APPEAL from the Superior Court of San Bernardino County. David A. Williams, Judge. (Super.Ct.No. CIVRS906198)
The opinion of the court was delivered by: Richli J.
Filed 12/13/10; on rehearing
CERTIFIED FOR PUBLICATION
Appellant Brian D. Peters is the victim of a Nigerian-style email scam. He agreed that his corporation would receive money supposedly owed to a gentleman in Malaysia, and would then pay that money out at the gentleman's direction, in return for a 15 percent fee. His corporation received checks totaling $808,988.90 and deposited them in an account with respondent Chino Commercial Bank, N.A. (the Bank). It then had the Bank make wire transfers totaling $468,000 out of the account. All of the checks bounced, because they had been altered. This resulted in an overdraft. The Bank claims, and Peters does not dispute, that he was personally liable for any overdraft.
The Bank promptly obtained a right to attach order against Peters. Peters appeals from the right to attach order. He argues that the Bank had the burden of proving that it did not act negligently and that it failed to carry this burden.
We will hold that, even assuming the Bank had the burden of proof, it introduced sufficient evidence that it did not act negligently in accepting the checks for deposit. We will further hold that the Uniform Commercial Code (UCC) precludes any claim that the Bank acted negligently in making the wire transfers. Accordingly, we will affirm.
Faux Themes Inc. (Faux) is a corporation in the construction business. In March 2008, it opened a checking account with the Bank. Both Peters and Marilyn Charlnoes were authorized signers on the account. Peters was the president of the corporation; Charlnoes was the treasurer of the corporation.
The written account agreement defined "you" and "your" as "the account holder and anyone else with the authority to deposit, withdraw, or exercise control over the funds in the account." It then provided: "Each of you also agrees to be jointly and severally (individually) liable for any account shortage resulting from charges or overdrafts . . . ."
Until April 2009, the average monthly balance in the account ranged from $3,000 to $5,000; the deposits in any one month never exceeded about $10,000.
In March 2009, Peters received an email supposedly from Husaine Norman, a citizen of Malaysia. Norman said that certain third parties in the United States and Canada owed him money; however, they were insisting that "they can not transfer the funds to any bank account outside America continent due to their new company policy." He asked Peters to "assist me in receiving the funds and forward to me." He offered to pay Peters 12 percent of the money. Peters agreed (apparently after negotiating an increase of his fee to 15 percent).
On April 30, 2009, Faux received a check for $178,000; Peters had Charlnoes deposit it. On May 8, 2009, the Bank confirmed that the check had cleared. Charlnoes then had the Bank wire $80,000 to a bank in Hong Kong.
Also on May 8, 2009, Faux received a second check, for $373,988.90; Peters had Charlnoes deposit it.
On May 12, 2009, Charlnoes had the Bank wire another $71,000 to the same bank in Hong Kong.
On May 15, 2009, the Bank confirmed that the second check had cleared, and Charlnoes had the Bank wire $317,000 to a bank in China. On May 21, 2009, Faux received a third check, for $257,000; Peters had Charlnoes deposit it.
On May 22, 2009, the Bank was notified that the first check had been altered, so as to change the name of the payee to Faux. On May 28, 2009, the Bank was notified that the second and third checks had been similarly altered. Because all three checks were dishonored, the account was overdrawn in the total amount of $458,782.60.
Dann H. Bowman, the president of the Bank, met with Peters. Peters brought along all of his email correspondence with Norman. Bowman told Peters that he "had been caught up in a check cashing scam." At one point, Peters remarked that his arrangement with Norman "seemed pretty fishy to me . . . but, times being what they are, I decided to take the chance." Peters testified, however, that ...