Peter E. Shapiro, P.A. v. Wells Fargo Bank

Peter E. Shapiro, P.A. (Shapiro) (plaintiff) was a private law firm with a client who needed to repay a loan. The client forwarded an email from the lender’s lawyer, James Messenger, containing wire-transfer instructions for repaying the loan. Money was to be sent to Messenger’s account at M & T Bank. The next day, the client forwarded a second email with new instructions to transfer funds to an account at Wells Fargo Bank, N.A. (Wells Fargo) (defendant). Shapiro did not contact Messenger directly to clarify instructions. Wells Fargo completed the transfer to the second account. Messenger was not the account’s owner. Shapiro contacted Wells Fargo for a recall, but the funds had already been removed. Wells Fargo’s automated money-transfer system created an audit trail for Shapiro’s transaction. The trail included an entry identifying a possible name and account-number mismatch. No Wells Fargo employee saw the entry. Language in Shapiro’s transfer triggered Wells Fargo’s Office of Foreign Asset Control to review the transaction for United States sanction violations. However, the sanction review did not cover mismatches between intended beneficiaries and receiving account owners. Shapiro filed suit in federal district court, alleging a violation of the Uniform Commercial Code (UCC). Wells Fargo filed a motion for summary judgment.