Corfan Banco Asuncion Paraguay v. Ocean Bank

• Decision Date: 10 June 1998
• Docket Number: No. 97-1363,97-1363
• Citation: 715 So.2d 967
• Parties: 23 Fla. L. Weekly D1407, 35 UCC Rep.Serv.2d 1320 CORFAN BANCO ASUNCION PARAGUAY, a foreign banking corporation, Appellant, v. OCEAN BANK, a Florida bank, Appellee.
• Court: Florida District Court of Appeals

Page 967

715 So.2d 967

23 Fla. L. Weekly D1407, 35 UCC Rep.Serv.2d 1320

CORFAN BANCO ASUNCION PARAGUAY, a foreign banking corporation, Appellant, v. OCEAN BANK, a Florida bank, Appellee.

No. 97-1363.

District Court of Appeal of Florida Third District.

June 10, 1998.

Rehearing Denied Sept. 2, 1998.

Silver & Waldman, and Glen Waldman, Miami, for appellant.

Coffey, Diaz & O'Naghten, Miami; Kendall Coffey and Louis K. Nicholas, II, Miami, for appellee.

Before NESBITT, LEVY and SORONDO, JJ.

SORONDO, Judge.

Corfan Banco Asuncion Paraguay, a foreign banking corporation (Corfan Bank), appeals the lower court's entry of a Final Summary Judgment in favor of Ocean Bank, a Florida bank.

On March 22, 1995, Corfan Bank originated a wire transfer of $72,972.00 via its intermediary Swiss Bank to the account of its customer, Jorge Alberto Dos Santos Silva (Silva), in Ocean Bank. The transfer order bore Silva's name as the recipient and indicated that his account number was 010070210400 (in fact, this was a nonexistent account). Upon receipt of the wire transfer, Ocean Bank noticed a discrepancy in this number and before depositing the money, confirmed with Silva that his correct account number was 010076216406. ¹ Ocean Bank did not, however, inform Corfan Bank or Swiss Bank of the error. Once the correct number was confirmed by Silva, Ocean Bank accepted the wire transfer and credited Silva's account.

The next day, Corfan Bank became aware of the account number discrepancy and, without first checking with either Silva or Ocean Bank, sent a second wire transfer of $72,972.00 to Silva's correct account number at Ocean Bank. The second transfer order did not indicate that it was a correction, replacement or amendment of the March 22nd transfer. Because the information of the transfer was correct, it was automatically processed at Ocean Bank and was credited to Silva's account. Several days later, Corfan Bank inquired of Ocean Bank regarding the two transfers, maintaining that only one transfer was intended. By that time, Silva had withdrawn the proceeds of both wire transfers. ² When Ocean Bank refused to repay $72,972.00 to Corfan Bank, this litigation ensued. Corfan Bank proceeded on two claims, one based on the section 670.207, Florida Statutes (1995), which codifies as Florida law section 4A-207 of the Uniform Commercial Code (UCC), and one based on common law negligence. Ocean Bank answered denying liability under the statute and also contending that the negligence claim was precluded by the preemptive statutory scheme.

The trial court, emphasizing that Florida's adoption of the UCC sections concerning wire transfers did not abrogate the basic tenets of commercial law, found that Ocean Bank had not contravened section 670.207 by crediting the erroneous March 22nd wire transfer to Silva's account. Finding that Corfan Bank was the party best situated to have avoided this loss, the court held that Corfan Bank must bear that loss and, therefore, the court granted Ocean Bank's motion for summary judgment as to count one (the UCC count). Additionally, the court dismissed count two (the negligence count).

We begin with a review of the exact language of section 670.207(1), Florida Statutes:

(1) Subject to subsection (2), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance of the order cannot occur.

Corfan Bank argues that this language is clear and unambiguous, where a name or bank account number, or other identification refers either to a nonexistent or unidentified person or a nonexistent account, the order cannot be accepted. Ocean Bank responds that such a "highly technical" reading of the statute is "contrary to commercial and practical considerations and common sense." It suggests that we look to the legislative intent and conclude that the "or" in the statute should be given conjunctive rather than disjunctive effect. ³ We respectfully decline Ocean Bank's invitation to look behind the plain language of the statute and conclude that given its clarity it must be read as written.

In Capers v. State, 678 So.2d 330 (Fla.1996), the Florida Supreme Court stated:

[T]he plain meaning of statutory language is the first consideration of statutory construction. St. Petersburg Bank & Trust Co. v. Hamm, 414 So.2d 1071, 1073 (Fla.1982). Only when a statute is of doubtful meaning should matters extrinsic to the statute be considered in construing the language employed by the legislature. Florida State Racing Comm'n v. McLaughlin, 102 So.2d 574, 576 (Fla.1958).

