Shearson Lehman Bros., Inc. v. Wasatch Bank

ORDER

ALDON J. ANDERSON, Senior District Judge.

Before the court is Defendant’s Motion for Summary Judgment. The core issue presented by the motion is whether and to what extent a collecting or depositary bank will be liable to the drawer or the unintended payee of a check when the drawer’s faithless employee induces the drawer to issue checks, fraudulently indorses them in the name of the specified payee, and absconds with the funds. Because under the undisputed facts of the case, the “fictitious payee” defense as codified by section 3-405 of the Uniform Commercial Code affords the defendant…