RBS Citizens, National Association v. Aresty et al

Filing 82

Magistrate Judge Leo T. Sorokin: ORDER entered. Order on Motions in Limine. The Defendants' First Motion in Limine to Exclude Recently Disclosed Witnesses and Documents (Docket # 73) is ALLOWED to the extent that the Defendants may depose the witness prior to the trial and that the Plaintiff shall bear the costs of the deposition, including the cost of the expedited transcript for the Parties. In all other respects, the Motion is DENIED. The Plaintiff's Motion in Limine to Prohibit Defendants From Arguing that the Fraudulent Check at Issue in This Case Was Returned to Citizens on November 2, 2007 (Docket # 74) is DENIED, without prejudice to the issue being revisited after the evidence is heard. The Plaintiff's Motion in Limine to Preclude Argument, Evidence or Testimony regarding the Coding and Information on the Back of the Check (Docket # 75) is DENIED. The Plaintiff's Motion in Limine to Preclude the Pinzler Affidavit (Docket # 76) is DENIED AS MOOT. The Plaintiff's Motion in Limine to Preclude the Defendants from Arguing Negligence as a Defense to Citizens' Breach of Contract and UCC Charge-Back Claims (Docket # 77) is DENIED. The Plaintiff's Motion in Limine to Preclude the Defendan ts from Arguing Negligence Because They Cannot Submit Admissible Evidence on the Standard of Care (Docket # 78) is DENIED, without prejudice to revisiting the issues raised therein as the evidence develops during trial. The Plaintiff's Motion in Limine to Prohibit the Defendants From Arguing a Special Relationship (Docket # 79) is DENIED, also without prejudice to revisiting the issues raised therein as the evidence develops during trial. See attached Order. (Chernetsky, James)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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RBS CITIZENS, NATIONAL
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ASSOCIATION,
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Plaintiff/Defendant-in-Counterclaim,
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v.
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JEFFREY ARESTY and
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ARESTY INTERNATIONAL LAW FIRM,
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Defendants/Plaintiffs-in-Counterclaim.
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__________________________________________)

Civil Action No. 09-10116-LTS

ORDER ON MOTIONS IN LIMINE

SOROKIN, M.J.
The Plaintiff’s Motion in Limine to Prohibit the Defendants From Arguing a “Special
Relationship” (Docket # 79) is DENIED, but without prejudice to revisiting the issues raised
therein as the evidence develops during trial.
The Plaintiff’s Motion in Limine to Preclude the Defendants from Arguing Negligence
Because They Cannot Submit Admissible Evidence on the Standard of Care (Docket # 78) is
DENIED, also without prejudice to revisiting the issues raised therein as the evidence develops
during trial. M.G.L. c. 106, § 4-103(e) defines the relevant legal standard. Citizens was
obligated to “exercise ordinary care in handling” the check in question.1 Article Three of the

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The Plaintiff has not argued that the contracts it asserts that the Parties formed
dispensed with or diluted this obligation. In any event, Massachusetts law would bar such a
provision: “the parties to the [account] agreement cannot disclaim a bank’s responsibility for its
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UCC states that “ordinary care”
in the case of a person engaged in business means observance [of] reasonable commercial
standards, prevailing in the area in which the person is located, with respect to the
business in which the person is engaged. In the case of a bank that takes an instrument for
processing for collection or payment by automated means, reasonable commercial
standards do not require the bank to examine the instrument if the failure to examine does
not violate the bank’s prescribed procedures and the bank’s procedures do not vary
unreasonably from general banking usage not disapproved by this Article or Article 4.
M.G.L. c. 106 § 3-103(a)(7).
This definition also applies to Article Four. See M.G.L. c. 106 § 4-104(c) (incorporating
into Article Four the definition of “ordinary care” cited supra). In the course of the trial, the
Defendants bear the burden of proof on this claim. M.G.L. c. 106 § 4-406(e); Grassi Design
Group, Inc. v. Bank of America, N.A., 74 Mass.App.Ct. 456, 459 (2009). Thus they must
introduce evidence of the relevant “reasonable commercial standards.”
Contrary to the Plaintiff’s argument, bank customers are not necessarily required in all
cases to introduce such evidence through an expert. Although expert testimony may ordinarily
be necessary to prove the standard of care used by banks in the community, some acts committed
by banks may be so obviously negligent that the trier of fact can easily recognize that the actions
violate the standard of care. See, e.g., Schultz v. Bank of America, 413 Md. 15, 29-31 (2010)
(citing as examples where no expert testimony was necessary: Saxon v. Harrison, 186 Md.App.
228 (2009) (bank paid on check indorsed with only part of payee’s name); Free State Bank &
Trust v. Ellis, 45 Md.App. 159 (1980) (bank improperly released collateral of a customer);
Taylor v. Equitable Trust Co., 269 Md. 149 (1973) (bank transferred funds without determining
whether the transfer was authorized). See also Govoni & Sons Const. Co., Inc. v. Mechanics

