RICHARD C. BARTEL v. BANK OF AMERICA CORPORATION

District of Columbia
Court of Appeals
No. 14-CV-1069
DEC 24 2015
RICHARD C. BARTEL
Appellant,
v. CAB-5798-13
BANK OF AMERICA CORPORATION,
Appellee.
On Appeal from the Superior Court of the District of Columbia
Civil Division
BEFORE: Thompson and McLeese, Associate Judges; and Steadman, Senior Judge.
JUDGMENT
This case came to be heard on the transcript of record, the briefs filed, and
was argued by counsel. On consideration whereof, and as set forth in the opinion filed
this date, it is now hereby
ORDERED and ADJUDGED that the judgment on appeal is reversed, and
the case is remanded for further proceedings.
For the Court:
Dated: December 24, 2015.
Opinion by Associate Judge Roy W. McLeese.
Dissenting opinion by Associate Judge Phyllis D. Thompson.
Notice: This opinion is subject to formal revision before publication in the
Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the
Court of any formal errors so that corrections may be made before the bound
volumes go to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 14-CV-1069
RICHARD C. BARTEL, APPELLANT,
V.
BANK OF AMERICA CORPORATION, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(CAB-5798-13)
(Hon. Neal E. Kravitz, Motions Judge)
(Argued June 3, 2015 Decided December 24, 2015)
Matthew August LeFande for appellant.
David M. Ross for appellee.
Before THOMPSON and MCLEESE, Associate Judges, and STEADMAN, Senior
Judge.
Opinion for the court by Associate Judge MCLEESE.
Dissenting opinion by Associate Judge THOMPSON at page 17.
MCLEESE, Associate Judge: Appellant Richard C. Bartel sued appellee
Bank of America Corporation, seeking to compel the Bank to honor a lost cashier’s
check. The trial court granted summary judgment to the Bank on the ground that
2
Mr. Bartel had failed to proffer admissible evidence from which a reasonable
factfinder could find that the check has not already been paid. We reverse and
remand for further proceedings.
I.
In the trial court, Mr. Bartel alleged the following. In 1994, Mr. Bartel
purchased a cashier’s check in the amount of $30,761 from the Bank’s predecessor
in interest. The check was payable to “Dana McKinley or Edna McKinley or
Richard Bartel.” The check was intended to serve as consideration for a
contemplated business transaction between Mr. Bartel and the McKinleys. Shortly
after the check was issued, Mr. Bartel and Ms. McKinley placed the check in the
McKinleys’ fireproof safe, for safekeeping. The McKinleys agreed to hold the
check until Mr. Bartel wanted to retrieve the check or request its return. The
McKinleys decided not to go ahead with the contemplated transaction, but Mr.
Bartel left the check with them in the hope that they might nevertheless come to an
agreement.
The contemplated transaction never took place, and Mr. Bartel eventually
made unsuccessful efforts to obtain the check from the McKinleys. Ms. McKinley,
3
who was blind and could not open the safe, died in 2008. Mr. McKinley, who had
been appointed a guardian due to failing health, said that he no longer knew the
correct combination to the safe. Mr. McKinley also said that he had not moved or
touched the check and that the check had not been removed from the house.
In 2009, Mr. Bartel filed an action in Florida seeking to obtain possession of
the check. When the safe was eventually drilled open, the check was not found
inside. Mr. McKinley died in 2011. The check was not listed on the inventories
prepared in connection with the McKinleys’ estates. An inquiry into the
McKinleys’ financial records found no evidence of a deposit other than ordinary
pension deposits. The check did not escheat to the State of Maryland and was not
found in Maryland records of unclaimed property.
In 2013, Mr. Bartel filed a declaration of loss and demanded that the Bank
pay the check. After the Bank refused to pay, Mr. Bartel filed suit in Superior
Court. In pertinent part, Mr. Bartel sought relief under D.C. Code §§ 28:3-309 and
-312 (2015 Supp.), which establish procedures by which a party can obtain
payment of a lost cashier’s check or other negotiable instrument. The trial court
granted summary judgment to the Bank. Specifically, the trial court concluded that
4
Mr. Bartel had failed to carry his burden of offering admissible evidence that the
check has not already been paid to someone entitled to enforce it.1
II.
“To prevail on a motion for summary judgment, a party must demonstrate
that there is no genuine issue of material fact and that [it] is entitled to judgment as
a matter of law. This court’s review of orders granting summary judgment is de
novo, with the court conducting an independent review of the record and applying
1
The trial court and the parties appear to have used the term “negotiate” to
refer to the presentation of a cashier’s check to the bank for payment. Strictly
speaking, “negotiation” is the transfer of an instrument to another holder, which is
distinct from presentation to the bank for payment. See D.C. Code § 28:3-201 (a)
(2012 Repl.) (defining “negotiation”); D.C. Code § 28:3-501 (2012 Repl.)
(defining “presentment”); D.C. Code §§ 28:3-602, -603 (2012 Repl. & 2015 Supp.)
(discussing “payment”); see generally, e.g., Lawrence’s Anderson on the Uniform
Commercial Code § 3-201:8, Westlaw (3d ed. database updated Dec. 2014)
(“Presentment of an instrument for payment is not a negotiation of the
instrument.”). We decide in this opinion only the question whether Mr. Bartel bore
the burden of proof on the issue of prior payment, concluding that he did not.
Although some of the discussion in this opinion is potentially relevant to the
related question whether Mr. Bartel bore the burden of proving that the McKinleys
had not negotiated the check, i.e., transferred possession of the check to a holder,
we choose to leave that question for the trial court to consider on remand. We also
do not decide whether dismissal or summary judgment would be appropriate on
other grounds not reached by the trial court, including laches as well as other
statutory requirements under sections 28:3-309 and 28:3-312. Specifically, we do
not decide the question whether, given that the Bank bears the burden on the issue
of prior payment, the Bank nevertheless can demonstrate an entitlement to
summary judgment on that issue.
5
the same substantive standard used by the trial court. We construe the record in
the light most favorable to the party opposing summary judgment.” Boyrie v. E &
G Prop. Servs., 58 A.3d 475, 477 (D.C. 2013) (citations and internal quotation
marks omitted). Because we conclude that neither section 28:3-309 nor section
28:3-312 places on Mr. Bartel the burden of proving that the check has not already
been paid, we reverse the grant of summary judgment.
We turn first to section 28:3-309.2 Under that provision, a person seeking
payment of a lost instrument must demonstrate that he or she has the right “to
2
Section 28:3-309 provides:
(a) A person not in possession of an instrument is entitled to
enforce the instrument if: (1) The person seeking to enforce the
instrument: (A) Was entitled to enforce the instrument when loss of
possession occurred; or (B) Has directly or indirectly acquired
ownership of the instrument from a person who was entitled to
enforce the instrument when loss of possession occurred; (2) The loss
of possession was not the result of a transfer by the person or a lawful
seizure; and (3) The person cannot reasonably obtain possession of the
instrument because the instrument was destroyed, its whereabouts
cannot be determined, or it is in the wrongful possession of an
unknown person or a person that cannot be found or is not amenable
to service of process.
