Page Ave. Check Cashing LLC v King Rose of NY Inc

Civil Court of the City of New York, Bronx County

Decided on July 2, 2026

Index No. CV-003698-23/BX

Eric J. Wursthorn, J.

A bench trial was held on April 15, 2026 in this action wherein plaintiff, a licensed check cashing company, seeks to recover the funds it paid to nonparty Glass Doctor of Richmond County ("Glass Doctor") in connection with two checks defendant issued to Glass Doctor. After defendant issued the checks to Glass Doctor, it ordered a stop payment on both checks. Plaintiff remains in possession of both checks. Assuming, for purposes of this decision, that Glass Doctor breached its contract with defendant and was not entitled to the full payment it received,^FN1 the core issue before the Court is who, as between defendant and plaintiff, must bear that loss. For the reasons that follow, the Court finds that plaintiff is a holder in due course of both checks, and awards judgment in its favor.

At trial, both parties were represented by counsel: Carlos Galarce, Esq. for plaintiff and Michael Siegel, Esq. for defendant. Each side called one witness: plaintiff called Scott Movica, plaintiff's managing member and the defendant called Yoel Borgenicht, defendant's president. The parties stipulated to five documents coming into evidence on behalf of the Plaintiff (Plaintiff's Exhibits 1-5) and one packet of documents coming into evidence on behalf of the defendant (Defendant's Exhibit 1). Based upon the testimony and evidence adduced at trial, the Court makes the following findings of fact and conclusions of law.

[*2]I. Findings of Fact

Mr. Borgenicht credibly testified that Glass Doctor was defendant's subcontractor for a construction job at which defendant was the general contractor. The job involved the construction of a residential apartment building. Specifically, Glass Doctor was obligated to deliver and install fire-rated glass at the building.

Prior to the date defendant issued the subject checks, defendant had ongoing dealings with Glass Doctor, about which defendant did not present any evidence or testimony. On cross-examination, Mr. Borgenicht was asked by plaintiff's counsel about eighteen checks issued from defendant to Glass Doctor, which Glass Doctor negotiated to plaintiff (Plaintiff's Exhibit 5). These checks are dated November 1, 2018 through April 26, 2019. Mr. Borgenicht admitted that he did not order a stop payment on any of these checks.

Meanwhile, Glass Doctor had a written Commercial Check Cashing Service agreement with plaintiff, which was signed by Teresa O'Neil as Owner of Glass Doctor on January 12, 2019 (Plaintiff's Exhibit 2). The agreement lists two people who were authorized to negotiate instruments on behalf of Glass Doctor: Teresa O'Neil and Charlie Castrovinci. O'Neil is identified as an owner of Glass Doctor and no title on behalf of the organization is listed for Castrovinci. The agreement further provides in pertinent part: "Liability for Returned Items: Commercial owner(s) as well as Authorized person(s) will be held liable to [plaintiff] for all returned Checks, plus all bank fees, interest and charges due with regard to any returned Checks."

Mr. Borgenicht testified that on May 9, 2019, Glass Doctor's owner, Charles Castrovinci, arrived at the job site and demanded payment in full before Glass Doctor would install the glass at the building. Mr. Borgenicht claims that he acquiesced to Castrovinci's demands, even though he testified that the contract did not require advance payment. Thus, Mr. Borgenicht signed and issued the subject checks to Glass Doctor for $4,800.00 and $7,200.00 before the work was performed.

Glass Doctor proceeded to install the glass. Sometime after Glass Doctor left the site, Mr. Borgenicht testified that he "immediately realized" Glass Doctor had installed non-fire rated glass and thus the work/goods did not conform to the parties' agreement. Mr. Borgenicht further testified that he called Castrovinci, who "acknowledged that he did not comply with the contractual requirements" but refused to remedy the issue and said it was defendant's "problem." Mr. Borgenicht claimed that he told Castrovinci he would order a stop payment on the checks and demanded that the checks be returned, which Castrovinci refused to do. No specific testimony was given about when this conversation occurred.

The same day that the defendant issued the subject checks and Glass Doctor installed the glass, someone on behalf of Glass Doctor negotiated the checks to plaintiff. Mr. Movica oversees and manages plaintiff's daily operations, which includes managing the tellers and their transactions at plaintiff's stores. Mr. Movica credibly admitted that he did not know who presented the checks on behalf of Glass Doctor on May 9, 2019, as he was not the teller at plaintiff's 960 Bloomingdale Road location. Rather, a teller named Diana received the checks and processed the transaction, giving the unknown person cash for the value of the checks less a 2% fee. Mr. Movica testified that Diana is no longer employed by plaintiff.

Mr. Movica explained that when a customer negotiates a check to plaintiff, the customer presents the check to plaintiff's teller, who will examine the check and open the customer's [*3]profile and history to monitor transactions. The teller will proceed to negotiate the check, provided there is nothing altered or suspicious about it. Mr. Movica claimed there was no evidence that the check was dishonored, although he did not have any personal knowledge of the underlying transaction. Mr. Movica speculated that Diana may have called him to approve the transaction but admitted she was not required to do so before negotiating the checks at issue.

