Wisper Corp. v. California Commerce Ban

Facts

The Rivera-Torres family purchased the Colony Club apartment complex in Orlando, Florida. They retained Scott Aurich (Aurich), a commercial real estate broker, to oversee the management of many of its real estate holdings. Aurich advertised for help and hired Benitez to assist in the operations and with the books and accounting. Benitez did not disclose to Aurich that he recently had been convicted of embezzling checks from a former employer. Aurich knew Benitez was in jail for approximately a month shortly after he was hired and Benitez's daughter told Aurich that Benitez had been convicted of driving while under the influence of alcohol or driving with a suspended license, Aurich did not confirm this information with either the court or the jail. Carlos Rivera-Torres also was aware of Benitez's jail term and loaned Benitez $6,000 for bail money. Benitez did not have any authority to withdraw money from P's Bank of America account. Using Epoch's monthly financial statements and bank account statements from the Bank of America, Benitez also prepared financial statements which were given to P's outside accounting firm for preparation of tax returns. Benitez also prepared financial statements for International. After D's solicitation of the Rivera-Torres family's banking business, Carlos Rivera-Torres opened a personal account with D. At a dinner meeting, Carlos Rivera-Torres introduced Benitez to several D officers. On April 21, 1989, Benitez opened an account in the name of 'Wisper Corporation, N.V.' at the San Ysidro branch of D. Benitez signed documents representing himself as an officer of P and as the only signatory named by P's board of directors. Benitez provided no documentation to D verifying his authority to act on behalf of P. Benitez merely delivered to Fimbres a translated copy of P's articles of incorporation, which did not identify any of P's shareholders, directors or officers, and did not name Benitez in any capacity. Benitez deposited into the new account 28 checks received from Epoch and later withdrew those funds on his own signature and for his own benefit. Benitez typically used a rubber endorsement stamp (presumably the Bank of America stamp altered to delete the account number) to endorse the checks 'For Credit Account of Wisper Corp. N.' At the time of deposit, D's employees typically would write the account number for D's P account opened by Benitez (i.e., 32013880-01) below the stamped endorsement. Alejandro Rivera-Torres received monthly reports from Epoch showing P's net receipts from the Colony Club complex which should have been deposited monthly in P's account with the Bank of America. He also received regular summaries of the balance in P's account with the Bank of America. However, despite this available information, he never noticed Benitez's diversion of money from P over the two-year period. On May 8, 1992, P and International filed a complaint for damages against D, Banamex and Union Bank, asserting causes of action for negligence and mistake. P sought damages of at least $1,399,132.83 against D and Banamex, and International sought damages of at least $11,820.33 against D and Banamex. At close of trial, the court granted P's motion to amend its complaint to include a cause of action against D for conversion. The jury found by special verdict that D did not 'act in good faith, and in accordance with reasonable commercial standards, in paying Check No. 2219. The jury found D was negligent and its negligence was a cause of damage to P. It also found P was negligent and its negligence contributed as a cause of its own damage. The jury found the total amount of damages suffered by P and International was $1,445,953.60. The jury attributed 75 percent of the negligence to P and the remaining 25 percent to D. The court entered judgment against D (1) for International in the amount of $11,820.33 plus 7 percent interest from November 23, 1990, through June 29, 1993, and at the legal rate thereafter until paid, and (2) for D in the amount of $358,533.32 plus interest from June 29, 1993, until paid. The judgment noted that P’s amount represented the total amount of damages found by the special verdict less the $11,820.33 amount for International, multiplied by D's 25 percent proportionate liability for its negligence. This appeal resulted with P contending it was due prejudgment interest.

Issues

Rule of Law

Holding and Decision

Legal Analysis

© 2007-2024 ABN Study Partner.