Let me give you some facts and see what you think (leaving out last names so don't fret):

1. Connie (man) and Mrs. Connie are account holders.
2. Signature cards are signed Connie and Mrs. Connie way back when (don't know the wife's real name; I thought she was Connie at first).
3. Connie dies 091103 and we are notified sometime shortly thereafter by family or obituaries presumably since we have a message that predates our system conversion in Sept 2004.
4. Connie receives pension check monthly.
5. Mrs. Connie continues to cash Connie's pension checks until it is discovered in 2009 or 2010 (don't know which since Mrs. Connie closed account with us in 03/09 and the last check we cashed was Jan 2009)
6. Company's bank sends back only 7 items that begin with the most recent and goes back three years from current date.
7. Company's bank sends adjustment request with no affidavit from company, only cover letter stating maker is returning items due to unauthorized/forged endorsement.
8. My bank recognizes its mistake in cashing these checks for Mrs. Connie.

My questions:

1. Should I pay all, part, or none?
2. If part or none, what should I cite as my reasons for refusal?
3. What liability, if any, does the company bear for taking six or seven years to decide that their client is dead and that they should stop issuing checks?
4. Do I need an affidavit? If so, from whom?

Thanks.

I don't think there's a black and white answer. You don't know when the check issuer learned of the pensioners death, for example. Such companies don't get automatic notification from funeral homes like Social Security does. On the other hand, your bank apparently knew of his demise in late 2003 or early 2004.

Forged endorsement claims are enforceable only from three years (most states) from the triggering event. You could be looking at up to 36 items, if the pension payments were made monthly.

If you pay for all seven checks for which you've received claims, there's nothing to prevent the company from identifying more forged endorsements and entering more claims. I suggest you contact bank counsel with a view toward determining whether there are more forged items pending claims and whether a settlement might be reached in which the issuing company agrees not to pursue any further claims against the bank.