Paskenta Band v. Umpqua Bank

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 3, 2021
• Docket: 17-15486
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION MAY 3 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

PASKENTA BAND OF NOMLAKI No. 17-15486 INDIANS; PASKENTA ENTERPRISES CORPORATION, D.C. No. 2:15-cv-00538-MCE-CMK Plaintiffs-Appellants,

v. MEMORANDUM*

UMPQUA BANK; UMPQUA HOLDINGS CORPORATION,

Defendants-Appellees.

Appeal from the United States District Court for the Eastern District of California Morrison C. England, Jr., District Judge, Presiding

Argued and Submitted January 26, 2021 San Francisco, California

Before: KLEINFELD, RAWLINSON, and HURWITZ, Circuit Judges.

This appeal by Appellants-Plaintiffs Paskenta Band of Nomlaki Indians and

Paskenta Enterprises Corporation (collectively, Paskenta) seeks to reverse the

district court’s dismissal of Paskenta's third amended complaint asserting claims

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. for negligence, breach of contract and aiding and abetting against

Appellees-Defendants Umpqua Bank and Umpqua Holdings Corporation

(collectively, Umpqua Bank). We have jurisdiction under 28 U.S.C. § 1291.

Reviewing de novo, we affirm. See Northstar Fin. Advisors, Inc. v. Schwab

Invests., 904 F.3d 821, 828 (9th Cir. 2018).

1. Negligence Claim

Paskenta’s complaint does not plausibly allege facts to support a claim for

negligence. The duty to investigate and discover the wrongdoing of Paskenta’s

authorized signatories fell to Paskenta, and not to Umpqua Bank. See Cal. Fin.

Code§ 1451 (providing that banks may assume that any activity initiated by an

authorized signer is for a valid purpose unless the bank receives written notice

from the debtor otherwise); see also Chazen v. Centennial Bank, 61 Cal. App. 4th

532, 537 (1998) (holding that “commercial banks have no duty to police their

fiduciary accounts . . . and are not liable for the misappropriation of trust funds by

the trustee”) (citations and alteration omitted); Desert Bermuda Props. v. Union

Bank, 265 Cal. App. 2d 146, 150 (1968) (holding that a bank “was not required to

inquire into the financial relationship of [the corporation] and its officers and

directors acting within the scope of their conferred authority until Bank received

2 notice that their authority had been revoked or Bank officially learned that

authorization never existed”).

2. Breach of Contract Claim

The contract between Umpqua Bank and Paskenta imposed no obligation on

Umpqua Bank to monitor transactions by authorized signatories on Paskenta’s

accounts at Umpqua Bank. See Chazen, 61 Cal. App. 4th at 537 (explaining that

“the relationship of bank and depositor is founded on contract . . . which is

ordinarily memorialized by a signature card that the depositor signs upon opening

the account”); see also Blackmon v. Hale, 463 P.2d 418, 422 (Cal. 1970) (in bank)

(holding that the signature card “serves as a contract between the depositor and the

bank for the handling of the account”). Umpqua Bank was not notified of any

change in account authorization until Paskenta’s May 30 cease and desist letter,

which Paskenta acknowledges that Umpqua Bank honored.

3. Aiding and Abetting Claim

Paskenta’s complaint does not sufficiently allege a claim for aiding and

abetting. Specifically, Paskenta failed to plausibly allege that Umpqua Bank

actually knew that processing transactions requested by Paskenta’s authorized

signatories, assisted those employees in committing a specific tort. See Das v.

Bank of Am., N.A., 186 Cal. App. 4th 727, 745 (2010). Instead, Paskenta alleged

3 that various irregularities required further investigation by Umpqua Bank to

determine whether Paskenta employees were engaged in wrongdoing. However,

actual knowledge is required to establish an aiding and abetting claim. See Das,

186 Cal. App. 4th at 745 (affirming dismissal of an aiding and abetting claim

because plaintiff failed to allege that “the bank had actual knowledge of the

underlying wrong it purportedly aided and abetted”); see also Chavez v. United

States, 683 F.3d 1102, 1108-10 (9th Cir. 2012) (explaining that “conclusory

statements . . . are not entitled to the presumption of truth”).

Because Paskenta failed to state any plausible claim against Umpqua Bank,

the district court did not err in dismissing Paskenta’s third amended complaint.

AFFIRMED.