Cheeseman, H. (2014). Legal Environment of Business:
Re write this below :
GOSSELS V. FLEET BANK
Peter Gossels received a check from the German government for $85,071.19 Euros in which he presented to Fleet National Bank for payment to be drawn on Dresdner Bank of Germany. During the exchange for payment or draw on the account, the teller failed to inform Mr. Gossel or provide information related to the collection of payment on the check. Two months later Mr. Gossels was notified that he had received a deposit in the amount of $81,754.77 that was based on a later exchange rate in December rather than October. This resulted in a difference of almost $7,000 dollars due to the variance in time the check was processed based on the spot rate for Euro to U.S. currency. The case was heard by the appeals court and remanded back to the trial court for a judgment of his claims. Parties The case was previously heard in the Boston Municipal Court by a suit filed by Peter Gossels, as the plaintiff, against Fleet National Bank, the respondent. The appeal was filed by Peter Gossels and was heard by the Massachusetts Court of Appeals on August 22, 2007. The appellant, in this case, was Peter Gossels and the appellee was Fleet National Bank. Facts Peter Gossels had presented a check from the German government in the amount of $85,071.19 Euros to Fleet National bank to be drawn on Dresdner Bank of Germany on October 15, 1999. Two months later Mr. Gossels was notified that he had received a deposit in the amount of $81,754.77 that was based on a later exchange rate in December rather than October.
GOSSELS V. FLEET BANK This resulted in a difference of almost $7,000 dollars due to the variance in time the check was processed based on the spot rate for Euro to U.S. currency (FindLaw, 2009). After receiving the deposit Mr. Gossels filed a 30-day demand letter to the bank and filed a complaint with the Massachusetts Attorney General. The claim made my Mr. Gossels is the lower court failed to find that Fleet National Bank was in breech of contract by failing to act in “Good Faith”. According to Cheeseman, 2014 good faith is defined as honesty in the conduct or transaction concerned. Specifically, that Fleet National Bank had failed to act in good faith to collect the euro proceeds from the check it had accepted, as agent, from Mr. Gossels (FindLaw, 2009). In accordance with this Fleet Bank had a fiduciary duty to Mr. Gossels under the Commonwealth of Massachusetts. The Fleet National Bank, and the international teller, as a general agent for Mr. Gossels, where he was the primary, failed to exercise the fiduciary relationship and duty of care in not disclosing all material fact in the exchange of the check for collection. In this case the duty of care was the obligation that the teller, and Fleet, as agents for Mr. Gossels owed to use the same level of care that a reasonable person in the same position would use in the same circumstances. A breach occurred, through the tellers’ actions, whether they were purposeful or not in that the check was not endorsed, and information in regards to spot rate and the delay that was caused was due to negligence of the agent.
The Municipal Court entered a judgment against Mr. Gossels in his contract claim, conversion claim, but found that damages were owed in the amount of $6,861.68. Mr. Gossels appealed the decision based on the following: 1) that the trial judge erred to find Fleet was in breach of contract, 2) The judge erred in the finding that Fleet had converted his fund for their use, and 3) the judgment of $6,861.68 in damages (FindLaw, 2007). Issues The central theme of this case revolves around the statutes as to the fiduciary relationship between an agent and the primary in a transaction. It is important to note that the appeals court found that in this case the relationship is founded more on statute than agreement as found in contracts law. Because of this differentiation, Mr. Gossels claim is actually a tort and not a contract issue. Due to this differentiation the bank, or agent, had a fiduciary relationship and a duty of care with and to Mr. Gossels. In this relationship, the bank was negligent and that code specifies that the use of ordinary care is in fact required to collections and they are liable by law. Applicable Law First, under the Uniform Commercial Code, as it relates to the transaction in question, the bank did in fact become an agent and Gossels the primary when the check was accepted for collection (FindLaw, 2007). Fleet had provided a receipt for the collection of the funds as provided by the check, regardless of the check was or was not endorsed.