(b) A person seeking enforcement of an instrument under
subsection (a) of this section must prove the terms of the instrument
and the person’s right to enforce the instrument. If that proof is made,
section 28:3-308 applies to the case as if the person seeking
(continued…)
6
enforce the instrument.” D.C. Code § 28:3-309 (b). Subsection (a) specifies three
requirements for establishing an entitlement to enforce the instrument. First, the
person seeking payment must either (A) have been entitled to enforce the
instrument at the time possession was lost or (B) have acquired ownership from
someone so entitled. D.C. Code § 28:3-309 (a)(1). Second, the loss of possession
must not be the result of a transfer by the person seeking payment. D.C. Code
§ 28:3-309 (a)(2). Third, the person seeking payment must not be reasonably able
to obtain possession of the instrument. D.C. Code § 28:3-309 (a)(3). The second
and third requirements (non-transfer and unavailability of instrument) plainly do
not impose any burden on the person seeking payment to prove that the instrument
has not already been paid to a person entitled to enforce the instrument. Although
the analysis is more complicated, we conclude that the same is true of the first
requirement.
(…continued)
enforcement had produced the instrument. The court may not enter
judgment in favor of the person seeking enforcement unless it finds
that the person required to pay the instrument is adequately protected
against loss that might occur by reason of a claim by another person to
enforce the instrument. Adequate protection may be provided by any
reasonable means.
7
In the present case, Mr. Bartel apparently relies on section 28:3-
309 (a)(1)(A), which requires that he show that he was entitled to enforce the
instrument when he lost possession of the instrument. Under D.C. Code § 28:3-
301 (2012 Repl.), the phrase “person entitled to enforce” an instrument includes a
holder of the instrument, a non-holder in possession of the instrument, and a person
entitled to enforce the instrument under section 28:3-309. Under D.C. Code
§ 28:1-201 (20) (2012 Repl.), one way to qualify as a holder of a negotiable
instrument is to be in possession of an instrument payable to the person. These
provisions do not require Mr. Bartel to establish that the check at issue in this case
has not already been paid.
Section 28:3-309 functions sensibly under this reading. Qualifying as a
person entitled to enforce an instrument does not establish a right to payment of the
instrument. Rather, the Bank in this case can avoid having to pay the cashier’s
check if the Bank can establish a defense to payment under D.C. Code § 28:3-
308 (b) (2012 Repl.). Critically for current purposes, however, section 28:3-308
places the burden on the bank to prove any defense it may have. D.C. Code
§ 28:3-308 (b) (person entitled to enforce instrument is entitled to payment unless
“the defendant proves a defense or claim in recoupment”). Moreover, prior
payment of an instrument is generally treated as an affirmative defense. See, e.g.,
8
Household Fin. Co. v. Watson, 522 S.W.2d 111, 114 & n.1 (Mo. Ct. App. 1975)
(“Payment is an affirmative defense . . . .”); Estate of Kosuga v. Rockstar Media,
LLC, No. 10. Civ. 6628(ER), 2013 WL 1268612, at *6 (S.D.N.Y. Mar. 28, 2013)
(“[P]ayment is essentially an affirmative defense, of which the burden of proof
rests on the party who pleads it.”); Lawrence’s Anderson on the Uniform
Commercial Code § 3-603:28, Westlaw (3d ed. database updated Dec. 2014)
(“Payment is an affirmative defense and the burden of proof is on the party
asserting it.”). We also note that section 28:3-309 (b) precludes the trial court from
requiring payment of a lost instrument unless the person required to pay “is
adequately protected against loss that might occur by reason of a claim by another
person to enforce the instrument. Adequate protection may be provided by any
reasonable means.”3
For the foregoing reasons, we conclude that section 28:3-309 does not place
a burden on Mr. Bartel to prove that the cashier’s check has not previously been
paid. We reach the same conclusion as to section 28:3-312, which provides an
3
The Bank argues that it no longer has records that might shed light on
whether the cashier’s check has previously been paid, because it retains records for
only seven years -- one year longer than is required under federal law. We do not
view that circumstance as determinative of the burden-of-proof issue, although it is
potentially relevant to one or more of the Bank’s defenses.
9
alternative procedure, available in addition to the procedure established under
section 28:3-309, to parties seeking payment of lost cashier’s checks. D.C. Code
§ 28:3-312 (d). Under section 28:3-312’s procedure, the claimant must demand
payment from the bank. D.C. Code § 28:3-312 (b). Among other requirements,
the demand must include a sworn declaration of loss. D.C. Code § 28:3-
312 (b)(ii). The declaration of loss must state that “(i) the declarer lost possession
of a check, (ii) the declarer is the . . . payee of the check, in the case of a cashier’s
check or teller’s check, (iii) the loss of possession was not the result of a transfer
by the declarer or a lawful seizure, and (iv) the declarer cannot reasonably obtain
possession of the check . . . .” D.C. Code § 28:3-312 (a)(3). Subject to various
timing requirements, a properly submitted claim becomes “enforceable.” D.C.
Code § 28:3-312 (b).
Once the claim is enforceable, “the obligated bank becomes obliged to pay
the amount of the check to the claimant if payment of the check has not been made
to a person entitled to enforce the check.” D.C. Code § 28:3-312 (b)(4). This
provision is not explicit about whether claimants or banks bear the burden of proof
on the issue of prior payment. We conclude that the provision is better read as
implicitly imposing the burden on banks. First, information about whether a check
has already been paid will in general be more readily available to banks than to
10
claimants. See generally, e.g., Riggs Nat’l Bank of Washington, D.C. v. District of
Columbia, 581 A.2d 1229, 1249-50 (D.C. 1990) (allocating burden of proof on
issue to banks because, among other reasons, facts relevant to issue were “more
likely to be within the knowledge of the bank”) (brackets and internal quotation
marks omitted). Second, as we have already noted, the applicable statutory scheme
treats comparable issues as matters of defense. D.C. Code §§ 28:3-309, -308 (b).
In sum, we conclude that Mr. Bartel does not have the burden of proving
that the cashier’s check in this case has not already been paid. We therefore
disagree with the ground upon which the trial court granted summary judgment. In
this court, the bank raises several alternative contentions upon which it claims
summary judgment could appropriately have been granted, such as that Mr.
