
    PARISH NATIONAL BANK, v. Norman D. OTT, III, M.D., and Beverly C. Ott.
    No. 2000-CA-0163.
    Court of Appeal of Louisiana, Fourth Circuit.
    April 17, 2002.
    Rehearing Denied May 7, 2002.
    John Anthony Dunlap, Roy E. Bloss-man, Robert Spier Stassi, Carver, Darden, Koretzky, Tessier, Finn, Blossman & Ar-eaux, L.L.C., New Orleans, LA, for Plain-tiffiAppellant.
    Mark S. Stein, Charlton D. Hunley, Lowe, Stein, Hoffman, Allweiss & Hauver, New Orleans, LA, for DefendanVAppellee.
    (Court composed of Chief Judge WILLIAM H. BYRNES III, Judge DENNIS R. BAGNERIS, SR, and Judge TERRI F. LOVE).
   JjDENNIS R. BAGNERIS, SR, Judge.

Parish National Bank (“PNB”), appeals the decision of the trial court finding Dr. Ott not liable to the bank on the master note executed by Dr. Ott and his wife, Beverly (Ott) Gallavan. The court held that Dr. Ott’s actions in connection with draw request forged by his wife were not the most compelling and contributing factors in this action and ruled in favor of Dr. Ott, dismissing PNB’s action. The trial court also dismissed Dr. Ott’s Reconven-tional Demand against PNB for damages to his credit due to PNB’s reporting the default on the note. Because there were no damages rendered against Dr. Ott, the trial court dismissed his cross claims against Ms. Gallavan.

STATEMENT OF THE CASE

Norman Ott and his wife, Beverly Galla-van, executed a master note representing a $100,000 line of credit in May of 1994. After the $1000 initial draw required to open the credit account, future draw requests required the signatures of both Dr. Ott and Ms. Gallavan. Throughout 1994 draw requests were submitted to PNB purportedly signed by both Dr. Ott and Beverly Gallavan. Dr. Ott testified that he did not sign the draw requests, never authorized Gallavan to sign his name, | {.and was unaware that the line of credit was being accessed at all by Gallavan until October of 1994.

After learning of the forgeries, Dr. Ott requested that PNB not allow further draws from the line of credit without his express verbal authorization. After the Otts separated in 1995 Dr. Ott made a single interest payment on the account. This was the first interest payment made by Dr. Ott since the account had been opened. Dr. Ott testified that this payment was made for the sole purpose of protection as maker on the loan. After the note was placed in default in 1995, PBN reported the default to credit reporting agencies. Dr. Ott brings a cross claim against PNB for. damages to his credit reputation based on this reporting.

On May 31st, 1996, a default judgment was rendered against Gallavan in the amount of $99,105.00 plus interest and attorneys fees. PNB based its claim against Dr. Ott primarily on the theories of ratification or confirmation of the debt, estop-pel-, and breach of a duty to both supervise his wife and to timely notify the bank of unauthorized activities. The district court did not find any of these arguments by PNB to be persuasive. Instead the court held that the contributing factor in the action was the PNB’s failure to exercise commercially reasonable banking standards.

The court presented the following evidence as support of this holding:

1) PNB did not have written policies or procedures for verification of signatures. Mr. Seal, PNB’s representative, admitted that he did not verify Dr. Ott’s signature for every draw request, and when he did, he relied on his familiarity with Dr. Ott’s signature.
2) PNB allowed faxed draw requests without follow-up of the originals. It did this without approval from the bank’s loan committee. The court | ¡¡specifically held that although the Otts requested the use of faxed draws, this alone did not relieve PNB of its duty to impose safeguards.
3) PNB wired the funds from the draw requests into a Hibernia account in the name of Gallavan. The court emphasized that there were no established procedures at PNB for this type of transaction.

