Grossman v. Nationsbank, No. 00-10730

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Citation: 225 F.3d 1228
• Docket Number: No. 00-10730
• Parties: (11th Cir. 2000) Stephen GROSSMAN, Plaintiff-Appellant, v. NATIONSBANK, N.A., Defendant-Appellee. Non-Argument Calendar.
• Decision Date: 06 September 2000

Page 1228

225 F.3d 1228 (11th Cir. 2000) Stephen GROSSMAN, Plaintiff-Appellant,
v.
NATIONSBANK, N.A., Defendant-Appellee. No. 00-10730
Non-Argument Calendar. United States Court of Appeals,
Eleventh Circuit. September 6, 2000.
September 19, 2000.

Appeal from the United States District Court for the Middle District of Florida. (No. 98-00239-CIV-OC-21C), Ralph W . Nimmons, Jr., Judge.

Before TJOFLAT, BARKETT and HULL, Circuit Judges.

PER CURIAM:

Plaintiff-Appellant Stephen Grossman appeals the district court's order dismissing his complaint for failure to state a claim upon which relief could be granted. Fed.R.Civ.P. 12(b)(6). This case arises out of Grossman's claims that Nationsbank improperly transmitted a fund transfer on his behalf through the Federal Reserve Wire Transfer Network ("Fedwire").¹ Grossman alleged that the improper transfer

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resulted in damages of over $200,000 to him. After review, we affirm.

I. GROSSMAN'S COMPLAINT

We first review the allegations in Grossman's complaint. Grossman's complaint alleges that he entered into a joint venture agreement (the "JV agreement") with HMF Management ("HMF") in order to participate in an investment program. On October 7, 1996, in furtherance of the JV agreement, Grossman opened an account at First Union National Bank (the "HMF-Grossman JV account"). Grossman received instructions from HMF for the wire transfer of Grossman's investment funds into the HMF-Grossman JV account at First Union. Grossman attached to his complaint as Exhibit B a copy of the wire-transfer instructions as he received them from HMF. The wire transfer instructions read as follows:

WIRE TRANSFER INSTRUCTIONS

HMF-GROSSMAN JV

 BANK NAME: AM SOUTH BANK
                 BANK ADDRESS: CLEARWATER, FLORIDA
                 ABA# : 063 210 112
                 ACCOUNT NAME: DIVERSIFIED VENTURES
                 ACCOUNT NUMBER: 3283155856
                

FOR FURTHER CREDIT TO:

 BANK NAME: FIRST UNION
                 BANK ADDRESS: JACKSONVILLE, FLORIDA
                 ABA# : 063000021
                 ACCOUNT NAME: HMF-GROSSMAN JV
                 CAP ACCOUNT NUMBER: 9981575600 [handwritten]
                

_________

(R1-2 at Exh. B). The wire transfer instructions thus directed that the funds be wired to bank name "Am South Bank," account name "Diversified Ventures," account number 3283155856, and then "for further credit to" bank name "First Union," account name "HMF-Grossman JV," account number 9981575600.

On October 11, 1996, Grossman visited a Nationsbank² branch office and requested assistance in effecting the wire transfer of his funds to the HMF- Grossman JV account. Grossman provided a copy of the wire-transfer instructions to an employee of Nationsbank. The employee prepared a "Request for Funds Transfer" form that Grossman signed. Grossman attached to his complaint at Exhibit C a copy of the funds transfer form. The funds transfer form contained the following information, in pertinent part (the printed form headings are underlined):

WIRE AMOUNT $250,000.00
                ___________
                

RECEIVING BANK (Use ONLY if different from Beneficiary's Bank)
                FINAL DESTINATION: FIRST UNION, JACKSONVILLE, FL R/T
                # 06300021, HMF-GROSSMAN JV # 9981575600
                

BENEFICIARY'S BANK
                FIRST DESTINATION: AM SOUTH BANK, CLEARWATER, FL R/T/
                

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# 063 210 112 DIVERSIFIED VENTURES
                

BENEFICIARY NAME
                AM SOUTH BANK
                

BENEFICIARY ACCOUNT NUMBER (REQUIRED)
                3283155856
                

ORIGINATOR TO BENEFICIARY INFORMATION (SPECIAL INSTRUCTIONS,
                EX. ATTENTION, REFERENCE NUMBER, ETC.) FINAL DESTINATION
                ADDRESS: FIRST UNION 2801 SOUTHWEST HIGH MEADOWS AVE, PALM
                CITY, FL 34490
                

ORIGINATOR/BY ORDER OF
                STEPHEN GROSSMAN METHOD OF PAYMENT: DBT ACCT # 2010788969
                _______
                

(R1-2 at Exh. C).

