PacMoore Products, Inc. v. Fifth Third Bank

PacMoore Products, Inc. (PacMoore) (plaintiff) maintained corporate bank accounts with Fifth Third Bank (Fifth Third) (defendant). PacMoore directed that all wire transfers from its accounts required dual authorization, including approval from its president, William Moore. In September 2021, PacMoore Process Technologies, LLC (PPT), a related company owned by Moore, sold substantially all its assets to Glanbia, an unrelated entity. PPT also maintained accounts with Fifth Third. After the sale, Fifth Third unilaterally changed the wire-authorization process for both PPT’s and PacMoore’s accounts, designating Kenneth Tatina—Glanbia’s controller—as the sole approver for wire transfers from both companies’ accounts. Neither Moore nor anyone at PacMoore approved this change. Moore discovered the change in February 2022 and immediately contacted Fifth Third to object. Fifth Third replied that restoring dual authorization would affect “the entire PacMoore relationship” and left Tatina as the sole approver. On May 17, 2022, Moore asked Tatina to initiate a wire transfer of $207,018.83 from PacMoore’s Fifth Third account to Moore’s personal Merrill Lynch account. A hacker intercepted Tatina’s email and provided Tatina with fraudulent wire instructions. Tatina then initiated a transfer to the hacker’s account. Fifth Third executed the transfer based solely on Tatina’s order, and the funds were lost. PacMoore sued Fifth Third, alleging that the bank violated § 4A-202 of the Illinois Uniform Commercial Code (UCC) by executing an unauthorized payment order. Fifth Third moved to dismiss, arguing that the transfer was authorized under § 4A-202(a).