-105.
[Triffin v. SHS Grp., LLC, 466 N.J. Super. 460, 467
(App. Div. 2021).]2
2
While this appeal was pending, we issued this published opinion. During oral
argument on July 27, 2021, both parties were directed to provide supplemental
briefing within one week to address how this recently published case applied, if
at all, to the instant appeal. Neither party submitted the supplemental briefing
as of the date of this opinion.
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Also, a "payor bank” is a bank that is the drawee of a draft. N.J.S.A. 12A:4-
105(c). Here, Garcia's payroll check was the draft, Host was the drawer,
Santander was the depository bank, and Citibank was the payor bank.
The Code defines a "negotiation" as a "transfer of possession, whether
voluntary or involuntary, of an instrument by a person other than the issuer to a
person who thereby becomes its holder." N.J.S.A. 12A:3-201(a). Once a party
becomes a holder of a negotiable instrument, that party is entitled to enforce
obligations under the instrument. N.J.S.A. 12A:3-414(b) ("If an unaccepted
draft is dishonored, the drawer is obliged to pay the draft according to its terms
at the time it was issued or, if not issued, at the time it first came into possession
of a holder . . . ."). However, the holder of a dishonored draft is not entitled to
payment if "the defendant proves a defense or claim in recoupment." N.J.S.A.
12A:3-308(b).
Plaintiff contends that a holder's indorsement is required for the transfer
of a negotiable instrument. We acknowledge this general principal is reflected
in Chapter 3 of the Code. See N.J.S.A. 12A:3-201(b) ("[I]f an instrument is
payable to an identified person, negotiation requires transfer of possession of
the instrument and its indorsement by the holder."); N.J.S.A.12A:3-203(c)
("Unless otherwise agreed, if an instrument is transferred for value and the
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transferee does not become a holder because of lack of indorsement by the
transferor, the transferee has a specifically enforceable right to the unqualified
indorsement of the transferor, but negotiation of the instrument does not occur
until the indorsement is made."). However, the need for an indorsement on a
negotiable instrument prior to transfer is not absolute.
Specifically, when a depository bank comes into possession of an
unindorsed item, such as a check, N.J.S.A. 12A:4-205 governs. Under Section
12A:4-205(a), "the depository bank becomes a holder of the item at the time it
receives the item for collection if the customer at the time of delivery was a
holder of the item, whether or not the customer indorses the item." (Emphasis
added). The commentary to N.J.S.A. 12A:4-205 further clarifies that "[w]hether
[the depository bank] supplies the customer’s indorsement is immaterial."
N.J.S.A. 12A:4-205, cmt. 1 (emphasis added). Here, Garcia was a holder,
because the payroll check he initially deposited electronically was issued
directly to him by Host, and his failure to indorse the check prior to depositing
with Santander did not affect Santander's status as a holder. Accordingly,
N.J.S.A. 12A:4-205 dooms plaintiff's argument. See also Triffin, 466 N.J.
Super. at 469.
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Additionally, N.J.S.A. 12A:3-414(c) instructs that "[i]f a draft is accepted
by a bank, the drawer is discharged, regardless of when or by whom acceptance
was obtained." Here, Garcia's check was "accepted by a bank," i.e., Santander,
thereby discharging Host from further liability. That is to say, Host was relieved
of any obligation to pay plaintiff because it paid the full amount due to Santander
before the check was presented to Ali's, and "[p]revious payment of a draft is a
defense to enforcement." Triffin, 466 N.J. Super. at 467 (citing N.J.S.A. 12A:3-
305(a)(2)). Because Host's prior payment provided it with a defense to
enforcement, defendants were entitled to summary judgment as a matter of law.
To the extent plaintiff argues that Young's certification was inadmissible
hearsay, and the judge should not have considered it, we are not convinced. As
the judge found, Young presented a certification "claiming to have personal
knowledge of the presentment and honoring of the check on July 7, 2016," and
plaintiff "failed to produce any evidence that would rebut Young's certification."
We are persuaded the judge properly considered Young's certification because
it met the "business records" exception under N.J.R.E. 803(c)(6).
To satisfy the business records hearsay exception, a proponent must
demonstrate that "the writing [was] made in the regular course of business," it
was "prepared within a short time of the act, condition or event being described,"
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and "the source of the information and the method and circumstances of the
preparation of the writing must justify allowing it into evidence." N.J. Div. of
Youth and Fam. Servs. v. M.C. III, 201 N.J. 328, 347 (2010) (quoting State v.
Matulewicz, 101 N.J. 27, 29 (1985)).
Here, Young certified he had "firsthand knowledge of the facts and
circumstances of this action, having reviewed the records maintained in Citi's
ordinary course of business." Young also certified the records presented to the
court were "created by Citibank or its predecessor-in-interest in the normal
course of its regularly conducted business activity as a regular practice, at or
near the time of the occurrence so stated in the records by, or from information
transmitted by, a person with knowledge of the contents of such matters."
Moreover, DiCalogero's certification corroborated Young's certification,
separately provided documents which satisfied the business records hearsay
exception, and confirmed Garcia's check was honored by Santander before it
was presented to Ali's and dishonored on July 13, 2013. Copies of the checks
in the record also support this sequence of events because the electronically
deposited check bears no indorsement, while the check presented to Ali's is
indorsed. See Triffin, 466 N.J. Super. at 469-70 (finding that a court may use
the lack of indorsement on an electronically deposited check as proof that the
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deposit occurred before the same check was indorsed and cashed at a check-
cashing institution).
Plaintiff's remaining arguments are without sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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