Bartel’s declaration of loss under section 28:3-312 was deficient; that Mr. Bartel
transferred the cashier’s check to the McKinleys, thereby defeating his claim under
both section 28:3-309 and section 28:3-312; and that Mr. Bartel’s claim is barred
by laches. Mr. Bartel disputes those contentions. The trial court did not resolve
those issues, and we “exercise our discretion to leave [those] issue[s] for resolution
by the trial court in the first instance.” Folks v. District of Columbia, 93 A.3d 681,
686 (D.C. 2014). See generally, e.g., Jaiyeola v. District of Columbia, 40 A.3d
356, 372 (D.C. 2012) (although court has discretion to affirm grant of summary
11
judgment on alternative grounds not decided by trial court, court has “cautioned
that it usually will be neither prudent nor appropriate for this court” to do so)
(internal quotation marks omitted).
As the dissent notes, this court in some circumstances will affirm a trial
court’s ruling on alternative grounds not decided by the trial court. In our view,
that approach is not warranted in this case. With respect to Mr. Bartel’s request for
relief under section 28:3-312, the dissent would affirm on the ground that Mr.
Bartel’s sworn declaration of loss was deficient in two respects, because the
declaration failed to allege both (1) that Mr. Bartel lost possession of the check and
(2) that the loss of possession was not the result of a transfer by Mr. Bartel. As to
the first asserted deficiency, however, the Bank did not raise either in the trial court
or in this court the specific argument that the declaration failed to allege loss of
possession. Affirmance on that ground therefore would not be appropriate. See,
e.g., Linen v. Lanford, 945 A.2d 1173, 1180 n.4 (D.C. 2008) (“Generally speaking,
matters not properly presented to a trial court will not be resolved on appeal.”)
(internal quotation marks omitted); In re Shearin, 764 A.2d 774, 778 (D.C. 2001)
(points not raised on appeal “are treated as abandoned”).
12
As to the second asserted deficiency, the Bank did argue that the declaration
of loss was inadequate on the issue of transfer. In doing so, however, the Bank
appears to have understood the declaration to have been supplemented by Mr.
Bartel’s sworn statements in response to interrogatories. Thus, as framed by the
Bank, the question is whether the declaration and the response to interrogatories,
taken together, were adequate on the issue of transfer. That question also arises
under section 28:3-309, and we discuss that question on the merits briefly infra.
But it would not be prudent or procedurally fair to affirm on the different ground,
relied upon by the dissent, that the declaration must be considered in isolation and
so considered is deficient. The Bank has not argued that the declaration must be
considered in isolation, the parties have not briefed that issue, the trial court did not
decide the issue, and the dissent does not explicitly address the issue.
With respect to Mr. Bartel’s request for relief under section 28:3-309, the
dissent first concludes that the undisputed facts establish that Mr. Bartel transferred
the check to the McKinleys. See D.C. Code §§ 28:3-309 (a)(2) (loss of possession
must not be result of transfer). We do not share the dissent’s confidence. As the
dissent notes, “transfer” is defined as delivery “for the purpose of giving to the
person receiving delivery the right to enforce the instrument.” D.C. Code § 28:3-
203 (a) (2012 Repl.). Although the dissent states that Mr. Bartel “delivered the
13
check to the McKinleys for the purpose of giving them the right to enforce it,” Mr.
Bartel indicated in a sworn statement that he did not intend the McKinleys to have
any authority over the check other than to hold it until its return or until the
contemplated transaction was consummated. The dissent asserts that delivery
under such circumstances should still be viewed as a “transfer.” The dissent cites
no case so holding, however, relying instead on an illustration in a report by the
Permanent Editorial Board of the Uniform Commercial Code that neither party
cited and that addresses the use of a note as security. See Permanent Editorial Bd.
for the Unif. Commercial Code, Application of the Uniform Commercial Code to
Selected Issues Relating to Mortgage Notes 11 (2011) (stating that if borrower
delivers mortgage note to provider of funds, as security, provider of funds would
be entitled to enforce note if delivery of note constituted transfer of note). The
illustration poses rather than answers the question whether delivery of a mortgage
note in such circumstances would be a transfer. Id. Moreover, the illustration does
not discuss section 28:3-309 or address shared possession of a cashier’s check
among co-payees. Id. We also observe that the dissent does not fully respond to
Mr. Bartel’s arguments as to why giving a cashier’s check to another payee for
safekeeping and possible future negotiation should not be viewed as a transfer. We
are not inclined to reach out to decide an uncertain question of apparent first
14
impression in the absence of a ruling by the trial court and fuller briefing by the
parties.
Second, the dissent concludes that Mr. Bartel failed to establish a material
dispute of fact as to whether he was entitled to enforce the check at the time he lost
possession, because the check at some point might have been endorsed by the
McKinleys so as to permit a third party to enforce the check. This issue too seems
far from settled. For one thing, it is unclear to us when Mr. Bartel lost possession
of the check, and the dissent does not explicitly address that question. Mr. Bartel
presumably lost actual possession of the check when the check was put in the
McKinleys’ safe, and no one has suggested that the McKinleys had endorsed the
check at that point. It is less clear, however, for how long, if at all, Mr. Bartel
thereafter had constructive possession of the check. Nor is obvious whether
constructive possession counts as possession for purposes of section 28:3-309.
In any event, we think it unclear that Mr. Bartel failed to raise a material
dispute of fact on the question whether the McKinleys endorsed the check before
Mr. Bartel lost possession of the check. According to Mr. Bartel, (1) he obtained
the check with his own funds; (2) he entrusted the check to the McKinleys’
15
safekeeping in the hope that the check would become consideration for a business
transaction; (3) the transaction never occurred; (4) he unsuccessfully demanded
return of the check; (5) he has no information that the check was endorsed to a
third party or presented to a bank for payment; (6) various searches failed to locate
the check; and (7) an analysis of the McKinleys’ financial records showed no
transaction suggesting that the McKinleys presented the check for payment or
endorsed the check to a third party in exchange for payment. Such evidence would
not be dispositive, but the dissent does not explain why a reasonable factfinder
could not infer by a preponderance of the evidence that the McKinleys did not
violate their alleged agreement with Mr. Bartel by negotiating the check before Mr.
Bartel lost possession of the check. Cf. Ruby v. Farmers Mut. Auto. Ins. Co., 79
N.W.2d 644, 645-48 (Wis. 1956) (although insurance policy provided that
mysterious disappearance of property would presumed to be due to theft,
circumstantial evidence supported trial court’s inference that property at issue was
lost rather than stolen); cf. generally, e.g., Schwab v. Reilly, 560 U.S. 770, 790
(2010) (noting “the presumption that parties act lawfully”); Rock River Commc’ns,
Inc. v. Universal Music Grp., Inc., 745 F.3d 343, 350 (9th Cir. 2014) (“Both
California and federal law assume that people act lawfully unless proven
otherwise.”).
