HomeMy WebLinkAboutMINUTES - 03092004 - C.24 TO: BOARD OF SUPERVISORS Contra
FROM: Silvano B. Marches!, County Counsel
Costa
DATE: March 9, 2004
` - County
SUBJECT: Settlement Agreement with California Check Cashing Stores, Inc. Clelf
SPECIFIC REQUEST(S)OR RECOMMENDATIOWS)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
AUTHORIZE the Auditor-Controller to execute an agreement with California Check Cashing Stores,
Inc. to settle a stopped-check lawsuit filed against the County.
FISCAL IMPACT:
Under the terms of the settlement agreement, the County will pay California Check Cashing Stores,
Inc. a total of $874.32, which represents the amount of the stopped check, half of a $20
administrative fee, and half of the $155.30 fee to file the lawsuit.
BACKGROUND:
On January 29, 2004, California Check Cashing Stores, Inc. ("CCCS") served the County with a
complaint for money (California Check Cashing Stores, Inc. v. Contra Costa County, et al., Superior
Court Case No. WS O4-0115). CCCS alleges it is a "holder in due course" of a check (No. 357346)
drawn on the County's account with Wells Fargo Bank in the amount of $786.67. The County
placed a stop payment order on the check after issuing it. The payee subsequently endorsed the
check and delivered it to CCCS for value.
A party becomes a "holder in due course" by taking a check for value in good faith, without notice
that the instrument has been dishonored. (Cal. U. Com. Code, § 3302.) CCCS appears to be a
legitimate holder in due course of check No. 357346. A bank is required to honor a stop-payment
order (Cal. U. Com. Code, § 4303), but is not required to provide notice of the order to unknown
third parties. A third party is not required to ask whether an check has been dishonored. The
County is entitled to collect the amount of the check from the payee. Given the foregoing, the small
amount in controversy, and the cost of further legal fees in going to trial, settlement appears to be
the most cost-effective course of action.
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CONTINUED ON ATTACHMENT: 1ES SIGNATURE:
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.�'kECOMMENDATION OF COUNTYADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
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SIGNATURE(SW- 6
-- -- ---
--------------ACTION OF
BOARD ON APPROVE AS RECOMMENDED XX OTHER
r
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
XX UNANIMOUS(ABSENT & V ) AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AlrES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED MARCH 09, 2004
CONTACT: Thomas L.Geiger(335-1813) JOHN SWEETEN,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTYADMINISTRATOR
CC: Auditor
BY ,DEPUTY
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