The trial court concluded that PNB’s actions and their lack of sound banking procedures created this situation, and Dr. Ott’s actions were not the controlling factor in the outcome. It found no ratification on the part of Dr. Ott and that his actions with respect to notification of the bank were reasonable under the circumstances.

LAW AND DISCUSSION

The Appellants do not assert any error in the trial courts findings of fact, merely in its conclusions of law. Therefore they are merely asking this Court to determine whether the trial court was legally correct, giving no special weight to the findings of fact by the trial court. All of the trial court’s legal conclusions however are based, to some degree, on findings of fact. Those facts are therefore subject to review where appropriate. Thus, the primary issue in this court is whether the trial court was legally correct in denying PNB’s claims for relief.

Confirmation and Ratification

The first contention of PNB is that Dr. Ott provided confirmation of the draw activity by Gallavan. Their primary evidence of this confirmation is the interest payment made by Dr. Ott on April 27, 1995, to bring the outstanding interest on the account current. According to PNB this payment constitutes partial performance of the agreement and an acknowl-edgement of the debt. The bank 14claims that this performance, combined with the knowledge of the fraudulent activity that had occurred on the account, shows that Dr. Ott recognized his liability on the note.

After the forgery of Dr. Ott’s signature on the draw requests was established at trial, the Appellant asserted that Ott’s actions constituted tacit ratification or confirmation. Louisiana Civil Code article 1843 states;

Ratification is a declaration whereby a person gives his consent to an obligation incurred on his behalf by another without authority.
An express act of ratification must evidence the intention to be bound by the ratified obligation.
Tacit ratification results when a person, with knowledge of an obligation incurred on his behalf by another, accepts the benefit of that obligation.

The Appellant argues that Dr. Ott’s conduct constituted a tacit ratification since he accepted the benefit of an obligation knowing that it was incurred on his behalf. In support of this argument PNB cites Gallioto v. Trapani, 238 La. 625, 116 So.2d 2703, 276 (1959), which states the law of ratification. “An unauthorized contract of an agent is ratified by the principal, who, when notified of such contract, does not immediately repudiate it, but accepts the benefit arising under such contract.” This argument however relies on acceptance of an agency relationship between Ott and Gallavan. I do not believe that the Appellants have successfully established that such a relationship existed between them.

The Appellee asserts that the Appellant’s reliance on case law discussing ratification by a husband of his wife’s conduct from other jurisdictions is unwarranted. We agree.

|5In Nationwide Finance Co. of Gretna, Inc. v. Pitre, this court specifically addressed ratification, by a husband, of forged signatures by his wife. In that case this court specifically stated;

For ratification of an unauthorized act, the facts must indicate a clear and absolute intent to ratify the act, and no intent will be inferred when the alleged ratification can be explained otherwise. Lacaze v. Kelsoe, 185 So. 676 (La.App. 2 Cir.1939); Derouen’s Estate v. General Motors Acceptance Corp., 245 La. 615, 159 So.2d 695 (1964); Williams v. Arkansas Louisiana Gas Company, 193 So.2d 78 (La.App. 2 Cir.1966).
In making payments on the account, Mr. Pitre clearly did not intend to be bound on the note. While Mr. Pitre felt that he was legally bound on the note until he consulted an attorney, at no time did he desire to be bound on the note or intend to ratify the forged signature. Nationwide Finance Co. of Gretna, Inc. v. Pitre, 243 So.2d 326, 328 (La.App. 4 Cir.1971).

In the instant case, Dr. Ott’s payment of the interest can easily be explained as an act other than ratification. As the trial court stated in its reasons for judgment, Dr. Ott claims that the interest payment was made to protect himself, not ratify his wife’s fraudulent activities, and that statement by Dr. Ott was deemed credible. The Appellant also argues that this payment by Dr. Ott shifts the burden of proof. According to Litvinoffs treatise on obligations, the Appellant claims Dr. Ott must now prove no obligation existed. The Lit-vinoff treatise however has no authority over this Court nor does the burden of proof shift to Dr. Ott in this case.

