Florida/Georgia Personal Injury & Workers Compensation

...Section 201 defines “security procedure.” Section 202 addresses when a bank can shift the risk of loss to the customer, i.e., the safe-harbor provision. Ordinarily, the bank receiving a payment order bears the risk of loss of any unauthorized funds transfer. FLA. STAT. § 670.204....

...670.203, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. Fla. Stat. § 670.204 (1) (emphasis added). The Official Comment to § 670.204 notes that the provision only applies to cases in which, among other things, “no commercially reasonable security procedure is in effect.” Id....

...nsider. See Anderson v. Branch Banking & Trust Co., 56 F.Supp.3d 1345, 1351-52 (S.D.Fla.2014). BB & T contends that the Negligence Plaintiffs’ common law claims are displaced by the loss allocation principles in Fla. Stat. §§ 674.401 and 670.204, and by the absolute liability preclusions in Fla....

...customer fails to object to the unauthorized or altered item within 180 days after the statement or items are made available to the customer. Fla. Stat. § 674.406 (6). Similarly, Article 4A initially places the risk of loss on the bank. Fla. Stat. § 670.204 (1) (“If a receiving bank accepts a payment order issued in the name of its customer as sender which is not authorized and not effective ......

...ized transfers. Because of this, BB & T asserts that any negligence based upon unauthorized transactions is preempted by the requirements of the Uniform Commercial Code (“U.C.C.”). More specifically, BB & T contends that §§ 674.401 and 670.204, Florida Statutes, codifying U.C.C. §§ 4-401 and 4A-204, respectively, sets forth the rights, duties, and remedies applicable to the alleged unauthorized transfers, and, therefore, Plaintiffs cannot circumvent the statutory scheme and seek refuge in the common law. Section 670.204, Florida Statutes, governs unauthorized wire transfers, and provides If a receiving bank accepts a payment order issued in the name of its customer *1352 as sender which is not authorized and not effective as the order of the customer under s....

...order was accepted or that the customer’s account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section. Fla. Stat. § 670.204 (1)....

...ies, and liabilities in Article 4A. See 2011 WL 294447 , at *9 (S.D.Fla. Jan. 27, 2011). The Court does not disagree that the alleged opening of the accounts can be appropriately pursued as a claim for negligence not inconsistent with Article 4A and § 670.204, Florida Statutes....

...the accounts is barred by the statute of limitations. See ECF No. [35] at 7. Plaintiff fails to address how the claims predicated on the individual unauthorized transactions are consistent with the U.C.C and the applicable Florida Statute. 4 Because § 670.204 provides a remedy for an individual who has been harmed by virtue of an unauthorized transaction, BB & T argues that Plaintiffs’ attempt to bypass such relief is inconsistent with said statute....

...Counts III and IV are Sufficient to Survive a Motion to Dismiss Finally, BB & T asserts that Counts III and IV, claims for refund of unauthorized and ineffective funds transfer, cognizable under Chapter 670, Florida Statutes, fail to state a claim upon which relief can be granted. To reiterate, § 670.204, Florida Statutes, states If a receiving bank accepts a payment order issued in the name of its customer as sender which is not authorized and not effective as the order of the customer under s....

...order was accepted or that the customer’s account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section. Fla. Stat. § 670.204 (1)....

...In sum, actions falling under this provision include situations where a receiving bank accepts a payment order or transfers funds when it was not authorized to do so. First, BB & T asserts that the only transfer at issue is the initial funding transfer to the unauthorized accounts. However, the plain language of § 670.204 does not place such a limitation on the customer; if the receiving bank, in this case BB & T, accepts an unauthorized payment order — the funds transfers found in Exhibit E to Plaintiffs’ Third Amended Complaint, ECF No....

...ichment; 3) vicarious liability / conversion; 4) aiding and abetting conversion; 5) breach of fiduciary duty; 6) aiding and abetting breach of fiduciary duty; 7) negligent supervision; 8) constructive fraud; 9) fraud; and 10) violation of Fla. Stat. § 670.204. On November 2, 2004, defendants filed a notice of removal with this court, contending that removal of Mr. Bensman's state court action was proper because Mr. Bensman's state law claim under Fla. Stat. § 670.204 is completely preempted by federal law (i.e. 12 C.F.R. §§ 210.25-210.32). Mr. Bensman has now filed a motion to remand this case to state court, contending that his claim under Fla. Stat. § 670.204 is not completely preempted by federal law. Alternatively, Mr. Bensman argues that even if his claim under Fla. Stat. § 670.204 is completely preempted by federal law, the court should remand his remaining state law claims to the state court....

...w.'" Id. (quoting Franchise Tax Bd., 463 U.S. at 24,103 S.Ct. 2841). B. Preemption of Mr. Bensman's Fla. Stat. § 670,204 Claim By Federal Law Mr. Bensman asserts that his case should be remanded to the state court because his claim under Fla. Stat. § 670.204 is not completely preempted by federal law. Fla Stat. § 670.204 specifically provides, in relevant part: [i]f a receiving bank accepts a payment order issued in the name of its customer as sender which is not authorized and not effective as the order of the customer under section 670.202 or is not enfo...

...bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund.... In this case, Mr. Bensman alleges that the defendants are strictly liable under section 670.204 to return $4.5 million of funds that were wired without authorization during the period encompassing January through March of 2000....

...The Eisenberg court added that the only claims that are not preempted by Regulation J are claims where the Fedwire transfer "is only incidental" to the claims in the complaint. Id. In Mr. Bensman's case, however, his complaint for damages under Fla. Stat. § 670.204 specifically alleges that defendants are liable because they "wire transferred [funds] from Plaintiff Bensman's custodial account to Rx Remedy without authorization." PI's....

...Bensman is specifically alleging that Citibank is liable "for the manner in which it [handled Mr. Bensman's] Fedwire funds transfer." Thus, under the logic outlined in Eisenberg and Donmar, the court finds that Mr. Bensman's state law claim under Fla. Stat. § 670.204 is either duplicative of or contradictory to Regulation J and is thus preempted. Accordingly, the court finds that removal jurisdiction is proper in this case because Mr. Bensman's claim under Fla. Stat. § 670.204 is completely preempted by Regulation J....

...bank, payment occurs when the debit is made to the extent the debit is covered by a withdrawable credit balance in the account.”). When a receiving bank—really, the paying bank—receives a payment order, it must determine whether the payment is “veri- fied.” Id. § 670.204(1)....

...The term “commercially reasonable” is one we will return to later in our discussion. If a bank accepts a payment order that isn’t verified, then the bank “shall refund any payment” and “shall pay interest on the re- fundable amount.” Id. § 670.204(1)....

...or [when] the sender of a pay- ment order pays the order and was not obliged to pay all or part of the amount paid [under Section 402(4)].” Id. To recap, Section 670.501 provides that any section in Chap- ter 670 is modifiable by agreement “except as otherwise provided.” Id. § 670.501. Section 670.204 requires a bank to refund a payment order if it was not verified (unless the bank followed commercially reasonable security procedures in good faith), and this obligation may not be varied by agreement. Id. § 670.204(1)....

...16 Opinion of the Court 21-11763 another.” Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992). The Appellants have the better reading here for three rea- sons. First, BB&T’s reading ignores the text of Section 670.204. That section makes an important distinction between (1) a fraudu- lent transfer and (2) the interest that fraudulent transfer would have accumulated had it not been fraudulently transferred. Under that section, if a customer fails to notify a bank of a fraudulent transfer within “a reasonable time,” the sole penalty is that the customer loses the interest on the refunded payment. Id. § 670.204(1). As the commentary explains, “the bank is not entitled to any recovery from the customer based on negligence for failure to in- form the bank....

...banks could make the statutory refund period. Nor was BB&T able to identify one at oral argument. So if banks could modify the one- year period, there’s no principled way to draw the line as to how short of a refund period is too short. There’s also another problem: Section 670.204 imposes a 90- day notification period for an account holder to obtain, in addition to her refund, interest on the fraudulent transfer. To be sure, Flor- ida expressly authorized the shortening of that period from 90 days to a “reasonable” period. But that just proves the point. In other words, even though § 670.204(2) authorizes modifi- cation to a “[r]easonable period” of the 90-day period during which the customer is entitled to receive interest as well as a refund, it prohibits any changes to the bank’s obligation “to refund payment as stated in subsection (1).” Fla. Stat. § 670.204(2)....

...even shorter than the “reasonable” refund notice period—because, on their faces and unlike for the 90-day period, the statutes do not limit the changes to the one-year period to “reasonable” ones. That would certainly “impair” the right to refund payment, in violation of § 670.204(2)’s prohibition on doing so....

...In Florida, a specific provision generally controls over a broader one. McGregor v. Fowler White Burnett, P.A., 332 So. 3d 481, 491 (Fla. Dist. Ct. App. 2021). Section 204 concerns only unauthorized or unverified wire transfers and a bank’s duty to refund. FLA. STAT. § 670.204....

...we are comparing the expression of a prohibition against modifica- tion in some parts of Chapter 670 with its absence in Section 505. BB&T makes a fair argument, but ultimately, we find it un- persuasive for two reasons. First, as we discussed earlier, see supra at 17 and 18, Section 670.204 limits modifications to the 90-day pe- riod to receive interest to “reasonable” periods. FLA. STAT. § 670.204(2)....

...The presumption against inef- fectiveness provides that “a textually permissible interpretation that furthers rather than obstructs the document’s purpose should be favored.” Id. at 63. Here, BB&T’s interpretation—that the one- year time-period isn’t an unmodifiable obligation referenced in Sec- tion 670.204—would allow banks to eviscerate the protection Sec- tion 670.204 creates....

...North Fork Bank, 838 N.E.2d at 633 (“To vary the period of repose would, in effect, impair the customer’s section 4–A–204 (1) right to a refund[.]”). The Appel- lants’ alternate interpretation—the one-year period is an unmodifi- able obligation referenced in Section 670.204—is reasonable and furthers the text’s purpose, so we adopt it. See FLA. STAT. § 670.204 cmt....

...think it prudent for the district court to do so based on the com- plete record. IV. CONCLUSION In sum, we hold that the district court erred in concluding that the parties could modify the one-year period to assert a claim for repayment under Section 670.204....