IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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 Trust Company (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 August 2005, Hurricane Katrina caused 1

United States Court of Appeals

Fifth Circuit

F I L E D

September 22, 2011

Lyle W. Cayce

Clerk

Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5th Cir.

R. 47.5.4.

United Bank was the original plaintiff in this action. On April 2, 2009, United Bank 1

merged with Liberty Bank and Liberty Bank became the plaintiff. Because United Bank was

the entity involved at all relevant times during this dispute, we refer to Plaintiff-Appellee as

United Bank throughout this opinion.

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No. 10-30772

extensive flood damage to United Bank’s corporate office in New Orleans. Less

than two months later, on October 19, United 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 Coast, 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, Gulf Coast used it to

reconcile its books because, it alleges, the Federal Reserve owed it approximately

$127,000. In 2008, shortly after restoring its accounting department after

recovering from Hurricane Katrina, United Bank conducted an internal audit

during which it discovered the missing credit 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 refused, and United Bank

amended its complaint to add Gulf Coast and Fiserv as defendants in this

action. On July 16, 2010, the district 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 standard as the district court. See Moss v.

BMC Software, Inc., 610 F.3d 917, 922 (5th Cir. 2010). Summary judgment 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 the

nonmoving party.” SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993).

 This appeal only involves United Bank’s claim against Gulf Coast for conversion. 2

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Gulf Coast’s principal contention on appeal is that it cannot be liable for

conversion under Louisiana law. Specifically, Gulf Coast argues that: (1) an

improperly credited cash letter cannot 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] courts have uniformly considered actions against banks

for wrongful transfer or disposition of account funds as conversion actions.” 

Sanderson v. First Nat’l Bank of Commerce, 723 So. 2d 1036, 1038 (La. App.

1998) (collecting cases).

Although somewhat confusing, Gulf Coast’s second argument seems to be

that United 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 instruments. 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

for conversion liability for Gulf Coast. But this is not so. As the district court

apparently took for granted—and rightly so—United Bank has a claim against

Gulf Coast under 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 immaterial that Gulf Coast did not initially obtain possession of United

Bank’s credit by committing a wrongful act. As the district court correctly

observed, “[a]lthough a party may have rightfully come into possession of

another’s goods, the subsequent refusal to surrender 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 Reserve and Fiserv were negligent in

applying the credit to Gulf Coast’s account, and that United Bank was negligent

in not sooner discovering the missing credit on its books. Gulf Coast does not

point to any evidence to support this argument, and thus the district court would

not have been required to 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 forecloses an allocation of fault between Gulf Coast and

United Bank: “[I]f a person suffers . . . loss as a result partly of his own

negligence and partly 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 were 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 of 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 any liability on the part of Fiserv or the Federal Reserve. The

Louisiana law is silent about how to treat cases involving both intentional and

3

negligent tortfeasors. Article 2324(B) of the Louisiana Civil Code broadly states that “[a] joint

tortfeasor shall not be liable for more than his degree of fault and shall not be solidarily liable

with any other person for damages attributable to the fault of [the] other person,” but this rule

does not apply to joint intentional tortfeasors, who remain liable in solido. La. Civ. Code art.

2324(A). This ambiguity has led the author of one civil law treatise to observe that “[t]he legal

relationship of the separate intentional and negligenttortfeasors who both are a cause of harm

to the plaintiff has created a rapidly growing and very serious brier patch . . . [because] the

degree of culpability of an intentional wrongdoer is so disparate from that of a negligent

wrongdoer that the two will not mix.” William E. Crawford, 12 Louisiana Civil Law Treatise:

Tort Law § 21:12 (2d ed. 2010).

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Second Restatement of Torts, to which the Louisiana Supreme Court has

repeatedly turned 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

Insurance Co., 267 So. 2d 714, 719 n.1 (La. 1972), provides that a third-party

intentional tort “is a superseding cause of harm to another resulting therefrom,

although the actor’s negligent conduct created a situation which 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

of the opportunity to commit” the intentional tort. Restatement (Second) of

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

against 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.

Plaintiff also asserts, for the first time on appeal, that United Bank’s claim is

4

prescribed by its failure to file the case within the one-year prescriptive period for conversion

claims under Louisiana law. See La. Civ. Code art. 3492. Gulf Coast has waived this defense

because it failed to raise it below. See Spotts v. United States, 613 F.3d 559, 569-70 (5th Cir.

2010) (arguments “not raised before the district court are waived and cannot be raised for the

first time on appeal”) (citation and internal quotation marks omitted).

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