lack of good faith or failure to exercise ordinary care.” M.G.L. c. 106, § 4-103(a).
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Bank, 51 Mass.App.Ct. 35, 44-46 (2001). The Court understands the Defendants’ primary
allegations of lack of ordinary care in this case to be: that the teller who received the check failed
to determine that the routing number on the check did not match the routing number of the
purported issuing bank; that the bank failed to inform Aresty that the check had been returned as
“sent wrong” prior to his wiring the funds (assuming that the check was returned on November
2nd); and, that the bank granted Aresty provisional credit before collecting the funds. Subject to
evaluation of the sufficiency of the evidence as actually presented, the Court is not prepared to
say in limine that it is not possible for the Defendants to prove without expert testimony the
applicable standard of care with regard to these actions.
The Plaintiff’s Motion in Limine to Preclude the Defendants from Arguing Negligence as
a Defense to Citizens’ Breach of Contract and UCC Charge-Back Claims (Docket # 77) is
DENIED. The Defendants may pursue their UCC-based ordinary care claim.
The Plaintiff’s Motion in Limine to Preclude the Pinzler Affidavit (Docket # 76) is
DENIED AS MOOT because the Defendants have, at this time, withdrawn their request to admit
the documents. The Court will revisit the issue if the Defendants seek to admit the documents.
Any such request shall occur at sidebar or otherwise outside the presence of the jury.
The Plaintiff’s Motion in Limine to Preclude Argument, Evidence or Testimony
regarding the Coding and Information on the Back of the Check (Docket # 75) is DENIED. The
Bank’s recently-identified witness (as the Court understands the proposed testimony at the
moment) will testify based upon particularized knowledge he has acquired from his experience
in the course of his work for the Bank. This type of testimony is permissible lay testimony under
Rule 701 rather than expert testimony subject to Rules 702-705. See Fed. R. Evid. 701,

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Commentary to the 2000 Amendments. Similarly, the Defendants may seek to elicit testimony
from witnesses at trial regarding the meaning of the markings on the back of the check, provided
that any such witness has a foundation to support such testimony. The Defendants may also seek
to offer admissible documents that explain codes that appear on the back of the check. Whether
the Defendants may argue to the jury in their closing argument that the jury should conclude that
the Bank received the check back on November 2nd (prior to the Bank again receiving the check
back on November 5th) will depend upon whether or not the evidence admitted at trial would
support such an argument. Accordingly, the Motion in Limine to Prohibit Defendants From
Arguing that the Fraudulent Check at Issue in This Case Was Returned to Citizens on November
2, 2007 (Docket # 74) is DENIED, without prejudice to the issue being revisited after the
evidence is heard.
The Defendants’ First Motion in Limine to Exclude Recently Disclosed Witnesses and
Documents (Docket # 73) is ALLOWED to the extent that the Defendants may depose the
witness prior to the trial and that the Plaintiff shall bear the costs of the deposition, including the
cost of the expedited transcript for the Parties. In all other respects, the Motion is DENIED.

SO ORDERED.

/s / Leo T. Sorokin
Leo T. Sorokin
UNITED STATES MAGISTRATE JUDGE

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