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First Division
June 30, 2005

JUSTICE McBRIDE delivered the opinion of the court:

Plaintiffs-appellants, Michaline Mikrut and Theresa Mudjer, in their capacity as co-executorsof the estate of their deceased brother, Theodore Kasprzycki, sued the defendant-appellee, First Bankof Oak Park (First Bank). The action sought to recover estate funds that were converted by plaintiffs'attorney, Anthony Capetta. Capetta, in his capacity as plaintiffs' fiduciary, received three checkswhich represented the proceeds of Kaspryczki's estate. Plaintiffs claimed that Capetta, withoutplaintiffs' authority, improperly endorsed these checks, deposited them into his client trust account(escrow account) with First Bank, and converted those funds for his own use. Count I of plaintiffs'amended complaint alleged conversion under section 3-420 of the Uniform Commercial Code (UCC)(810 ILCS 5/3-420 (West 2000). Count II alleged a "claim of interest" under sections 3-306 and 3-307 of the UCC (810 ILCS 5/3-306, 3-307 (West 2000)). First Bank moved for summary judgmenton each count arguing, among other things, that under the Fiduciary Obligations Act (760 ILCS 65/7(West 2000)), First Bank was relieved of liability because it did not act in bad faith or withknowledge that Capetta breached his fiduciary duties to plaintiffs. First Bank's summary judgmentmotion was ultimately granted by the trial court. Plaintiffs then filed a motion to reconsider whichthe trial court denied. Plaintiffs appeal from the orders entered by the trial court.

Plaintiffs alleged in their amended complaint that Anthony Capetta was an attorney and wasrepresenting plaintiffs as co-executors of their deceased brother's estate in 1996. The estate was thesubject of a probate action filed in the circuit court of Cook County. Capetta continued to representplaintiffs until he died on January 27, 1997. Prior to his death, Capetta maintained a client trustaccount, which the parties refer to as an "escrow account," with First Bank. Plaintiffs alleged thatCapetta, as agent for plaintiffs, "had delivered to him" three checks representing the proceeds of thesale of certain estate assets. These assets consisted primarily of the decedent's real estate andcommon stock in a variety of corporations.

Theresa Mudjer explained in her deposition that Capetta "suggested" the checks at issue beput into his safe after the estate closing. According to Mudjer, the rationale for leaving the checksin Capetta's safe was that they could not be cashed until after probate, a period of six months. Mudjerand her sister agreed that the checks could be kept in Capetta's safe.

The first of these three checks was drawn on American National Bank, as check number3105812 dated June 16, 1996, and was made payable to "Theresa M. Mudjer & Michaline MikrutIndependent Executors of the Theodore Michael Kaspyrzycki Estate" in the amount of $93,224.42. The second check was drawn on Citibank, as check number 013147084, dated July 10, 1996, andwas made payable to "Mrs Therese M Kudjer, Mrs Michaline Mikrut Co-Execs, Est TheodoreMichael Kasprzycki C/O A.B. Capetta" in the amount of $486, 678.63. The third check was drawnon Harris Trust and Savings Bank, as check number 013147084, dated July 26, 1996, and was madepayable to "Michaline Mikrut & Theresa M Mudjer Ind Co-Ex C/O Anthony B Capetta Atty at Law"in the amount of $129, 373.22.

While the endorsements on the reverse side of the first and third checks in the record beforeus are illegible, the endorsement on the back side of the second check states: "Pay To The Order ofAnthony B. Capetta Escrow Acct," with the apparent signatures of "Mrs. Theresa M. Mudjer" andMrs Michalene Mikrut" as "Co - Execs Est. Theodore Michael Kasprzycki."

Plaintiffs alleged that Capetta was not authorized to endorse any of these checks and FirstBank was never advised that Capetta was authorized to endorse these checks. Mudjer also testifiedin her deposition that she did not talk to Capetta about the idea of cashing the checks. She said sheunderstood that her endorsement would be required to negotiate the checks at issue. MichalineMikrut testified that she understood there was no way to negotiate the checks without herendorsement and her sister's endorsement.

Plaintiffs further alleged that without their authorization Capetta improperly forged plaintiffs'endorsements on the three checks and deposited them into his escrow account at First Bank. Capettathen allegedly spent the plaintiffs' funds for his personal benefit. Plaintiffs did not know of Capetta'sfraud, specifically that he deposited these checks into the escrow account without the plaintiffs'authorization, until after Capetta died. They also discovered that Capetta had misappropriated fundsfrom many of his clients by making payments from the escrow account for his personal use.

Prior to Capetta's death and plaintiffs' discovery of the forged endorsements, Capetta provideda "Final Account" for the estate on November 29, 1996. He sent this document to Joseph Mikrut,the son of Michaline Mikrut, who was assisting the plaintiffs in preparing the estate's tax forms. TheFinal Account included the combined value of the three checks on which Capetta allegedly forged hisendorsements.

