Court Opinion

ID: 4573094
Source: CourtListenerOpinion
Date Created: 2020-10-05 20:00:37.480272+00
Date Added: 2024-06-11T13:31:39.995368
License: Public Domain

Case: 20-11951    Date Filed: 10/05/2020   Page: 1 of 6

                                                            [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                No. 20-11951
                            Non-Argument Calendar
                          ________________________

                   D.C. Docket No. 8:19-cv-02603-VMC-AEP

JULIO J. VALDES,
M.D., P.A., a Florida corporation,

                                                               Plaintiff-Appellant,

                                      versus

CUSTOMERS BANK, INC.,
a Foreign Profit corporation,

                                                              Defendant-Appellee.

                          ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                         ________________________

                                (October 5, 2020)

Before WILLIAM PRYOR, Chief Judge, JILL PRYOR and BRASHER, Circuit
Judges.

PER CURIAM:
               Case: 20-11951     Date Filed: 10/05/2020    Page: 2 of 6

      Julio Valdes, M.D., P.A., appeals the dismissal of its amended complaint

against Customers Bank, Inc. Valdes complained that the bank violated Article 4A

of the Uniform Commercial Code, as adopted by Florida, by accepting

$384,882.34 in wire transfers made payable to Valdes that its office manager, April

Urling, misrouted to her personal account at Customers Bank. See Fla. Stat.

§ 670.207(2). Customers Bank moved to dismiss for failure to state a claim. See

Fed. R. Civ. P. 12(b)(6). The district court dismissed the amended complaint with

prejudice for failing to cure deficiencies identified in its order dismissing the

original complaint without prejudice. We affirm.

      After Customers Bank removed the action from a Florida court, 28 U.S.C.

§ 1332(a), the district court ruled that Valdes failed to plausibly allege that the

bank improperly accepted the wire transfers, see Fed. R. Civ. P. 12(b)(6). The

district court explained that Valdes “misread[]” “Florida Statutes §§ 670.201 and

670.204 . . . [to] require[] [Customers Bank] . . . to detect errors in payment orders”

and that the provisions allowed banks “to rely on the account number listed in the

payment orders as identification of the intended beneficiary” unless the banks

actually knew of a mismatch. See Fla. Stat. § 670.207(2). The district court

dismissed the complaint because Valdes made “no allegation that any individual

person at Customers Bank was ever aware of [a] mismatch” or that the bank

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“failed to exercise due diligence in maintaining reasonable routines for the

communication of such information.”

      To determine whether Valdes’s amended complaint plausibly alleges that the

bank improperly accepted the wire transfers, we accept its allegations as true and

view them in the light most favorable to Valdes. See Isaiah v. JPMorgan Chase

Bank, 960 F.3d 1296, 1302 (11th Cir. 2020). Valdes alleged that its long-time

employee, Urling, opened an account at Customers Bank and then instructed

Valdes’s claims settlement service to have two insurers send wire transfers made

payable to Valdes to her personal account. Valdes alleged that the wire transfers

“identif[ied] [Valdes, not Urling,] as the Payee” and “provided . . . [Valdes’s]

T[ax] I[dentification] N[umber]” instead of Urling’s social security number and

that Customers Bank violated “policies, procedures and internal controls . . .

[intended] to detect and deter money laundering and the financing of criminal

activity” by failing to detect Valdes’s fraud. Valdes alleged that “Customers Bank

knew that the name and [tax identification number] of the intended Payee . . ., the

Medical Practice, did not match the Urling Customers Bank Account number”; that

the bank “knew that Ms. Urling was not entitled to receive the payments”; and that

the bank failed “to exercise due diligence in maintaining reasonable routines to

monitor the [wire] transfers.”

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      The district court ruled that Valdes’s amended complaint, “like the initial

complaint,” “failed to plausibly plead that Customer Bank violated Article 4A in

accepting the transfers.” See Fed. R. Civ. P. 12(b)(6). The district court ruled that,

despite “emphasis [placed] on the medical practice’s [tax identification number]

and its status as a business entity,” the amended complaint failed to state how the

bank had actual knowledge of the discrepancy between the account number and

payee named on the payment orders or how the bank violated “the due diligence

standard which applies to funds transfers under Article 4A.”

      Florida adopted Article 4A of the Uniform Commercial Code, which

governs the transfer of funds. Fla. Stat. § 607.102. To make wire transactions more

accurate and efficient, banks may process transactions using automated means. See

id. § 670.207 cmt. n.2. A bank may accept a wire transfer using the account

number identified on the payment order unless the bank knows that the account

number does not match the named payee. Id. § 670.207(2). The statute states that:

             If a payment order received by the beneficiary’s bank identifies
             the beneficiary both by name and by an identifying or bank
             account number and the name and number identify different
             persons, the following rules apply:

                    (a) . . . [I]f the beneficiary’s bank does not know that the
                        name and number refer to different persons, it may
                        rely on the number as the proper identification of the
                        beneficiary of the order. The beneficiary’s bank need
                        not determine whether the name and number refer to
                        the same person.

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                    (b) If the beneficiary’s bank . . . knows that the name and
                        number identify different persons, no person has
                        rights as beneficiary except the person paid by the
                        beneficiary’s bank if that person was entitled to
                        receive payment from the originator of the funds
                        transfer. If no person has rights as beneficiary,
                        acceptance of the order cannot occur.

      The term “know” means “actual knowledge” as determined “[f]rom all the

facts and circumstances known to [it] at the time in question . . . .” Id.

§ 671.201(25)(c). Knowledge exists concerning “a particular transaction . . . when

it is brought to the attention of the individual conducting that transaction” or “when

it would have been brought to the individual’s attention if the organization had

exercised due diligence.” Id. § 671.201(27). An organization “exercises due

diligence if it maintains reasonable routines for communicating significant

information to the person conducting the transaction and there is reasonable

compliance with the routines.” Id.

      The district court did not err by dismissing Valdes’s complaint. Valdes

alleged no facts from which the district court could draw a reasonable inference

that Customers Bank improperly accepted the wire transfers for Urling. See

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Customers Bank could accept the wire

transfers so long as it “[did] not know” that Urling’s account number did not “refer

to” the named payee, Valdes. See Fla. Stat. § 670.207(2)(a). Valdes’s conclusory

allegations that Customers Bank knew of the discrepancy were insufficient to

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“nudge[ ] [Valdes’s] claim[] across the line from conceivable to plausible.” Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). And Valdes never alleged that

Customers Bank had actual knowledge of the discrepancy. Valdes identified no

occasion when a bank employee was aware of or was told that Urling’s account

number did not refer to Valdes. See Fla. Stat. § 671.201(27). Nor could the bank

have known of the discrepancy from the face of the payment orders because they

were processed using an automated system that read only the number of the

designated bank account. See id. § 670.207 cmt. n.2. Valdes also alleged no facts

to establish that Customers Bank failed to exercise due diligence. See id.

§ 671.201(27). Customers Bank “maintaine[d] [a] reasonable routine[],” id., in

which its automated processing system “rel[ied] on the [account] number as the

proper identification of the beneficiary of the order,” id. § 670.207(2)(a). Valdes

alleged that Customers Bank did not comply with security procedures, but Valdes

never alleged how monitoring Urling’s account for suspicious or structured

transactions would have revealed that her account number did not match the payee

named on the transfer orders. Because Valdes alleged no facts to establish that

Customers Bank knew that the account number did not match the name on the

payment orders, the district court correctly dismissed on the ground that the

amended complaint failed to state a plausible claim for relief.

      We AFFIRM the dismissal of Valdes’s amended complaint.

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