{
  "id": 6767476,
  "name": "LAWYERS MUTUAL LIABILITY INSURANCE COMPANY OF NORTH CAROLINA, Plaintiff v. SUE E. MAKO; R. SCOTT GIRDWOOD; and MAKO & ASSOCIATES, P.A., Defendants",
  "name_abbreviation": "Lawyers Mutual Liability Insurance v. Mako",
  "decision_date": "2014-04-01",
  "docket_number": "No. COA13-691",
  "first_page": "129",
  "last_page": "133",
  "citations": [
    {
      "type": "official",
      "cite": "233 N.C. App. 129"
    }
  ],
  "court": {
    "name_abbreviation": "N.C. Ct. App.",
    "id": 14983,
    "name": "North Carolina Court of Appeals"
  },
  "jurisdiction": {
    "id": 5,
    "name_long": "North Carolina",
    "name": "N.C."
  },
  "cites_to": [
    {
      "cite": "N.C. Gen. Stat. \u00a7 25-4-104",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "weight": 4,
      "year": 2013,
      "pin_cites": [
        {
          "page": "(11)"
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "567 S.E.2d 184",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 2002,
      "pin_cites": [
        {
          "page": "187",
          "parenthetical": "\"Negotiable instruments, also called simply \"instruments,\" may include, e.g., a personal check, cashier's check, traveler's check, or CD [pursuant to] N.C.G.S. \u00a7 25-3-104.\""
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "151 N.C. App. 704",
      "category": "reporters:state",
      "reporter": "N.C. App.",
      "case_ids": [
        9082112
      ],
      "year": 2002,
      "pin_cites": [
        {
          "page": "707",
          "parenthetical": "\"Negotiable instruments, also called simply \"instruments,\" may include, e.g., a personal check, cashier's check, traveler's check, or CD [pursuant to] N.C.G.S. \u00a7 25-3-104.\""
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/nc-app/151/0704-01"
      ]
    },
    {
      "cite": "N.C. Gen. Stat. \u00a7 25-3-104",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "pin_cites": [
        {
          "page": "(f)"
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "343 S.E.2d 188",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 1986,
      "pin_cites": [
        {
          "page": "190-91"
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "80 N.C. App. 383",
      "category": "reporters:state",
      "reporter": "N.C. App.",
      "case_ids": [
        8523953
      ],
      "year": 1986,
      "pin_cites": [
        {
          "page": "385"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/nc-app/80/0383-01"
      ]
    },
    {
      "cite": "601 S.E.2d 915",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 2004,
      "pin_cites": [
        {
          "page": "920",
          "parenthetical": "citation omitted"
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "166 N.C. App. 333",
      "category": "reporters:state",
      "reporter": "N.C. App.",
      "case_ids": [
        8411331
      ],
      "year": 2004,
      "pin_cites": [
        {
          "page": "340",
          "parenthetical": "citation omitted"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/nc-app/166/0333-01"
      ]
    }
  ],
  "analysis": {
    "cardinality": 498,
    "char_count": 10037,
    "ocr_confidence": 0.715,
    "pagerank": {
      "raw": 4.03580807328026e-08,
      "percentile": 0.18201601715003463
    },
    "sha256": "ae3023ee62f959428f34c5167c9fe7c5dddfe960d3eb7a4811582a28fd699a68",
    "simhash": "1:e8ce221406b85c2b",
    "word_count": 1589
  },
  "last_updated": "2023-07-14T17:57:00.832613+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges McGEE and STROUD concur"
    ],
    "parties": [
      "LAWYERS MUTUAL LIABILITY INSURANCE COMPANY OF NORTH CAROLINA, Plaintiff v. SUE E. MAKO; R. SCOTT GIRDWOOD; and MAKO & ASSOCIATES, P.A., Defendants"
    ],
    "opinions": [
      {
        "text": "BRYANT, Judge.\nAs our General Statutes hold that a cashier\u2019s check is to be treated in the same fashion as a traditional check, a cashier\u2019s check must undergo a provisional settlement period before it can be deemed irrevocably credited by the payor bank. Where there is no issue as to any material fact regarding our statutory language concerning the processing of a cashier\u2019s check, summary judgment is appropriate.\nDefendants Sue E. Mako; R. Scott Girdwood; andMako & Associates, P.A. (\u201cdefendants\u201d) had a professional liability insurance policy (\u201cthe policy\u201d) with plaintiff Lawyers Mutual Liability Insurance Company (\u201cLawyers Mutual\u201d) for the period of 7 August 2011 through 7 August 2012. On 17 June 2011, defendants received an email from a potential client, Oliver Burkeman (\u201cBurkeman\u201d). Burkeman contacted defendants seeking assistance in collecting $350,000.00 allegedly owed him by his former employer, Crest Iron and Steel; Burkeman claimed the money was part of a workers\u2019 compensation claim settlement.