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Case Citation
Legal Case Name

CONDER v. UNION PLANTERS BANK, N.A. Case Brief

United States Court of Appeals, Seventh Circuit2004
384 F.3d 397 Commercial Law Torts Contracts

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Case Brief Summary & Legal Analysis

General Brief
3 min read

tl;dr: A drawer victimized by a Ponzi scheme sued the depositary bank for accepting improperly endorsed checks. The court held the bank was not liable, as the UCC bars a drawer’s conversion claim and the bank’s actions did not cause the drawer’s loss.

Legal Significance: This case clarifies that under the revised UCC, a drawer cannot sue a depositary bank for conversion. It also affirms the “intended payee” defense as a direct application of tort causation principles, barring liability where funds reach the entity the drawer intended to pay.

CONDER v. UNION PLANTERS BANK, N.A. Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

The plaintiff, Conder, was a victim of a Ponzi scheme operated by Johann Smith and his associates through various entities known as the “Heartland Financial Group.” Conder wrote numerous checks payable to “Johann M. Smith Escrow Agent.” Instead of being endorsed by Smith, the checks were stamped “FOR DEPOSIT ONLY LINCOLN FIDELITY ESCROW” and deposited into an account held by Lincoln Fidelity, a Heartland entity, at the defendant Union Planters Bank. Union Planters, the depositary bank, accepted these improperly endorsed checks for deposit. The funds were subsequently withdrawn by the schemers, resulting in a loss of approximately $35 million to all investors. Conder, representing a class of investors, sued Union Planters Bank, asserting claims for conversion and negligence for its role in accepting the checks without proper endorsements from the named payee.

Court Holding & Legal Precedent

Issue: Can a drawer of a check sue a depositary bank for conversion or negligence when the bank accepts the check with an improper endorsement for deposit into an account controlled by the entity the drawer intended to receive the funds?

No. The court affirmed the dismissal of the drawer’s suit. The UCC Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nu

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IRAC Legal Analysis

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IRAC (Issue, Rule, Analysis, Conclusion) is the exact format professors want to see in your exam answers. Our exclusive Flash-to-Full briefs combine holding, analysis, and rule statements formatted to match what A+ students produce in exams. These structured briefs help reinforce the essential legal reasoning patterns expected in law school.

Legal Issue

Can a drawer of a check sue a depositary bank for conversion or negligence when the bank accepts the check with an improper endorsement for deposit into an account controlled by the entity the drawer intended to receive the funds?

Conclusion

This decision reinforces the UCC's specific allocation of liability in the check Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostr

Legal Rule

Under Uniform Commercial Code § 3-420(a)(i), an action for conversion of an Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla

Legal Analysis

The court analyzed the plaintiff's two theories of liability, conversion and negligence, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do e

Flash-to-Full Case Opinions

Flash Summary

  • Under UCC § 3-420(a), a drawer of a check cannot sue
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui offic

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