Judge Richard L. Fruin, Case Number: 24STCV22864, Date: 2025-05-01 Tentative Ruling

6/13/2024: Wire transfer (“Ryerson Transfer”) of $1,322,948.74 sent from Plaintiff’s account at Banc of California (“Banc”) to an account at Trustmark National Bank (“Trustmark”) maintained for a Ryerson and Associates, P.C. (“Ryerson” and “the Ryerson Account”). Trustmark credits funds to the Ryerson Account.

6/17/2024 – 6/20/2024: Ryerson wires $1.17 million out of the Ryerson Account.

6/24/2024: Banc sends Trustmark a reversal request for the Ryerson Transfer due to suspected fraud.

6/25/2024: Trustmark sends Banc a request for a hold harmless agreement. Due to coding error, Trustmark concurrently wires back $1,322,948.74.

6/25/2024 – 6/27/2024: Trustmark requests a return of the funds at least three times. Banc does not (and has not) returned the funds.

9/5/2024: Plaintiff sues Banc and Trustmark for a declaration establishing entitlement to the funds.

2/4/2025: Trustmark moves for summary judgment.

4/18/2025: Trustmark files its reply, noting Plaintiff filed no opposition.

Plaintiff Pacific Edge Real Estate (“Plaintiff”) filed this action against defendants Banc of California (“Banc”) and Trustmark National Bank (“Trustmark”)¿(‘together “Defendants”)¿on September 5, 2024, asserting a single claim for declaratory relief.

Plaintiff alleges it was a victim of a fraudulent transaction wherein approximately $1.3 million was wired from Plaintiff’s account at Banc¿to an account at Trustmark. (Compl., ¶ 8.) Plaintiff has no relationship with Trustmark. (Ibid.) When Trustmark was notified, it returned the allegedly stolen funds to Banc. (Id., ¶ 9.) Banc still holds the funds. (Ibid.) According to the complaint, although Banc currently holds the funds, “Plaintiff contends and Trustmark denies that the Deposit belongs to Plaintiff and should be released by BOC to Plaintiff.” (Id., ¶ 10.) Plaintiff seeks a declaration from the Court that the funds indeed belong to Plaintiff.

Trustmark moved for summary judgment on¿February 4, 2025. Plaintiff filed no opposition. Trustmark filed its reply on April 18, 2025, urging the Court to grant its unopposed motion.

Trustmark acknowledges the fraudulent transfer from BOC, but contends the money had already been disbursed out of the relevant Trustmark accounts by the time Bank alerted Trustmark to the fraud eleven days later. (PSS 8.) Trustmark mistakenly returned $1.3 million to Trustmark even though Plaintiff’s money had already been transferred out of the purported fraudster’s account. (PSS 4-7, 11.) Plaintiff is now asserting ownership over funds that¿Trustmark¿mistakenly wired to Banc. (PSS 8.)

Trustmark timely served Plaintiff¿and Banc with its motion by electronic and overnight mail on February 4, 2025. (02-04-2025 POS.)¿Neither Bank nor Plaintiff filed an opposition. Trustmark filed its reply on April 18, 2025, indicating it has carried its threshold burden on summary judgment and its unopposed motion should be granted.

The Court agrees.¿Trustmark submits the declaration of Linda Nicholas, its Wire Transfer Manager and custodian of relevant records. Nicholas attests and proves with transfer records that Plaintiff’s¿$1.3 million¿was transferred to an IOLTA account¿maintained at Trustmark¿for a “Ryerson & Associates, P.C.”(“Ryerson Account”)¿on June 13, 2024.¿(Nicholas Decl., ¶ 5 and Exh. 1.)¿$1.17 million was subsequently transferred out of the account on June 17 and June 20, 2024. (Id., ¶¶ 6-8 and Exhs. 2-4.) Banc forwarded Trustmark Plaintiff’s reversal request on June 24, 2024. (Id., ¶ 9 and Exh. 5.) The money was already gone.¿The $1.3 million sent to Banc came out of Trustmark’s general account, not from the Ryerson Account. (Id., ¶ 16.)

Where a¿bank receives funds fraudulently obtained and then forwards funds, all pursuant to otherwise valid transfer orders, the bank that acted as intermediary is not liable to the victim of the fraud. (See¿Zengen, Inc. v. Comerica Bank¿(2007) 41 Cal.4th 239, 251-260.)¿And common-law duties are presumptively preempted by the UCC under these circumstances. (See¿ibid.) Plaintiff, having not filed any opposition, has established no basis why it can claim ownership in funds transferred from Trustmark after Trustmark had already¿transferred away the fruits of the fraud perpetrated against Plaintiff.

It is not clear why Plaintiff would not be entitled to the remaining $130,000 that Ryerson did not wire out of the account. But Trustmark is not cross-claiming for a declaration that the funds belong to Trustmark. It seeks only to defeat Plaintiff’s prayer for a declaration that “the [entire] Deposit belongs to Plaintiff.” Trustmark shows Plaintiff is not entitled to such a declaration.

Trustmark’s unopposed motion for summary judgment is granted. Trustmark is ordered to submit a proposed judgment within 15 days of this order.

Trustmark is ordered to give notice. This TR shall be the order of the Court, unless changed at the hearing, and by this reference shall be incorporated into the Minute Order.