The record shows that Capetta had been a customer at First Bank for many years. Capettamaintained three personal accounts with First Bank in addition to the escrow account. On December9, 1985, Capetta and his wife obtained a mortgage, secured by their real property, in the amount of$310,000. In connection with the mortgage loan, Capetta and his wife executed a "Pledge to SecureGuaranty and Other Liabilities" with First Bank. That document stated the following in pertinentpart:

"Upon non-payment when due of any of the Obligations, orupon any failure of the undersigned or any of them, to perform underthis Agreement,

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(3) any indebtedness owing from the Bank to the Undersignedand any deposits of the Undersigned in the possession or control ofthe Bank for any purpose may at any time without notice be appliedon any or all of the Obligations."

This mortgage loan was modified several times. The final modification occurred in 1996, and theCapettas' adjusted net worth was calculated at $1.16 million.

Capetta provided legal services for three principals at First Bank prior to his death. Specifically, Capetta wrote a will for the in-laws of Frank Prucha, a vice president at First Bank andset up a trust for the disabled aunt of Prucha's wife. Capetta also assisted Thomas Dwyer, anotherFirst Bank vice president, in purchasing a home in 1992, Capetta drafted a will for Dwyer and hiswife, he helped Dwyer's sister-in-law purchase a condominium, and he prepared income tax returnsin1994 for an in-law of Dwyer. In addition, Capetta assisted Mike Kelly, First Bank's president, withthe purchase of three real estate properties.

As indicated above, plaintiffs sued First Bank shortly after Capetta died. Count I of plaintiffs'amended complaint alleged a conversion claim against First Bank for the forged checks under section3-420 of the UCC. Count II alleged a "claim of interest" in the checks under sections 3-306 and 3-307 of the UCC. First Bank moved for summary judgment on both counts. With regard to countI, First Bank argued that section 7 of the Fiduciary Obligations Act (760 ILCS 65/7 (West 2000)),discussed below, provided it with a complete defense to any liability based on the malfeasance ofCapetta because the bank acted in good faith and without actual knowledge of Capetta's breach ofhis fiduciary duties to plaintiffs. It further asserted that because Joseph Mikrut, who was plaintiffs'agent, knew that the checks had been negotiated before Capetta's death, plaintiffs had ratified thedeposit of the checks into Capetta's escrow account. As to count II, First Bank argued plaintiffsfailed to provide any evidence showing that First Bank had "notice of a breach of fiduciary duty" asrequired under section 3-307 of the UCC set forth below.

The trial court, in an order dated December 13, 2002, stated the following, in relevant part:

"1. Defendant's Motion for Summary Judgment is granted andjudgment is entered against Plaintiffs as to their entire Complaint,except to the extent that Plaintiffs can show payments, involving all orpart of the funds represented by Plaintiffs' checks delivered to Capetta,falling within the circumstances described in the second sentence of760 ILCS 65/7 or the circumstances described in 810 ILCS 5/3-307(b)(4). If Plaintiffs contend that such payments were made,Plaintiffs shall identify such payments in a writing filed with the Courtand served on Defendant's counsel no later than December 31, 2002.

2. With respect to Defendant's Motion for Summary Judgmentargument based on ratification, the court declines to enter summaryjudgment on this ground because it finds there is a triable issue offact."

On December 31, 2002, plaintiffs asked the trial court to reconsider the summary judgmentorder entered in favor of First Bank. With regard to count I, plaintiffs argued that section 3-420 ofthe UCC superceded section 7 of the Fiduciary Obligations Act. Plaintiffs also argued, in thealternative, that section 9 of the Fiduciary Obligations Act should apply instead of section 7 and thatthe section 9 defense to liability was not available to First Bank under these facts. Concerning countII, plaintiffs argued that First Bank's knowledge of Capetta's finances and the past relationshipbetween Capetta and several First Bank officers raised a fact question as to whether First Bank hadnotice of Capetta's breach of fiduciary duty under section 3-307 of the UCC.

Plaintiffs attached to their motion to reconsider 10 checks made payable to First Bank anddrawn on Capetta's escrow account in the amounts of: $72, 949.68, $107,478.68, $62,000, $5,000,$5,000, $10,000, $5,000, $20,000, $21,000, and $60,000, respectively. In its response to plaintiffs'motion to reconsider, First Bank noted the first three of these checks predated or were "written out"of the escrow account before Capetta deposited the first of the checks belonging to the plaintiffs. With regard to the seven remaining checks, First Bank established that these checks were madepayable to First Bank so that Capetta could purchase seven cashiers' checks that were made payableto third parties. Plaintiffs also attached to their motion to reconsider 12 checks that were drawn offaccounts other than the escrow account. First Bank responded by claiming that because these checkswere not drawn from the escrow account at issue, they could not possibly consist of any of the fundsrepresented by plaintiffs' checks that were delivered to Capetta.

