### IN THE UNI TED STAT ES COURT OFAPPEALS FOR THE FIF TH CIRCU IT

No. 10-30772

LIBERTY BANK & TRUST COMPANY, Plaintiff-Appellee,
v. GULF COAST BANK & TRUST COMPANY, INC., Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 2:08-CV-4316

Before DAVIS, CLEMENT, and ELROD, Circuit Judges. PER CURIAM: * Defendant-Appellant Gulf Coast Bank and Trus t C ompany (Gulf Coast) appeals from an order granting summary judgment to Plaintiff-Appellee Liberty Bank and Trust Company (Liberty Bank), which was formerly United Bank and Trust Company (United Bank). During Augu s t 2 0 0 5 , H u rri c a n e Katrina caused 1 U n i te d S ta te s C o u rt o f A p p ea l s F i ft h C i rc u i t 

### F I L E D Sep tem ber 2 2, 2 011 Lyle W . Cayce Clerk

Purs uant to 5th Cir. R. 47.5 , the c o u r t has det erm ined that this opi nion sho uld not * be publ ish ed and is not pr ece dent excep t unde r the lim ite d cir cum st ance s se t for th in 5th Cir. R. 47.5 .4.
Unit ed Bank wa s the origi nal plai ntif f in this act ion. On Apri l 2, 2009, Unit ed Bank 1
me rged wi th Liber ty Bank and Liber ty Bank beca me the plai ntif f. Becaus e Unit ed Bank wa s the entity involved at all rele vant tim es dur ing this dis put e, we ref er to Plaint iff-Ap pel lee as Unit ed Bankt hrougho ut this op inion. Case: 10-30772 Document: 00511610539 Page: 1 Date Filed: 09/22/2011No. 10-30772

extensive flood damage to United Bank’s corporate office in New Orleans. Less than two months later, on Octob e r 1 9 , U nited Bank sent a “cash letter”—essentially a deposit—for $121,748.46 to the Federal Reserve through Fiserv Solutions, Inc., a data processing company. The amount was mistakenly credited, however, to Gulf C o a s t , not to United Bank. Two days later, the Federal Reserve notified Gulf Coast that it had received an “extra bundle” in the amount of $121,748.46. Rather than return the amount, G u lf Coast used it to reconcile its books because, it alleges, the Federal Res e rv e o w e d it approximately $127,000. In 2008, shortly after restoring its accounting department after recovering from Hurricane Katrina , U n i t e d Bank conducted an internal audit during which it discovered the missi n g c r e d i t for the October 19, 2005 cash letter. United Bank then notified the Federal Reserve of the missing credit. On August 29, 2008, United Bank filed suit against the Federal Reserve and United Bank’s insurer, The Kansas Bankers Surety Company. After learning from the Federal Reserve in March 2009 that Gulf Coast had received its money, United Bank asked Gulf Coast to return it. Gulf Coast refu s e d , a n d United Bank amended its complaint to add G u l f C oast and Fiserv as defendants in this action. On July 16, 2010, t h e d i s t rict court granted summary judgment to

2 United Bank on its conversion claim against Gulf Coast. We AFFIRM. We review the district court’s ruling on a motion for summary judgment de novo , applying the same legal stand a r d a s the district court. See Moss v. BMC Software, Inc. , 610 F.3d 917, 922 (5th Cir. 2010). Summary jud g m ent is
proper if there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). We “review the evidence and any inferences therefrom in the light most favorable to t h e nonmoving party.” SEC v. Recile , 10 F.3d 1093, 1097 (5th Cir. 19 93).

This ap pea l o nly i nvolves U nite d Bank ’s c laim agai nstG ulf Coas t forc onvers ion. 2
2 Case: 10-30772 Document: 00511610539 Page: 2 Date Filed: 09/22/2011No. 10-30772

Gulf Coast’s principal contention on appeal is that it cannot be liable for conversion under Louisiana law. Specifically, Gulf Coas t argues that: (1) an improperly credited cash letter c a n n o t be the basis of the tort of conversion in Louisiana; and (2) United Bank’s only potential recourse is against the Federal Reserve, not Gulf Coast. Each of these arguments is incorrect under Louisiana law. With respect to the first—for which Gulf Coast cites no authority—“[Louisiana] c o u rt s h ave uniformly considered actions against banks for wrongful transfer or disposition of account funds as conve r s i o n actions.” Sanderson v. First Nat’l Bank of Commerce , 723 So. 2d 1036, 103 8 ( L a
. App. 1998) (collecting cases). Although somewhat confusing, Gulf Coast’s second argument seems to be that U n ited Bank’s conversion claim against Gulf Coast can only arise under Louisiana Revised Statute § 10:3-420, which governs actions for the conversion of negotiable instrum e n ts. Gulf Coast asserts that this statutory section may plausibly allow a claim against the Federal Reserve, but not Gulf Coast, because Gulf Coast and United Bank never had a banking relationship. This argument is flawed because it improperly assumes that § 10:3-420 is the only possible basis f o r conversion liability for Gulf Coast. But this is not so. As the district co u r t apparently took for granted—and rightly so—United Bank has a claim against Gulf Coast un d e r general Louisiana law conversion principles. See, e.g., Dual Drilling Co. v. Mills Equip. Inv., Inc. , 721 So. 2d 853, 857 (La. 1998). Moreover, it is immate r i a l t h at Gulf Coast did not initially obtain possession of United Bank’s credit by committing a wrongful a c t

