Peter E. Shapiro, P.A. v. Wells Fargo Bank, N.A.
| Decision Date | 05 November 2018 |
| Docket Number | Case No. 18-cv-60250-UU |
| Parties | PETER E. SHAPIRO, P.A., Plaintiff, v. WELLS FARGO BANK, N.A., Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Justin Elias King, Jeffrey Bruce Crockett, Coffey Burlington, P.L., Miami, FL, for Plaintiff.
Amy S. Rubin, Dori Katrine Stibolt, Fox Rothschild LLP, West Palm Beach, FL, for Defendant.
THIS CAUSE comes before the Court upon Defendant's Motion for Summary Judgment (D.E. 54).
THE COURT has considered the Motion, the pertinent portions of the record and is otherwise fully advised in the premises. For the reasons set forth below, the motion is granted.
Unless otherwise noted, these facts are undisputed.
Plaintiff, Peter E. Shapiro, P.A., is a law firm whose sole principal is Mr. Peter Shapiro.1 D.E. 53, ¶¶ 1–2. The case arises out of a $504,611.13 wire transfer that Plaintiff initiated to an account at Defendant, Wells Fargo Bank. Id. ¶ 4.
Shapiro had a client, a car dealership, that needed to repay a loan, and Shapiro facilitated that transaction. Id. ¶¶ 3–9. On November 16, 2017, the client forwarded Shapiro an email from the lender's lawyer, James Messenger, containing wire transfer instructions for repaying the loan. Id. ¶ 6. That email identified Mr. Messenger's bank as M & T Bank in Syracuse, New York. Id. ¶ 7.
The next day, the client forwarded Shapiro another email purportedly from Mr. Messenger that directed repayment to a different account: a Wells Fargo account based in Texas. Id. ¶¶ 9–10. The second email stated:
Please here are [sic] my escrow account for today [sic] payoff wire transfer instructions. Our M & T bank [sic] is currently on audit [and] as a result can't receive funds for now. Please let the wire transfer be made to this our Wells Fargo bank [sic]. Find attached our bank details.
Despite receiving these two sets of wire transfer instructions, Plaintiff did not email or speak to Mr. Messenger. D.E. 53-1, 53:16–19 (Deposition of Peter Shapiro). And despite the five typographical and capitalization errors in the second email, Shapiro chose to rely on it because it was more recent. Id. 54:19–55:4.
The same day that Shapiro received the second email, he initiated the wire transfer to the Wells Fargo account. D.E. 53 ¶¶ 12–13; Ex. G. But Mr. Messenger never received the funds, because the Wells Fargo account did not belong to him. D.E. 71 ¶ 5. It belonged instead to someone named Chris Achebe, who promptly removed the funds from the account. D.E. 53 ¶¶ 17, 37. On December 14, Plaintiff's bank sent Wells Fargo a recall request, but Wells Fargo denied it because the funds were already gone. Id. ¶¶ 36.
Wells Fargo processes wire transfers through an electronic system called the Money Transfer System ("MTS"). D.E. 53 ¶ 19. When a wire transfer identifies a valid Wells Fargo account number, the MTS processes the transfer through an automated2 process. Id. ¶¶ 19, 24. MTS creates an automated audit trail that documents the various automated steps in the process. Id. ¶ 20. In this case, the automated audit trail included an entry that reads, "possible name mismatch in CDT party." Id. ¶ 23. This possible name mismatch entry was not seen by anybody at Wells Fargo. Id. ¶ 26. Possible name mismatch entries are common in wire transfers. Id. ¶ 28.
The wire transfer included the partial word "ATTORN." Id. ¶ 30. This triggered Wells Fargo's Office of Foreign Asset Control ("OFAC") to review the transfer for possible United States sanctions violations because of the similarity of "ATTORN" to "ATTOUN," a name which appears on the sanctions list. Id. This review was conducted by a person, who determined that there was no match between "ATTORN" and "ATTOUN." Id. ¶ 35. The OFAC screening process does not consider whether there is a name mismatch between the intended beneficiary and the name attached to the receiving account. Id. ¶ 33.
