UCC vs. Common Law in Texas: Cadence Bank v. Elizondo (Tex.App. 2019) Houston COA panel splits in dispute between attorney and bank over charge-back for a fraudulent settlement check

THE CASE OF THE SCAMMED ATTORNEY: WHO SHOULD BEAR THE RISK AND LOSS – BANK OR BANK CUSTOMER? Houston court of appeals panel splits on bank's overdraft claim against attorney resulting from chargeback applied to IOLTA account when counterfeit settlement check was dishonored where bank had executed wire transfer of a large junk of the amount of the check prior to its collection based on provisional settlement credit contrary to wire transfer agreement. Cadence Bank v. Elizondo, No. 01-17-00886-CV (Tex.App. – Houston [1st Dist.] May 16, 2019, no pet. h)(majority opinion)(dissenting opinion).The First Court of Appeals today decided a dispute over who should bear the loss for damages caused by a sophisticated international scam involving a counterfeit cashier’s check (a purported settlement check) deposited into an attorney’s IOLTA account at Cadence Bank. The bank had wired funds representing a large portion of the provisional credit for the face value of…

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