The Appellant also must show knowing acceptance of benefits from Mrs. Ott’s actions. PNB attempts to show this two ways. The first attempt by PNB to show acceptance of benefits is the transfer of title to a piece of property in Yscloskey, Louisiana as an apparent “donation”. The appellee successfully counters this description of the property transfer by evidence of Dr. Ott’s payment of $5,000 and adoption of mortgage payments on the property. Second the Appellant argues that money from the fraudulent draws was used for purchase, |firenovation, and improvement of the Yscloskey property. Louisiana law states that the benefit for ratification must be a direct benefit. The benefit must be traceable directly to Dr. Ott. Nationwide Finance Co. of Gretna, Inc. v. Pitre, supra. The Appellee asserts that draw requests cannot possibly be traced directly to Dr. Ott, as Ms. Gallavan herself stated that it is impossible for PNB or anyone else to determine the source of any particular expenditure used. Additionally, even if it could be shown that Dr. Ott received a direct benefit from the fraudulent PNB draws, the benefit must be knowingly received, not forced. Fleet Finance, Inc. v. Loan Arranger, 604 So.2d 656, 660 (La.App. 1 Cir.1992).

Equitable Estoppel

Next the Appellant argues that Dr. Ott’s conduct estops him from denying his liability on the note. The Appellant bases this argument on the Louisiana Supreme Court’s application of the Restatement (Second) Agency § 8B in Independent Fire Insurance Co. v. Able Moving and Storage Co., Inc., 650 So.2d 750 (La.1995). This is based on the argument that PNB changed its position based on the belief that the transaction was entered into by him. Because Dr. Ott became aware that PNB believed he had agreed to the draw requests, and yet did nothing to correct that mistaken belief, he is estopped from denying liability for the loan.

The Appellee argues that the Appellant’s reliance on Independent Fire is misplaced. Rather than adopting the Restatement (Second) Agency as the appellant claims, the issue in the case dealt specifically with apparent authority. The application of section 8B of the restatement in that case was to whether a national moving company was liable for fire loss caused by its insolvent agent. It involved a case of clear agency, whereas here, there is no clear agent/principal relationship. Ott argues that there is no principal/agent relationship between Ott |7and Gallavan, and there cannot be any apparent authority. As a result, application of Independent Fire to the facts of this case is not helpful.

The Appellant fails to prove such an agency relationship existed. The definition of a principal is one who has permitted or directed another to act for his benefit and subject to his direction and control and an “agent” is a person who has undertaken to act for another and be controlled by the other in so acting. The trial court stated that there is no evidence that such an agency relationship existed between Ott and Gallavan. PNB never advanced money to Gallavan believing that she was acting as an agent of Dr. Ott. In the Appellant’s reply brief, they admit that there is no community regime in this case, yet they seem to rely on the spousal agency presumption to justify their contention that there was an agency relationship between Dr. Ott and Gallavan.

Duty

A large portion of the Appellant’s argument concerning Ott’s duty uses case law under the Uniform Commercial Code (UCC) provisions in Louisiana Revised Statute Title 10, to illustrate a person’s duty of care in cases of forgery; specifically La. R.S. 10:3-406. As the Appellant notes, these provisions are not directly applicable to the draw requests at issue in this case since the draw requests are not “instruments” as defined in the UCC. The appellant argues that even under 10:3-406, the comments make it clear that acts by a person whose failure to “exercise ordinary care substantially contributes to ... the making of a forged signature” ■ must be direct.

Additionally, the appellee urges that a duty cannot be created where one does not legally exist, and the duty the appellant tries to analogize from Title 10 does not apply to the facts of the present case. Even applying La.R.S. 10:3-406, | sthe failure to exercise due care must substantially contribute to the loss and the burden of proving the failure of a party to exercise ordinary care is on the person asserting the failure. In this case, as the trial court found, the appellant did not successfully prove that Dr. Ott failed to exercise ordinary care, and found that, as between PNB and Dr. Ott, PNB was the more substantial cause of the' loss.

