The Honor able Richa rd K. Eaton, J udg e, United States Court of International Trade , * sitti ngby desig nation. 06 -55 20 -cv Phil & K at

hy ’s Inc . v . Sa f

ra N at iona l B ank

of N ew Y ork 1 U N IT E D S T A T E S C O U R T O F A P P E A LS 2 F OR THE S EC OND C IR C U IT 3

_______________ 4 5 August Term, 2008 6 7 (Argued: J anuar

y 13, 2009 Dec ided: Fe bruar y 9, 2009) 8 9 Docke t No. 06-5520-c v 10

_______________ 11 12 13 P H I L & K ATHY ’ S I

NC . AN I LLI N O I S C O RP ., 14 15 Plaintif f-Appellant , 16 17 —v.— 18 19 S AF R A N A T I O N A L B A N K O F N EW Y O RK , A NA TI ONAL B ANK I NG AS S OC I ATI ON , 20 21 Defendant- Appellee

. 22

_______________ 23 24 B e f o r e : 25 S TR AUB AND H A LL , Circuit Judges , and E ATON , Judge
. * 26

_______________ 27 Plaintiff filed this suitseekingto rec over $1,500,000 it cla ims was err oneously disbursed 28 to a third party

by defe ndant bank. Plaintiff now a ppeals fr om the judgme nt of the United States 29 District Court for the Southern D istrict of NewYork (L eonar d B. Sand, Judge ) g ranting 30 defe ndant’s motion pursuant to Rule 12(b)(6) of the F eder al Rules of Civil P roce dure. 31 Def

endant’ s motion called upon the District Court to determine whether upon a bank’ s rec eipt of 32 a pay

ment order

to a non-identifiable or nonexistent customer the orde r is void by operation of 33 law or whether

the re ceivingbank is entitled to act pursua nt to an amendment of

the orde r. The 34 District Court held that New Y ork’s Unifor m Comm erc ial Code § 4-A- 211 allows a re ceiving 35 bank to awa it and act upon a timely amendment of

a pay ment order . We affir

m on the opinion 36 below. 37 382 1

_________________________________ 2 T H O M A S J. V E R T IC C H IO , Swa ns on , M art in & B e ll, L L P, Chicag o, I L(L . Donald Prutzman, 3 Tanne nbaum Helpe rn Sy rac use & Hirschtritt L L P, New Yor k, NY, on the brief

), for Plain tiff4 Appellant
. 5 6 B AR R Y R. F I S CHER , F isc he r & Mand e ll L L P, New Y ork, NY, for Defendant-Appe llee
. 7

_________________________________ 8 P ER C UR I AM : 9 Plaintiff Phil & K athy ’s Inc. appe als from a judgme nt of the United States District Court 10 for the Souther

n District of Ne w York ( L eonar d B. Sand, Judge ), g rantingthe motion of 11 De fe nd ant S a fr a

Natio na l B ank

of Ne w Y or k ( “ Sa fr a ” ) p ur su ant t o F e de ra l Ru le of Civ il 12 Procedur e 12(b) (6). 13 As se t out at g re ate r l e ng th b y the Di str ic t Co ur

t, t he fo llo wi ngfa c ts, dr awn fr om P hil & 14 Kathy ’s Complaint and other docume nts, are a cce pted as true
. Se e Ph il &Kat hy ’s In c . v . S

afra 15 Nat ’l

Ba nk of N e w York, No. 06 CV 4916 (L BS), - - F . Supp. 2d --, 2009 WL248425 (S.D.N.Y. 16 Fe b. 2, 2009). Phil & Kathy ’s is an I llinois corpor ation in the business of re packa g ing a nd 17 selling pr escr iption drugs. Saf ra is a national bankingassociation with its main office in New 18 York City . Phil & Kathy ’s commenc ed the instant litigation ag ainst Safra to rec over $1.5 million 19 se nt t o Sa fr a

via wi re tr ans fe r. Phi l & Kathy ’s c la ime d th at Sa fr a e rr on e ou sly

dis burs e d th os e 2 0 f un d s t o a th i r d p ar ty. 21 On

July 2, 20 03 , Ph il & Kathy ’s a uth or ize d a g e nt w e nt t o it s b ank in I lli no is, Ha

rr is T ru st 22 and Saving s Ba

nk (“H arr is”), and issued a pay ment order

reque sting a

wire tra nsfer of $1.5 23 milli on from its acc ount to Safra f or a be nefic iary

identified as “ Ba

nco Do B rasil SA/Proteknika 24 Do B rasil” ( here inafter “Jul y 2 Pay ment Orde r”) . Har

ris executed the July

2 Pay ment Orde r the3 1 same da

y . Howeve r, bec ause Saf ra did not have an ac count owner with the name “ Ba

nco Do 2 Br asil SA/P roteknika D o Br asil,” the tra nsaction wa s not completed and the intended bene ficiar y 3 d i d

n o tr e c e i v e th e m o n e y. 4 On the next day , J uly 3, the bene ficiar

y informed Phil & Kathy ’s that it did not rece ive 5 the money

and that Phil & Kathy ’s “must pay today .” It instructed Phil & Kathy ’s to chang e the 6 be ne fi c iary

name fr om “ B anc o D o B ra sil SA/Pr ote kn ika Do B ra sil ” to “ B lue Va le .” Phi l & 7 Kathy ’s ag ent re turned to Ha rris on Jul y

