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ALNOR CHECK CASHING v. KATZ

April 22, 1993

ALNOR CHECK CASHING
v.
JEFF KATZ AND SOLAR RESEARCH CORPORATION, et al.



The opinion of the court was delivered by: BY THE COURT; HERBERT J. HUTTON

MEMORANDUM AND FINAL JUDGMENT

 HUTTON, J.

 April 22, 1993

 Presently before the Court is the plaintiff Alnor Check Cashing's ("Alnor") Motion for Reconsideration and to Vacate this Court's Memorandum and Order of March 10, 1993, the third-party defendant United States of America's response, Alnor's reply and Motion for Oral Argument.

 I. BACKGROUND

 The relevant facts and procedural developments are set forth in full in this Court's opinion dated March 10, 1993. This Court reaffirms its earlier opinion in its entirety, but issues this memorandum to discuss two arguments that Alnor now raises in its Motion for Reconsideration. *fn1"

 II. DISCUSSION

 A. Count I: Indemnification

 Alnor urges this Court to vacate its earlier Order dismissing count I on the basis that the Court misunderstood Alnor's original position. Alnor argues:

 
Alnor now seeks reconsideration and reversal of this Court's prior Order based upon what Alnor perceives to be a misapprehension both by the Government and this Court as to the nature of Plaintiff's claim. For this reason, Plaintiff wishes to clarify its position. . . .

 ...

 
At the outset, Plaintiff's indemnification Count is not based upon the premise that Katz' signature was uttered without authority. To the contrary, it is based in common law contract principles of unjust enrichment.

 (Alnor Memorandum at 2-3) (emphasis in original). In the March 10, 1993 opinion, this Court dismissed Alnor's claim against the United States because under Treasury Regulation 31 C.F.R. § 240.5, Alnor had guaranteed the authenticity of Jeff Katz's signature to Mellon P.S.F.S. ("PSFS"), and ultimately the Treasury. Alnor Check Cashing v. Katz, No. 93-0424 (E.D. Pa. Mar. 10, 1993) at 8, 1993 U.S. Dist. LEXIS 3046. *fn2" When this Court dismissed count I of Alnor's complaint, the Court assumed that Alnor was challenging Jeff Katz's authority to cash the check. Id. This assumption was not due to a lack of clarity or understanding on the part of the Court. As the following discussion indicates, if Alnor is proceeding on a theory that Jeff Katz had authority to cash the check, this Court lacks subject matter jurisdiction to entertain Alnor's claim under 28 U.S.C. § 1346(a). Fed. R. Civ. P. 12(b)(1).

 Simply stated, Alnor only has two logical positions in this case: (1) Jeff Katz did not have the authority to cash the Solar Research Check; or (2) Jeff Katz did have the authority to cash the Solar Research Check. No matter which theory Alnor decides to proceed upon, this Court's earlier decision properly dismissed the United States as a party. See 28 U.S.C. § 1346.

 If Jeff Katz did not have the authority to cash the Solar Research Check, then Alnor cannot assert a claim against the United States because Alnor guaranteed Katz's signature to the Treasury Department under 31 C.F.R. § 240.5. As this Court discussed in its March 10, 1993 opinion:

 
§ 240.5 Guaranty of indorsements. The presenting bank and the indorsers of a check presented to the Treasury for payment are deemed to guarantee to the Treasury that all prior indorsements are genuine, whether or not an express guaranty is placed on the check. When the first indorsement has been made by one other than the payee personally, the presenting bank and the indorsers are deemed to guarantee the Treasury, in addition to other warranties, that the person who so indorsed had unqualified capacity and authority to indorse the check on behalf of the payee. Id.
 
...
 
Under § 240.5 any subsequent endorsers of a treasury check warrant that the initial endorsement was both valid and made under unqualified capacity of the signor.

 Alnor Check Cashing v. Katz, No. 93-0424 (E.D. Pa. Mar. 10, 1993) at 8, 1993 U.S. Dist. LEXIS 3046. Alnor has presented no legal authority or alternative Treasury Regulation to the Court that warrants reversing the earlier decision that regulation 31 C.F.R. § 240.5 precludes Alnor's claim because Alnor has "guaranteed" the authenticity of Katz's signature. As such, the Treasury Regulations preclude any challenge by Alnor that Jeff Katz did not have the authority to cash the Solar Research check.

 Apparently conceding this point, Alnor now argues in its present motion that this Court "misinterpreted" Alnor's original position and that Jeff Katz's actually did have authority to cash the Solar Research Check. (Alnor Memorandum at 2-3). The government responds that Alnor cannot assert this position because Alnor's indemnification claim exists only if Solar Research prevails against Alnor for wrongfully cashing an unauthorized check. In other words, Alnor is judicially estopped from seeking indemnification for wrongfully cashing a check if its theory of liability is that Jeff Katz actually had the authority to cash the Solar Research Check.

 It is well settled law that a district court lacks jurisdiction under the Tucker Act (or "Little Tucker Act"), 28 U.S.C. § 1346 to entertain claims against the United States based upon principles of "quasi" or "implied-in-law" contracts. Army and Air Force Exchange Serv. v. Sheehan, 456 U.S. 728, 738, 72 L. Ed. 2d 520, 102 S. Ct. 2118 (1982); Hatzlachh Supply Co. v. United States, 444 U.S. 460, 465 n.5, 62 L. Ed. 2d 614, 100 S. Ct. 647 (1980) GAF Corp. v. United States, 932 F.2d 947 (Fed. Cir. 1991); Weisberg v. United States Dep't of Justice, 240 U.S. App. D.C. 339, 745 F.2d 1476, 1493 (D.C. Cir. 1984) (refusing to adopt 1 Corbin on Contracts, § 95, at 407-08 (1963 & Supp. 1984) (quasi contractual relief)); Kunkler v. Fort Lauderdale Hous. Auth., 764 F. Supp. 171 (S.D. Fla. 1991).

 In Army and Air Force Exchange Serv. v. Sheehan, 456 U.S. 728, 738, 72 L. Ed. 2d 520, 102 S. Ct. 2118 (1982), the United States Supreme Court stated:

 
Claims grounded on implied-in-fact contracts may be brought under the Tucker Act, but the Act does not confer jurisdiction with respect to contracts implied in law.

 Id. at 738 n.10 (citing Hatzlachh Supply Co. v. United States, 444 U.S. 460, 465 n.5, 62 L. Ed. 2d 614, 100 S. Ct. 647 (1980)). Adopting the Supreme Court's reasoning, the United States Court of Appeals for the District of Columbia has held that the district courts lack subject matter jurisdiction to hear claims for quasi-contractual or implied-in-law contracts. Weisberg v. United States Dep't of Justice, 240 U.S. App. D.C. 339, 745 F.2d 1476, 1493 (D.C. Cir. 1984) (refusing to adopt 1 Corbin on Contracts, § 95, at 407-08 (1963 & Supp. 1984) (quasi contractual relief)). Recently, the Federal Circuit held:

 
The Claims Court may not do by judicial fiat what Congress has not done by legislation. The trial court may not enforce a warranty implied in law. The Tucker Act does not grant the Claims Court ...

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