Is Merrill Lynch liable to Harrington as the drawee of the check?

The MacNabs purchased a piece of property from Richard Harrington’s client. Although Harrington was an experienced attorney, he made a bad mistake. The MacNabs came to the closing with a personal check drawn on their Merrill Lynch cash management account for $150,128.70. The check had not been certified. Harrington should have refused to close, but instead called Merrill Lynch and spoke with a Ms. Ruark. She told him there were sufficient funds in the MacNabs’ account to cover the check and that she would put a hold on the account in the amount of the check. When asked to confirm this promise in writing, Ruark sent the following fax to Harrington: “This letter is to verify that the funds are available in the Merrill Lynch account. There is a pend on the funds for the check that was given you.”
In fact, the MacNabs’ account did not contain sufficient cleared funds to cover the check, which bounced. The MacNabs repeatedly promised to make the check good, but never did. Harrington paid his clients the amount owing and then sued the MacNabs. Although he eventually obtained a judgment against them, they did not pay him the full amount.He also sought recovery fromMerrill Lynch.