C. NICHOLAS PEREOS, LTD., Appellant,
BANK OF AMERICA, N.A., Respondent
Appeal from a district court summary judgment in a tort action. Second Judicial District Court, Washoe County; Janet J. Berry, Judge.
C. Nicholas Pereos, Ltd., and C. Nicholas Pereos, Reno, for Appellant.
Poli & Ball, P.L.C., and Michael N. Poli and Jody L. Buzicky, Las Vegas, for Respondent.
BEFORE HARDESTY, C.J., PARRAGUIRRE and CHERRY, JJ.
NRS 104.4406 regulates the relationship between a bank and its customers concerning losses sustained due to unauthorized activity in the customer's bank account. Generally, a customer " must exercise reasonable promptness" in examining a bank statement and within 30 days notify the bank of any unauthorized transactions. NRS 104.4406(3), 4(b).
Because genuine issues of material fact exist in this case regarding the manner of delivery of bank statements, the contents of online and received-in-branch statements, and the bank's exercise of due care in paying certain unauthorized transactions, we conclude that the district court erred in granting summary judgment. We further conclude that unauthorized account transactions that occur within the one-year period before the customer gives notice to the bank are not time-barred under NRS 104.4406(6)'s one-year period of repose because the statute does not differentiate between a single forgery and multiple forgeries by the same wrongdoer. Therefore, the one-year period of repose begins to run with each successive forgery.
FACTS AND PROCEDURAL HISTORY
Mary Williams, a long-time employee of appellant, the C. Nicholas Pereos, Ltd., law firm, was a signator on the firm's operating account with respondent Bank of America. In September 2006, the firm's solo practitioner, C. Nicholas Pereos, removed Williams as a signator on the account, leaving Pereos as the sole signator. Pereos told Williams to let the Bank of America account " run itself out" to cover any outstanding checks, but he never took any action to affirmatively close the account.
In 2010, Pereos discovered that Williams had been embezzling money since 2006. Despite being removed as a signator on the account, Williams deposited checks made out to Pereos, Ltd. into the Bank of America account and would then write and sign checks for her own personal use. Pereos notified the bank of the unauthorized transactions on January 28, 2010. The next month, Pereos, Ltd. filed a complaint against Bank of America based on Williams' use of unauthorized signatures to withdraw funds from the account from 2006 to 2010. When it was discovered that Williams had enrolled the Pereos, Ltd. account in online banking and the bank statements had not been mailed, Pereos amended the complaint to include an allegation that Bank of America had failed to make Pereos, Ltd.'s statements available as required by NRS 104.4406(1).
Bank of America moved to dismiss the amended complaint, or alternatively for summary judgment, on the ground that Pereos, Ltd.'s claims for unauthorized transactions were time-barred either because they were not reported by Pereos, Ltd. within 30 days under NRS 104.4406(4)(b) or within the one-year period of repose under NRS 104.4406(6). The bank argued that, notwithstanding Pereos, Ltd.'s contention that the account statements were not mailed to it, Pereos' deposition testimony revealed that Pereos had on occasion personally picked up some of Pereos, Ltd.'s bank account statements from Bank of America in 2006, 2007, and 2008. The bank attached copies of the account's statements to its motion and argued that the " [u]nauthorized transactions...were contained in the bank statements that were made available to [Pereos]" . In opposition, Pereos, Ltd. argued that the statements he obtained were insufficient to provide it with notice of the unauthorized signatures as they " were only a single page or two-page document...that showed check numbers and the amount of the check, and balances. Nothing more[.]" Moreover, he contended that the statements were insufficient because they did not contain a copy of the canceled checks. Pereos also argued that his claims for unauthorized checks cashed within the year preceding his notification to the bank were not time-barred. Conversely, Bank of America argued that, because the same wrongdoer committed all of the wrongful transactions, all claims were time-barred by Pereos, Ltd.'s failure to give the bank notice within 30 days after receiving the account statements.
The district court granted summary judgment in favor of Bank of America, finding that it was irrelevant whether Pereos, Ltd. received copies of the checks because NRS 104.4406(1) does not require the inclusion of check images. Moreover, the district court found that there was " no dispute that the bank statements received by [Pereos] contained item numbers, amounts, and dates of payment," and thus, the account statements Pereos received were sufficient to notify him of the unauthorized activity on the ...