Court Opinion

ID: 4150802
Source: CourtListenerOpinion
Date Created: 2017-03-07 21:00:58.03115+00
Date Added: 2024-06-11T09:27:26.172474
License: Public Domain

NOT FOR PUBLICATION                          FILED
                     UNITED STATES COURT OF APPEALS                       MAR 7 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

 LAURIE B LLC, a California limited              No.    15-56028
 liability company,
                                                 D.C. No.
                  Plaintiff-Appellee,            2:14-cv-03942-DMG-SS

   v.
                                                 MEMORANDUM *
 WELLS FARGO BANK N.A.,

                  Defendant-Appellant.

                    Appeal from the United States District Court
                       for the Central District of California
                      Dolly M. Gee, District Judge, Presiding

                      Argued and Submitted February 13, 2017
                               Pasadena, California

Before: M. SMITH and OWENS, Circuit Judges, and KORMAN,** District Judge.

        Wells Fargo Bank N.A., appeals from the district court’s order granting

Laurie B LLC’s motion for summary judgment and denying Wells Fargo’s motion

for summary judgment. As the parties are familiar with the facts, we do not

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
        **
             The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
recount them here. We have jurisdiction under 28 U.S.C. § 1291, and we reverse

and remand.

      Wells Fargo has raised a triable issue of fact as to whether California

Commercial Code section 3405(c) applies. Section 3405(c) provides that:

         Under [section 3405(b)],1 an indorsement is made in the name of
         the person to whom an instrument is payable if (1) it is made in a
         name substantially similar to the name of that person or (2) the
         instrument, whether or not indorsed, is deposited in a depositary
         bank to an account in a name substantially similar to the name of
         that person.

Cal. Com. Code § 3405(c) (emphasis added).

      The checks at issue here were payable to Laurie B LLC and deposited into

an account named “Desert Underground Utilities, Inc. dba Laurie B” without

Laurie B LLC’s indorsement. In response to Wells Fargo’s contention that section

3405(c) applies, Laurie B LLC argues that the names “Laurie B LLC” and “Desert

Underground Utilities Inc., dba Laurie B” are not “substantially similar” as a

matter of law because they (1) refer to different types of corporate entities, and

(2) are facially distinguishable. Neither argument entitles Laurie B LLC to

summary judgment.

1
  Under section 3405(b), where an employer entrusts an employee with
responsibility over an instrument, and the employee fraudulently indorses the
instrument, “the indorsement is effective as the indorsement of the person to whom
the instrument is payable if it is made in the name of that person.” Cal. Com. Code
§ 3405(b).
                                          2
      Regarding the first argument, Laurie B LLC’s reliance on McMullen Oil Co.

v. Crysen Refining, Inc. (In re McMullen Oil Co.), 251 B.R. 558, 576 (Bankr. C.D.

Cal. 2000), is misplaced. In McMullen, the court held that the names “McMullen

Oil Co. Pension Plan” and “McMullen Oil Co.” were not substantially similar

because of the inherent differences between a pension plan and a business. Id. In

contrast, here the entities are both businesses. Moreover, nowhere does the text of

section 3405(c) require that the two names consist of the same type of corporate

entity to support a finding of substantial similarity.

      Laurie B LLC’s second argument fares no better because the fact that Desert

Underground Utilities, Inc. was doing business as the fictitious business name

“Laurie B” does not preclude a finding of substantial similarity. For example,

Shane Smith Enters., Inc. v. Bank of Am., N.A., No. 4:06CV00376 JLH, 2007 WL
1880201, at *5-6 (E.D. Ark. June 29, 2007), held that the names “Melvin Lewis

Walker dba S. Smith Enterprises” and “Shane Smith Enterprises Inc.” were

substantially similar despite the fact that one entity was operating under a dba

name. See also Spear v. Wells Fargo Bank, N.A. (In re Bartoni-Corsi Produce,

Inc.), 130 F.3d 857, 861 n.7 (9th Cir. 1997) (explaining that California courts

afford “great deference” to other jurisdictions’ interpretations of the Uniform

Commercial Code (citation omitted)). Therefore, Desert Underground’s use of a

dba name is no impediment to a finding of substantial similarity under section

                                           3
3405(c).

      In sum, whether the names are substantially similar under section 3405(c) is

a factual question for the jury. Accordingly, we reverse the district court’s grant of

summary judgment in favor of Laurie B LLC.

      REVERSED AND REMANDED.

                                          4