Appeal from a judgment of the United States District Court for the Southern District of New York (Cote, J.) dismissing Plaintiffs-Appellants' claims on the ground that they are barred by N.Y. UCC § 4-A-505.
The opinion of the court was delivered by: Barrington D. Parker, Circuit Judge
Before: DENNIS JACOBS, Chief Judge, B.D. PARKER, Circuit Judge, NICHOLAS TSOUCALAS, Judge, Court of International Trade.*fn1
This appeal, arising from a judgment of the United States District Court for the Southern District of New York (Cote, J.), requires us to consider whether the New York Uniform Commercial Code Section 4-A-505, which imposes a one-year statute of repose on certain claims based on electronic funds transfers, bars Plaintiffs-Appellants' common law claims, which have longer limitations periods. The District Court concluded that it does. Covina 2000 Ventures Corp. v. Merrill Lynch, Pierce, Fenner & Smith, No. 06 Civ. 15497, 2008 WL 1821738 (S.D.N.Y. Apr. 21, 2008). We agree and affirm.
The relevant facts are undisputed unless otherwise noted. In 2000, Youxin Ma, a businessman with substantial interests in Asia and in this country, established Covina 2000 Ventures Corp., a British Virgin Islands-based company, and George Brothers Investment Co. Ltd., a Cayman Islands-chartered corporation, as investment vehicles. That same year, Ma opened accounts for Covina and George Brothers at Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch"). Merrill Lynch assigned Irene Ng, a financial advisor, as the registered representative on both accounts. Ng was authorized to, among other things, effectuate funds transfers from the accounts upon Ma's request.
Ma maintains that Ng was involved in an elaborate scheme involving Rebecca and Terry Solomon, a married couple who pled guilty to conspiracy to commit mail and wire fraud, wire fraud, and money laundering, in connection with their perpetuation of two fraudulent investment schemes.*fn2 See Press Release, United States Department of Justice, United States Attorney's Office, Northern District of California, Husband and Wife Plead Guilty to Conspiracy, Fraud, and Money Laundering in $18 Million Investment Scheme (Sept. 26, 2008). According to Ma, Ng fraudulently, and without his knowledge, executed a loan agreement pursuant to which George Brothers was to lend the Solomons an unspecified amount of money. Apparently pursuant to this loan agreement, and in a series of approximately twenty-five wire transfers occurring from June 2002 to April 2004, Ng transferred more than $9 million from the Covina and George Brothers accounts to various accounts controlled by Rebecca Solomon.
The record is unclear as to how much Ma knew about these transactions. Twenty-four of the wire transfers' letters of authorization were apparently signed by Ma. Twenty-one of these letters contain written notations by Ng purportedly indicating that she confirmed the transactions with Ma. However, Ma maintains that Ng forged his signature on the letters of authorization and falsely noted that she had confirmed the transfers with Ma.We assume, for purposes of this appeal, that, as Ma contends, the transactions were unauthorized.
The account agreements required Merrill Lynch to send Ma monthly statements summarizing the accounts' activity, such as any wire transfers executed from the accounts.The parties do not dispute that Merrill Lynch generated these statements in the ordinary course of business, that Merrill Lynch mailed them to Ma at the address he provided, and that Ma received at least some of them. None of the statements was returned as undeliverable by the post office. It is also not disputed that the Covina and George Brothers monthly account statements listed the date and amount of each wire transfer, though the statements did not identify the wire transfers' beneficiaries.
Ma's position is somewhat inconsistent. He concedes that he received some account statements during the June 2002 to April 2004 period, but maintains that he did not receive the statements on a regular basis. He also contends that he did not review any of the statements that he didreceive. Instead, he relied on Ng to update him on the state of the accounts while his secretary placed the unopened statements in a storage room in his office. Ma did not notify Merrill Lynch that he believed he was not receiving his statements on a regular basis until November 2006, when he was preparing to sue. Ma also admits that, prior to that time, he was not aware that any of the statements was missing. As he put it: "[b]ecause I never reviewed a statement, therefore, I don't know whether I received it or not."
Ma sued Merrill Lynch in December 2006 (more than two years after the last allegedly fraudulent wire transfer), alleging various common law claims, including breach of contract, breach of fiduciary duty, fraud, conversion, negligence, and breach of the covenant of good faith and fair dealing.*fn3 Merrill Lynch moved for summary judgment on the ground that the one-year statute of repose in Section 4-A-505 of the New York Uniform Commercial Code bars all of Ma's claims. The District Court granted Merrill Lynch's motion. This appeal followed. We ...