I was going to mention this opinion today simply as a reminder of a very common check scam. One to which, sadly, a nontrivial number of lawyers have fallen victim, including but not limited to the plaintiff here.
I will, in fact, make that reminder. Because it's important. Don't fall for this:
"On an unspecified date, Y.P. [a sole practitioner] received “what appeared to be a legitimate debt payment cashier’s check in the amount of $99,700.00” from a “purported client.” The check was “purportedly issued by Falls City National Bank” and “written on behalf of ‘Fastenal, Inc.’ ” The check “ostensibly represented what [Y.P.] believed to be partial payment of a debt obtained as part of a legal matter being handled by [Y.P.] on behalf of [the] purported client.”
On Friday, March 18, 2022, Y.P. deposited the check into the IOLTA account.1 On Monday, March 21, 2022, the client directed Y.P. to wire transfer $89,730 “as soon as the funds from the Check cleared” and to retain $9,970 as the legal fees for his services."
Needless to say, the "cashier's check" was fraudulent, the whole thing was a scam, the bank reversed the deposit after the wire went out, and the lawyer lost the entire amount of the $89,730 wire. (My children would now insert a sad face emoji here, but we're far too old for that.
To reiterate: Don't wire money out for an "excess" deposit. Do. Not. Do. It.
But as I read further in the opinion, I also wanted to mention the doctrinal merits. The trial court dismissed the lawyer's lawsuit against the bank on the pleadings, and after reading the first couple of paragraphs of the opinion, I assumed that the Court of Appeal would affirm. And, indeed, it largely does so.
But not entirely.
The lawyer-plaintiff here added one critical set of facts. Plaintiff alleges that he called the bank and was expressly told by a bank employee that the certified check "had cleared" (when, of course, it had not), and that he then went to the bank, told that same employee that he was super suspicious about the check, but that same employee again reiterated that the check had cleared and plaintiff was thus "good to go" to send the wire.
The Court of Appeal says, essentially: "Well, your other causes of action are meritless, but yeah, if the bank employee did indeed say those things, that would indeed count as a negligent misrepresentation." So that part of the lawsuit -- and only that part -- survives.
Now, between you and me, the lawyer here is presumably well trained in the law, and a well trained lawyer might perhaps realize that his lawsuit against the bank for getting scammed might not one that regularly goes so well, and hence that lawyer might perhaps be inclined to maybe just maybe add some allegations about some alleged oral statements that may or may not have actually transpired, but that would be good enough to get past a demurrer (and likely past summary judgment as well, since they involve a credibility call between the lawyer that says they happened and a bank employee who will perhaps say they didn't).
Of course, I'm not saying that happened here. Of course not. What do I know? I'm just saying that things like that could happen. In a parallel universe, perhaps.
So two lessons. One, don't fall for this scam. Two, if you do fall for that scam, it would be really helpful if you alleged (truthfully, of course) that you contacted the bank and they repeatedly assured you that the fake check that you deposited had already cleared.
All good?
Oh, one last thing. Not surprisingly, the plaintiff here does not want his real name in a published opinion that tells the entire world that he was scammed. So plaintiff sues under his initials: Y.P.
The text of the Court of Appeal's opinion similarly consistently refers to the plaintiff as Y.P., and never uses his real name.
And then, on the last page, when it lists the counsel for the parties:
"Peretz & Associates, Yosef Peretz and David Garibaldi, for Plaintiff."
Oops.