The appellee claims that equitable estop-pel is only applied as a theory of last resort, and in order for it to apply, PNB must first prove that Ott had an obligation and then that he made some representation or conduct by action or word to PNB. Ott denies any duty to supervise Galla-van’s actions, or obligation to prevent the forgeries based on some “propensity” knowledge. Additionally, Ott claims that PNB must show reliance on the actions of Dr. Ott in making the advances to Galla-van. Because the signatures of Ott on the draw requests were forged, Ott claims there was no action on his part which PNB could not change its position or rely on any of Ott’s actions during the time the draws were being made.

Ott asserts that he had no power or authority to supervise Gallavan and no duty to do so. Specifically, Ott argues that he had no higher duty based on his knowledge of Gallavan’s alleged propensities. Further, there is no propensity established that Ott knew of. He claims that Gallavan had previously signed two of his checks, which he told her not to do again, and she did not do again. Additionally, even within the duty analysis argued by PNB, Ott asserts that his actions taken to prevent fraudulent activity on the Note were not unreasonable and therefore Ott cannot be liable under PNB’s duty theories.

The Appellant argues that it is well settled in Louisiana law the where one of two parties must suffer loss through fault of another, the burden of loss should be placed on the party that most contributed to that loss. The appellant claims that _[gbecause Dr. Ott did not inform PNB immediately after becoming aware of his wife’s fraudulent conduct he was no longer an innocent party and his is liable for all that follows. There is a strong argument, however, that PNB was more responsible for the loss in this circumstance. The trial court stated that PNB’s banking practices were the controlling factor in this case. It is certainly arguable that had PNB adequately confirmed the signatures on the draw request, they would have discovered the fraudulent signature.

Dr. Otts’ Reconventional Demand

The trial court found that there was no negligence on the part of PNB in not notifying the credit reporting agencies that the debt on the Note and Dr. Ott’s liability were in dispute. The trial court further held that Dr. Ott did not himself report the dispute on his own behalf and made no attempt to protect his credit or mitigate his damages. I believe the findings of the trial court on this issue were correct and the Appellee’s reconventional demand should have been dismissed.

CONCLUSION

For the reasons stated above the trial court’s judgment is affirmed. Additionally, the Court affirms the judgment of the trial court dismissing the Reconventional Demand by Dr. Ott against PNB.

AFFIRMED.

11 BYRNES, C.J.,

dissents with reasons.

When Dr. Ott sent his check dated April 27, 1995 as a payment on the account, as a matter of law he ratified and acknowledged his indebtedness. Dr. Ott also ratified and acknowledged his obligation on the line of credit in December of 1994 when he executed original loan documents when requested to do so, long after he knew of unauthorized transactions on the line of credit. Dr. Ott admitted that he intended to make good on the loan and that it was his intention from the beginning to be bound for the indebtedness:

Q. Do you recall anyone presenting to you for your signature any documents related to this Paris National Bank loan in December of 1994?
A. I think Beverly brought one that said that the — parish national had failed to get a signature, an original signature on the loan application. From the inception, as a matter of course, I, of course, made that right, since it was my original intention to contract for the loan.

These positive actions proving ratification and acknowledgement are reinforced by Dr. Ott’s failure for many months to repudiate or even question the transactions he now says were unauthorized.

