Santander Bank, N.A. v. Durham Commercial Capital Corp.

Santander Bank, N.A. (Santander) (plaintiff) was a client of the Connolly, Geaney, Ablitt, & Willard, P.C. (CGAW) law firm. CGAW assigned Santander’s account receivable to Durham Commercial Capital Corporation (Durham) for collection. Durham duly notified Santander of the assignment and of Santander’s legal obligation to henceforth make account payments exclusively to Durham. Santander received Durham’s notice but did not comply with Durham’s instructions to acknowledge receipt of the notice and acceptance of the notice’s terms. Thereafter, Santander continued to pay off its CGAW account by making payments directly to CGAW. Minimal but far from overwhelming evidence suggested that Durham was aware of these ongoing payments. After CGAW declared bankruptcy, Santander sued for a federal district-court declaratory judgment that Santander had no obligation to pay Durham sums that Santander had already paid CGAW. Santander argued that (1) the confidentiality clause of CGAW’s legal-services agreement prevented CGAW from assigning Santander’s account, (2) the assignment was void as against public policy, (3) Durham’s assignment notice was ambiguous as to the need for Santander’s acceptance and therefore ineffective, (4) Durham’s awareness of Santander’s continued payments to CGAW waived any Uniform Commercial Code (UCC) § 9-406 claim, and (5) Santander was entitled to the defense of recoupment. Both Santander and Durham moved for partial summary judgment.