In Moughrabie v. Citibank , Michael Moughrabie sued to recover $6,200 that his bank removed from his account.
Moughrabie deposited a cashier's check in the amount of $19,000, and withdrew the $6,200 after he was supposedly told by a teller that the check had cleared and the funds were available for use. However, Citibank claimed it later called and wrote Moughrabie the day the check was determined to be counterfeit.
After the Kings County Civil Court denied Citibank 's request to dismiss the case, an appeal to the Appellate Term, Second Department, followed.
The AT2 reversed, noting that "[u]ntil the time that final settlement of the check was made, the risk of non-collection remained with [Moughrabie] and any settlement made thereon by [ Citibank ] was provisional only." Since his conversation with the teller took place before a "final settlement," Moughrabie couldn't reasonably rely on any representation made by the institution's employees.
You can take that to the bank!
To download a copy of the Appellate Term's decision, please use this link: Moughrabie v. Citibank