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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 20-11951
Non-Argument Calendar
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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.
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Appeal from the United States District Court
for the Middle District of Florida
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(October 5, 2020)
Before WILLIAM PRYOR, Chief Judge, JILL PRYOR and BRASHER, Circuit
Judges.
PER CURIAM:
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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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