Florida/Georgia Personal Injury & Workers Compensation

...judgment on this defense. Chavez appeals. Generally speaking, under Florida’s version of the Uniform Commercial Code (“UCC”), if a bank and its customer agree upon a “security procedure,” as that phrase is defined by Fla. Stat. § 670.201, and the procedure is commercially reasonable, a bank is absolved of liability for a fraudulent transfer of the customer’s funds if the bank, when processing an order to transfer the customer’s funds, follows the security procedure in good faith. See FLA. STAT. §§ 670.201 & 670.202(2)....

...Honorable Timothy C. Batten, Sr., United States District Judge for the Northern District of Georgia, sitting by designation. 2  Case: 11-15804 Date Filed: 11/27/2012 Page: 3 of 26 satisfy § 670.201 and consequently § 670.202(2) does not apply....

...Relevant to the current dispute is § 5 of the FTA, which details the security procedure for the account. In general, a security procedure is a procedure that the bank uses when processing payment orders in order to verify the authenticity of the order and to detect any errors in their transmission or content. FLA. STAT. § 670.201....

...nsfers, which may be initiated by a written payment order. Id. § 670.103. 8  Case: 11-15804 Date Filed: 11/27/2012 Page: 9 of 26 The statutes at issue here are Fla. Stat. §§ 670.201 & 670.202....

...Florida law defines a “security procedure” in relevant part as “a procedure established by agreement of a customer and a receiving bank for the purpose of . . . [v]erifying that a payment order or communication amending or canceling a payment order is that of the customer.” Fla. Stat. § 670.201....

...addition” and “any other means” clarify that the additional means envisioned are additional security procedures, as does the location of this provision in section 5, which is titled “Security Procedure.” And Florida law defines “Security Procedure” in section 670.201 in language that tracks the text of section 5(iii) of the Agreement. Section 670.201 defines a security procedure as “a procedure established by agreement . . . for the purpose of . . . [v]erifying . . . a payment order,” Fla. Stat. § 670.201, and section 5(iii) permits the Bank to use “any other means to verify any Payment Order.” The majority also misreads section 5(ii) of the Agreement....

...es and the bank followed those procedures in good faith. FLA. STAT. § 670.202(2). A security procedure is “established by agreement of a customer and a receiving bank” and does not include a bank’s unilaterally adopted internal processes. Id. § 670.201 & cmt. Whether a security procedure is “commercially reasonable” is “a question of law” to be determined by considering all the following: (1) the circumstances of the customer known to the bank (includ- ing the size, type, and fre...

...In addition, the dis- trict court should apply the factors laid out by statute to the Appel- lants in this case—that is, whether the procedures were reasonable as applied to the Appellants—not whether the security procedures are commercially reasonable in the abstract. FLA. STAT. § 670.201 & cmt....