The trial court denied plaintiffs' motion for reconsideration on October 14, 2003. With regardto count I, the trial court found that section 7 of the Fiduciary Obligations Act applied and absolvedFirst Bank from liability. With regard to count II, the court determined that plaintiffs did not makea factual showing that section 3-307(b)(4) of the UCC applied. Specifically, it found the evidencedid not show any checks taken by First Bank in payment of or as security for a debt known by FirstBank to be the personal debt of Capetta. Plaintiffs appeal. We first consider whether the trial courtproperly granted summary judgment in favor of First Bank with respect to the conversion claim(count I). The granting of summary judgment by the trial court is subject to de novo review. CentralIllinois Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 821 N.E.2d 206 (2004). The relevantstatutory provisions that concern count I are as follows.

Section 3-420 of the UCC provides, in relevant part:

"Conversion of instrument.

(a) The law applicable to conversion of personal propertyapplies to instruments. An instrument is also converted if it is takenby transfer, other than a negotiation, from a person not entitled toenforce the instrument or a bank makes or obtains payment withrespect to the instrument for a person not entitled to enforce theinstrument or receive payment. An action for conversion of aninstrument may not be brought by (i) the issuer or acceptor of theinstrument or (ii) a payee or indorsee who did not receive delivery ofthe instrument either directly or through delivery to an agent or a co-payee." 810 ILCS 5/3-420(a)(West 2000).

Section 7 of the Fiduciary Obligations Act states:

"If a deposit is made in a bank to the credit of a fiduciary assuch, the bank is authorized to pay the amount of the deposit or anypart thereof upon the check of the fiduciary, signed with the name inwhich such deposit is entered, without being liable to the principal,unless the bank pays the check with the actual knowledge that thefiduciary is committing a breach of his obligation as fiduciary indrawing the check or with knowledge of such facts that its action inpaying the check amounts to bad faith. If, however, such a check ispayable to the drawee bank and is delivered to it in payment of or assecurity for a personal debt of the fiduciary to it, the bank is liable tothe principal if the fiduciary in fact commits a breach of his obligationas fiduciary in drawing or delivering the check." 760 ILCS 65/7(West 2000).

Section 9 of the Fiduciary Obligations Act states:

"Notwithstanding any other law, if a fiduciary makes a depositin a bank to his personal credit of checks drawn by him upon anaccount in his own name as fiduciary, or of checks payable to him asfiduciary, or of checks drawn by him upon an account in the name ofhis principal if he is empowered to draw checks thereon, or of checkspayable to his principal and indorsed by him, if he is empowered toindorse such checks, or if he otherwise makes a deposit of funds heldby him as fiduciary, the bank receiving such deposit is not bound toinquire whether the fiduciary is committing thereby a breach of hisobligation as fiduciary; and the bank is authorized to pay the amountof the deposit or any part thereof upon the personal check of thefiduciary without being liable to the principal, unless the bank receivesthe deposit or pays the check with actual knowledge that the fiduciaryis committing a breach of his obligation as fiduciary in making suchdeposit or in drawing such check, or with knowledge of such factsthat its action in receiving the deposit or paying the check amounts tobad faith." 760 ILCS 65/9 (West 2000).

As a preliminary matter, we consider plaintiffs' first argument that section 9 of the FiduciaryObligations Act is applicable here. Plaintiffs argue that the language of section 9 "would at leastpotentially apply to a case involving a bank taking a check with a forged endorsement." Specifically,they contend the key language in section 9 that makes it applicable is, "if a fiduciary makes a depositin a bank *** of checks payable to his principal and indorsed by him, if he is empowered to endorsesuch checks ***, the bank receiving such deposit is not bound to inquire whether the fiduciary iscommitting thereby a breach of his obligation as fiduciary." 760 ILCS 65/9 (West 2000). Accordingto plaintiffs, this language, as opposed to section 7 of the Fiduciary Obligations Act, addresses thesituation here and relieves the bank of liability only if the fiduciary was "empowered to indorse suchchecks." 760 ILCS 65/9 (West 2000). According to plaintiffs, since Capetta was not empoweredto indorse the checks at issue, section 9 does not relieve First Bank of liability and therefore undersection 3-420 of the UCC First Bank would be liable for the conversion.

We reject plaintiffs' argument with regard to the applicability of section 9 because Capetta didnot make a deposit in a bank "to his personal credit." 760 ILCS 65/9 (West 2000). Section 9 comesinto play when a fiduciary makes a deposit to his personal account. County of Macon v. Edgcomb,274 Ill. App. 3d 432, 436-37, 654 N.E.2d 598 (1995). In this case, it is undisputed that Capettadeposited the checks at issue into his escrow account, not into his personal account. Thus, section9 of the Fiduciary Obligations Act does not apply.

