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PGA case - Page 638 689 So.2d 638 96-0844 La.App 4 Cir 34...

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Page 638 689 So.2d 638 96-0844 La.App. 4 Cir. 2/12/97, 34 UCC Rep.Serv.2d 1080 GULF STATES SECTION, PGA, INC. and The Travelers Insurance Company v. WHITNEY NATIONAL BANK OF NEW ORLEANS. No. 96-CA-0844. Court of Appeal of Louisiana, Fourth Circuit. Feb. 12, 1997. Page 639 Thomas H. Matuschka, Grayson H. Brown, Law Firm of Grayson Brown, Baton Rouge, for Plaintiffs/Appellants. Jay Corenswet, Mary L. Grier Holmes, Milling, Benson, Woodward, Hillyer, Pierson & Miller, New Orleans, for Defendant/Appellee. Before BYRNES, ARMSTRONG and JONES, JJ. [96-0844 La.App. 4 Cir. 1] ARMSTRONG, Judge. In this suit to recover payments made on forged checks, the plaintiffs, Gulf States Section, PGA, Inc. (the "PGA"), and its insurer, The Travelers Insurance Company ("Travelers"), appeal from a judgment rendered against them and in favor of the plaintiff, Whitney National Bank of New Orleans ("Whitney"). We now affirm the judgment of the trial court. During a four month period in 1992, from May through August, an employee of PGA, Adrenetti Collins, a secretary, forged and negotiated eighteen PGA checks totalling $22,699.81. Travelers paid the PGA this amount, less a deductible, under an insurance policy. Travelers and PGA instituted this action against Whitney, which paid the forged instruments, seeking reimbursement. Collins was hired as a temporary employee sometime in February or March 1992 by Robert Brown, the executive director of the Gulf States Section of the Professional Golf Association. He employed Collins, whom he knew as Elizabeth Couch, an alias, as a full-time employee in May 1992. Unbeknownst to Brown, in 1982 Collins had been convicted of the theft of $5,445.07 from a previous [96-0844 La.App. 4 Cir. 2] employer, which she obtained by forging and negotiating twenty company checks. She also had a 1985 conviction for issuing worthless checks. The trial court found that Brown's negligence contributed to the forgeries and therefore the defendants were precluded from recovering from Whitney, which made payment on the forged instruments. Brown testified Page 640
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that his PGA office had a staff of three, including a secretary. While three of "his officers" were authorized to write checks, Brown said they were not in the office. He primarily signed checks and was responsible for paying bills and handling the bank accounts. The checks were made to be tractor-fed through a printer. The checks came in lots of 2,000, all connected to be fed through the printer, and were kept in a box beneath the printer stand in Brown's office. Collins had access to his office. Brown wrote approximately 150-200 checks a month and used a computer program, Quicken, to write and record the checks. The checks were sequentially prenumbered. Using the program, Brown would bring up a representation of a check on his computer screen, type in the information on the screen, the name of the payee, the amount, etc., and then print the check. The check roll was not always hooked up to run through the printer so, when preparing to print out a check, Brown would have to align the checks so the information as to payee, amount, etc. would be correctly printed on the blank check. During this alignment process Brown would make
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