\nOn 23 June 2011, Burkeman sent a signed Fee Agreement to defendants, and defendants agreed to represent Burkeman in collecting his settlement money. Defendants would assess Burkeman a contingent fee of 20% of any amount obtained.\nOn 11 July 2011, defendants received an initial check for $175,000.00 from Crest Iron and Steel in partial payment of the amount purportedly owed to Burkeman. Defendants deposited the check into their trust account on 12 July 2011. Although defendants had a policy of holding funds for ten days prior to distribution, the policy was not enforced and distribution of the funds was authorized that same day. Burkeman was to collect $140,000.00 after defendants\u2019 contingent fee of $35,000.00 had been deducted from the $175,000.00 check. Defendants attempted to wire $140,000.00 to a bank account in Japan per Burkeman\u2019s instructions. However, due to an error in account information, the wire was unsuccessful and defendants could not collect their contingent fee.\nOn 14 July 2011, defendants received a second check for $175,000.00 from Crest Iron and Steel in partial payment of the amount purportedly owed to Burkeman. On 15 July 2011, defendants deposited the second check and, again not abiding by their policy of holding funds for ten days, immediately wired $140,000.00 to the Japanese bank account. Defendants collected from the second check a $35,000.00 contingent fee which was deposited to defendants\u2019 trust account. Also on 15 July 2011, defendants were notified by RBC Bank that the first of the two checks was being returned unpaid. On 18 July 2011, RBC Bank notified defendants that the second check was also being returned unpaid. Both checks were determined to be fraudulent. As a result, defendants suffered a total loss of $175,000.00 from their client trust account.\nOn 1 November 2011, defendants filed a claim with Lawyers Mutual to recover $175,000.00 in funds lost as a result of the fraud. Lawyers Mutual filed a complaint for declaratory relief on 2 November 2011. On 12 December 2011, Lawyers Mutual filed a motion for summary judgment but withdrew that motion on 21 December 2011. Lawyers Mutual then filed a motion for judgment on the pleadings that same day, but the motion was not heard. Defendants filed a motion for summary judgment on 23 December 2011, which was denied by the trial court on 3 April 2012.\nOn 30 May 2012, Lawyers Mutual filed an amended complaint for declaratory relief. Lawyers Mutual then filed for summary judgment on 15 October 2012. On 18 December 2012, the trial court granted Lawyers Mutual\u2019s motion for summary judgment determining in relevant part that: \u201cIt is undisputed that the funds at issue in this action were lost at a time when the deposit had not yet \u2018cleared\u2019 Defendants\u2019 trust account at the depositary bank. The court concludes that the phrase \u2018irrevocably credited\u2019 in the insurance policy precludes coverage of Defendants\u2019 claim of loss.\u201d Defendants appeal.\nOn appeal, defendants argue that the trial court erred in granting Lawyers Mutual\u2019s motion for summary judgment. We disagree.\nSummary judgment is appropriate \u201cif the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (2013). Thus, this Court must \u201cdetermine, on the basis of the materials presented to the trial court, whether there is a genuine issue as to any material fact and whether the moving party is entitled to judgment as a matter of law.\u201d Coastal Plains Utils., Inc. v. New Hanover Cnty., 166 N.C. App. 333, 340, 601 S.E.2d 915, 920 (2004) (citation omitted). We review the granting of summary judgment de novo. Va. Elec. & Power Co. v. Tillett, 80 N.C. App. 383, 385, 343 S.E.2d 188, 190-91 (1986).\nDefendants contend that the trial court erred in granting summary judgment to Lawyers Mutual because, under Provision I., Section (r) of their insurance policy with Lawyers Mutual, the term \u201cirrevocably credited\u201d is ambiguous. Specifically, defendants argue that they understood \u201cirrevocably credited\u201d to mean that the policy would cover losses involving forged cashier\u2019s checks because they assumed that a cashier\u2019s check is, like cash, irrevocably credited upon deposit. Defendants\u2019 insurance policy provides in part that:\nI. Exclusions . . . [T]his policy does not afford to any Insured any coverage or benefits whatsoever, including, but not limited to, any right to any defense, with respect to:\n(r) any claim, or any theory of liability asserted in a suit, based in whole or in any part upon disbursement by any Insured, or any employee or agent of any Insured, of funds, checks or other similar instruments deposited to a trust, escrow or other similar account unless such deposit is irrevocably credited to such account[.]