Plaintiffs next argue that section 3-420 of the UCC applies because the allegations in theiramended complaint implicate a conversion claim. They further allege that section 3-420, by its plainterms, applies to instruments taken from a person not entitled to enforce the instrument or receivepayment. 810 ILCS 5/3-420 (West 2000). According to plaintiffs section 7 of the FiduciaryObligations Act applies only to the fiduciary's drawing of a check and, because the checks at issuewere not drawn by Capetta, their conversion claim can stand. Apart from their own interpretationof section 7, however, plaintiffs offer no authority supporting such a construction. Plaintiffs furthercontend that section 3-420 of the UCC "supercedes" section 7 of the Fiduciary Obligations Act in thiscase. First Bank responds that section 7 of the Fiduciary Obligations Act applies and it is not liablefor plaintiffs' loss, which resulted from Capetta's malfeasance, because First Bank did not act in badfaith or with actual knowledge of Capetta's breach of his fiduciary obligations to plaintiffs.

We also reject plaintiffs' claim that section 7 is limited to situations involving checks drawnby a fiduciary. The first words of section 7 state: "If a deposit is made in a bank to the credit of afiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof uponthe check of the fiduciary ***." 760 ILCS 65/7 (West 2000). This section further provides that abank is not liable for paying the amount of the deposit, "unless the bank pays the check with theactual knowledge that the fiduciary is committing a breach of his obligation as the fiduciary indrawing the check or with knowledge of such facts that its action in paying the check amounts to badfaith." 760 ILCS 65/7 (West 2000). Based on the language of section 7, we read it to include abank's actions in paying checks that are deposited by a fiduciary as well as paying on checks drawnby a fiduciary.

Further, as set forth in Edgcomb, the Fiduciary Obligations Act applies where a fiduciaryendorses an instrument made payable to the principal or to the fiduciary in his fiduciary capacity, orwhere the fiduciary draws checks in his fiduciary capacity. Edgcomb, 274 Ill. App. 3d at 435, citing760 ILCS 65/4, 5 (West 1992). Moreover, the payor bank is protected under section 7 when it paysthe amount of the deposit if the fiduciary's check is " 'signed with the name in which such deposit isentered.' " Edgcomb, 274 Ill. App. 3d at 436, quoting 760 ILCS 65/7 (West 1992). Therefore, thelanguage of section 7 indicates that it applies to the actions of depositing and paying as well as todrawing. Where statutory language is clear and unambiguous, a court must give it effect. USXCorp. v. White, 352 Ill. App. 3d 709, 720, 817 N.E.2d 896 (2004).

Plaintiffs alternatively argue that in the event section 7 of the Fiduciary Obligations Actapplies, they have presented sufficient evidence to overcome First Bank's summary judgment motion. Specifically, plaintiffs contend the evidence establishes factual questions as to whether First Bank hadknowledge of Capetta's "misdeeds" and whether First Bank knew that Capetta was acting in breachof his fiduciary duties.

The Uniform Fiduciaries Act was approved by the National Conference of Commissioners onUniform State Laws and the American Bar Association in 1922 and was enacted in Illinois in 1931. In Illinois, it is entitled the Fiduciary Obligations Act. Edgcomb, 274 Ill. App. 3d at 435. Thepurpose of the Fiduciary Obligations Act is to protect depository banks, specifically:

"[t]o cover situations which arise when one person honestlydeals with another knowing him to be a fiduciary. The Act ' "relaxessome of the harsher rules which require of a bank * * * the highestdegree of vigilance in the detection of a fiduciary's wrongdoing." '[Citation.]

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The Act relieves the depository bank of the duty of seeing thatfunds are properly applied. It becomes the principal's burden toemploy honest fiduciaries. [Citation.]" Johnson v. Citizens NationalBank of Decatur, 30 Ill. App. 3d 1066, 1069-70, 334 N.E.2d 295(1975), quoting National Casualty Co. v. Caswell & Co., 317 Ill. App. 66, 72 (1942).

The Fiduciary Obligations Act also:

"[R]elieves the bank of liability to the principal unless the bankhas actual knowledge that the fiduciary is committing a breach of hisobligation or the bank has knowledge of facts that its action in payingthe check amounts to bad faith. [Citation.] Where the fiduciary usesfiduciary funds for the payment of a personal debt to the bank by acheck drawn on that account, the bank is liable to the principal if thefiduciary in fact commits a breach of his obligation. [Citation.]" Go-Tane Service Stations, Inc. v. Sharp, 78 Ill. App. 3d 785, 789-90, 397N.E.2d 249 (1979).

See also Hosselton v. First American Bank N.A., 240 Ill. App. 3d 903, 907-08, 608 N.E.2d 630(1993), and Bellflower Ag Service, Inc. v. National Bank & Trust Co. in Gibson City, 130 Ill. App.3d 80, 86, 473 N.E.2d 998 (1985) (which state the purpose of the Fiduciary Obligations Actidentified above).

The decisions cited above hold that under section 7 of the Fiduciary Obligations Act, a bankthat deals with a fiduciary is not liable to the principal for a fiduciary's breach unless the bank acts inbad faith or has actual knowledge that the fiduciary's conduct is in breach of his obligations to theprincipal. Edgcomb, 274 Ill. App. 3d at 436. Section 7, however, also provides that a drawee bankis liable if a fiduciary delivers a check made payable to it "in payment of or as security for a personaldebt," and "if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing ordelivering the check." 760 ILCS 65/7 (West 2000). Under this latter provision, plaintiffs must showthat Capetta drew checks on the client escrow account in payment of or as security for a personaldebt Capetta owed to First Bank.

