National Bank of Commerce v. Shelton

Justin Shelton (plaintiff), the owner of Justin International (company), maintained a checking account at National Bank of Commerce (NBC) (defendant). In October 1999, the company issued two paychecks totaling $747.50 to an employee named W. J. “Sonny” Shelton. However, the company’s bookkeeper mistakenly deposited the paychecks into Justin’s NBC account rather than into Sonny’s account, which also was with NBC. Upon discovering the error, the bookkeeper asked NBC to transfer the money to Sonny’s account. NBC did so. However, due to a computer error, NBC proceeded to execute monthly $747.50 transfers from Justin’s account to Sonny’s account until April 2005, when Justin discovered the mistake and notified NBC. Justin sued NBC for negligence, gross negligence, and breach of fiduciary duty. The parties cross-moved for summary judgment, which the trial court awarded to Justin. The trial court ruled that, under Mississippi’s version of Uniform Commercial Code (UCC) § 4A-204, which governed unauthorized payment orders, Justin was entitled to $49,335 plus interest for the $2,242.50 that NBC transferred to Sonny in the 90 days immediately before Justin notified NBC. The trial court computed the interest to be $44.28, which represented 90 days of interest on $2,242.50. NBC and Justin both appealed. NBC argued, among other things, that the trial court erred in applying § 4A-204 because there were no unauthorized payment orders. Rather, NBC contended, Justin’s claim was governed by UCC § 4A-205, which applied to erroneously duplicated payments and under which Justin’s claim would have been time-barred. On his appeal, Justin argued that the trial court miscomputed his interest judgment by awarding him only 90 days’ interest rather than interest for the full period between when he notified NBC of the error and the date NBC refunded the money.