Freese v. Regions Bank, N.A., 284 Ga. App. 717 (2007)

Cary Stephen Wiggins

Case Conclusion Date:March 30, 2007

Practice Area:Business

Outcome:Appeal lost

Description:My client sued a bank that refused to reimburse him for certain fraudulent checks drawn on his corporate account.My client did not dispute the checks within the 30-day period provided for in the Bank's standard "customer agreement." We argued that the trial court erred in holding that O.C.G.A. § 11-4-103(a) allowed a bank to contractually shorten the 60-day period established in O.C.G.A. § 11-4-406(f) through its customer agreement, notwithstanding allegations of negligence. In a divided opinion, the court of appeals disagreed. It held that the Uniform Commercial Code permits parties to a contract of deposit to agree between themselves as to their duties and the legal consequences that flow therefrom. An account agreement was controlling unless it was manifestly unreasonable, and the 30-day period here was not manifestly unreasonable. Shortening the time period did not excuse the bank from its duty of ordinary care or disclaim the bank's liability for negligence in the future inasmuch as the notice period started over again each time the bank sent a new statement to the customer. Accordingly, the trial court properly upheld the parties' agreement that the bank could not be charged with liability after the expiration of the 30 days provided for in the agreement.