UNIFORM COMMERCIAL CODE
Act 174 of 1962
440.4406 Statement of account; identification of items paid; retention of items or copies; customer's duty to discover and report unauthorized signature or alteration; failure to comply with subsection (3); failure of bank to exercise ordinary care in paying item; time limitation.
Sec. 4406.
(1) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount, and date of payment.
(2) If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of 7 years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.
(3) If a bank sends or makes available a statement of account or items pursuant to subsection (1), the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.
(4) If the bank proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by subsection (3), the customer is precluded from asserting against the bank the following:
(a) The customer's unauthorized signature or any alteration on the item, if the bank also proves that it suffered a loss by reason of the failure.
(b) The customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding 30 days, in which to examine the item or statement of account and notify the bank.
(5) If subsection (4) applies and the customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to loss, the loss is allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with subsection (3) and the failure of the bank to exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the preclusion under subsection (4) does not apply.
(6) Without regard to care or lack of care of either the customer or the bank, a customer who does not within 1 year after the statement or items are made available to the customer (subsection (1)) discover and report his or her unauthorized signature on or any alteration on the item is precluded from asserting against the bank the unauthorized signature or alteration. If there is a preclusion under this subsection, the payor bank may not recover for breach of warranty under section 4208 with respect to the unauthorized signature or alteration to which the preclusion applies.
History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
Notes of Decisions
United States v. NBD Bank N.A., 922 F. Supp. 1235 (E.D. Mich. 1996).
· cites it 9× “§ 440.4406 NBD argues that GNMA may not successfully assert any of its claims against NBD because it did not comply with the notice requirement of M.”
Siecinski v. First State Bank, 531 N.W.2d 768 (Mich. Ct. App. 1995).
· cites it 3× “Defendant moved for summary disposition, asserting that the claim was barred under the time limit of former MCL 440.4406(4); MSA 19.4406(4). The court agreed, granted the motion, and dismissed the case.”
Winkler v. Com. Nat'l Bank of L'Anse, 202 N.W.2d 468 (Mich. Ct. App. 1972).
· cites it 10× “Defendant answered and asserted in an affirmative defense that the plaintiff failed to notify the bank of the alleged forgeries within the time required by MCLA 440.4406; MSA 19.4406. The cause was tried by a jury commencing on March 8, 1971.”
People ex rel. Michigan Pub. Sch. Employees' Ret. Sys. v. Michigan Nat'l Bank, 173 N.W.2d 762 (Mich. Ct. App. 1969).
· cites it 2× “The uniform commercial code adopts the concept of an absolute time limit for actions by a customer against his bank; actions based on forgery of a payee’s signature must be commenced within three years of the time of delivery of the bank statement and items to the customer…”
People v. Lyndell Robinson, 179 N.W.2d 239 (Mich. Ct. App. 1970).
· cites it 2× “4207 [4]) neglect in asserting a claim beyond a reasonable time after learning of a breach would discharge the collecting bank; also, the statute of limitations in an action by a customer against his own bank based on payment of an item bearing an unauthorized endorsement is…”
Benson v. Comerica Bank, 442 N.W.2d 284 (Mich. Ct. App. 1989).
· cites it 2× “The trial court summarily disposed of the case after finding MCL 440.4406; MSA 19.4406 inapplicable. Thus, the issue before this Court is the *520 correct interpretation of the statute.”
Carson Fischer, PLC v. Michigan Nat. Bank, 713 N.W.2d 265 (Mich. 2006).
“Pursuant to MCL 440.4406(6), as modified by the parties' account agreement, Michigan National Bank's liability is limited to those checks listed in plaintiff Carson Fischer, PLC's post-notification bank statements after September 1, 2000.”
Carson Fischer Plc v. Michigan Nat'l Bank (Mich. 2005).
“The parties are directed to include among the issues to be briefed: (1) whether the insertion of personal loan numbers on the face of embezzled checks made payable to the order of Michigan National Bank was an “alteration” of the checks as that term is utilized in MCL 440.4406…”
— Mich. Comp. Laws § 440.4406(1) — 1 case
United States v. NBD Bank N.A., 922 F. Supp. 1235 (E.D. Mich. 1996).
“§ 440.4406 NBD argues that GNMA may not successfully assert any of its claims against NBD because it did not comply with the notice requirement of M.”
— Mich. Comp. Laws § 440.4406(2)(a) — 1 case
Winkler v. Com. Nat'l Bank of L'Anse, 202 N.W.2d 468 (Mich. Ct. App. 1972).
“Defendant answered and asserted in an affirmative defense that the plaintiff failed to notify the bank of the alleged forgeries within the time required by MCLA 440.4406; MSA 19.4406. The cause was tried by a jury commencing on March 8, 1971.”
— Mich. Comp. Laws § 440.4406(2)(b) — 2 cases
Winkler v. Com. Nat'l Bank of L'Anse, 202 N.W.2d 468 (Mich. Ct. App. 1972).
“Defendant answered and asserted in an affirmative defense that the plaintiff failed to notify the bank of the alleged forgeries within the time required by MCLA 440.4406; MSA 19.4406. The cause was tried by a jury commencing on March 8, 1971.”
Benson v. Comerica Bank, 442 N.W.2d 284 (Mich. Ct. App. 1989).
“The trial court summarily disposed of the case after finding MCL 440.4406; MSA 19.4406 inapplicable. Thus, the issue before this Court is the *520 correct interpretation of the statute.”
— Mich. Comp. Laws § 440.4406(4) — 3 cases
Siecinski v. First State Bank, 531 N.W.2d 768 (Mich. Ct. App. 1995).
“Defendant moved for summary disposition, asserting that the claim was barred under the time limit of former MCL 440.4406(4); MSA 19.4406(4). The court agreed, granted the motion, and dismissed the case.”
People ex rel. Michigan Pub. Sch. Employees' Ret. Sys. v. Michigan Nat'l Bank, 173 N.W.2d 762 (Mich. Ct. App. 1969).
“The uniform commercial code adopts the concept of an absolute time limit for actions by a customer against his bank; actions based on forgery of a payee’s signature must be commenced within three years of the time of delivery of the bank statement and items to the customer…”
— Mich. Comp. Laws § 440.4406(6) — 2 cases
Siecinski v. First State Bank, 531 N.W.2d 768 (Mich. Ct. App. 1995).
“Defendant moved for summary disposition, asserting that the claim was barred under the time limit of former MCL 440.4406(4); MSA 19.4406(4). The court agreed, granted the motion, and dismissed the case.”
Carson Fischer, PLC v. Michigan Nat. Bank, 713 N.W.2d 265 (Mich. 2006).
“Pursuant to MCL 440.4406(6), as modified by the parties' account agreement, Michigan National Bank's liability is limited to those checks listed in plaintiff Carson Fischer, PLC's post-notification bank statements after September 1, 2000.”
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