“Thought for the Day” #632 – by Stephen R. Elville, J.D., LL.M.

December 28, 2015

A New Jersey appeals court has held that a bank is not liable for improper withdrawals made by a nursing home resident’s caregiver under a power of attorney because the resident’s signature was on the power of attorney. In re Estate of Yahatz (N.J. Super. Ct., App. Div., No. A-0099-14T1, Dec. 14, 2015).  Michael Yahatz opened a bank account and signed an agreement that provided that the bank would not be liable if Mr. Yahatz failed to notify the bank of suspected problems within 60 days of receiving a bank statement.  Mr. Yahatz entered a nursing home where Nydia Davalia was one of his caretakers.  Mr. Yahatz signed a power of attorney appointing Ms. Davalia as his attorney-in-fact and authorizing her to make withdrawals from his bank account.  Ms. Davalia withdrew $80,000 from the account.  After Mr. Yahatz died, his estate filed a claim against the bank, arguing that it was negligent when it accepted the power of attorney.  The trial court granted the bank summary judgment, ruling that the claims were time-barred because Mr. Yahtzee did not notify the bank about the contested withdrawals until more than 60 days after he received the bank statement. The estate appealed, arguing that the power of attorney was invalid on its face because of the way it was signed.  The New Jersey Superior Court, Appellate Division, affirmed, holding that the bank was not negligent when it accepted the power of attorney from Ms. Davila because the signature on the power of attorney was Mr. Yahatz’s signature. According to the court, “there can be no violation of a duty of ordinary care, or a finding of bad faith, where a bank fails to take action to confirm the authenticity of a signature the customer does not dispute is his own.”