Harber v. Leader Federal Bank for Savings
Judith Harber sued Leader Federal Bank for Savings after her ex-husband made unauthorized transactions on her account, including converting a Large Denomination Certificate (LDC) to an Instant Access account and forging her signature for withdrawals. The trial court partially granted summary judgment to both parties, ruling some claims were barred by a one-year statute of limitations (Tenn.Code Ann. § 47-4-406), but found the bank acted in bad faith regarding two withdrawals. The appellate court affirmed that Harber ratified the conversion by seeking interest benefits and that the one-year limit applied to six unauthorized withdrawals, affirming the finding of bad faith and prejudgment interest. However, the court reversed, holding that the one-year limitation did not apply to the conversion transaction itself or claims regarding interest checks, as these did not involve 'items' or 'debit entries' as defined by the statute. The case was remanded for further proceedings consistent with this opinion.