\nPursuant to N.C. Gen. Stat. \u00a7 25-3-104(f), \u201c \u2018Check\u2019 means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier\u2019s check or teller\u2019s check.\u201d N.C.G.S. \u00a7 25-3-104(f) (2013); Thompson v. First Citizens Bank & Trust Co., 151 N.C. App. 704, 707, 567 S.E.2d 184, 187 (2002) (\u201cNegotiable instruments, also called simply \u201cinstruments,\u201d may include, e.g., a personal check, cashier\u2019s check, traveler\u2019s check, or CD [pursuant to] N.C.G.S. \u00a7 25-3-104.\u201d). A settlement agreement to pay a negotiable instrument can be either provisional or final. N.C. Gen. Stat. \u00a7 25-4-104(11) (2013). A negotiable instrument may also be referred to as an \u201citem.\u201d Id. \u00a7 25-4-104(9).\nAn item is finally paid by a payor bank when the bank has first done any of the following:\n(1) Paid the item in cash;\n(2) Settled for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement; or\n(3) Made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearing-house rule, or agreement.\nId. \u00a7 25-4-213(a). A payor bank may revoke a provisional settlement prior to making final payment and before its midnight deadline by returning the item. Id. \u00a7 25-4-301(a).\nDefendants argue that \u201cirrevocably credited\u201d is ambiguous because a cashier\u2019s check differs from a traditional check. Defendants further argue that it was their understanding that a cashier\u2019s check was as good as cash. Defendants\u2019 argument is without merit, as pursuant to N.C.G.S. \u00a7 25-3-104(f), a cashier\u2019s check is treated the same as a traditional check. A traditional check cannot be deemed fully credited until its provisional settlement period has elapsed without action by the bank to reject the check; the same is true for a cashier\u2019s check. Therefore, the provisional settlement period that accompanies traditional checks must also apply to cashier\u2019s checks. As such, Lawyers Mutual\u2019s policy\u2019s use of \u201cirrevocably credited\u201d refers to the statutory provisions which govern a check\u2019s acceptance or rejection during its provisional settlement period. Accordingly, Provision L, Section (r) of Lawyers Mutual\u2019s insurance policy would not protect defendants unless defendants deposited a check and waited until the provisional settlement period had finally elapsed to ensure that the check had been accepted and fully credited by the payor bank, regardless of whether it was a traditional check or cashier\u2019s check. Therefore, the trial court did not err in granting Lawyers Mutual\u2019s motion for summary judgment.\nAffirmed.\nJudges McGEE and STROUD concur\n. Defendants charged Burkeman a 20% contingent fee for any amount recovered; as such, defendants\u2019 contingent fee for assisting Burkeman with the first purported settlement check of $175,000.00 was $35,000.00. Defendants would likewise assess a contingent fee of $35,000.00 for assisting Burkeman in collecting the second purported settlement check of $175,000.00.",
        "type": "majority",
        "author": "BRYANT, Judge."
      }
    ],
    "attorneys": [
      "Poyner Spruill LLP, by T. Richard Kane and Andrew H. Erteschik, for plaintiff-appellee.",
      "Girdwood & Williams, PLLC, by Benjamin D. Williams, for defendant-appellants."
    ],
    "corrections": "",
    "head_matter": "LAWYERS MUTUAL LIABILITY INSURANCE COMPANY OF NORTH CAROLINA, Plaintiff v. SUE E. MAKO; R. SCOTT GIRDWOOD; and MAKO & ASSOCIATES, P.A., Defendants\nNo. COA13-691\nFiled 1 April 2014\nInsurance \u2014 interpretation of policy \u2014 term not ambiguous\u2014 cashier\u2019s check treated as traditional check\nThe trial court did not err in a declaratory relief action by granting summary judgment in favor of plaintiff insurer. The term \u201cirrevocably credited\u201d was not ambiguous in the insurance policy as, pursuant to N.C.G.S. \u00a7 25-3-104\u00ae, a cashier\u2019s check is treated the same as a traditional check. Therefore, the insurance policy would not have protected defendants unless defendants had deposited the cashier\u2019s check and waited until the provisional settlement period had finally elapsed.\nAppeal by defendants from order entered 18 December 2012 by Judge Lucy N. Inman in Wake County Superior Court. Heard in the Court of Appeals 5 November 2013.\nPoyner Spruill LLP, by T. Richard Kane and Andrew H. Erteschik, for plaintiff-appellee.\nGirdwood & Williams, PLLC, by Benjamin D. Williams, for defendant-appellants."
  },
  "file_name": "0129-01",
  "first_page_order": 139,
  "last_page_order": 143
}