Legal Question in Banking Law in California

I was sent two checks from my auto insurance claims adjuster, one in the amount of $1000.00 and the other for $3910.00. I deposited both checks into my credit union checking account first thing the following day. On the same day I was able to withdraw the greater amount of the two checks without any problems, until that evening the teller called me and told me that a stop payment was issued on the amount I withdrew , but not on the grand left behind. I was totally unaware of this fact and now the bank is telling me that I am at fault and has put a hold on my account until further notice. I was told that the claims department from Liberty Mutual had notified me about the stop payment but this is totally false and pretty outrageous and insulting to me. I already sent my car to the shop and refuse to give my money back to the bank in exchange for an unfrozen account. Who is at fault here and what are some of my rights if overdrafts fees occur due to the freeze and inability to pay my bills that are due? Thank you for your time.


Asked on 11/20/10, 7:51 am

1 Answer from Attorneys
Robert F. Cohen Law Office of Robert F. Cohen

It depends on what your agreement was with the insurance carrier. Undoubtedly, the payment(s) was/were made to repair your car. You must have been in touch with the adjuster. How much did he/she say would be sent to you? Anything beyond that probably was a mistake, and arguably you should have known that. Did you provide the carrier with an estimate for the cost of repairs? Was there a letter accompanying the checks? What did the letter say? Did it mention the check for $3,910? Obviously, more details are necessary to sort it all out.

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Answered on 11/25/10, 11:53 am


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