Moreover, even if Dr. Ott cannot be held for the full balance due on the line of credit under theories of ratification and acknowledgement, he should be held liable, at the very least, for the draws totaling $58,000.00 made in January of 1995 | ^because of his breach of his duty to notify the bank of known unauthorized withdrawals on his account. The trial court’s finding of “Dr. Ott’s actions under the circumstances to be reasonable,” is so contradicted by Dr. Ott’s own testimony as to be manifestly erroneous. ■

Dr. Ott’s consistently admits that he knew of the unauthorized draw requests as early August of 1994 and no later than October of 1994; and if in October, the strong implication is that it would have been in early October:

Q. When was the first time you learned of the fact that Beverly Ott accessed that line of credit in addition to the . original one thousand dollar draw that you made individually? ■
A. I can’t pin it down to an exact date, but it had to be sometime in late August or September, I think, of '94. Could have some leeway, but, that seems to be about right.
Q. How did you come to find out that she had accessed the line of credit?
A. Well, I was in the office and there was some sort of interest sheet or something — or something of that nature from Parish national Bank there, and I saw that and it struck me that I — that I hadn’t— that I — that I hadn’t signed any draws and I don’t know the time span in which I talked to her about it, but I asked her about it and [s]he told me that she had signed my name on that line of credit.
Q. And what time frame are we speaking of? When approximately did that happen?
A. August, September, October, '94. [Emphasis added.]

Dr. Ott went on to testify that at some uncertain time thereafter he called the bank and “asked that all the draw requests be forwarded to me at that time,” but he did not recall telling the bank of any unauthorized activity. He does not contend on this appeal that he told the bank of any unauthorized activity at that time. The trial court did not find that he informed the bank of any unauthorized activity at that time. He also said that he instructed his wife not to sign his name again.

LHe then testified that in October a bank employee, Mr. Seals, informed him that the balance on the line of credit “may bé a hundred thousand dollars.” Dr. Ott testified that when he finally received copies of the draw requests in December of 1994 or January of 1995, he instructed Mr. Seal not to authorize any more draws from that account without his verbal authorization. However, he did not notify the bank that there had been any unauthorized transactions on the account. Dr. Ott could not recall when he finally got around to notifying the bank.

He knew that his wife was purchasing and renovating property, some of which he had a personal interest in and others in the name of Contracting Resources, Inc., of which he was a 30% shareholder, but he had a monumental ignorance of the financing:

Actually, I don’t know what monies went into the account. I really don’t know what account she was using. I knew that properties were being purchased and renovated.

Later his testimony shows that he was concerned enough about what was going on with the line of credit that he tried to take precautions in his real estate dealings:

Q. The money that came from Parish National Bank, are you aware that it was deposited into a Hibernia account?
A. I really don’t know where it was deposited.
Q. You don’t know where it went? Did you know that Beverly had drawn the money on the parish National Bank loan?
A. Well, not ’til I had found the interest payments, sometime [in] September or October, in '94. [Emphasis added.]
Q. Okay. Now, you were aware that she was purchasing properties in the name of Contracting Resources, Inc.?
A. That she was purchasing properties? Yes.
Q. You didn’t know whose name the properties were going in?
A. I know there were some in her name and my name, individually. Through the whole time span, some were in Contracting Resources solely, and two properties, Contracting Resources and Terrence | /Tyler, and then I think the last two were Contracting Resources and Norman Ott.
Q. Was there any reason why you acquired an interest in the last two, in joint ownership with Contracting Resources, Inc.?
A. Yes.
Q. And what would that be.?
A. Well, by this time I knew that the loan was not as it should have been, the draws, and I felt that I could do — that I could control the funds and protect myself, but Mr. Motter was at the closing of these two things and failed to put the funds into escrow, so those fund[s] were lost.

Dr. Ott then acknowledged taping a conversation with his wife on November 29, 1994:

[W]hen we entered the discussion around November — end of November, after I found that interest statement, she told me that she had made the draw and at that time, I told her, “Don’t sign my name to anything.” She told me it was totally paid off, and that was the end of that.

Thus, by his own testimony Dr. Ott admitted that while he became aware of the problem on the line of credit account when he came across the interest statement in September or October (perhaps even in late August), he waited until November 29, 1994 to bring the matter up with his wife and made no mention of it to the bank. I can only assume that Dr. Ott was either in an intentional state of denial, did not want to rock the boat with his wife, or was recklessly indifferent to his financial affairs, or a combination of the above.

The unreasonable lethargy with which Dr. Ott responded to the knowledge of the unauthorized draws comes out over and over again in his testimony:

Q. And despite the fact that as of at least the — early September of 1994, at which time you learned of unauthorized activity on the account, you did nothing to notify parish National Bank that unauthorized activity had occurred, is that correct?
A. I told Kenny in January not to do any more loans.
Q. Do you recall what the balance was on the account at the time you advised Mr. Seal not to make any more draws on the line?
A. As I told you, back in October, I believe I learned it was a hundred thousand dollars.
IsQ. Do you believe it was still commensurate in that amount in January of '95?
A. Well, I think so, yes.

Dr. Ott testified that he and his wife, Beverly, physically separated on January 5, 1995. Dr. Ott thought that one of the properties he purchased jointly with Contracting Resources was acquired subsequent to that date, from which a reasonable fact finder must infer that at least another was acquired prior to that date. What this means is that at the same time that Dr. Ott wants the court to believe that he was reasonable in relying on his wife’s verbal representations that the line of credit balance was paid off as of November 29, 1994, and that she would make no further unauthorized advances, he trusted her so little that he was recording their conversation and was trying to structure the manner in which title was taken to properties in a way that would afford him some extra protection. Dr. Ott’s testimony is either so internally inconsistent as to be unworthy of belief, therefore making it manifest error for the trial court to credit his testimony, or his actions must be characterized as a reckless disregard of reasonable standards of financial practice, even for an uneducated layman. Even an uneducated layman knows or should know that if there is unauthorized activity on his account that he should report it immediately. Either Dr. Ott’s actions constitute a reckless failure to respond in a reasonable manner to knowledge of irregularities on his account, or, more likely, he tacitly acquiesced in and ratified the transactions, and it was only after the marriage and business arrangements with his wife, Beverly, fell apart that he changed his mind and decided to attempt to repudiate the transactions. That he initially intended to tacitly approve and ratify his wife’s actions is demonstrated by his admission he had not repudiated checks signed by his wife in the past without his authorization:

February of '94, she had signed my name on to rather significant checks, and they came back and I saw them Rand at that time, I told her she was never to sign my name again on anything.

Dr. Ott could offer no legally reasonable explanation for not notifying the bank when questioned by his own attorney:

Q. Dr. Ott, you testified that you knew certainly by the fall — sometime in the fall of 1994 that there had been a draw request made?
A. Yes.
Q. Is there any reason why at that point you didn’t call Parish National Bank and tell them about the unauthorized signature?
A. Well, she told me that it had been paid back — and this is my wife. You’ve got marital troubles. I’m trying to work through that, and I just at that time didn’t do it.

The only reasonable conclusion to draw from this testimony is that Dr. Ott did not intend to repudiate the transactions when he learned about them. It was only after he was unable to work out his marital differences that he decided to take any action.

Dr. Ott reaffirmed this later in his testimony on re-cross when asked why he didn’t report the unauthorized activity to the bank:

Well, like I said, she’s my wife. She told me the loan had been completely paid off. We have got marital problems I’m trying to work on, and she told me it was paid.

Any reasonable fact finder would have to conclude that Dr. Ott knew for months about the unauthorized activity on the account but didn’t want to rock the already sinking marital boat by bringing it to the bank’s attention. What may have suited his personal convenience at the time in no way excuses his flagrant disregard of any reasonable standard of financial practice.

Dr. Ott testified that he first requested the bank to require his verbal authorization to any draws sometime between January 15 and January 20. The record does not support the conclusion that either of the two draws made by the bank in January were made after he had given these instructions to the bank.

|7He could even be said to have lulled the Bank into a false sense of security when he furnished signed loan documents to the Bank in December, long after he knew there had been unauthorized draws on the account.

