Stowell v. Cloquet Co-op Credit Union
Supreme Court of Minnesota
557 N.W.2d 567 (1997)
Randall Stowell (plaintiff) opened an account with Cloquet Credit Union (defendant) and signed a Draft Withdrawal Agreement stating that a statement would be treated as accurate and final if he didn't object within 20 days of mailing. Over about a year, a neighbor named Robert Nelson stole roughly 50 checks and Stowell's monthly statements from his mailbox, forged Stowell's signature, and cashed the checks; Credit Union sent duplicate statements that Stowell also never received, despite his repeated inquiries. Stowell eventually discovered the forgeries -- totaling over $22,000 -- when a check bounced, and sued Credit Union for reimbursement; a jury found for Stowell and the court of appeals affirmed, and Credit Union appealed.
Whether, under the Uniform Commercial Code, a bank may, by agreement with a customer, set a time limit by which a customer must inspect account statements and notify the bank of any errors, as long as this period is not manifestly unreasonable.