Id. at 332. See also Starr Tyme, Inc. v. Cohen, 659 So.2d 1064 (Fla.1995); C.W. v. State, 655 So.2d 87 (Fla.1995); Baker v. State, 636 So.2d 1342 (Fla.1994); State v. Jett, 626 So.2d 691 (Fla.1993); Weber v. Dobbins, 616 So.2d 956 (Fla.1993); In re McCollam, 612 So.2d 572 (Fla.1993); Aetna Cas. & Sur. Co. v. Huntington Nat'l Bank, 609 So.2d 1315 (Fla.1992); Taylor Woodrow Constr. Corp. v. Burke Co., 606 So.2d 1154 (Fla.1992); Streeter v. Sullivan, 509 So.2d 268 (Fla.1987). These cases preclude the analysis urged by Ocean Bank. Although Ocean Bank's position has been noted in the legal literature, ⁴ "unambiguous language is not subject to judicial construction, however wise it may seem to alter the plain language." Jett, 626 So.2d at 693. Then Chief Justice Rosemary Barkett explained the reasoning behind this principle in Weber v. Dobbins, 616 So.2d 956 (Fla.1993):

The reason for the rule that courts must give statutes their plain and ordinary meaning is that only one branch of government may write laws. Just as a governor who chooses to veto a bill may not substitute a preferable enactment in its place, courts may not twist the plain wording of statutes in order to achieve particular results. Even when courts believe the legislature intended a result different from that compelled by the unambiguous wording of a statute, they must enforce the law according to its terms. A legislature must be presumed to mean what it has plainly expressed, and if an error in interpretation is made, it is up to the legislature to rewrite the statute to accurately reflect legislative intent.

Id. at 959-60 (Barkett, C.J., dissenting) (citations omitted).

The Supreme Court of Florida has fashioned only one exception to this general rule: "[t]his Court will not go behind the plain and ordinary meaning of the words used in the statute unless an unreasonable or ridiculous conclusion would result from failure to do so." Holly v. Auld, 450 So.2d 217, 219 (Fla.1984). The plain and ordinary meaning of the words of the statute under review do not lead to either an unreasonable or ridiculous result. As discussed more thoroughly below, one of the critical considerations in the drafting of Article 4A was that parties to funds transfers should be able to "predict risk with certainty, to insure risk with certainty, to adjust operational and security procedures, and to price funds transfer services appropriately." See 19A Fla. Stat. Ann. 15 (U.C.C.cmt.1995). All of these goals are reasonable and assured by the plain statutory language.

In the present case, although the payment order correctly identified the beneficiary, it referred to a nonexistent account number. Under the clear and unambiguous terms of the statute, acceptance of the order could not have occurred. As the Florida Supreme Court stated in Jett:

We trust that if the legislature did not intend the result mandated by the statute's plain language, the legislature itself will amend the statute at the next opportunity.

Jett, 626 So.2d at 693.

As indicated above, the trial court dismissed count two of the complaint which sounded in negligence. The court concluded that the statutory scheme preempts the common law remedy of negligence. It is not clear whether the adoption of Article 4A of the UCC abrogated the common law cause of action for negligence relating to a wire transfer, as raised in count two of the complaint. The Uniform Commercial Code Comment following section 670.102, Florida Statutes (1995), which delineates the subject matter for chapter 670, provides in part:

In the drafting of Article 4A, a deliberate decision was made to write on a clean slate and to treat a funds transfer as a unique method of payment to be governed by unique rules that address the particular issues raised in this method of payment. A deliberate decision was also made to use precise and detailed rules to assign responsibility, define behavioral norms, allocate risks and establish limits on liability, rather than to rely on broadly stated, flexible principles. In the drafting of these rules, a critical consideration was that the various parties to funds transfers need to be able to predict risk with certainty, to insure against risk, to adjust operational and security procedures, and to price funds transfer services appropriately. This consideration is particularly important given the very large amounts of money that are involved in funds transfers.

Funds transfers involve competing interests--those of the banks that provide funds transfer services and the commercial and financial organizations that use the services, as well as the public interest. These competing interests were represented in the drafting process and they were thoroughly considered. The rules that emerged represent a careful and delicate balancing of those interests and are intended to be the exclusive means of determining the rights, duties and liabilities of the affected parties in any situation covered by particular provisions of the Article. Consequently, resort to principles of law or equity outside of Article 4A is not appropriate to create rights, duties and liabilities inconsistent with those stated in this Article.

(Emphasis added). See U.C.C. § 4A-102 cmt. (1977); ...