16
As the dissent points out, Mr. Bartel stated in his reply brief that the
McKinleys had the right to alienate the check. We do not understand that
statement, however, as a concession that Mr. Bartel would have had no legal
complaint against the McKinleys had they negotiated the check contrary to the
alleged agreement between Mr. Bartel and the McKinleys. More generally,
whether it would have been wrongful for the McKinleys to negotiate the check
under the alleged circumstances of this case seems yet another issue better left for
consideration in the first instance by the trial court.
The dissent further points out that checks “do not disappear out of safes into
thin air.” It does not follow, however, that the check in this case must have been
negotiated by the McKinleys, because -- among other possibilities -- checks can be
inadvertently removed from safes and lost or misplaced.
Finally, we note that the dissent repeatedly suggests that Mr. Bartel bears the
burden under section 28:3-309 of showing that the check was never endorsed by
the McKinleys. That too seems unclear at best. It is true that section 28:3-309 (a)
requires a claimant to establish that he or she “is entitled to enforce the
instrument.” But the provision further indicates that a claimant may meet that
17
requirement by showing (1) an entitlement to enforce the instrument at the time the
claimant lost possession of the instrument, (2) that the loss of possession was not
the result of transfer by the claimant or lawful seizure; and (3) that the claimant is
unable to obtain possession of the instrument. D.C. Code § 28:3-309 (a). On its
face, at least, the provision focuses on a claimant’s right of enforcement at the time
the claimant loses possession of the instrument, not at the time the instrument later
cannot be found by anyone or at the time the claimant brings suit. The provision
thus does not appear to place on a claimant the very difficult task of proving what
happened to the instrument after the claimant lost possession of the instrument.
In sum, we are not inclined to affirm the trial court’s denial of relief under
sections 28:3-309 and 28:3-312 on the alternative grounds relied upon by the
dissent.
Accordingly, the judgment of the Superior Court is reversed and the case is
remanded for further proceedings.
So ordered.
18
THOMPSON, Associate Judge, dissenting: I see no reason why we should
drag out this litigation through a remand when, on the summary judgment record
that is before us, we are able to conclude as a matter of law that appellant Bartel is
not entitled to recover under either of the statutory provisions on which he relies:
D.C. Code §§ 28:3-312 and 28:3-309 (2012 Repl. & Supp. 2014).1 To explain why
we are able to do so, I begin with a summary of the facts that adds some important
details to the summary set out in the majority opinion.
On March 9, 1994, Mr. Bartel purchased a cashier’s check in the amount of
$30,761.00 from NationsBank, the predecessor of Bank of America N.A. (the
“Bank”).2 The check was made payable to the order of “Dana McKinley or Edna
McKinley or Richard Bartel.” In his summary judgment papers, Mr. Bartel
explained that, from “shortly after its issuance,” the check was in the possession of
Dana McKinley; it was “intended to be [Mr. Bartel’s] consideration for a
contemplated later business transaction between the McKinleys and [Mr. Bartel].”
1
The provisions of D.C. Code Title 28, Subtitle I contain the Uniform
Commercial Code (“UCC”) as adopted in the District of Columbia. See D.C. Code
§ 28:1-101 (2012 Repl.).
2
Mr. Bartel brought the instant action against appellee Bank of America
Corporation, which asserted in its answer that the Bank is “the sole proper party
defendant.” However, appellee did not raise this as an issue in its brief in this
appeal.
19
Specifically, Mr. Bartel “sought for the McKinleys to sell their shares of Eclipse
Holdings, Inc. [a company of which Mr. Bartel was a majority shareholder] back to
the company treasury.” Dana McKinley and Mr. Bartel “personally placed the
check in [the McKinley’s fireproof] safe in 1994[.]” The McKinleys “refused to
consummate the intended business transaction[,]” but Mr. Bartel “nevertheless left
the funds with Dana McKinley with hope that they would come to an agreement
later.” The transaction that Mr. Bartel hoped for never occurred.
Mr. Bartel eventually made demands for return of the check in “numerous
emails, telephone calls, and personal visits to Dana.” According to Mr. Bartel,
Dana McKinley (“Dana”) told him that he “never touched or moved the check”
and that “the check was never removed from his house,” but also stated at some
point that the safe could not be opened because either he had fumbled a change in
the combination or “his Guardian had changed the combination.” The guardian
had been appointed in 2008 because Dana was suffering from “deteriorating
mental illness.” At some point, the guardian had the safe drilled open, and the
cashier’s check was not found.
20
Edna McKinley (“Edna”) died in April 2008, having at some point prior to
that time become “blind and immobile.” The record does not disclose at what
point Edna became blind and immobile, but, according to Mr. Bartel, he and the
Mckinleys (i.e., both Edna and Dana) “continued to work together for several
years” after the McKinleys declined to sell their Eclipse Holdings stock. Further,
although averring that Dana stated that he “never touched or moved the check,”
Mr. Bartel made no reference to any equivalent representation by Edna.
Mr. Bartel stated in a May 2008 email that Rene McKinley (Dana’s sister
and Edna’s daughter) had access to the McKinley safe “years ago” through “a
combination given to her by a friend of Edna’s, William Sharrar.”
Dana McKinley died in September 2011. The cashier’s check was not
listed on either Dana’s or Edna’s estate inventory, and the representatives of the
estates reported that, after diligent efforts, they could find no evidence that the
check was deposited into an account belonging to either.3
3
Mr. Bartel requested that the Bank research the check. The Bank
responded that it had no record of escheatment of the funds corresponding to the
check amount. In addition, Mr. Bartel sent an inquiry to the office of the
(continued…)
21
Mr. Bartel asserts that he had “no information indicating to [him] that the
cashier’s check was lost until the inventory of Dana McKinley’s estate in 2013.”
On July 29, 2013, he wrote to the Bank, attaching a copy of the check, making
what he labeled a “declaration of loss,” and demanding payment. The Bank
declined to honor his demand for payment. It explained that, in compliance with
federal law, it keeps its records, including records of predecessor banks, for a
period of seven years, which exceeds the record-retention period required under
federal law.4 The Bank asserts that it has no records of the check and has been
unable to “locate any information related to the Check.”5
(…continued)
Comptroller of Maryland, the State in which the check was issued, which office
reported that it had no record of unclaimed funds relating to the check.
4
See 12 U.S.C. § 1829b (g) (2012) (providing that “[a]ny type of record or
evidence required under this section [entitled “Retention of records by insured
depository institutions”] shall be retained for such period as the Secretary may
prescribe for the type in question” but that “[a] period so prescribed shall not
exceed six years unless the Secretary determines . . . that a longer period is
necessary in the case of a particular type of record or evidence”).