Plaintiff filed the complaint on February 5, 2018, which included one claim for violating the Uniform Commercial Code's ("UCC") wire transfer statute as adopted in Florida Statutes section 670.207, and one claim for negligence. D.E. 1. The Court dismissed the negligence claim with prejudice because it was preempted by the wire transfer statute. D.E. 14. The Court allowed the statutory claim to proceed. Id.
Summary judgment is authorized only when the moving party meets its burden of demonstrating that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. When determining whether the moving party has met this burden, the Court must view the evidence and all factual inferences in the light most favorable to the non-moving party."
Adickes v. S.H. Kress & Co. , 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ; Rojas v. Florida , 285 F.3d 1339, 1341-42 (11th Cir. 2002).
The party opposing the motion may not simply rest upon mere allegations or denials of the pleadings; after the moving party has met its burden of proving that no genuine issue of material fact exists, the non-moving party must make a showing sufficient to establish the existence of an essential element of that party's case and on which that party will bear the burden of proof at trial." See Celotex Corp. v. Catrett , 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Poole v. Country Club of Columbus, Inc. , 129 F.3d 551, 553 (11th Cir. 1997) ; Barfield v. Brierton , 883 F.2d 923, 933 (11th Cir. 1989).
If the record presents factual issues, the Court must not decide them; it must deny the motion and proceed to trial. Envntl. Def. Fund v. Marsh , 651 F.2d 983, 991 (5th Cir. 1981). Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree about the inferences that should be drawn from these facts. Lighting Fixture & Elec. Supply Co. v. Cont'l Ins. Co. , 420 F.2d 1211, 1213 (5th Cir. 1969). If reasonable minds might differ on the inferences arising from undisputed facts, then the Court should deny summary judgment. Impossible Elec. Techs., Inc. v. Wackenhut Protective Sys., Inc. , 669 F.2d 1026, 1031 (5th Cir. 1982) ; see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ().
Moreover, the party opposing a motion for summary judgment need not respond to it with evidence unless and until the movant has properly supported the motion with sufficient evidence. Adickes , 398 U.S. at 160, 90 S.Ct. 1598. The moving party must demonstrate that the facts underlying the relevant legal questions raised by the pleadings or are not otherwise in dispute, or else summary judgment will be denied notwithstanding that the non-moving party has introduced no evidence whatsoever. Brunswick Corp. v. Vineberg , 370 F.2d 605, 611-12 (5th Cir. 1967). The Court must resolve all ambiguities and draw all justifiable inferences in favor of the non-moving party. Liberty Lobby, Inc. , 477 U.S. at 255, 106 S.Ct. 2505.
As the Court noted in its order on the motion to dismiss (D.E. 14), the viability of Plaintiff's statutory claim turns on whether Wells Fargo had actual knowledge that the recipient's name and the name on the receiving account did not match. The Court explained, "[i]f Wells Fargo did not know [of the mismatch], then it was entitled to rely on the account number, and thus did not violate the statute when it transferred the funds to Chris Achebe." D.E. 14, p. 4. Wells Fargo now moves for summary judgment on the basis that there is no evidence tending to show that Wells Fargo had actual knowledge of the mismatch.
In opposition, Plaintiff first argues that Wells Fargo knew about the mismatch because it opened the receiving account in Chris Achebe's name and the automated audit trail identified a possible name mismatch. And second, it argues that the statute imposes a due diligence requirement on Wells Fargo, which the bank failed to meet.
Florida has adopted the Uniform Commercial Code's ("UCC") relevant banking statutes. This case is governed by section 670.207 of the Florida Statutes. Section 670.207 () entitled "Misdescription of beneficiary," provides, in relevant part:
§ 670.207(2) (emphasis added).
Knowledge means "actual knowledge" and is effective for a particular transaction:
from the time when it is brought to the attention of the individual conducting that transaction, and, in any event, from the time when it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating...
To continue reading
Request your trial