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07/16/97 MICHELLE MANFREDI v. DAUPHIN DEPOSIT BANK

July 16, 1997

MICHELLE MANFREDI, APPELLANT
v.
DAUPHIN DEPOSIT BANK V. COZEN & O'CONNOR, LOUIS A. MANFREDI AND CHARLOTTE M. MANFREDI, APPELLEES



Appeal from the Order of the Court of Common Pleas of York County, Civil Division at No. 94 SU 02960 01. Before CASSIMATIS, J.

Before: Cavanaugh, Popovich and Olszewski, JJ. Opinion BY Popovich, J.

The opinion of the court was delivered by: Popovich

OPINION BY POPOVICH, J.:

Filed July 16, 1997

This is an appeal from an order of the Court of Common Pleas of York County granting summary judgment in favor of Dauphin Deposit Bank (Dauphin Deposit) in an action for conversion and violation of the Uniform Fiduciaries Act (UFA). *fn1 After examining the Uniform Commercial Code (UCC) *fn2 and the UFA, the lower court determined that appellant had no right of action against Dauphin Deposit for conversion and that Dauphin Deposit had a good faith defense under the UFA. Accordingly, the lower court granted summary judgment in favor of Dauphin Deposit. We agree that appellant cannot sue Dauphin Deposit for conversion under the UCC. However, we find that Dauphin Deposit is liable under the UFA.

Our scope of review is plenary when reviewing the propriety of a lower court's entry of summary judgment. Schriver v. Mazziotti, 432 Pa. Super. 276, 638 A.2d 224, 225 (1994), alloc. denied, 539 Pa. 638, 650 A.2d 52 (1994). We must examine the entire record in the light most favorable to the non-moving party and resolve all doubts against the moving party when determining if there is a genuine issue of material fact. Chrysler Credit Corp. v. Smith, 434 Pa. Super. 429, 643 A.2d 1098, 1100 (1994). We will only reverse the lower court's grant of summary judgment if there is a manifest abuse of discretion. Accu-Weather, Inc. v. Prospect Communications, Inc., 435 Pa. Super. 93, 644 A.2d 1251 (1994). Pursuant to Pennsylvania Rule of Civil Procedure 1035(b), summary judgment shall be rendered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law."

The parties agree that there is no genuine issue of material fact and that the pertinent, undisputed facts are as follows: On May 9, 1987, appellant Michelle Manfredi, a minor, was injured in a motor vehicle accident. Shortly thereafter, appellant, by her parents and natural guardians, Louis and Charlotte Manfredi, filed a suit seeking compensation for her injuries. On September 26, 1988, the lower court approved a settlement of the suit and ordered that $34,480.07 be paid "to plaintiffs, Louis and Charlotte Manfredi, as parents and natural guardians of Michelle Manfredi, a minor, to be deposited in a Mutual Fund Growth Account through Common Sense Trust." Trial Court Opinion filed 3/19/96 p. 3. A check dated October 14, 1988, and payable "to the order of Louis and Charlotte Manfredi, as parents and natural guardians of Michelle Manfredi, a minor," was distributed to appellant's parents. After receiving the check, Louis endorsed the check, and, on October 20, 1988, he deposited it into his and Charlotte's joint checking account with Dauphin Deposit. Charlotte did not endorse the check. Dauphin Deposit never received a copy of the lower court's September 26, 1988, order, and was never given any verbal limitations regarding the check at issue. After the check was deposited, Louis periodically wrote checks on the account for his own use.

In July, 1992, after appellant reached the age of majority, she realized that her father had used all of the settlement funds, except for $800, for his own purposes. As a result, she filed a Petition for Accounting. Following a hearing on the matter, the lower court entered a judgment in favor of appellant and against Louis for $48,464.80.

On January 27, 1995, appellant filed a complaint seeking to recover damages from Dauphin Deposit on the theory of conversion under the UCC and violation of Section 6372 of the UFA. *fn3 She argued that the bank improperly deposited the settlement check since it contained a forged and unauthorized endorsement, and that the bank violated its burden of inquiry when Louis made the deposit. Dauphin Deposit argued that appellant had no right of action for conversion and that it had a good faith defense under the UFA. The parties cross-filed motions for summary judgment. The lower court determined that there was no entitled to judgment as a matter of law. This appeal followed.

Appellant's first argument is that the bank is liable for conversion because it permitted her father, Louis, to deposit the settlement check in her parents' joint checking account without the endorsement of both parents. *fn4 Her argument is rooted in the language of 13 Pa.C.S.A. §§ 3116(2) and 3419(a)(3). *fn5

Section 3116 provides the following:

§ 3116. Instruments payable to two or more persons

An instrument payable to the order of two or more persons:

(1) if in the alternative is payable to any one of them and may be negotiated, discharged or enforced by any of ...


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