On October 17, 1996, Grossman was again in the Nationsbank branch office. The employee who had prepared the funds transfer form asked Grossman if the transfer had gone well. Grossman replied that he assumed it had gone well because the funds had reached the HMF-Grossman JV account at First Union. The employee then told Grossman that the "wire transfer room" had told her that because both Nationsbank and First Union were "on line," there was no need to route the funds through Am South Bank. As a result, Nationsbank had wired the money directly to First Union for credit to the HMF-Grossman JV account.

Grossman then reviewed the joint-venture documents, and determined that the transfer directly from Nationsbank to the HMF-Grossman JV account "appeared to be inconsistent with the wiring instructions given to him." While the funds had reached the ultimate intended account, the HMF-Grossman JV account, the funds had gone to the account directly and not through Am South Bank and the Diversified Ventures account. On October 18, 1996, Grossman again contacted the Nationsbank branch office and requested that the "wire be sent in accordance with the instructions he had been provided and, in turn, had provided the bank." After the same Nationsbank employee consulted with the "wire room," she told Grossman that the funds would be recalled and resent in conformity with the instructions.

Within the next several days, Grossman received confirmation from both the "wire room" and the same Nationsbank employee that the funds had been recalled and resent. However, in early November, Grossman contacted First Union and learned that no deposit had been received to the HMF-Grossman JV account. Grossman immediately called Am South Bank to inquire as to why the funds had not been forwarded to the HMF-Grossman JV account as the wiring instructions had directed. Am South told Grossman that it could not provide him any information regarding an account to which he was not a signatory, and that he should contact the owner of the Diversified Ventures account at Am South to which Nationsbank had wired the funds.

Over the next several months, Grossman tried unsuccessfully to determine what had happened to the funds that were intended for deposit in the HMF-Grossman JV account at First Union. Nationsbank continued to insist that it had transferred the money to Am South according to Grossman's instructions, and that it was then Am South's responsibility to complete the transaction pursuant to the instructions that Nationsbank had forwarded to Am South with the funds. In March 1997, Am South informed Grossman that the Diversified

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Ventures account had been closed in February 1997.

HMF, the sole signatory to the Diversified Ventures account at Am South, initially told Grossman that the delay in forwarding the funds to the HMF-Grossman JV account at First Union had been due to a federal audit of Diversified Ventures. However, on March 6, 1997, HMF wired $50,000.00 to Grossman's Nationsbank account in return for an agreement from Grossman authorizing HMF to deduct $50,000.00 from the principle sum of the investment that it would soon transfer to the HMF- Grossman JV account. Grossman attached to his complaint at Exhibit D a copy of this agreement.

In August 1997, Grossman sought assistance from the Federal Reserve Bank in Washington D.C. Officials there informed him that Nationsbank was responsible for the loss of the funds due to its failure to execute the payment order according to Grossman's instructions. According to the Federal Reserve, the loss of the funds was not to be blamed on Am South's failure to forward the funds as instructed. As a result, Grossman made a written demand for damages on Nationsbank. Nationsbank promised to address Grossman's demands "as expeditiously as possible," but never concluded its inquiry. Grossman's complaint alleges damages in excess of $200,000.00 as a result of Nationsbank's "failure to complete the wire transfer transaction in accordance with the instructions Grossman had provided, or to advise Grossman that such transaction could not be completed as structured."

II. THE DISTRICT COURT'S ORDER

In its motion to dismiss, Nationsbank contended that Grossman failed to plead the essential elements of a cause of action for the erroneous execution of a Fedwire funds transfer. Fed.R.Civ.P. 12(b)(6). In granting Nationsbank's motion to dismiss, the district...