NOT RECOMMENDED FOR PUBLICATION File Name: 24a0097n.06
No. 23

- 3743 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
KENT GROUP PARTNERS, LLC, Plaintiff

- Appellant ,

v. CITIZENS BANK, NA, Defendant

- Appellee

. ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
OPINION

Before: KETHLEDGE , BUSH , and READLER , Circuit Judge s . KETHLEDGE, Circuit Judge. Kent Group Partners wire d $6.25 million to an account at Citizens Bank , thinking that the account belonged to Sprin t . I n truth , t he accoun t belonged to hackers who withdrew the money immediately . Kent later brought this suit against Citizens , asserting claims under Article 4 of the Uniform Commercial Code and for civil conspiracy, among other claims

. The district court dismissed. We affirm.
Kent alleged that a group of hackers opened an account at Citizens on behalf of a shell
company. The hackers intercepted emails in which Kent discussed with Sprint an upcoming wi re transfer of $6,256,608.79 to Sprint’s account. The hackers then pretended to be Sprint employees and provided Kent with the account number for their shell company

. Kent initiated the transfer from its bank , Capitol One, to the account at Citizens

. Ke nt’s transfer instructions provided Citizens with Sprint’s name and business address, but the shell company’s account number.No. 23

- 3743 , Kent Group Partners, LLC v. Citizens Bank, NA

- 2

- Citizens deposited the money into the shell company’s account, and the hackers withdrew the
money . Kent thereafter brought this s uit against Citizens , alleg ing that Citizens broke the law when it accepted the funds and should have screened its customers more carefully. The district court dismissed Kent’s complaint for failure to state a claim. We review that d ecision de novo

. Lambert
v. Hartman , 517 F. 3 d 433, 438

- 39 (6th Cir. 2008). On appeal, Kent first argues that the district court erred in dismissing its claim under Ohio Revised Code § 1304.62 , which codifies Uniform Commercial Code § 4A

- 207

. That statu t e lays
out a b ank’s process when wire

- transfer instructions include a discrepancy between the name of the intended beneficiary and the account number of the intended beneficiary. If the receiving bank “does not know that the name and [account] number refer to different persons , ” then “it may rely
on the number as the proper identification” of the beneficiary. Ohio Rev. Code Ann. § 1304.62 (B)(1). When the receiving bank relies on the account number, a plaintiff can establish liability only if it proves that the bank ha d “ actual knowledge ” of the discrepancy in the instructions

. Id. § 130 1

. 202(B)

. The defect that runs through Kent’s complaint is that Kent never alleged any particular facts supporting an inference that Citizens knew that the wire

- transfer instructions contained a discrepancy. Kent does allege that Citizens “knew or should have known ” that the transfer instructions referred to two different people . B ut those allegations are nothing more than

“ [ t ] hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements

. ” Ashcroft v. Iqbal , 556 U.S. 662, 678 (20 09). And Kent’s allegation s that Citizens was negligent when it allowed the hackers to open the account do not , as Kent contends, lead to the “inexorable conclusion” that Citizens actively participated in the hackers’ scheme. Nor doNo. 23

- 3743 , Kent Group Partners, LLC v. Citizens Bank, NA

- 3

- these allegations sup port an inference that Citizens had actual knowledge of

— or was willfu l l y blind to

—

the discrepancy in the wire instructions. Finally, Kent’s allegation that Citizens knew “that Sprint did not have an account at Citizens” does not support an inference of actual knowledge

— t he applicable section of Article 4A of the Code addresses the reality that wire transfers are processed “by automated means” without “human reading” or intervention. U

. C

. C

. § 4A

- 20 7, cmt. 2 (Am. L. Inst. & Unif. L. Comm’n 2022) . And Kent has not alleged any facts supporting an inference that , as to this transfer , Citizens actually knew that Sprint was the intended bene ficiary

. The district court properly dismissed this claim. Kent next argues that the district court erred in dismissing its civil

- conspiracy claim. Civil conspiracy requires “ a malicious combination of two or more persons to injure another in person

or property

. ” Kenty v. Transamerica Premium Ins. Co. , 650 N.E.2d 863 , 866 ( Ohio 1995) (quotation omitted)

. Specifically, those persons must share “a common understanding or design, even if tacit, to commit an unlawful act.” W oodward Const r ., Inc. v. For 1031 Summit Woods I , L LC , 30 N.E.3d 237, 243 ( Ohio Ct. App. 2014 ) (quotation omitted)

. Kent’s complaint lacks any allegation that Citizens and the hackers had any such understanding

. Instead, Kent alleges that Citizens should have known that the hackers were committing fraud when they opened the bank account and asked to withdraw the money

— essentially, that Citizens’ actions were “consistent
with c onspiracy

. ” Bell Atl. Corp. v. Twombly , 550 U.S. 544, 5 5 4 (2007)

. But Citizens’ negligen ce in screening its customers , without more, is not enough to allege an agreement between the hackers and Citizens

. The district court properly dismissed this claim, as well. Finally, Kent argues that the district court should not have entered its dismissal with prejudice. Our “default rule ” is that a district court properly dismisses a complaint with prejudice for failure to state a claim if the plaintiff has neither moved to amend its complaint nor filed aNo. 23

- 3743 , Kent Group Partners, LLC v. Citizens Bank, NA

- 4

- proposed amendment. Ohio Police & Fire Pension Fund v. Standard & Poor ’ s Fin. Servs. LLC , 700 F.3d 829, 844 (6th Cir. 2012)

. Here, Kent did neither. Nor has Kent shown any “extenuating circumstances” for that omission. Id

. The district court did not abuse its discretion when it dismissed Kent’s complaint with prejudice.
The district court’s judgment is affirmed.