Plaintiffs argue they have raised questions of fact as to whether First Bank acted in bad faith, had actual knowledge with regard to Capetta's breach of a fiduciary duty to them, and took checksfrom Capetta in payment of or as security for a debt known by First Bank to be a personal debt ofCapetta. We disagree. Although Capetta was a fiduciary and deposited funds into the escrowaccount, there is no evidence in the record that shows First Bank acted in bad faith or with actualknowledge of Capetta's breach of his fiduciary obligations to plaintiffs, or that First Bank took checksfrom Capetta in payment of or as security for a debt known by First Bank to be a personal debt ofCapetta.

An example of bad faith is where the bank "suspects that the fiduciary is acting improperlyand deliberately refrains from investigating in order that [it] may avoid knowledge that the fiduciaryis acting improperly." Edgcomb, 274 Ill. App. 3d at 436. Plaintiffs claim questions of fact exist withregard to First Bank's bad faith because of First Bank's knowledge of Capetta's personal financialinformation and because Capetta provided legal services for high-ranking First Bank officers. Plaintiffs add that because First Bank had access to all of Capetta's financial information, it could havediscovered that Capetta's personal expenditures greatly exceeded his income. According to plaintiffs,a trier of fact could infer that First Bank had sufficient knowledge of the fraudulent nature of thesubject transactions to impose liability under section 7 of the Fiduciary Obligations Act.

Establishing bad faith, however, requires evidence that First Bank suspected Capetta wasacting improperly and deliberately refrained from investigating so that First Bank could avoidknowledge that Capetta was acting improperly. Edgcomb, 274 Ill. App. 3d at 436. Here, plaintiffshave not presented any evidence that First Bank suspected Capetta was acting improperly as afiduciary. Instead, the evidence shows that Capetta, who was plaintiffs' designated fiduciary foradministering the estate matters, deposited the checks at issue into his client escrow account. Asnoted by the trial court, Capetta's "deposits [ ] to a clearly identified fiduciary account were not perse alarming." As further observed by First Bank, under the protection afforded by the FiduciaryObligations Act, there was no duty for it to investigate this "outwardly proper" transaction. Moreover, even if the suspicion of Capetta's fiduciary impropriety did exist, plaintiffs provided noevidence indicating that First Bank deliberately refrained from investigating. Thus, First Bank didnot accept the checks at issue in bad faith.

Plaintiffs have also failed to provide evidence that First Bank had actual knowledge thatCapetta was breaching any fiduciary duty in depositing the checks at issue. A depository bank thatdeals with a fiduciary is not liable unless it had "actual knowledge the conduct constitute[d] a breachof a fiduciary obligation." Edgcomb, 274 Ill. App. 3d at 436. The bank being on notice "of theexistence of the fiduciary relationship is not enough to raise a duty of inquiry." Edgcomb, 274 Ill.App. 3d at 436. Edgcomb also establishes that the knowledge of an organization is determined bythe knowledge of the individual who conducts the transaction. Edgcomb, 274 Ill. App. 3d at 439.

Plaintiffs rely on the same facts set forth above to support their argument that First Bank hadactual knowledge that Capetta breached a fiduciary obligation to them. Here, the record, at best,indicates that First Bank was on notice that Capetta was plaintiffs' fiduciary. However, there is noevidence suggesting that First Bank had actual knowledge that Capetta's acts of depositing the checksinto the client escrow account were a breach of his fiduciary obligation. Specifically, plaintiffs havefailed to provide any evidence that the individual or individuals at First Bank who conducted thetransaction and accepted the checks at issue had any such knowledge. As a result, plaintiffs have notestablished that First Bank had actual notice that Capetta was breaching any fiduciary duty in payingthe checks at issue. Edgcomb, 274 Ill. App. 3d at 436.

Finally, with regard to the latter provision set forth in section 7, plaintiffs argue that they havepresented sufficient evidence to create a question of fact as to whether First Bank took an instrumentfrom Capetta knowing that the instrument was in payment of or as security for one of Capetta's debts. They claim to have established this by evidence of Capetta's long-standing account activity at FirstBank and documentation which showed First Bank's knowledge of Capetta's fiduciary status "byvirtue of his escrow account." Plaintiffs further contend that Capetta secured his mortgage debt toFirst Bank with his other accounts there. Specifically, they assert that Capetta's escrow accountserved as collateral for the mortgage on Capetta's home. Finally, plaintiffs argue that the subjectchecks were used as payment for Capetta's personal debts and that they provided evidence of checksdrawn on the escrow account and made payable to First Bank in their motion to reconsider.

Again, at best, plaintiffs' evidence establishes that First Bank knew of Capetta's fiduciarystatus. However, plaintiffs provide no evidence that First Bank took an instrument from Capettaknowing that the instrument was in payment of or as security for one of Capetta's debts owed to FirstBank.

