Respondent bank filed an action against appellant, the authorized signer on a checking account with the bank, and related others, asserting causes of action for breach of contract and fraud. The Superior Court of San Bernardino County (California) granted the bank’s application for a right to attach order, which sought to attach property of appellant, who was the victim of a Nigerian-style email scam. Appellant sought review.
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Overview
Appellant’s corporation had received checks and deposited them in an account with the bank. It then had the bank make wire transfers out of the account. All of the checks bounced, because they had been altered. That resulted in an overdraft. The bank claimed, and appellant did not dispute, that he was personally liable for any overdraft. The court held that the trial court properly found that the bank had demonstrated the probable validity of its claim. The bank introduced sufficient evidence that it did not act negligently in accepting the checks for deposit. Accordingly, the bank established that it properly charged back the account for the altered checks. The Uniform Commercial Code precluded any claim that the bank acted negligently in making the wire transfers. The bank’s liability for its acceptance of the wire transfers was limited to its liability, if any, under U.C.C. art. 4A. Under U.C.C. § 4A-212, a receiving bank could not be held liable under common law theories for merely accepting a wire transfer. Accordingly, even assuming the bank was negligent in making the wire transfers, it was entitled to recover the resulting overdraft from appellant.
Outcome
The court affirmed the order.