TRI-COUNTY NATIONAL BANK V. GREENPOINT CREDIT, LLC
CIVIL PROCEDURE – Indispensable parties; Statute of Limitations (Conversion)
Tri-County appeals grant of Summary Judgment by TC on Greenpoint’s claim for conversion. Greenpoint held a security interest in a mobile home that was destroyed by fire for which the homeowner and Greenpoint were jointly issued a check by the home’s insurer, Kentucky Farm Bureau, in late 2002. The homeowner then presented the check to Tri-County for cashing, which Tri-County did even though Greenpoint had not also endorsed the check. Greenpoint sued Tri-County for conversion in June 2004 for the bank’s violation of KRS 355.3-420. The TC entered Summary Judgment for Greenpoint, noting that the bank admitted to negotiating the check without Greenpoint’s endorsement. On appeal, Tri-County cites several errors in TC’s ruling: Greenpoint’s failure to name an indispensible party, and the expiration of the applicable statute of limitations.
Held: COA affirms the TC’s grant of Greenpoint’s MSJ, noting that Tri-County had not preserved its argument that Greenpoint should have named KFB and Republic Bank (as drawer and payor of the check, respectively) as defendants as well since the burden is on the party who believes an indispensible party should be joined to file the appropriate motion in an effort to join such a party. Tri-County never filed any such motion or otherwise brought the issue to the attention of the TC, so the COA ruled that the issue was not subject to appellate review.
COA also rejects the statute of limitations argument, noting that Greenpoint’s action did not allege any breach of warranties as contained in KRS 355.4-207 as Tri-County contends, but rather asserted a conversion claim. Per KRS 355.3-118(7), an action for conversion of a negotiable instrument must be commenced within 3 years after the claim accrues. COA concludes that Greenpoint’s suit came 18 months after the conversion, which was clearly within the allotted timeframe.
Digested by Chad Kessinger