5
The Bank asserted in an opposition to Mr. Bartel’s motion for summary
judgment that it “is extremely likely that one of the other payees negotiated the
instrument years ago and that record of the transaction has since been destroyed as
per BofA’s policies and procedures.”
22
On August 23, 2013 — more than 19 years after the cashier’s check was
issued by the Bank’s predecessor — Mr. Bartel brought suit against appellee for
the check amount of $30,761.00, asserting claims under Article 3 of the UCC. He
argued in his summary judgment papers that, on the undisputed facts, he satisfies
the requirements of § 28:3-312 (“§ 3-312”) (entitled “Lost, destroyed, or stolen
cashier’s check, teller’s check, or certified check”) or, “alternatively,” the
requirements of § 28:3-309 (“§ 3-909”) (entitled “Enforcement of lost, destroyed,
or stolen instrument”). The appeal presents issues of statutory construction, as to
which our review is de novo.
The summary judgment record enables us to conclude that Mr. Bartel does
not satisfy the requirements of § 28:3-312. Section 3-312 creates an obligation for
a bank (the “obligated bank”) to pay the amount of a cashier’s check to a
“claimant” who declares, in a declaration of loss that comports with the
requirements set out in the statute, that the check was lost, destroyed, or stolen.
§ 3-312 (b)(4). To comply with § 3-312 with respect to a cashier’s check, a
declaration of loss must state under penalty of perjury “to the effect” that:
(i) the declarer lost possession of a check,
(ii) the declarer is the . . . remitter [i.e., purchaser] or
payee of the check . . .
23
(iii) the loss of possession was not the result of a transfer
by the declarer or a lawful seizure, and
(iv) the declarer cannot reasonably obtain possession of
the check because the check was destroyed, its
whereabouts cannot be determined, or it is in the
wrongful possession of an unknown person or a person
that cannot be found or is not amenable to service of
process.
§ 3-312 (a)(3).
Mr. Bartel states that his “demand of July 29, 2013 . . . satisfie[d] the
definition of a “declaration of loss[.]”6 However, quite clearly, his purported
declaration of loss was missing some of the statutorily required elements. It does
not state, under penalty of perjury or otherwise, that “the declarer lost possession
of a check.” Nor does it state that “the loss of possession was not the result of a
transfer by the declarer or a lawful seizure” (and, as discussed below, Mr. Bartel
stated to the contrary, in a sworn interrogatory response, that he gave the check to
the McKinleys to pay them for the (anticipated) sale of certain stock to Mr.
6
He has never argued that his demand letter plus his interrogatories or
something else together constitute his declaration of loss.
24
Bartel).7 In short, the purported declaration of loss did not strictly comply with
§ 3-312 (a)(3).8
Just as clearly, the summary judgment record shows that Mr. Bartel cannot
satisfy the requirements of § 3-309. Section 3-309 (a), entitled “Enforcement of
lost, destroyed, or stolen instrument,” provides that:
(a) A person not in possession of an instrument is entitled
to enforce the instrument if:
(1) the person seeking to enforce the instrument
. . . [w]as entitled to enforce the instrument when
loss of possession occurred . . .
(2) [t]he loss of possession was not the result of a
transfer by the person or a lawful seizure; and
7
Further, Mr. Bartel did not assert in his Complaint that the loss of
possession was not the result of a transfer. Cf. Hirsch v. Wells Fargo Bank, No.
1:13-cv-01489, 2014 U.S. Dist. LEXIS 29587, *6 (N.D. Ohio Mar. 7, 2014)
(“[W]hen a complaint omits facts that, if they existed, would clearly dominate the
case, it seems fair to assume that those facts do not exist.” (quoting McGregor v.
Industrial Excess Landfill, Inc., 856 F.2d 39, 42 (6th Cir. 1988) (further citation
omitted)).
8
Because a declaration of loss that complies with § 3-312 (a)(3) creates an
obligation for the bank that issued the cashier’s check to pay the check, see § 3-312
(b)(4), and because the obligated bank “may not impose additional requirements on
the claimant,” U.C.C. § 3-312 cmt. 2, strict compliance with the elements of § 3-
312 (a)(3) is required.
25
(3) [t]he person cannot reasonably obtain
possession of the instrument because the
instrument was destroyed, its whereabouts cannot
be determined, or it is in the wrongful possession
of an unknown person or a person that cannot be
found or is not amenable to service of process.
(b) A person seeking enforcement of an instrument under
subsection (a) of this section must prove the terms of the
instrument and the person’s right to enforce the
instrument. . . .
Thus, to prevail under § 3-309, Mr. Bartel must prove that “[t]he loss of
possession [of the cashier’s check] was not the result of a transfer by the person.”
Per D.C. Code § 28:3-203 (a), an instrument is “transferred” “when it is delivered
by a person other than its issuer for the purpose of giving to the person receiving
delivery the right to enforce the instrument.” Mr. Bartel acknowledges that he
handed over possession of the cashier’s check to the McKinleys, named payees, in
anticipation that they would accept the check as consideration for the sale of their
shares of stock in Eclipse Holdings, Inc. In other words, he voluntarily and
purposely delivered the check to the McKinleys for the purpose of giving them the
right to enforce it.9 This undisputed fact alone is enough to defeat Mr. Bartel’s
9
The McKinleys did not already have the right to enforce the instrument
simply by virtue of the fact that they were named payees. To have a right to
enforce the check, they needed to be (or to have been) in possession of the
instrument. See D.C. Code § 28:3-301 (2012 Repl.) (providing that “person
(continued…)
26
claim. The fact that his intent to enable the McKinleys to enforce the check was
contingent upon their agreement to the stock sale, and the fact that Mr. Bartel had a
right to demand the return of the check or the purchase price if the sale did not
occur, do not negate the fact that he made a transfer that rendered him unable to
satisfy § 3-309 (a)(2).10 See 6B Ronald A. Anderson, Anderson on the Uniform
(…continued)
entitled to enforce” means “the holder of the instrument”); D.C. Code § 28:1-
201(21) (2012 Repl. & Supp. 2014) (providing that in the case of an instrument
made payable to an identified person, the “holder” is that “identified person” if
(s)he “is the person in possession”); Gregory E. Maggs, Determining the Rights
and Liabilities of the Remitter of a Negotiable Instrument: A Theory Applied to
Some Unsettled Questions, 36 B.C. L. Rev. 619, 649 (July 1995) (“[A] person who
does not have possession of an instrument generally cannot enforce it.”).
I recognize that Mr. Bartel has asserted in his sworn interrogatory responses
that he placed the check in the McKinleys’ safe “for safekeeping,” but, even if
fully credited, that statement does not negate Mr. Bartel’s further sworn assertion
that by delivering to the McKinleys the check payable to either of them, he gave
them the authority to enforce the check, albeit in contemplation of their coming “to
an accord regarding the[] sale” of their stock to Mr. Bartel.
