Page 34 - John Hundley 2014

3. Customer Failed To Comply With Dispute Notice Requirement.

Under the bank-depositor agreement in Aliaga, the customer was required to notify the bank of
account problems, including erroneous statement entries or improper charges, within 60 days of the
date the bank sent the monthly statement to it. The customer in Aliaga did not do this, waiting nearly
two years before objecting to the payment.

“This case . . . illustrates that bank customers run tremendous risks if they do not reconcile their
bank statements in a timely manner,” the court said. It enforced the 60-day clause.

The customer argued it was not bound by the 60-day clause because the UCC controlled and the
bank-depositor agreement did not address the bank’s “negligent acceptance” of a “void” check. The
court rejected these arguments because “they are inconsistent with the UCC, disregard [prior case
law], and ignore the plain and unambiguous terms of the parties’ agreement.”

4. One-Year Contractual Statute Of Limitations Applied.

In Aliaga, the bank-depositor agreement also required that a disputing customer commence suit
within one year of the bank’s provision of the subject monthly statement. Aliaga did not do so.

Aliaga claimed that this provision was “procedurally unconscionable” and that the three-year
period of UCC § 4-111 should apply. The court said Aliaga produced no evidence the agreement
was unconscionable, and that it was “common knowledge that account holders should review monthly
bank statements to ensure against errors and rectify them promptly.” It affirmed the trial court’s
dismissal of the customer’s complaint.

Second-Tier Subsidiary Exempt Under Collection Agency Act

The exemption under the Collection Agency Act (225 ILCS 425) of banks and their subsidiaries is
not limited to first-tier subsidiaries, the Appellate Court in Chicago has ruled.

In Bank of Am., N.A. v. Kulesza, 2014 IL App (1st) 132075, debtors sought
to vacate a mortgage foreclosure judgment on the ground that the originally-
named plaintiff, BAC Home Loans Servicing, LP was not registered under the
act and thus the judgment was void. That entity was actually a limited
partnership owned by a subsidiary of the bank.

Noting that the legislature expressly limited a similar exemption under the
Residential Mortgage License Act (205 ILCS 635) to first-tier subsidiaries, the
court “express inclusive of a provision in one part of a statute and its omission
in a parallel section is an intentional exclusion from the later” and could not be ignored. Accordingly,
the second-tier entity was a subsidiary exempt under the act.

Brenda/SharpThinking/#123.pdf
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