The opinion of the court was delivered by: MIRIAM GOLDMAN CEDARBAUM
Plaintiff Victor Hugo O'Farrill Avila, the drawer of a check against his account at defendant Bank of America National Trust and Savings Association, ("BOA") sues BOA, the drawee bank, for paying on the check which bore a forged endorsement (the "check"). Plaintiff also asserts claims against Banco Internacional SNC, ("Banco"), the depositary bank, for presenting the check to BOA for collection, collecting the proceeds, and converting plaintiff's funds. Plaintiff seeks recovery from both defendants of the face value of the check, $ 260,000, and consequential damages from Banco in the amount of $ 340,000.
In open court, I granted Banco's motion for summary judgment with respect to the claim against it for consequential damages. (Tr. at 38-39.)
Plaintiff moves for summary judgment against BOA for the face amount of the check. Banco moves for summary judgment on plaintiff's claim against it for the face amount of the check.
For the reasons discussed below, plaintiff's motion for summary judgment is denied, and Banco's motion for summary judgment is granted in part and denied in part.
Avila, a native of Mexico and, until recently a vice-president of Televisa S.A., a broadcasting company, deals in horses as a hobby. On April 21, 1990, plaintiff drew a check in the amount of $ 260,000 against his account at BOA for the purchase of two horses. The seller and payee of the check was Patrick Ronge, a resident of Belgium. Plaintiff gave the check to Alberto Guasch, an associate who had negotiated the purchase, and asked Guasch to deliver the check to Ronge in Belgium. (Pl's 3-G Stmt., Ex. 3, O'Farrill Dep. p. 22.) Because Guasch was unable to make the trip, he returned the check to Ronge's secretary, Tania McKelligan. (Id.) On April 24, 1990, McKelligan gave the check to Jose Cedillo, an accounts manager at Televisa. Cedillo delivered the check to Dinamica Cambiaria Casa de Cambio ("Dinamica"), an exchange house located in Mexico City, for the purpose of transferring funds in the amount of $ 260,000 to Ronge's account in Geneva, Switzerland. Plaintiff claims that the receipt given by Dinamica to Cedillo specified that the check itself would be delivered to Ronge. (Id. at P 9.) However, the translated version of the receipt which plaintiff has submitted is ambiguous on this point. (Id. at Ex. 4.)
Plaintiff alleges that an officer of Dinamica, Alfonso Rocha Aldana ("Rocha"), forged Ronge's signature, stamped the check with Dinamica's standard stamp of endorsement, "for Deposit Only A/C No. 5002-4531-1-1 Dinamica Cambiaria," and then deposited the check into Dinamica's account at Banco. (Id. at P 10.)
In compliance with the restrictive endorsement, Banco accepted the check for deposit into Dinamica's account. (Def's 3-G stmt P 6.) Banco processed the check through the Federal Reserve clearing House System. (Id. at P 7.) On approximately April 26, 1990, BOA received the check through the Federal Reserve System. (Id. at P 9.) Because the check appeared to contain the required endorsements, BOA approved the check for payment. BOA debited plaintiff's account in the amount of $ 260,000, and transmitted funds in this amount through the Federal Reserve wire into Dinamica's account with Banco in New York City. (Id. at P 10.)
While the subsequent events are unclear, it is undisputed that the funds were never transferred to Ronge. Dinamica sent Banco two transfer orders, one on May 3, 1990 requesting that Banco transfer $ 100,000 to Ronge, and the other on May 4, 1990 requesting a transfer to Ronge in the amount of $ 160,000. In a letter dated September 20, 1990 to Dinamica's General Manager, Banco stated that when it tested the transfer orders, "it was found that although such instructions had been received, at no time were they carried out" since Dinamica's account had insufficient funds. (Pl's Opp. 3-G Stmt, Ex. 16.) Because Ronge called several times to report that he had not yet received the funds, McKelligan checked with Rocha, and was repeatedly told that the funds were en route to Ronge's bank. (McKelligan Aff. at P 6.) On May 4, 1990, after learning that Ronge still had not received the funds, McKelligan contacted Dinamica's account officer at Banco, Yves Pierre-Pierre. Plaintiff alleges that Pierre-Pierre told McKelligan that $ 100,000 had been transferred to Ronge's bank, but that the remainder of the funds had been withdrawn from the account. Later that day, McKelligan sent a fax to Pierre-Pierre which informed him that Ronge had not received the funds and gave an alternative bank to which he could wire the funds. (Pl's 3-G Stmt., Ex. 8.) At this point, Dinamica's account balance was approximately $ 100,000. (Pl's 3-G Stmt, Ex. 10.) Because Dinamica's account subsequently was depleted, no funds were ever transferred to Ronge.
Plaintiff initiated an action in Mexico against Cedillo and various Dinamica officers. It is undisputed that plaintiff subsequently authorized the court to pardon Cedillo, and all proceedings against Cedillo were dismissed. (Def's Opp. 3-G Stmt, Ex. K.) No information has been submitted by either party on the outcome of the investigation with respect to the officers of Dinamica.
Defendants contend, and plaintiff does not dispute, that California law governs plaintiff's claims against BOA and New York law governs plaintiff's claims against Banco.