During discovery, plaintiff provided records of relevant transactions to defendant (Defendant's Exhibit 1). These records included copies of negotiated checks, transaction details such as amount, date and time, and photographs taken at the time of many of the transactions. Sometimes these photos depicted individuals who presumably presented the associated check. Often, the photos merely depicted an unoccupied portion of the store. When defense counsel pointed Mr. Movica to the pictures that were taken by plaintiff contemporaneously with the underlying transactions (Plaintiff's Exhibits 3 and 4), Mr. Movica admitted the pictures depicted only the store, and did not show the person(s) who presented the checks.

Mr. Movica posited that these empty photos were likely due to "teller error" or "laziness." Mr. Movica maintained, however, that the individual who presented the checks must have been one of the authorized users, O'Neil or Castrovinci, or the checks would not have been negotiated. Mr. Movica further explained that when a frequent customer is known to a teller, there is no requirement to take their picture. Rather, pictures are more likely taken with new customers, as they are for plaintiff's protection.

After plaintiff paid Glass Doctor's authorized user the monies for the checks, less applicable fees, plaintiff discovered that a stop payment order had been placed on both checks. Mr. Movica then notified both defendant and Glass Doctor that the checks had been dishonored.

Mr. Borgenicht admitted that after he advised Castrovinci he would put a stop payment order on the checks, defendant did not have any further communication with Glass Doctor. According to Mr. Borgenicht, plaintiff's notice of dishonor of the checks was when defendant first learned that Glass Doctor had cashed the checks.

Mr. Movica was asked by defense counsel about what, if any, efforts plaintiff made to recover the monies from Glass Doctor. Mr. Movica responded that after he put Glass Doctor on notice that the checks had been dishonored, he was advised by Glass Doctor that they were attempting to resolve the issue with defendant but "he hasn't made good on it."

Defense counsel also asked Mr. Movica about a check for $3,000.00 from T and S Glass Inc ("T and S Glass"), a parent and/or affiliate of Glass Doctor, dated June 23, 2018, and payable to Castrovinci (Defendant's Exhibit 1, fourth page from the back). According to plaintiff's records, this check was returned with the following code listed: "NSF." Defense counsel asked Mr. Movica whether it was "typical for plaintiff to continue to do business with customers who have bounced checks?" Mr. Movica responded that the decision whether to continue doing business with such a customer was made on a case-by-case basis and plaintiff may make a business decision to not cut off a particular customer.

II. Conclusions of Law

Since defendant ordered a stop payment on both checks, defendant's bank declined plaintiff's request to draw the value of the checks, resulting in their dishonor. Plaintiff therefore seeks to have defendant honor the checks as a holder in due course.

There is no dispute that both checks are negotiable instruments, issued by defendant and [*4]that plaintiff now holds both (see generally NY UCC § 3-307). Under NY UCC § 3-307(3), once a holder produces a properly signed instrument, the burden is on the defendant to demonstrate a genuine defense (Nat'l Union Fire Ins. Co. v Allen, 232 AD2d 80 [1st Dept 1997]). Once a genuine defense is established, the burden then shifts to the holder to demonstrate its status as a holder in due course. (Id.)

A holder in due course takes the instruments free from all personal claims on the part of any person, and defenses of any party to the instrument with whom the holder has not dealt, except specific enumerated provisions not at issue here (NY UCC § 3-305). Plaintiff is entitled to the special protections of a holder in due course pursuant to NY UCC § 3-302 (1) by showing that it took the checks for value, in good faith, and, insofar as is relevant here, "without notice that the checks had been dishonored or of any defense against or claim to it on the part of another" (see Hartford Acc. & Indem. Co. v American Exp. Co., 74 NY2d 153 [1989]). When there is a legitimate dispute about whether a party is a holder in due course, the court must engage in a fact-intensive inquiry and evaluate the particular circumstances in each case (see e.g. Bank of Babylon v Zaffuto Const. Co, Inc., 157 AD2d 640 [2d Dept 1990]).

At trial, defendant attempted to show that plaintiff did not take the checks in good faith, and relatedly, took the checks with notice that they were dishonored and/or with notice of defendant's particular claims against Glass Doctor. "Good faith" as to whether a party is a holder in due course is defined under the NY UCC as "honesty in fact in the transaction or conduct concerned" (NY UCC § 1-201[b][20]) and the court's inquiry is limited to "what, in fact, the holder actually knew" (Regent Corp., U.S.A. v Azmat Bangladesh, Ltd., 253 AD2d 134, 142 [1st Dept 1999] citing Chemical Bank v Haskell, 51 NY2d 85, 91-92 [1980]).