As additional support for their claim that Capetta secured his mortgage debt to First Bankwith his other bank accounts, plaintiffs refer us generally to a 66-page citation to the record. Citingto 66 pages in the record without identifying the specific documentary evidence relied upon is not arelevant citation supporting plaintiffs' claim. Failure to provide relevant citations to the record is aviolation of Supreme Court Rule 341(e)(7) and results in a waiver. See McGovern v. Kaneshiro, 337Ill. App. 3d 24, 38, 785 N.E.2d 108 (2003); 188 Ill. 2d R. 341(e)(7). This court "is not a depositoryin which an appellant may dump its arguments without factual foundation in hopes that [the court]will sift through the entire record to find support for a determination favorable to appellant'sposition." Coffey v. Hancock, 122 Ill. App. 3d 442, 444, 461 N.E.2d 64 (1984). We will not siftthrough 66 pages in the record to find some support for this contention. Therefore, we find this claimis waived.

Plaintiffs also argue that the "Pledge to Secure Guaranty and Other Liabilities" made inconnection with Capetta's original mortgage suggests that any indebtedness owed to First Bank byCapetta could be satisfied by the Bank's entitlement to take any of Capetta's deposits that were incontrol of the bank. However, we do not read this language to suggest that payment for any ofCapetta's indebtedness, including the mortgage debt, could be taken by First Bank from the escrowaccount at issue here. Thus, plaintiffs' claim that the escrow account served as collateral for themortgage on Capetta's home is again unsubstantiated by any documentation in the record and istherefore waived.

With regard to the 10 checks attached to plaintiffs' motion to reconsider that were drawn onCapetta's escrow account and made payable to First Bank, three of the checks were "written out"of the escrow account before plaintiffs' checks were deposited and the remaining seven were madepayable to First Bank so that Capetta could purchase cashiers' checks made payable to third parties. Thus, there is no evidence that First Bank took these checks in payment of or as security for a debtknown by First Bank to be a personal debt of Capetta owed to First Bank.

Two Illinois cases support the summary judgment order entered in favor of First Bank. Go-Tane, 78 Ill. App. 3d at 790, and Edgcomb, 274 Ill. App. 3d 432, 654 N.E.2d 598.

In Go-Tane, the plaintiff, a service station company, brought an action against the defendantbank, where the plaintiff's employee maintained an account. The employee was the manager at theplaintiff's Odgen Avenue gasoline station. The employee opened up an account with the defendantbank under the name of "Sharp Go-Tane Service." At the time he opened up the account, theemployee signed a sworn statement that he was the owner of the Ogden Avenue station. In fact, theemployee was only the manager and his duties were to deliver the day's proceeds from the sale of theplaintiff's products to a bonded messenger for placement into the plaintiff's account. However, theemployee, instead of following this procedure, deposited the cash proceeds into his own account atthe defendant bank and then issued a check to the messenger drawn on his account.

This conduct occurred for over two years until the employee was fired. On the day he wasfired, the employee stopped payment on all checks drawn by him on his accounts, specifically anychecks to the plaintiff. The bank complied and stopped payment on 10 checks, which amounted toover $15,000 of the plaintiff's funds that were embezzled by the employee. The employee thenwithdrew the balance of the account on the next day and fled the jurisdiction.

The plaintiff sued the defendant bank for, among other things, conversion of the funds. Thetrial court rejected this claim and granted summary judgment in the bank's favor. The question onappeal was whether the trial court properly entered summary judgment in favor of the bank. Onreview, the appellate court affirmed the trial court's summary judgment in the favor of the bank withregard to the conversion claim. Go-Tane, 78 Ill. App. 3d at 790. It did so because the facts failedto show the bank's "actual or bad faith knowledge" that the fiduciary breached a fiduciary obligationand therefore the bank was not liable for conversion under the Fiduciary Obligations Act. Go-Tane,78 Ill. App. 3d at 790.

As in Go-Tane, there are no facts in the instant case showing First Bank acted in bad faith,had actual knowledge that Capetta breached his fiduciary obligations to the plaintiffs, or took checksin payment of or as security for a debt known by First Bank to be a personal debt of Capetta. Absentevidence triggering any of the provisions set forth in section 7 of the Fiduciary Obligations Act, Go-Tane supports the finding that First Bank is absolved from liability for conversion here.

Edgcomb, cited above, also supports First Bank's position. In Edgcomb, the plaintiff countysued its former treasurer, who was a fiduciary, and two defendant banks to recover over $400,000that was allegedly embezzled by the former treasurer. The trial court dismissed all 11 counts againstthe banks and the county appealed.

