Valley Bank of Ronan v. Hughes

Scam victim Hughes (defendant) deposited counterfeit official checks and personal checks totaling over $1 million into his Valley Bank (plaintiff) accounts, after a bank official assured him (incorrectly) that the official checks didn't need verification; the bank wired $800,000 to a foreign account at Hughes's request before discovering the checks were counterfeit, then charged back Hughes's account for that amount. Hughes made partial payment and signed a secured note for the rest, then defaulted; Valley Bank sued to foreclose, and Hughes counterclaimed for negligent misrepresentation based on the bank's statements about its check-verification process, among other claims. The district court granted Valley Bank summary judgment, finding no violation of its UCC duty of ordinary care, and Hughes appealed.