Defendant must also prove that plaintiff had actual knowledge of the dishonor and/or any claims to or defenses against the checks (Citibank, N.A. v Deutsch, 99 AD2d 452 [1st Dept 1984]; see also General Credit Corp. v. New York Linen Co., Inc., 2002 NY Slip Op 50033(U) [Civ Ct, Kings Co 2002] ["the existence of mere suspicious circumstances does not constitute 'notice' such as will prevent a holder of a negotiable instrument from being a holder in due course."]; Regent Corp., U.S.A., supra). Further, the burden on a holder in due course to show that it had no knowledge of a defense or claim to the instrument is a "slight one" (First International Bank, Ltd. v. L. Blankstein & Son, Inc., 59 NY2d 436, 444 [1983]).

Notably, New York has not adopted the more expansive definition of good faith found in the definitions of the model Uniform Commercial Code, to wit: "honesty in fact and the observance of reasonable commercial standards of fair dealing." Thus, in New York, constructive knowledge is insufficient to show that a holder took the instrument in bad faith (Regent Corp., U.S.A., supra at 142 ["Constructive knowledge is insufficient and it is irrelevant what a reasonable banker in [plaintiff's] position should have known or should have inquired about."]).

Mr. Movica's testimony along with the admitted evidence establishes that plaintiff took the checks from an authorized user of Glass Doctor in good faith in a standard business transaction. Mr. Movica testified about plaintiff's relevant standard business practices, of which he would have knowledge as a manager of plaintiff's day-to-day operations and overseer of tellers and their transactions. Defense counsel's questioning of Mr. Movica about the photographs taken at the time the checks were presented is a red herring, since there is no dispute that an authorized user of Glass Doctor presented the checks to plaintiff to be cashed, and this case is not about whether cash was paid out to the wrong individual. As Mr. Movica [*5]pointed out, photographs of customers are recorded for plaintiff's protection, and a teller's error or "laziness" in failing to take a photograph of a frequent customer does not give rise to the inference that the transaction was conducted in bad faith or an irregular manner.

Indeed, it is incredible to believe that someone presented the checks to plaintiff's teller on May 9, 2019, informed the teller of the stop payment orders, and that the teller then cashed the checks. The Court also does not find that it needed to hear from the specific teller who negotiated the instruments at issue; Mr. Movica's testimony as someone who oversees all tellers who work at plaintiff's stores was properly based upon his personal knowledge and sufficiently specific to establish plaintiff's prima facie case.

Defendant has otherwise failed to establish that plaintiff took the checks in bad faith or with notice that they were dishonored and/or of defendant's particular claims against Glass Doctor. That Glass Doctor's parent and/or affiliate, T and S Glass, wrote a dishonored check to Castrovinci, and Castrovinci cashed that check at one of plaintiff's stores approximately ten months before the underlying transaction, does not demonstrate bad faith in the context of the subject transaction. Rather, Mr. Movica offered a legitimate business reason to continue to do business with T and S Glass, Castrovinci, and their affiliates.

Nor does the Court find that defendant has shown that this single transaction on June 23, 2018, would put plaintiff on notice that the particular checks at issue in this case would be dishonored. The June 23, 2018 transaction is too attenuated in time and otherwise dissimilar to the relevant facts here, such as the actual parties and the reason the check was dishonored. For example, it is unproven why the T and S Glass check was dishonored, i.e. because the subject account lacked sufficient funds or a stop payment order was placed on that check. On this record, the June 23, 2018 transaction does not give rise to actual knowledge of any facts which would prevent a commercially honest individual from taking defendant's checks on May 9, 2019 (see e.g. Regent Corp v Azmat Bangladesh, Ltd., 253 AD2d 134 [1st Dept 1999]).

Here, defendant has merely shown at trial that Glass Doctor knew the checks were dishonored at some point. No specific testimony or evidence was given, which would show that Glass Doctor knew the checks were dishonored before it cashed them, and certainly the record does not support a finding that plaintiff itself knew. Rather, plaintiff has met its relatively light burden and absent proof that Glass Doctor informed plaintiff or that plaintiff otherwise knew the checks were dishonored, plaintiff is a holder in due course with respect to both checks.

Because plaintiff is a holder in due course, and since defendant has not asserted an available defense under NY UCC § 3-305 (2), plaintiff is entitled to judgment in its favor for the full amount sought in the complaint: $4,800.00 plus $7,200.00 for both checks, plus $20.00 returned check fees for each check, plus interest from May 9, 2019 due to the loss of the use of money (CPLR 5001), together with costs and disbursements.

III. CONCLUSION

Accordingly, it is hereby

ORDERED that the Clerk is directed to enter a money judgment in favor of plaintiff Page Avenue Check Cashing LLC against defendant King Rose of NY Inc. for $12,040.00 plus interest from May 9, 2019, together with costs and disbursements.

This constitutes the decision and order of the Court.

Date: 7/2/2026

Hon. Eric J. Wursthorn, J.C.C.