. As the district court correctly observed, “[a]lthough a party may have rightfully come into possession of another’s goods, the subsequent refusal to sur r e n d e r the goods to one who is entitled to them may constitute conversion.” Gulf Coast also argues, in the alternative, that even if the district court’s finding of liability is upheld, the district court erred by not allocating fault

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between Gulf Coast, United Bank, Fiserv, and the Federal Reserve. Gulf Coast’s argument presupposes that the Federal R e s e r v e and Fiserv were negligent in applying the credit to Gulf Coast’s account, and that United Bank was negligent in not sooner discovering the miss i n g c r e d it on its books. Gulf Coast does not point to any evidence to support this argument, and thus the district court would not have been require d t o consider the question of comparative fault on summary judgment. Even assuming arguendo , however, that Gulf Coast could prove the negligence of another party, its plea for an allocation of fault fails as

a matter of law. Because Gulf Coast is liable for conversion, an intentional tort, Louisiana law plainly forec l o s e s a n allocation of fault between Gulf Coast and United Bank: “[I]f a person suffers

. . . loss as a result partly of h i s o w n negligence and pa r t l

y as a result of the fault of an intentional tortfeasor , his claim for recovery of damages shall not be reduced.” La. Civ. Code art. 2323(C) (emphasis added). Although this provision would be inapplicable wer e a third party, such as Fiserv or the Federal Reserve, to be found negligent, Gulf Coast 3 still would not be entitled to an allocation o f fault because any negligence by Fiserv or the Federal Reserve would not be the legal cause of United Bank’s injury. Under Louisiana law, Gulf Coast’s conversion is an intervening cause that would cut off a n y l i ability on the part of Fiserv or the Federal Reserve. The

L o u isi ana law is sil ent about how to tre at cas es involving both inte ntio na l a n d 3 negligent tor tf

eas ors
. Arti cle 2324( B) of the Louis iana Civil Code broa dly st ates that “[ a] joint tor tf eas or sha ll not be liable for mo re than his degr ee of faul t and sha ll not be so lid aril y liable wi th any othe r per so n for dam ages att ribut able to the faul t of [t he] othe r per so n,” but this rule doe s not app ly to joint inte ntio nal tor tf eas ors , wh o rem ain liable in sol ido

. La. Civ. Code art

. 2324(A). This amb iguity has led the autho r of one civil law tre atis e to obs erve that “[ t] he legal rela tio nshi p of the se par ate inte ntio nal and negligent tor tf eas ors wh o both are a caus e of harm to the plai n t i f

f h as cre ated a rap idl y grow ing and very se riou s brie r pat ch

. . . [be caus e] the degr ee of culp abilit y of an inte ntio nal wr ongdo er is so dis par ate fr om that of a negligent
wr ongdo er that the tw o wi ll not mi x.” Willi am E. Craw for d, 12 Louis iana Civil Law Treat ise : TortLaw § 21:1 2 ( 2d ed. 201 0).
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Second Restatement of Torts, to which the Louisiana Supreme Court has repeate d l y t urned when determining whether an intervening cause relieves liability, see, e.g., Adams v. Rhodia, Inc. , 983 So. 2d 798, 808 (La. 2008); Olsen

v. Shell Oil Co. , 365 So. 2d 1285, 1293 n.15 (La. 1978); Laird v. Travelers I nsurance Co. , 267 So. 2d 714, 719 n.1 (La. 1972), provides that a third-par t y intentional tort “is a superseding cause of harm to another resulting therefrom, although the actor’s negligent conduct created a situation w h i ch afforded an opportunity to the third person to commit such a tort

. . . , unless the actor at the time of his negligent conduct realized or should have realized the likelihood that such a situation might be created, and that a third person might avail himself

o f t h e opportunity to commit” the intentional tort. Restatement (Second) o f Torts § 448 (1965). Nothing in the summary judgment record demonstrates that it was foreseeable to Fiserv or the Federal Reserve that another legitimate bank would avail itself of the opportunity to convert the credit and refuse to return it to its rightful owner. Gulf Coast also argues that the district court erred by failing to offset the amount United Bank received in settlements from Gulf Coast’s co-defendants

a g a i n s t Gulf Coast’s liability. Gulf Coast cites no evidence or authority to support this argument, and we will not consider it. 4 The judgment of the district court is AFFIRMED.

P l a i ntif f als o ass ert s, for the fir st tim e on app eal, that Unit ed Bank ’s clai m i s 4 pr es cribed by its fai lure to fil e the cas e wi thin the one- year pr es cri pt ive per iod for conver sio n clai ms unde r Louis iana law

. See La. Civ. Code art

. 3492. Gu lf Coas t has wa ived this def ens e beca use it fai led to raise it below

. See Spotts v. Uni ted States , 613 F.3d 559, 569- 70 (5t h Cir. 2010) (ar gume nts “not rais ed bef ore the dis tri ct cour t are wa ived and canno t be rais ed for the fir stt im e o n ap pea l”) ( cit atio n an d inte rnal quot atio n m ark s om itt ed)

. 5 Case: 10-30772 Document: 00511610539 Page: 5 Date Filed: 09/22/2011