Author: Nancy Lischer
The Seventh Circuit reversed a $334,865 judgment against a credit union in Rodrigue v. Olin Employees Credit Union, Seventh Circuit No. 03-2470 and 03-2607 (7th Cir. April 19, 2005). An employee systematically cashed or de-posited checks she stole from her employer from 1992-1999. The employer did not sue the credit union until 2000. The lower court had held that the Illinois "continuing violation" rule applied so that the three-year UCC statute of limitations did not start until the last check was cashed.
The Seventh Circuit reversed, agreeing with the credit union (represented by Nancy Lischer of Hinshaw’s Appellate Group) that the UCC statute of limitations barred all but the last three years of checks. It held that the time to sue started upon accrual of each individual conversion claim. Because each converted check gave rise to a separate law suit, "accrual" was when each check was cashed. The Seventh Circuit agreed with the credit union that the fact that a series of checks had been cashed in the same fashion was irrelevant, holding: "[A] cause of action for conversion accrued, and the three-year statute of limitations began to run, at the time each check was cashed or deposited."
On appeal, the credit union faced the decision in Field v. First Nat'l Bank of Harrisburg, 619 N.E.2d 1296 (Ill.App. 1993), which held that as long as a series of checks are converted and cashed, the time to sue was extended until the last check was cashed under Illinois' "continuing violation" rule. The Seventh Circuit held that if the "continuing violation" question was presented to the Illinois Supreme Court, it would not follow the Field decision.
The Seventh Circuit remanded for recalculation of damages.
If you have any questions about this case, contact Nancy Lischer or your regular attorney contact at Hinshaw. |