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AMI 3001 Issues—Claim for Damages Based on Bank’s Improper Payment of Check(s)

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 3001
Arkansas Model Jury Instructions-Civil
November 2021 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 30. Bank Deposits and Collections
AMI 3001 Issues—Claim for Damages Based on Bank’s Improper Payment of Check(s)
(Plaintiff) claims damages from (defendant) and has the burden of proving each of three essential propositions:
First, that (defendant) permitted an unauthorized person to [cash][deposit to his/her own account][obtain the benefit of] the check(s);
Second, that (plaintiff) did not receive the benefit of the check(s);
And third, that (defendant)’s conduct in permitting the [cashing][deposit][obtaining of the benefit of] the check(s) was a proximate cause of (plaintiff)’s damages.
[If you find from the evidence in this case that each of these propositions has been proved, then your verdict should be for (plaintiff); but if, on the other hand, you find from the evidence that any of these propositions has not been proved, then your verdict should be for (defendant).]
NOTE ON USE
Use this instruction when a customer claims a bank improperly paid a check in violation of a provision of the Uniform Commercial Code. If a provision of the Uniform Commercial Code requires the customer to prove additional facts as essential elements of a claim, this instruction should be modified.
Use AMI 3002 (measure of damages) with this instruction.
If the court determines that either Ark. Code Ann. § 4-4-406 or § 4-3-406 is applicable, use AMI 3003 (stating the defense of Ark. Code Ann. § 4-4-406) and/or AMI 3006 (stating the defense of Ark. Code Ann. § 4-3-406) with this instruction.
Do not use the bracketed paragraph when the case is submitted on interrogatories. In addition, do not use the bracketed paragraph when the comparative fault provisions of Ark. Code Ann. §§ 4-4-406 or 4-3-406 apply.
COMMENT
This instruction is based on Ark. Code Ann. §§ 4-3-301, 4-3-403, 4-3-420 and 4-4-406. If there is an issue of fact whether the plaintiff has standing (i.e., is the holder, the payee, the intended beneficiary, or the person entitled to enforce the check), the instruction may need to be modified to add a new first element that addresses that issue. See Comment to Ark. Code Ann. § 4-3-301 and Comment 1 to Ark. Code Ann. § 4-3-420.
With the exception of a bank’s responsibility for lack of good faith or failure to exercise ordinary care, the provisions of Article 4 of the Uniform Commercial Code may be varied by agreement. Additionally, the parties may determine by agreement the standards by which the bank’s responsibility is to be measured if those standards are not manifestly unreasonable. Ark. Code Ann. § 4-4-103(a). As to the application and effect of Federal Reserve regulations, operating circulars, and clearinghouse rules, see Ark. Code Ann. § 4-4-103(b) and (c) and Comment 3 to Ark. Code Ann. § 4-4-103.
There may be fact issues as to whether a signature or endorsement was authorized. For example, more than one signature may be required. See Comment 4 to Ark. Code Ann. § 4-4-103. If the jury needs guidance on these issues, an additional instruction should be prepared.
An unauthorized signature may be ratified by conduct as well as express statements. See Comment 3 to Ark. Code Ann. § 4-3-103. If there is a fact issue as to whether a signature has been ratified, a separate instruction may be necessary on that issue.
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