No. 58441-3-I.The Court of Appeals of Washington, Division One.
April 30, 2007.
Appeal from a judgment of the Superior Court for Snohomish County, No. 04-2-13824-6, Richard J. Thorpe, J., entered May 19 and June 6, 2006.
Affirmed by unpublished per curiam opinion.
PER CURIAM.
Charles V. McClain III appeals the summary judgment dismissal of his suit against Washington Mutual Bank arising out of the bank’s efforts to recover money it disbursed to McClain when he negotiated a cashier’s check that was later dishonored. McClain raised no genuine issue of material fact, and his allegations of improprieties by opposing counsel and the trial court are groundless. We affirm and award fees for a frivolous appeal.
The trial court was presented with the following undisputed facts. McClain negotiated a $24,500 cashier’s check issued by Boeing Employees Credit Union (BECU) at Washington Mutual. McClain received $4,500 in cash and a $20,000 credit in his Washington Mutual account. Over the next two days, McClain withdrew the $20,000. Thereafter, BECU dishonored the cashier’s check.
In correspondence with McClain, Washington Mutual asserted that it was a holder in due course entitled to payment and not subject to any personal defenses existing between McClain and BECU. Washington Mutual debited McClain’s account $24,500, which left it with a negative balance, and demanded payment within seven days. McClain instead offered only to provide an unsecured note for the amount. Washington Mutual declined that offer.
Washington Mutual then contacted BECU, protesting the check’s dishonor, claiming holder in due course status, and requesting payment for the cash it had issued to McClain. BECU eventually issued a new check for $24,500 to Washington Mutual. Washington Mutual returned the original dishonored check to BECU, credited McClain’s account with that amount and reversed administrative charges assessed for the dishonor, limiting its recovery to the $24,500 it had disbursed to McClain.
McClain thereafter sued Washington Mutual for $49,000 on alternate theories of conspiracy to defraud, improper offset, failure to honor tender of payment, theft of funds, and theft of a dishonored cashier’s check. The trial court dismissed McClain’s suit on summary judgment and denied his subsequent motion for reconsideration. McClain appeals.
McClain’s sole assignment of error is that summary judgment was inappropriate because there was a dispute of fact. Dismissal on summary judgment is proper only where “there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law. . . .” CR 56(c). All facts and reasonable inferences are viewed in the light most favorable to the nonmoving party. Sherman v. State, 128 Wn.2d 164, 183, 905 P.2d 355 (1995). The nonmoving party, however, has the affirmative burden of setting “forth specific facts showing that there is a genuine issue for trial.” Young v. Key Pharms., Inc., 112 Wn.2d 216, 225-26, 770 P.2d 182 (1989).
Here, what McClain attempts to characterize as questions of fact were actually legal arguments. McClain acknowledged that Washington Mutual ultimately recovered only the amount it was entitled to, but nonetheless asserted two theories for his $49,000 claim. First, he contended that he was entitled to receive the original cashier’s check after he negotiated it and it was dishonored. Second, he maintained that he could require Washington Mutual to give him cash for the check it later received from BECU rather than depositing it into his account. The trial court correctly rejected both theories as a matter of law.
As for McClain’s claim to the cashier’s check, contrary to his contention, he transferred legal possession of the check to Washington Mutual when he indorsed it. RCW 62A.3-203(a), (b). Because Washington Mutual took the check for value in good faith without any notice of potential invalidity or infirmity, Washington Mutual was a holder in due course, with a right of possession free of any other claim. RCW 62A.3-306; Wesche v. Martin, 64 Wn. App. 1, 8, 822 P.2d 812 (1992). McClain’s additional argument that Washington Mutual promised to return the check to him fails because the record shows that Washington Mutual offered to return the check only if he remitted the cash amount, which he did not do. Nor does McClain’s citation to Kohler v. First Nat’l Bank of Tonasket, 157 Wash. 417, 289 P. 47 (1930) support his position. The holding from Kohler relied on by McClain addresses ownership of a cashier’s check at the instant of its issuance, not the right of possession of a check after it has been successfully negotiated for cash at a second bank.
As for McClain’s claim that he was entitled to the subsequent check from BECU to Washington Mutual, he contends that because that money came from his BECU account, he was its rightful owner with authority to designate it a gift to himself and require Washington Mutual to provide it to him in cash. But as McClain acknowledged in the trial court, Washington Mutual had a security interest in the original cashier’s check dishonored by BECU. Accordingly, the second check constituted proceeds of the original check, with the result that Washington Mutual held a security interest in that second check and any funds collected on it as well. See RCW 62A.4-210; RCW 62A.9A-102(64). In addition, the record is uncontroverted that Washington Mutual had a contractual right of offset to the second check and funds collected on it. See Exhibit 1.[1]
Finally, contrary to McClain’s contention, his offer of a promissory note in lieu of cash did not constitute a tender of payment sufficient to discharge his debt to Washington Mutual under RCW 62A.3-603(b) before the issuance of the second check. First, his contractual obligation to Washington Mutual did not involve a “negotiable instrument” as used in Article 3 of the Uniform Commercial Code. See RCW 62A3.104(a); Schwab v. Getty, 145 Wash. 66, 70, 258 P. 1035 (1927) (law governing negotiable instruments does not apply to simple contract). Second, even if RCW 62A.3-603(b) could apply, McClain’s offer of promissory note did not constitute a “tender of payment” within the meaning of the statute because it did not involve the production of money. Schmerer v. Darcy, 80 Wn. App. 499, 504, 910 P.2d 498 (1996). Nor did Washington Mutual’s handling of the second check constitute a gift to McClain or an illegal attempt at double recovery. Rather, the record clearly shows that Washington Mutual at all times acted to recover only the money it was due and appropriately credited McClain’s account to that end.
Though he does not separately assign procedural error, McClain also accuses opposing counsel and the trial court of improper ex parte communication regarding his motion to reconsider. The record shows, however, that with proper notice to McClain, counsel simply facilitated consideration of the motion after McClain failed to note it correctly for hearing. The court then appropriately overlooked McClain’s procedural error and resolved the motion on its merits.
Washington Mutual requests fees on appeal for under RAP 18.9(a). An appeal is frivolous under this rule if there are no debatable issues upon which reasonable minds might differ and it is so totally devoid of merit that there is no reasonable possibility of reversal. State ex rel Quick-Ruben v. Verharen, 136 Wn.2d 888, 905, 969 P.2d 64 (1998). We resolve all doubts in favor of the conclusion that an appeal is not frivolous. In re Marriage of Penry, 119 Wn. App. 799, 804 n. 2, 82 P.3d 1231
(2004). The record discloses no issue for which there was any reasonable possibility of reversal. Washington Mutual is therefore entitled to attorney fees under RAP 18.9(a).
Affirmed.
FOR THE COURT: