SECTION
229.56—Liability
A. 229.56(a) Measure
of Damages 1. In general, a person’s recovery
under this section is limited to the amount of the loss up to the
amount of the substitute check that is the subject of the claim, plus
interest and expenses (including costs and reasonable attorney’s fees
and other expenses of representation) related to that substitute check.
However, a person that is entitled to an indemnity under section 229.53
because of a breach of a substitute-check warranty also may recover
under section 229.53 any losses proximately caused by the warranty
breach, including interest, costs, wrongfully charged fees imposed
as a result of the warranty breach, reasonable attorney’s fees, and
other expenses of representation.
2. A reconverting bank also may be liable under section
229.38 for damages associated with the illegibility of indorsements
applied to substitute checks if that illegibility results because
the reduction of the original check image and its placement on the
substitute check shifted a previously applied indorsement that, when
applied, complied with appendix D. For more detailed discussion of
this topic, see section 229.38 and the accompanying commentary.
9-579.3
1. A bank’s delay beyond the time limits prescribed
or permitted by any provision of subpart D is excused if the delay
is caused by certain circumstances beyond the bank’s control. This
parallels the standard of UCC 4-109(b).
9-579.4
1. The Check 21 Act confers subject-matter jurisdiction on courts
of competent jurisdiction and provides a time limit for civil actions
for violations of subpart D.
9-579.5
1. This paragraph is designed to adopt the notice-of-claim provisions
of UCC 4-207(d) and 4-208(e), with an added provision that a timely
section 229.54 expedited-recredit claim satisfies the generally applicable
notice requirement. The time limit described in this paragraph applies
only to notices of warranty and indemnity claims. As provided in section
229.56(c), all actions under section 229.56 must be brought within
one year of the date that the cause of action accrues.
