Auto-Owners Insurance Co. v. Bank One
Supreme Court of Indiana
879 N.E.2d 1086 (2008)
Kenneth Wulf worked for Auto-Owners Insurance Company (plaintiff) collecting subrogation and salvage checks. Wulf opened a checking account at Bank One (defendant) in Auto-Owners' name without providing proof of authorization. Over nearly eight years, Wulf deposited $546,000 of Auto-Owners' checks into that account without the company's knowledge. When the fraud was discovered, Auto-Owners sued Bank One, arguing the bank failed to exercise ordinary care in opening the account and that this failure caused Auto-Owners' losses. The trial court granted summary judgment for Bank One, and the court of appeals affirmed.
Whether a fraudulently indorsed check is nonetheless effective against the employer when the bank paying the check exercised ordinary care in paying it.