10
This is consistent with the guidance provided by the Permanent Editorial
Board of the Uniform Commercial Code (the “UCC Board”). In a report that
courts have cited numerous times as elucidating the application of Article 3 of the
UCC, the UCC Board contemplates that if the Payee of a note borrows money
from a lender (“Funder”) and gives possession of the note (which, like a cashier’s
check, is a negotiable instrument) to the Funder to secure the Payee’s repayment
obligation, the delivery of the note from Payee to Funder can constitute “a transfer
of the note under UCC § 3-203” even though the Funder’s right to enforce its
security interest in the note is contingent upon Payee’s default on its repayment
obligation. Report of the Permanent Editorial Board for the Uniform Commercial
Code, “Application of the Uniform Commercial Code to Selected Issues Relating
to Mortgage Notes,” at 11 (November 14, 2011) (the “Report”); see also, e.g.,
(continued…)
27
Commercial Code § 3-309:5, p. 261 (3d ed. 1998) (“The fact that the plaintiff
would be able to . . . set aside a transfer because of fraud or other reason does not
remove the bar imposed by . . . § 3-309 of having made a voluntary transfer.”).
Mr. Bartel’s transfer to the McKinleys “vest[ed] in the[m as] transferee[s] any right
of [Mr. Bartel as] transferor to enforce the instrument.” D.C. Code § 28:3-203 (b).
Mr. Bartel also cannot prove through competent evidence that he has the
right to enforce the instrument, § 3-309 (b), or that he had that right “when loss of
(…continued)
(Darlene) Brown v. Dep’t of Commerce, 359 P.3d 771, 778 (Wash. 2015) (en
banc) (citing the Report as “authoritative”); Skelton v. Urban Trust Bank, 516 B.R.
396, 404 (Bankr. N.D. Tex. 2014) (applying the Report’s guidance on “transfers”
under the UCC); Mandalay Resort Group v. Miller (In re Miller), 310 B.R. 185,
191 n.11 (Bankr. C.D. Cal. 2004) (explaining that UCC Article III “negotiable
instruments include [inter alia] promissory notes, [and] cashier’s checks”).
Moreover, to conclude that there was no transfer within the meaning of D.C.
Code § 28:3-203 (a) because of circumstances related to the anticipated business
deal would contravene the general scheme of Article 3 of the U.C.C., which is to
make it unnecessary to “delve into the contractual relationships of named
payees[.]” Cf. American Nat’l Ins. Co. v. Citibank, 543 F.3d 907, 910 (7th Cir.
2008); see also id. at 909-10 (“Instead of being able to look at the payee line and to
verify that the person presenting the check was indeed entitled to do so, banks in
ANICO’s world would need to conduct a full-blown investigation every time to
make sure that a party with an equitable interest in the check was not lurking in the
background. Such a system would bring commercial transactions to a grinding
halt.”).
28
possession occurred[.]” § 3-309 (a)(1).11 As Judge Kravitz recognized, Mr. Bartel
was “handicapped in meeting [his] burden because [the McKinleys] died before the
complaint was filed and [as far as the record shows, their] testimony was not
preserved in a deposition[,]” Hamilton v. Howard Univ., 960 A.2d 308, 318 (D.C.
2008), and because anything Dana told Mr. Bartel about the check would be
inadmissible hearsay. While Mr. Bartel might be able to call Dana’s guardian, or
the McKinleys’ estate representatives, or other witnesses to testify that the check
was not found in the safe and that they found no evidence of a deposit of the
cashier’s check amount into either of the McKinleys’ bank accounts, that evidence
would have been relevant only to whether the McKinleys continued to possess the
check at the time of their deaths, or whether they deposited the cashier’s check
during a period for which their records or bank records are extant.12 Moreover,
11
A person seeking to enforce an instrument under § 3-309 has the burden
of proving “the terms of the instrument” and the person’s “right to enforce the
instrument.” § 3-309 (b). Since one of the terms of the instrument is the payee,
see, e.g., Yahn & McDonnell, Inc. v. Farmers Bank of Delaware, 708 F.2d 104,
109 (3d Cir. 1983), “right to enforce the instrument” must mean something more
than status as one of the alternative named payees.
12
Mr. Bartel stated in a June 2009 email that the check had not been cashed
“since 1999” – presumably the earliest date covered by the McKinleys’ existing
bank records. That leaves five years prior to 1999 as to which Mr. Bartel has come
forward with no competent evidence accounting for the status or disposition of the
check. Yet, “[v]irtually all [cashier’s checks] are presented for payment within 90
days” after the date of issuance. U.C.C. § 3-312 cmt. 3.
29
such testimony would not have addressed, e.g., whether either of the McKinleys
negotiated the check in some other way,13 such as (as appellee suggests) by
endorsing it and “transfer[ring] it to a third party holder in due course.” If either of
them did transfer the check, the transfer “vest[ed] in the transferee any right of the
transferor to enforce the instrument[,]” D.C. Code § 28:3-203 (b) (“§ 3-203 (b)”),
and thus divested the named payees — including Mr. Bartel — of any right to
enforce the instrument.14 Cf. Cadle Co. v. Proulx, 725 A.2d 670, 672 (N.H. 1999)
(citing New Hampshire’s version of § 3-203 (b) and holding that plaintiff’s transfer
of a note “divested [plaintiff] of the right to enforce the note in a court
proceeding”); United States Bank, N.A. v. Ugrin, 91 A.3d 924, 930 (Conn. App. Ct.
2014) (“If an endorsement makes a note payable to an identifiable person, it is a
‘special endorsement,’ and only the identified person in possession of the
instrument is entitled to enforce the instrument.”). The same result follows if
13
Per D.C. Code 28:3-201 (a), “‘[n]egotiation’ means 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.” “Except for
negotiation by a remitter, if an instrument is payable to an identified person,
negotiation requires transfer of possession of the instrument and its indorsement by
the holder. If an instrument is payable to bearer, it may be negotiated by transfer
of possession alone.” Id., § 3-201 (b).
14
Under D.C. Code § 28:3-110 (d) (2012 Repl.), “[i]f an instrument [like
the one at issue in this case] is payable to 2 or more persons alternatively, it is
payable to any of them and may be negotiated, discharged, or enforced by any or
all of them in possession of the instrument.”
30
either of the McKinleys endorsed the cashier’s check in blank and it thereafter fell
into the hands of a third person,15 becoming payable to that person and
extinguishing any right Mr. Bartel had to enforce the instrument. See D.C. Code
§ 28:3-109 (c) (2012 Repl.) (providing that “[a]n instrument payable to an
identified person may become payable to bearer if it is indorsed in blank pursuant
to section 28:3-205 (b)”); D.C. Code 28:3-205 (b) (2012 Repl.) (“When indorsed in
blank [i.e. indorsed without identifying a person to whom it is made payable], an
instrument becomes payable to bearer and may be negotiated by transfer of
possession alone[.]”). As to these possibilities, the record contains only hearsay
evidence (e.g., Mr. Bartel’s statement that Dana told him that he “never touched or
moved the check”). “Such hearsay evidence is insufficient to create a genuine
issue of material fact” and thus to avoid summary judgment. (Carla) Brown v.