Addressing the one count relevant here, the plaintiff alleged that a certain check in the amountof $3,132.49 was drawn by the former treasurer on the plaintiff's tax protest account at the defendantbank and the bank paid this check, which was used as payment on a commercial loan held by thetreasurer. The plaintiff further claimed that the defendant bank had actual knowledge of the formertreasurer's breach of his fiduciary obligations and acted in bad faith in paying this check. Theappellate court found that the trial court's dismissal of this count was proper with regard to liabilityof the defendant bank as payor of the check under section 7 of the Fiduciary Obligations Act sincethe bank had no "actual knowledge of a breach of fiduciary obligation or bad faith." Edgcomb, 274Ill. App. 3d at 438. The Edgcomb court further explained that the Fiduciary Obligations Act is"meant to limit liability 'to relatively uncommon cases in which the person who deals with thefiduciary knows all the relevant facts.' [citation.] " Edgcomb, 274 Ill. App. 3d at 438. The appellatecourt affirmed the dismissal of 10 counts the plaintiffs pled against the banks, but allowed one tostand because it stated a cause of action under section 5 of the Fiduciary Obligations Act, which isnot pertinent here.

As discussed above, the record does not show that First Bank exhibited bad faith, had actualknowledge of a breach of fiduciary obligation, or took checks in payment of or as security for a debtknown by First Bank to be a personal debt of Capetta.

Nonetheless, plaintiffs argue the law is clear that fiduciary authority to endorse settlementchecks, even when an attorney is involved in settling a judgment, must be specifically granted andbanks can be liable under a conversion theory for accepting forged checks. However, the primarycases that plaintiffs rely upon, Crahe v. Mercantile Trust & Savings Bank, 295 Ill. 375, 378-79, 129N.E.120 (1920), Kallison v. Harris Trust & Savings Bank, 338 Ill. App. 33, 86 N.E.2d 858 (1949),Bellflower, 130 Ill. App. 3d 80, and Leeds v. Chase Manhattan Bank, N.A., 331 N.J. Super. 416, 752A.2d 332 (2000), are distinguishable.

Although Crahe involved a forged endorsement by a fiduciary attorney, it was decided in1920, approximately 11 years before the Fiduciary Obligations Act became the law in Illinois.

In Kallison, the plaintiffs, who were co-partners, sued the defendant banks, MerchandiseNational Bank and Harris Trust and Savings Bank, on two counts, a complaint in law (count I), inwhich the cause of action is not specifically identified, and a claim in chancery for an accounting anddissolution (count II). Count II was allowed to stand but the trial court granted defendants' motionto dismiss count I based on a failure to state a cause of action. The plaintiffs appealed the dismissalof count I.

In Kallison, the facts showed the plaintiffs executed a partnership agreement with the thirdpartner, Samuel Lamm, in which the three partners agreed to conduct their business under the firmname "Commander Products." Specifically, the partnership agreement required that all funds receivedon behalf of the partnership be immediately deposited into a certain bank, which was not one of thedefendants and was designated as the depository for partnership funds. Under the partnershipagreement, "any two" of the partners were given authority to sign checks on behalf of the partnership. The plaintiffs alleged that Lamm orally agreed to close his individual account in the name of"Commander Products Company" at Merchandise National Bank and that Lamm also agreed to ceaseto conduct any business under the name "Commander Products Company." The plaintiffs claimedin count I that the defendants improperly paid two checks that were improperly endorsed by Lammand were wrongfully deposited into Lamm's personal bank account.

According to the plaintiffs, Lamm obtained two checks drawn on the defendant Harris Trustand Savings Bank, which were payable to the order of "Commander Products Co.," and the fundsrepresented in these checks were partnership funds. Lamm improperly endorsed the checks anddeposited them into his personal account at Merchandise National Bank in violation of thepartnership agreement. The plaintiffs never informed Merchandise National Bank or Harris Trust andSavings Bank that a partnership had been formed between them and Lamm, even though thepartnership name was very similar to Lamm's prior trade name. As noted above, the defendant banksfiled a motion to dismiss, the trial court dismissed the plaintiffs' complaint in law for failure to statea cause of action, and the plaintiffs appealed.

On appeal, the plaintiffs claimed that Lamm committed a forgery in endorsing the checksmade payable to "Commander Products Co.," the name used by him before entering into thepartnership agreement. The appellate court disagreed and found that Lamm's endorsement of thosechecks did not constitute a forgery because Lamm had authority to endorse the checks under thepartnership agreement. Kallison, 338 Ill. App. at 38. Further, the court, relying upon twoPennsylvania decisions and section 9 of the Fiduciary Obligations Act, noted that what a fiduciarydoes with funds collected from an authorized endorsement "was of no legal moment to the bank"unless the bank had actual knowledge that the fiduciary was committing a breach of his obligation asfiduciary by making a deposit into his personal account. Kallison, 338 Ill. App. at 40. Although thecourt did observe that Lamm's failure to deposit the checks into the partnership account violated thepartnership agreement, it held that the violation of a duty to deposit an endorsed check into aparticular account did not constitute a forgery. Kallison, 338 Ill. App. at 40. Therefore, the courtaffirmed the trial court's dismissal of the plaintiffs' complaint in law.

