Falk v. Northern Trust Co.
Appellate Court of Illinois
763 N.E.2d 380 (2001)
Patricia Podmokly, a signatory on Ralph Falk II's (plaintiff) accounts at Northern Trust Company (Northern) (defendant), misappropriated more than $2 million from those accounts over several years. Falk sued Northern, alleging it acted in bad faith by failing to investigate even though it had notice of red flags: Podmokly used stolen funds to pay off her own loan at Northern and deposited money from Falk's account into her own account there. Northern moved to dismiss because Falk didn't sue within one year of receiving bank statements showing the unauthorized transactions, as UCC § 4-406(f) requires; the circuit court agreed and dismissed the complaint.
Whether a bank customer is barred by the Uniform Commercial Code's one-year time limit from suing a bank over unauthorized transactions more than one year after the relevant statement, when the bank is alleged to have acted in bad faith.