Premier Boutique Business Litigation Law Firm Serving All of Florida

What are your remedies for Unauthorized Electronic Fund Transfers and Payments?

Are you the victim of an unauthorized electronic funds transfer? If so, you may be wondering what your legal remedies are? Before the recent case of Barak v. ACS International Projects, Ltd., courts debated whether to apply the remedies afforded by Article 4A (Fund Transfers), as adopted by Florida in Ch. 670 Fla. Stat., or to allow a plaintiff to seek additional remedies by asserting claims for the tortious conduct such as fraud, conversion, and civil theft.

This question was recently resolved by the Third District. Barak involved an action brought by a foreign corporation alleging that the defendant persuaded a third-party entity to wire payments intended for the plaintiff into the bank accounts belonging to an entity created by the defendant. The defendant subsequently transferred those funds to several other entities owned by the defendant. The plaintiff sued for civil theft and conversion. The defendant argued that the plaintiff’s claims were barred because they were preempted by Article 4A of the Uniform Commercial Code, as adopted and codified in chapter 670, Florida Statutes. The trial court rejected the defendant’s argument, and the defendant appealed.

The Third District agreed with the trial court that the plaintiff can assert claims for civil theft and conversion. The Third District explained that Article 4A of the Uniform Commercial Code, as adopted by Florida in Ch. 670, did not preempt plaintiff’s claims because Article 4A itself afforded no remedy to the plaintiff under this scenario. It reasoned that liability was not predicated upon the mechanics of the transfer, but rather upon the tortious conduct initiated by the defendant after the transfers were complete. The Third District stated “[u]nder these circumstances, barring the asserted claims would yield the absurd result of divesting [plaintiff] of any avenue of redress and shielding [defendant] from liability. As it could have hardly been the intent of the drafters [of Article 4a] to enable a party to succeed in engaging in fraudulent activity, such a result would contravene legislative intent.”

Rosenthal Law Group is here to assist you with redressing any fraud, conversion, civil theft, relating to electronic funds transfers or arising under any other scenario. Rosenthal Law Group has successfully litigated and defended claims involving tortious conduct.