Kallison is different from this case because the checks in Kallison were deposited into Lamm's personal account. Such action would implicate section 9 of the Fiduciary Obligations Act, which wehave already found is inapplicable here. Kallison further establishes that section 9 does not triggerbank liability unless the bank had actual knowledge that the fiduciary was committing a breach of hisobligation as fiduciary by making a deposit into his personal account. Kallison, 338 Ill. App. at 40. We fail to see how this case supports plaintiffs' position here.

The other Illinois decision plaintiffs rely upon with regard to this point is Bellflower, citedabove, where the court in analyzing section 9 of the Fiduciary Obligations Act, said:

"The purpose of the [Fiduciary Obligations] Act is to facilitate thefiduciary's performance of his responsibilities by limiting the liabilityof those who deal with him [citation]; it does not purport to absolvea bank from liability when it pays a check on an unauthorizedendorsement." Bellflower, 130 Ill. App. 3d at 86.

But as plaintiffs themselves acknowledge, this statement was made by the court while analyzingsection 9 of the Fiduciary Obligations Act, which we have already determined does not apply herebecause the checks that Capetta deposited were deposited into a fiduciary account, not his personalaccount. Thus, Bellflower is distinguishable.

Plaintiffs further rely on Leeds, a New Jersey decision cited above, in support of theirargument that section 3-420 of the UCC supercedes section 7 of the Fiduciary Obligations Act in thiscase. While plaintiffs acknowledge that Leeds is a foreign case, they point out that cases from foreignjurisdictions interpreting uniform acts are " 'given greater-than-usual deference since the generalpurpose of a uniform act is to make consistent the laws of the states that have enacted it.' [Citation.]"Reed v. Doctor's Associates, Inc., 331 Ill. App. 3d 618, 622, 772 N.E.2d 372, 376 (5^th Dist. 2002).

In Leeds, the plaintiffs hired an attorney, Louis Egnasko, to represent them in a mortgageforeclosure action and purchase and resale of property in New Jersey. The plaintiffs bought theproperty and entered into a contract to sell, which Egnasko handled, and he then accepted asettlement check on the plaintiffs' behalf. The settlement check was made payable to the plaintiffs. The check was drawn on United Jersey Bank, which became Summit Bank (Summit).

Egnasko altered the settlement check by typing "Louis Egnasko attorney for" above the payeeline so it looked as though he was named as the payee on the check. He then endorsed the check anddeposited it into his attorney trust account at Chemical Bank. Chemical later became ChaseManhattan Bank (Chase) as successor in interest. Egnasko subsequently drew a check from adifferent client trust account at Trust Company of New Jersey (Trustco). He paid the plaintiffs fromfunds out of the Trustco account but that account also contained funds that Egnasko had obtainedby altering and depositing another check, which was payable to the Shrewsbury State Bank(Shrewsbury). Thus, Egnasko used funds owed to Shrewsbury in order to pay the plaintiffs. Facinga conversion claim by Shrewsbury, Trustco filed suit against Egnasko and the plaintiffs in New York. The plaintiffs filed an answer and cross-claim in the New York action asserting that they were notliable for the Shrewsbury funds.

The plaintiffs then filed an action in the New Jersey court alleging strict liability under a UCCconversion theory for payment on the altered settlement check against both Chase, the depositorybank, and Summit, which was the drawer, drawee, payor bank. Chase and Summit filed summaryjudgment motions on a variety of grounds and the trial court granted summary judgment in favor ofboth defendants.

With regard to the plaintiffs' cause of action for conversion against Chase, the appellate courtstated that the applicable provision was New Jersey's version of section 3-420(a) of the UCC. Leeds,331 N.J. Super at 421, 752 A.2d at 335. It further held it was undisputed that Egnasko was notauthorized by the plaintiffs to endorse the check and had no right to receive or enforce payment onthat check. Leeds, 331 N.J. Super at 422, 752 A.2d at 336. The court found that such actionconstituted a forgery under the UCC and that Chase, by crediting Egnasko's trust account with theface amount of the check, paid the check to "a person not entitled to *** receive payment" inviolation of section 3-420 of the UCC. Leeds, 331 N.J. Super at 422, 752 A.2d at 336. The courtfurther found Chase to be strictly liable on the plaintiffs' conversion claim under section 3-420because Chase made or obtained "payment with respect to the instrument for a person not entitledto enforce the instrument or receive payment." Leeds, 331 N.J. Super at 423, 752 A. 2d at 336. According to the court, the justification for strict liability upon the depository bank was that " 'theloss should normally come to rest upon the first solvent party in the stream after the one who forgedthe indorsement.' [Citation.]" Leeds, 331 N.J. Super at 423, 752 A.2d at 336. It therefore found thatthe trial court improperly granted summary judgment against the plaintiffs and in favor of Chase. Leeds, 331 N.J. Super at 423, 752 A.2d at 337.

The court also addressed the defendants' contention that they were protected by section3B:14-58 of the Uniform Fiduciary's Law (N.J. Stat. Ann.