The trial court’s reasons for judgment state that it was reasonable for Dr. Ott to wait until November 29, 1994, to ask his wife about the unauthorized draws, a period of no less than a month and perhaps more than two months after his discovery of the problem. The trial court’s reasons for judgement further indicate that it was reasonable for Dr. Ott to wait until sometime in January, at least two weeks after he received copies of the draw requests, before instructing the bank not to make any more advances without his authorization, but still not alerting the bank to any problems on the account. The trial court’s reasons fail to take into account the fact that Dr. Ott did not need copies of the draw requests in order to know that there were unauthorized draws on the line of credit. Already quoted above is Dr. Ott’s testimony acknowledging that when he came upon the Parish Bank interest notice sometime in August, September or October, that, “it struck me that I — that I hadn’t that I — that I hadn’t signed any draws ...” He knew that any draws were unauthorized because he knew he didn’t co-sign them. He didn’t need two weeks to study the copies of the draws before his half-hearted attempt to stop the activity on the account in January after the horse was out of the barn. This was not an active business checking account with numerous banks statements and hundreds of checks to review. There were only a handful of draws and he knew without looking that they were all unauthorized. His wife had already admitted to that in November. But even if she had denied it, he still knew that the activity was unauthorized because he didn’t co-sign the draw requests, and he knew that from sometime in August, September or October according to his own testimony. Thus, this is not a case of how long is a reasonable delay for a bank customer to get around to examining his bank statement or cancelled checks in order to | sdiscover any irregularities. This is a matter of how long is it reasonable for a customer to delay in notifying a bank of known irregularities!! The only reasonable answer to that has got to be: “As soon as is practicable.” No reasonable fact finder could find that, “As soon as is practicable” could be as long as weeks or months. In other words, no reasonable fact finder could find that Dr. Ott’s conduct was reasonable. In fact, it can only be characterized as reckless, gross negligence, egregious and outrageous — so much so that the only logical conclusion is that, at the time, he did not intend to repudiate the transactions.

Dr. Ott admits that it was not until March or April at the earliest that he finally notified his accountant that his signature on the draws were forged. He asked his accountant to contact the bank.

On that portion of the tape that the court allowed into evidence there is conversation between Dr. Ott and his wife showing his intent to ratify her actions, at least to some extent:

Mrs. Ott: I m sure I have always told you that I owed almost a hundred thousand dollars.
Dr. Ott: Right, but I thought there was one draw, one time, to that first piece [of property] and that was it, and I never told you to sign my name. In fact, I didn’t even release its because—

Here Dr. Ott indicates that he-knew for some time that his wife had drawn down perhaps one hundred thousand dollars without his authorization but that he did not intend to repudiate the transaction at that time.

Dr. Ott also testified that he was not at home during the day and that whoever was home, including his wife would receive the mail. However, even after he learned of the unauthorized draws on the line of credit in August or September he never asked his wife whether any correspondence or notices had been received from the bank. He explained this by saying, “I had no reason to.”

[flThe behavior of Dr. Ott in this matter was so egregious and unreasonable as to overshadow any minor shortcomings attributable to the bank. The problem here was not how long it took Dr. Ott to obtain and examine copies of account records when he admits that he knew for certain in September or August of 1994 (or at the latest, October) that unauthorized transactions had been made on his account, but it was not until months later that he took even minimal action, and it was not for several months after that that he finally told the bank that his signature had been forged on the draw requests. The finding of the trial court that the actions of Dr. Ott were reasonable under the circumstances is so clearly contradicted by Dr. Ott’s own testimony, even after viewing the evidence in the light most favorable to Dr. Ott and the findings of the trial court, that a finding by this court of manifest error is inescapable.

For the foregoing reasons, I would reverse the judgment of the trial court and render judgment in favor of the Bank for the full amount of its claim. In the alternative, I would award the Bank at least $58,000, the amount of the draws made in January, after Dr. Ott had notice that unauthorized draws had been made on his account.  