Argenbright Sec., Inc., 782 A.2d 752, 760 (D.C. 2001).16
15
As described above, the record suggests that at least two “third persons”
— Rene McKinley and William Sharrar — had the combination to the safe.
16
The foregoing issues — whether Mr. Bartel’s purported declaration of
loss was legally sufficient and whether Mr. Bartel can prove that his loss of
possession of the check was not the result of a transfer and that he was entitled to
enforce the check at the time it was lost — were raised by appellee in the trial court
and before us, and Mr. Bartel has had a full opportunity to brief the issues. An
additional issue — and, in my view, an additional reason why summary judgment
in favor of appellee was warranted — relates to the requirement that a claimant
seeking to enforce an instrument under § 3-312 (a)(3)(i) must have been in
(continued…)
31
Mr. Bartel argues that the Bank should bear the burden of proving (as an
affirmative defense) that the check was already paid. That may be so (and I do not
disagree with my colleagues on this point), but the point I make is that the Bank’s
burden is not triggered unless Mr. Bartel first shows that he was entitled to enforce
the instrument when loss of possession occurred (and, as already discussed, that he
did not lose possession of the check as a result of a transfer). At the summary
judgment stage, having told the court repeatedly (in successive motions for
summary judgment) that the matter was ripe for decision on the summary
(…continued)
possession of the instrument at the time it became “lost.” It appears that Mr. Bartel
cannot satisfy this requirement either, because if the check was “lost,” it became
lost not while it was in Mr. Bartel’s possession, but after it was delivered to Dana
and placed in the Bartels’ safe. Cf. Seman v. First State Bank, 394 N.W.2d 557,
558-59, 560 (Minn. Ct. App. 1986) (recounting that Seman purchased from the
bank a cashier’s check that named as payee his former employee Evans, who was
to use the money to buy Seman a car, and that after Seman gave Evans the check,
he learned that Evans was a drug addict and was going to use the money to
purchase drugs, and thereafter asked the bank to stop payment on the check;
reasoning that the check was not “lost,” because “the purchaser himself had
delivered the check to the named payee”). However, since the parties have not
briefed or argued the issue as to when the check became “lost,” I do not rely on
this additional basis.
I note that even if we assume that Mr. Bartel had (joint) constructive
possession of the check in the safe, he still cannot prove that he lost it. If it was
cashed or negotiated by one of the alternative payees, it was not lost. See Bank of
Am. Nat’l Trust & Sav. Ass’n v. Allstate Ins. Co., 29 F. Supp. 2d 1129, 1145 (C.D.
Cal. 1998) (“The instrument in question was not lost . . . — it was cashed.”).
32
judgment record, Mr. Bartel failed to come forward with sufficient competent
evidence to meet his burden of proof.
There is a dearth of evidence about what the McKinleys might have done
with the check in the years between 1994 and the years of their declining health
and deaths (in 2008 and 2011). Mr. Bartel does not aver that Edna never touched
or moved the check (although he made such an averment as to Dana). In addition,
as Mr. Bartel himself explained, at some point during those many years, others
(relative Renee McKinley and friend William Sharrar) had the combination (and, it
can reasonably be assumed, access) to the McKinleys’ safe. Because items do not
disappear out of safes into thin air, it is more likely than not (if not certain) that
someone removed the check from the safe. To conclude that it is more likely than
not (or as likely as not) that the check was removed from the safe and negotiated, it
is not necessary, as the majority opinion appears to suggest, to assume that the
check was wrongfully negotiated by one of the McKinleys, or that they or anyone
else acted or intended to act unlawfully. As Mr. Bartel acknowledges in his Reply
Brief, the McKinleys, as named payees, had an “indisputable right to alienate the
check” (emphasis added). One of the McKinleys might lawfully have endorsed
33
and negotiated or cashed the check,17 fully intending to return the amount of the
check to Mr. Bartel upon demand. Or, to give another example, one of the
McKinleys might have (lawfully) endorsed the check in blank, making it a bearer
instrument and giving a third party who came into possession of the check a right
under the law to enforce it. See D.C. Code § 28:3-301 (“A person may be a person
entitled to enforce the instrument even though the person is not the owner of the
instrument or is in wrongful possession of the instrument.”); Collins v. Gilbert, 94
U.S. 753, 754 (1877) (describing the presumption that “[p]ossession of . . . an
instrument . . . indorsed in blank, is prima facie evidence that the holder is the
proper owner and lawful possessor of the same”); One West Bank, F.S.B. v. Bauer,
159 So. 3d 843, 844 (Fla. Dist. Ct. App. 2d Dist. 2014) (“Because [the bank]
possessed the original [negotiable instrument], endorsed in blank, it was the lawful
holder of the note entitled to enforce its terms.”).
17
By leaving with the McKinleys a check payable to the order of either of
them, Mr. Bartel made it possible and lawful for either of them to do so; Mr.
Bartel’s action rendered the McKinleys, as payees, holders in possession “entitled
to enforce [the] instrument.” D.C. Code § 28:3-301; see also D.C. Code § 28:1-
201 (21) (providing that a “holder” is “[t]he person in possession of a negotiable
instrument that is payable either to bearer or to an identified person that is the
person in possession”). I believe we can reasonably infer that what underlies the
requirement in §§ 3-309 and 3-312 that a claimant seeking to recover on a “lost”
negotiable instrument prove (in the case of § 3-309) or aver (in the case of § 3-312)
that he did not transfer the instrument is a presumption that the transferee will cash
or negotiate the instrument.
34
It is far from clear that the presumption on which the majority opinion relies
— a presumption that people act lawfully, ante at 15 — would apply in the UCC
Article III context, given the many references in the official comments to theft,
forgery, and fraudulent allegations of loss. See, e.g., comments 2 and 3 to § 3-312;
see also (Darlene) Brown, note 10 supra, 359 P.2d at 779 (noting that the UCC
Article III rule about who is entitled to enforce an instrument, such as a mortgage
note, “focuses on the party who possesses the note in order to protect the borrower
from being sued fraudulently or by multiple parties on the same note”). But even
if it is assumed that our jurisdiction would apply a general presumption that people
act lawfully and would also do so in the UCC Article III context, that presumption
would not negate or overcome the presumption under the law pertaining to
negotiable instruments, applied in the cases cited at the end of the preceding
paragraph, that a person in possession of an instrument made payable to that
person or to the bearer may lawfully enforce that instrument.18 Thus, the
18
And, unlike in Ruby v. Farmers Mut. Auto Ins. Co., 79 N.W.2d 644 (Wis.