As an agent for the collection of Mr. Gossels funds the bank not only had a fiduciary duty but at the duty of care and Fleet had failed to do as promised. The Court of Appeals used Kirley v. Kirley (1988), Mack v. American Fletcher Natl. Bank & Trust Co, and Barber v. Fox to interpret the law and determine that the breach of Fleets fiduciary duty was a tort and not a breach of contract. In this case, the law provided a remedy to Mr. Gossels under tort law as the “wrong” that was done was done through negligence and unintentional. On point two of Mr. Gossels’s claim that Fleet had converted funs from the check for its use, the court used Grand Pac. Fin. Corp v Brauer (2003), and Abington Natl. Bank v. Ashwood Homes, Inc to define conversion and that it wrongfully exercised an act of ownership (Leagle, 2007). According to case law Fleet, as a fiduciary, did in fact knowingly retain a portion of funds and deprived Mr. Gossels of those funds and commit a tort of conversion. In this case, conversion is not embezzlement as the bank did not abscond with the funds, but rather they purposefully deprived Mr. Gossels when they converted those funds to their private use based on their retail differential and failed to respond to Mr. Gossels requests for remedy. This conduct was explained by the court as described in Jerlyn Yacht Sales, Inc, v. Wayne R. Roman Yacht Brokerage more accurately when Fleet failed to disclose a profit that was not known to Mr. Gossels, the principal. The bank is bound, by a fiduciary relationship, to explain the disposition of funds. Holding The Massachusetts Appellate Court found in favor of Mr. Gossels and remanded the case back to the trial courts for remedy. The court found that Fleet was in fact liable for negligence.
GOSPELS V. FLEET BANK misrepresentation and held with the lower court judge’s decision. The court did reverse the lower court’s decision in regards to conversion and found that Fleet had violated its fiduciary duty. The prior judgment was vacated to reflect actual damages of $10,269.03, which would have been the amount based on the bank daily sheet, spot, and if the check and been processed in the manner prescribed not only by code but also by the bank policy. Reasoning The reasoning, in this case, was rather a matter of defining contract law and tort law and how the case should be considered under existing case law. The court of appeals found this case was in fact tort law and if prescribed under that doctrine the issue was unintentional, but due to negligence, as such Mr. Gossels was entitled to remedy by the court. The court further found that Mr. Gossels had sought remedy before filing an action with the court, and Fleet National Bank did not respond to his inquiries for remedy. The bank through negligence did not provide material information to Mr. Gossels that would have affected his decision to collect on payment through Fleet bank. Specifically, Fleet Bank had a duty of care to inform Mr. Gossels of any information, which a reasonable person may not be aware that would affect the transaction. Conclusion This is a prime example of how previous case law is used to not only decide litigation but also as the court defined “the gist” of applicable law to better represent the best interest of justice. Law and the interpretation should never be stagnant, but rather viewing law as living and breathing that grows over time to conform with our current society.
GOSSELS V. FLEET BANK established in this case as with other cases that contract law was more commonly tort law. This clearly reflects the changes that are occurring over time as they apply to law and our society. It is not that law itself is in-flexible but rather the interpretation of that law and how judges apply that interpretation in society to account for diversity and changes.
GOSSELS V. FLEET BANK
References Cheeseman, H. (2014). Legal Environment of Business: Online Commerce, Ethics, and Global Issues (8th ed.). Pearson. FindLaw. (2009, March 12). FindLaw’s Supreme Judicial Court of Massachusetts case and opinions. https://caselaw.findlaw.com/ma-supreme-judicial-court/1423720.html Leagle. (2007, August 22). GOSSELS v. FLEET NATIONAL BANK. https://www.leagle.com/decision/200786669massappct7971777 Mass. Appeals court case summaries, (2017). Massachusetts Lawyers Weekly. Veltri & Cavanagh (2008). Payments: 2007 Developments in Case Law. The Business Lawyer, 63(4), 1309-1328.