NOT FOR PUBLICATION FILED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