3 and spoke w ith the branc h manag er, who said that the 8 J uly

2 Pay ment Orde r “ha [d] not clear ed.” T he ag ent issued a se cond $1.5 million pay ment 9 order , this ti me namingBlue Vale a s the bene ficiar y (her einaf ter “ J uly 3 Pay ment Orde r”)
. 10 Har

ris executed the July

3 Pay ment Orde r that af

ternoon. 11 After

Phil & Kathy ’s ag ent left the H arr is branch, a n ag ent of Ha

rris sent the f

irst of three 12 “urg ent” wir es to Safra askingit to amend the J uly 2 Pay ment Orde r to name B lue Vale as the 13 benef

iciary . The ne x t business day (which w as Jul y

7 beca use of Independe nce D ay ), Safr a 14 pr oc e sse d th e July 3 Pa y me nt O rd e r a

nd c re dit e d $ 1. 5 mi lli on

to B lue Va le ’s a c c ount. The funds 15 wer e deduc ted from Phil & Ka thy ’s Har ris acc ount. Then, on Jul y 9, which wa s within five 16 business day s of J uly 2, Safra cre dited Blue Vale w ith an additional $1.5 milli on as a r esult of 17 Phil & Kathy ’s amende d J uly 2 Pay ment Orde r. 18 Phil & Kathy ’s filed this lawsuit ag ainst Safra on J une 26, 2006 in the United States 19 District Court for the Southern D istrict of NewYork. The g rava men of its Complaint i s that the 20 July

2 Pa y me nt O rd e r w a s c anc e lle d b y op e ra tio n o f l aw b e c a

us e it d id n ot n ame an id e nti fi a ble 21 benef

iciary . Phil & Kathy ’s re lies principally upon New Y ork Unifor

m Comm erc ial Code 22 (“N .Y.U.C.C.”) § 4-A -207(1) , which provide s, “if, in a pa y ment order

rec eived by

the4 1 benef

iciary ’s bank, the na

me, bank a ccount number , or other ide ntification of the be nefic iary 2 ref

ers to a none x istent or unidentifiable pe rson or a ccount, no pe rson has rights as a bene ficiar y 3 of the orde r and a cce ptance of the orde r ca nnot occur .” See also N. Y. U. C.C . § 4- A- 20 9( 3) . Ph il 4 & K athy ’s ar gues, there fore , that Har ris’s attempt to amend the July 2 Pay ment Orde r wa s 5 without effe ct and Saf ra ha d no authority

to acc ept the orde r and distribute the se cond installment 6 of $1.5 million t o Blue Vale. T he Complaint seeks $1.5 million, pl us expenses and intere st, from 7 Safra
. 8 Safra

moved to dismiss the Complaint pursuant to Fede ral Rule of Civil Procedure 9 12(b)( 6), ar guing that N.Y.U.C.C. § 4-A-211( 2) allows the se nder, he re H arr is, to amend a 10 pay

ment order , which it claimed Ha rris did when it re quested Safr a to amend the benef iciary ’s name to B lue Vale
. 11 See N.Y.U.C.C. § 4-A-211( 2) (“ [A] communication by the sende r ca

ncelling 12 or ame nding a

pay ment order

is effe ctive to ca

ncel or amend the or der if notice of the 13 c omm

un ic atio n is re c e ive d at a

tim e and in a mann e r a ff

or din gthe re c e ivi ngba

nk a re a so na ble opportunity

to act on the c ommunication before the bank a cce pts the pay ment order .”). 14 Safra 15 emphasizes that no authority exis ts for the proposition that a sende r’s a bility to amend pay

ment
or de rs un de r N .Y .U .C. C. § 4- A- 21 1 d oe s n ot e xten d to tho se tha t 16 ini tia lly name an unid e nti fi a

ble 17 benef

iciary , seeN.Y.U.C.C. § 4-A-207( 1), as Phil & Kathy ’s ar gument nece ssarily sug g ests. 18 Safra

contends, more over, that the only provision in Article 4A that spea ks to the circumstanc es 19 under which a pa y ment order

is canc elled by

operation of law is N.Y.U.C.C. § 4-A-211( 4), which 20 pr ov ide s, “ [a]n

un a c c e pte d p ay

me nt o rd e r i s c anc e lle d b y op e ra tio n o f l aw at th e c los e of the fi ft h 21 funds-tra

nsfer business day

of the re ceivingbank af

ter the e x ecution date or pay ment date of

the 22 order .” Safr a ar gues, there fore , that it was authorized to acc ept the ame nded Jul y 2 Pay mentThe unde rlying inter pretation of New Y ork law pr esente d by this appeal ha s not 1 been a ddresse d by

the New York Court of Appe als. At oral a rgument, howeve r, the pa rties ma int a ine d th at c e rt if

ic atio n to the Ne w Y or

k Co ur t of Ap pe a ls w a s n ot n e c e ssa ry be c a us e the plain text of Article 4A indicate d the answe r to the question at hand. U pon our own revie w, we a g ree with that assessment. See, e .g. , DiBella v. Hopk ins , 403 F.3d 102, 111 ( 2d Cir.) (“Ce rtification is to be used in those c ases whe re the re is a split of author ity on the issue, wher e a statute’s plain languag e does not indicate the answ er, or when pr esente d with a complex question of New Yor k common law for

which no Ne w York a

uthority can be found.”) (interna l quotation marks and bra ckets omitted), cert. de nied , 546 U.S. 939 (2005). 5 1 Orde r on Jul y

9, which wa s within five business day s of its rece ipt of Phil & K athy ’s initial pay ment order
. 2 3 The District Court in a thorough and we ll-rea soned opinion rejec ted Phil & Kathy ’s 4 position and gr anted Saf ra’ s motion t o dismiss . I t held that “[a]pply ing the UCC to the facts of 5 this case, it is clea r that def endant de alt with the two pay ment order s corr ectly .” Phil & Kathy’s 1 6 Inc. , 2009 WL248425, at *3.

We ag ree , and af

firm on the opinion below. 7