Facts
Azur instituted a case against chase bank for acting contrary to the provisions of sections 1643 and 1666 of the United States and Varnek his ``personal assistant” .Chase bank failed to notice the fraudulent acts Varnek who acted as his assistant since 2007.In her capacity as the ``personal assistant” Varnek opened accounts on behalf of Azur, made purchases on his behalf and had access to his ``personal bills”
Varnek in the year 1999 started forging the signature of Azur so as to withdraw money from his account. A times, Varnek would purchase items online and use Azur’s account to clear the payments. Additionally, she would forge his signature to write cheques in her favor. Chase bank was aware of the fraud thrice and called Azur to inform him. However, the transactions were validated later an act that was presumed to be carried out by Azur by Chase Bank. The transactions by Varnek were usually reflected on the statements sent to Azur by Chase Bank.
In the year 2006, Azur noticed the fraudulent activities committed by Azur and fired her. Later, Azur brought an action against Chase Bank seeking a refund of the money misappropriated by Varnek at the district court. The District court ruled against Azur and he appealed. The appellate court further ruled against Azur by affirming the earlier decision of the District Court.
Issues
Was there an agency relationship between Varnek and Azur?
Was Chase Bank responsible for the Misappropriated funds by Varnek?
Decision
The trial and appellate court ruled against Azur .The court’s opinion was that Varnek had apparent authority to act on behalf of Azur.
Reasoning
The appellate court commenced its analysis by defining apparent agency. The court stated that it is a relationship whereby an individual acts on behalf of the principal without express authority from the principal. However, the principal is aware of the cats of the person. In this case, Azur knew that Varnek was acting on his behalf despite the fact that he had not authorized her to do so. When Varnek was hired as Azur’s assistant, she was given access to his bank account details so that she could transact on his behalf fact that well known to Azur.
Chase Bank could not therefore question the actions of Varnek considering the fact that confirmations were made after it had contacted Azur thrice regarding suspected fraud activities by Varnek. Chase bank believed that the confirmations were actually made by Azur thus it cannot be blamed for acting negligently.
Secondly, the court applied the provisions of economic loss as per Pennsylvanian laws. The court held that the exception to the fore mentioned law provisions could only be cited if there is property or physical damage. In this case, the court held that Chase bank did not engage in the art providing information to its clients so as to benefit from that information. The court thus ruled that instituting a claim against Chase Bank contravened public policy. The court was of the view that Azur should have checked his accounts regularly so as to prevent misuse of authority by Varnek thus he cannot blame the bank for his inconveniences. The appellate court ``affirmed” the district court’s ruling.
Conclusion
My opinion is that the ruling was reasonable. Varnek acted under apparent authority thus Azur could not institute an action for reimbursement of the misappropriated money by Varnek while serving his ``personal assistant”.
Work cited
Azur vs. Chase Bank. Retrieved
