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Suntrust Bank, Atlanta v. Atlanta Classic Cars Inc.

A bank could not recover under a theory of money had and received based on a dealership's failure to list the bank as a lien holder on a car loan because the bank lost the opportunity to recover its collateral because the car was stolen, not because a third-party asserted a superior right.

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SunTrust Bank, Atlanta funded a car loan by issuing a check to Atlanta Classic Cars, Inc., “ACCI”, so that its customer could purchase a car. The check included a conditional endorsement whereby ACCI warranted that it would list SunTrust as the first lien holder on the application for a certificate of title. ACCI cashed the check but did not comply with the endorsement. The issue in this case is whether SunTrust is entitled to recover the full amount of the loan from ACCI under the theory of money had and received even though breach of the endorsement did not cause SunTrust’s loss. We hold that the bank may not recover under that theory, because, as applied to this scenario, the theory implicitly includes a requirement of causation.

Construed in favor of ACCI, the facts show that in 1997, Elizabeth Bassett purchased a Porsche from ACCI financed by SunTrust, with the loan secured by the car. On April 18, 1997, SunTrust wrote ACCI, instructing it to list SunTrust as the first lien holder on the car when it applied for a title. Three days later, SunTrust issued a cashier’s check payable to ACCI with the conditional endorsement. It is undisputed that ACCI initially failed to satisfy the endorsement. Bassett, a Florida resident, took the car there, where it was stolen and totaled by her estranged husband. Bassett then defaulted on the loan.

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