674.402

Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account.

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674.402 Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account.—

(1) Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.

(2) A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.

(3) A payor bank’s determination of the customer’s account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank’s decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.

History.—s. 1, ch. 65-254; s. 39, ch. 92-82.

Note.—s. 4-402, U.C.C.; supersedes s. 659.33.

Notes of Decisions

Cited in 9 cases (1 in the last 5 years), 1983–2021 · leading case: Koger v. East First Nat. Bank

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Koger v. East First Nat. Bank (1983) fladistctapp · cites it 7× “The first point concerns whether an individual corporate stockholder has a cause of action against a bank under section 674.402, Florida Statutes (1981), which tracks the language of section 4-402, Uniform Commercial Code (1977), for damages that result from actions between the…”

AmSouth Bank v. Tice (2005) ala · cites it 2× “Before the summary judgment in favor of Manheim's was made final, Tice filed a third-party complaint against AmSouth, alleging, *1063 among other things, negligence and wantonness under Alabama common law and violations of Florida's version of the Uniform Commercial Code ("the…”

Braden Furniture Co. v. Union State Bank (2012) ala “We concluded that the customer’s common-law claims of negligence and wantonness were encompassed in provisions of the Florida UCC, see § 674.402, Fla. Stat. Ann. ( West 1993 ) (providing a bank’s liability to a customer for wrongful dishonor), and § 674.”

Govaert v. First American Bank & Trust Co. (In re Geri Zahn, Inc.) (1991) flsb · cites it 6× “” Fla.Stat. § 674.402. Defendant contends that it is not liable to the Debtor because FABT dishonored only 12 checks, of which a maximum of 5 were payable to the sellers of merchandise in New York.”

Parrett v. Platte Valley State Bank & Trust Co. (1990) neb “1983), affirmed dismissal of Roger’s complaint based on a bank’s wrongful dishonor of the checks of a corporation in which Roger was a shareholder.”

JTM, INC. v. Totalbank (2001) fladistctapp · cites it 5× “JTM has failed to state a claim for relief under section 674.402, Florida Statutes (1993) because that statute does not apply to cashier's checks.”

Parrett v. PLATTE VALLEY STATE BANK & TR. (1990) neb “In construing Fla.Stat.Ann. § 674.402 (West 1966), which is identical to Neb.”

Regions Bank v. Marvin I. Kaplan (2021) ca11 “”); Fla. Stat. § 674.402 (3) (“A payor bank’s determination of the customer’s account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is re- ceived by the payor bank and the time that the…”

Scott v. NCNB Bank Corp. (1994) fladistctapp · cites it 2× “We reverse, in part, a final summary judgment entered in favor of the defendant bank on that portion of Appellant’s claim founded on a theory of wrongful dishonor under section 674.402(2), Florida Statutes. Graham v.”

— 674.402(2) — 2 cases

JTM, INC. v. Totalbank (2001) fladistctapp “JTM has failed to state a claim for relief under section 674.402, Florida Statutes (1993) because that statute does not apply to cashier's checks.”

Scott v. NCNB Bank Corp. (1994) fladistctapp “We reverse, in part, a final summary judgment entered in favor of the defendant bank on that portion of Appellant’s claim founded on a theory of wrongful dishonor under section 674.402(2), Florida Statutes. Graham v.”

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