Jefferson State Bank v. Lenk

Section 4.406 of the Texas Business and Commerce Code requires customers to timely notify their banks of unauthorized transactions. Today, we decide when that duty arises for estate administrators who are appointed after the unauthorized transactions occur on the estate’s account. The unauthorized transactions in this case took place approximately two years before the appointment of the administrator, who sued the bank to recover the money twenty-one months after her appointment. Section 4.406, however, precludes a customer from bringing a claim based on an unauthorized transaction if the…