Grand Bayman Belize, Ltd v. Wells Fargo Bank, N.A.

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 19, 2022
• Docket: 21-55146
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 19 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

GRAND BAYMAN BELIZE, LTD., a No. 21-55146 Seychelles limited liability company, D.C. No. Plaintiff-Appellant, 2:19-cv-07698-ODW-RAO

v. MEMORANDUM* WELLS FARGO BANK, N.A., Erroneously Sued As Wells Fargo and Company, a Delaware corporation,

Defendant-Appellee,

and

DOES, 1 through 10,

Defendant.

Appeal from the United States District Court for the Central District of California Otis D. Wright II, District Judge, Presiding

Submitted January 14, 2022** Pasadena, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Before: M. SMITH and OWENS, Circuit Judges, and S. MURPHY, III,*** District Judge.

Grand Bayman Belize, Ltd. (“Grand Bayman”) appeals from the district

court’s grant of summary judgment in favor of Wells Fargo Bank, N.A. (“Wells

Fargo”), determining that Wells Fargo was not prohibited from processing a

payment order under California Commercial Code (“Cal. Com. Code”) section

11207(b) and did not violate sections 11209(c) or 11302(a) when paying the

beneficiary. Because the parties are familiar with the facts, we do not recount

them here. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

We review a district court’s grant of summary judgment de novo and

determine, “[v]iewing the evidence in the light most favorable to the nonmoving

party, . . . whether there are any genuine issues of material fact and whether the

district court correctly applied the relevant substantive law.” Sw. Fair Hous.

Council, Inc. v. Maricopa Domestic Water Improvement Dist., 17 F.4th 950, 959

(9th Cir. 2021) (citation omitted). “A dispute about a material fact is genuine if

there is sufficient evidence favoring the nonmoving party for a jury to return a

verdict for that party.” Id. (citation omitted).

The district court properly applied Cal. Com. Code section 11207(b) to this

*** The Honorable Stephen Joseph Murphy, III, United States District Judge for the Eastern District of Michigan, sitting by designation.

2 case. See id. To determine that section 11207(b) governs these facts, we apply

California rules of statutory construction to California law and “begin[] with the

words themselves, giving them their plain and commonsense meaning.” Herrera

v. Zumiez, Inc., 953 F.3d 1063, 1071 (9th Cir. 2020) (internal quotation marks and

citation omitted). Section 11207(a) prohibits acceptance of wire transfer orders

where the “the name, bank account number, or other identification of the

beneficiary refers to a nonexistent or unidentifiable person or account,” but the

prohibition is explicitly “[s]ubject to subdivision (b)” of the same statute. See also

TME Enters., Inc. v. Norwest Corp., 22 Cal. Rptr. 3d 146, 153 (Ct. App. 2004)

(“Subsection (a) of UCC section 4A-207 [which is identical to Cal. Com. Code

section 11207], is expressly subject . . . to subsection (b).”). And section 11207(b)

plainly permits beneficiary banks to accept wire transfers where the payment order

“identifies the beneficiary both by name and by an identifying or bank account

number and the name and number identify different persons”—meaning there is a

mismatch between the name and number—so long as the number identifies an

account held at the bank, and the bank has no actual knowledge of the mismatch.

The words of the statute show that section 11207(b) applied here because the

payment order identified a name and beneficiary account number at Wells Fargo,

but the name and number identified different persons, and Wells Fargo had no

actual knowledge of the mismatch. Including an address on the payment order did

3 not prohibit Wells Fargo from properly processing the order. See Cal. Com. Code

§ 11207(b). Neither did the alleged “complete disconnect” between the account

number, name, and address on the payment order, because Wells Fargo did not

have actual knowledge of the disconnect. See Cal. Com. Code §§ 11207(b)(1),

1202(b); see also TME Enters., 22 Cal. Rptr. 3d at 153; U.C.C. § 4A-207 cmt. 2

(“‘Know’ is defined . . . to mean actual knowledge.”).

Wells Fargo also did not violate Cal. Com. Code section 11209(c) because it

is unclear if this section governs this transaction, but even if it does, it prohibits

acceptance of a payment order where the beneficiary did not have an account with

the receiving bank. See Cal. Com. Code § 11209(b)-(c); see also id.

§ 11103(a)(2)-(3) (defining “beneficiary” and “beneficiary’s bank”). There is no

genuine dispute of material fact that the beneficiary had an account with Wells

Fargo, and so section 11209 did not prohibit Wells Fargo from processing the

order. That it was not the account Grand Bayman intended to pay is not relevant to

whether the beneficiary, identified by account number as permitted by

section 11207(b), had a valid account.

Section 11302(a) does not govern this transaction because it applies only

when the beneficiary and receiving banks are different banks, but they appear to be

the same here. See Cal. Com. Code § 11103(a)(3)-(4) (defining “beneficiary’s

bank” and “receiving bank”); see also U.C.C. § 4A-104 cmt.1, Case #2 (clarifying

4 definitions of sender and receiving bank under the U.C.C. parallel to the Cal. Com.

Code provision). And Grand Bayman failed to “specifically and distinctly argue[]”

otherwise. Affordable Hous. Dev. Corp. v. City of Fresno, 433 F.3d 1182, 1193

(9th Cir. 2006) (citation omitted).

Moreover, even if Cal. Com. Code section 11302(a) applies to this

transaction, Grand Bayman did not present sufficient evidence to raise a genuine

dispute of material fact that it directed payment specifically to the San Francisco

branch. See Sw. Fair Hous. Council, Inc., 17 F.4th at 959. The account number,

beneficiary bank name, and routing number do not specifically identify the San

Francisco branch, and the intended beneficiary’s address was in Florida, so it is not

clear Grand Bayman expected Wells Fargo to pay the San Francisco branch, rather

than a branch in Florida.

AFFIRMED.