1956), cited in the majority opinion, the facts alleged by Mr. Bartel do not weigh in
favor of an inference of “loss.” In Ruby, involving the plaintiff’s claim against the
insurer for the value of a large diamond that went missing from a gemstone ring,
the court rejected the “presumption of theft” described in the insurance policy
because the “preponderance of the credible evidence [including evidence that no
one was known to have had access to the ring in the place where the plaintiff last
(continued…)
35
presumption the majority opinion invokes does not assist Mr. Bartel in meeting his
burden of proof as to his entitlement to enforce the check.
The record does not enable us to say what happened to the check, but what is
clear on the record before us is that Mr. Bartel cannot prove by a preponderance of
competent evidence a critical element of his § 3-309 claim: that he retained
entitlement to enforce the check at the time it allegedly was lost.19 A jury would
have to speculate in order to return a verdict for Mr. Bartel. For that reason, Judge
Kravitz did not err in granting summary judgment with respect to Mr. Bartel’s § 3-
309 claim. See McFarland v. George Washington Univ., 935 A.2d 337, 361 (D.C.
(…continued)
saw it, and evidence that the ring contained two smaller diamonds that were not
disturbed] . . . indicate[d] to a reasonable certainty that a theft did not take place.”
Id. at 648. There is no such preponderance of evidence here, as at least two people
in addition to the McKinleys had the combination to the safe where the cashier’s
check was stored. As the rule against hearsay dictates, there also is no
presumption that Dana McKinley spoke truthfully, accurately, and with a sound
mind when, as Mr. Bartel claims, he told Bartel that he had not touched the check.
19
Mr. Bartel was required to come forward with “competent evidence
admissible at trial” to avoid summary judgment. Sanchez v. Magafan, 892 A.2d
1130, 1132 (D.C. 2006); see also Nader v. de Toledano, 408 A.2d 31, 48 (D.C.
1979) (“Summary judgment should be granted to the movant unless the opposing
party offers competent evidence admissible at trial showing that there is a genuine
issue as to a material fact.”). He was not entitled to wait until trial to develop or
present the necessary evidence. See Aziken v. District of Columbia, 70 A.3d 213,
223 (D.C. 2013).
36
2007) (Because “a jury would have to speculate in order to find [the requisite]
causal link[, . . . the court] properly granted . . . judgment as a matter of law.”).
My colleagues in the majority have elected to “exercise our discretion to
leave [those] issue[s] for resolution by the trial court in the first instance” (quoting
Folks v. District of Columbia, 93 A.3d 681, 686 (D.C. 2014), and they rely on case
law “caution[ing] that it usually will be neither prudent nor appropriate for this
court” to affirm a grant of summary judgment on alternative grounds not decided
by the trial court. Ante at 10 (citing Jaiyeola v. District of Columbia, 40 A.3d 356,
372 (D.C. 2012)). However, in Folks, the proposed alternative basis for summary
judgment turned on whether the plaintiff had provided sufficient evidence that the
defendants had acted negligently, and we relied on authority holding that issues of
negligence are inappropriate for resolution on summary judgment. 93 A.3d at 686
(citing Crawford v. Katz, 32 A.3d 418, 435-436 (D.C. 2011) (brackets omitted). In
Jaiyeola, the posture was that trial court had not considered “whether appellant
genuinely needed to depose his former supervisor and obtain other discovery” in
order to try to establish a prima facie case of discrimination, 40 A.3d at 372, and
we treated the case as one where “the issues are not ripe for consideration, not
clearly presented by the record or . . . it would be better to leave to the trial court
37
the task of sifting through the summary judgment record.” Id. at 373 (quoting
Franco v. District of Columbia, 3 A.3d 300, 307 (D.C. 2010)).
Given the record in this case — no one contends that additional discovery is
needed, the issues were clearly presented below, the record is not voluminous, the
issue is not negligence or any other basis on which summary judgment “should be
granted sparingly,”20 and the issues are ones of statutory construction — I think the
more pertinent case authority can be found in this court’s recent decision in Stone
v. Landis Constr. Co., 120 A.3d 1287 (D.C. 2015):
In the absence of procedural unfairness, we may affirm a
judgment on any valid ground, even if that ground was
not relied upon by the trial judge. The requirement of
procedural fairness is satisfied here, since the parties
have fully briefed and argued th[e] substantive
question[s].
Id. at 1289 n.6 (internal quotation marks and citations omitted); see also Grimes v.
District of Columbia, 89 A.3d 107, 112 n.3 (D.C. 2014) (rejecting the trial court’s
rationale for dismissal of a retaliation claim, but affirming the dismissal on the
alternative ground, reasoning that there was “no unfairness in affirming on the
20
William J. Davis, Inc. v. Tuxedo LLC, 2015 D.C. App. LEXIS 454, *31
(D.C. Sept. 24, 2015) (internal quotation marks omitted).
38
[alternative] ground [that the complaint failed to state a DCHRA retaliation claim]
. . ., because [appellant] briefed that issue in this court and in the trial court”).
For the foregoing reasons, I would affirm the judgment of the Superior Court
in favor of appellee, on the ground that, on the undisputed factual record, appellant
failed to satisfy the requirements of § 3-312 or § 3-309.21 I respectfully dissent
from the judgment remanding the case for further proceedings.
21
I emphasize that my dissent is based on Mr. Bartel’s inability to satisfy
the statutory requirements of §§ 3-309 and 3-312, not on any lack of sympathy for
his circumstance. I note that these UCC provisions “supplement” rather than
displace other “principles of law and equity,” D.C. Code § 28: 1-103 (b) (2012
Repl.), meaning that they were no bar to Mr. Bartel’s pursuing other possible
(litigation or non-litigation) remedies, including the claims for unjust enrichment
and conversion that he also made in his Complaint. (On appeal, however, he has
not challenged the trial court’s ruling that he failed to make out a prima facie case
on his unjust enrichment and conversion claims.) I also note that while at least one
court has expressed an inclination to waive or bend the technical requirements of §
3-309 where there is little or no “risk that [the defendant] will ultimately be
prejudiced by plaintiff’s lack of due diligence,” A.I. Credit Corp v. Gohres, 299 F.
Supp. 2d 1156, 1160 (D. Nev. 2004), that circumstance is not presented here. If
the Bank or its predecessor did pay the cashier’s check (as many as 21 years ago),
no bond or other security will keep the Bank from being “forced to pay . . . twice”
(the “primary concern with regard to enforcement of a missing [negotiable
instrument”) if it is required to pay Mr. Bartel. Id.