Any Kind Checks and HDC Status
Andres Bocanegra
MBA 610-Q2285
January 4, 2015
6-3: Short Paper – Any Kind Checks and HDC Status
Several factors come into play when considering the fairness of the court’s ruling in this case. We have to look at whether Any Kind Checks Cashed acted reasonably in accepting a negotiable item from the payee. We also have to consider why the payee used the services of a check-cashing establishment in the course of conducting his business. Also, it is important to review the provisions that should be met when an entity tries to assert a protection as a holder in due course. Was Any Kind Checks an HDC in this case? This depends on what responsibility they had in accepting the negotiable instrument from Mr. Guarino. Did they exercise due care in accepting the item? These questions and others are important factors in determining Any Kinds’ status as an HDC in this case. The court ruled that Any Kind did retain HDC status with regards to the second check for $5,700 but not for the check for $10,000. In reviewing the brief for the case, we can see that the company did attempt to reach Mr. Talcott, but were unsuccessful. Without his authorization, Any Kind acted on their own in approving the cashing of the check. There is an assumption on Mr. Talcott’s part that Guarino was aware there was a stop payment on the $10,000 item. His assumption was incorrect, but he has no obligation to report what actions he took with his financial institution. Mr. Talcott was operating on an understanding that Guarino would not utilize the check based on the information that was relayed to him. Mr. Guarino, however, should have been aware of his conversation with Talcott and if he was acting reasonably, not pursued action on the $10,000 item. Any Kind has an obligation to act not only in good faith, but in fair dealing with consideration to all parties involved in order to maintain their status as an HDC. The reason Any Kind Checks does not attain HDC status in the transaction with the
MBA 610-Q2285
January 4, 2015
6-3: Short Paper – Any Kind Checks and HDC Status
Several factors come into play when considering the fairness of the court’s ruling in this case. We have to look at whether Any Kind Checks Cashed acted reasonably in accepting a negotiable item from the payee. We also have to consider why the payee used the services of a check-cashing establishment in the course of conducting his business. Also, it is important to review the provisions that should be met when an entity tries to assert a protection as a holder in due course. Was Any Kind Checks an HDC in this case? This depends on what responsibility they had in accepting the negotiable instrument from Mr. Guarino. Did they exercise due care in accepting the item? These questions and others are important factors in determining Any Kinds’ status as an HDC in this case. The court ruled that Any Kind did retain HDC status with regards to the second check for $5,700 but not for the check for $10,000. In reviewing the brief for the case, we can see that the company did attempt to reach Mr. Talcott, but were unsuccessful. Without his authorization, Any Kind acted on their own in approving the cashing of the check. There is an assumption on Mr. Talcott’s part that Guarino was aware there was a stop payment on the $10,000 item. His assumption was incorrect, but he has no obligation to report what actions he took with his financial institution. Mr. Talcott was operating on an understanding that Guarino would not utilize the check based on the information that was relayed to him. Mr. Guarino, however, should have been aware of his conversation with Talcott and if he was acting reasonably, not pursued action on the $10,000 item. Any Kind has an obligation to act not only in good faith, but in fair dealing with consideration to all parties involved in order to maintain their status as an HDC. The reason Any Kind Checks does not attain HDC status in the transaction with the