Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 06CC01828, Steven L. Perk, Judge.
Antonio Medina, in pro. per., for Plaintiff and Appellant.
Musick, Peeler & Garrett, Barry D. Hovis and Catherine M. Lee for Defendant and Respondent.
OPINION
SILLS, P. J.
Antonio Medina filed a complaint for wrongful dishonor of a payment order, breach of contract, negligence, and privacy violations against Citibank, claiming it refused to follow his instructions to transfer funds on several occasions and refused to honor a check he wrote to another bank. Citibank cross-complained against Medina, alleging he deposited a check drawn on another bank with Citibank, knowing there were insufficient funds to support the check, then transferred money out of the Citibank account before the check could be rejected, creating an overdraft in excess of $100,000.
After a bench trial, the court entered judgment for Citibank on the complaint and cross-complaint, awarding Citibank $100,174.87, plus $10,000 in punitive damages. Medina appeals, contending the judgment is not supported by sufficient competent evidence. We disagree and affirm.
FACTS
In May 2005, Medina had a checking account and a money market account at Citibank. On May 17, 2005, the balance in his Citibank checking account was $2008.08. The next day, Medina deposited into his Citibank checking account a cashier’s check drawn from World Savings Bank in the amount of $158,000. Citibank immediately credited Medina’s account with the amount of the cashier’s check. Medina then executed a request for an international wire transfer of funds in the amount of $155,000 from his Citibank checking account to an account in Spain under one of his aliases, Tony Anderson. Citibank debited the account for $155,000 plus a wire transfer fee of $40.
On May 19, Citibank’s operations officer reviewed the wire transfer request and cancelled it because the funds from the World Bank cashier’s check had not yet been collected. Citibank credited Medina’s checking account in the amount of $155,040. The funds from the World Bank cashier’s check became available to Medina on May 20; on that day, he transferred $158,000 to his Citibank money market account.
On May 24, Medina requested a domestic wire transfer from his Citibank money market account in the amount of $157,000 to a beneficiary bank, Fleet Bank, for transfer to Medina’s account at Forex Capital Market. Citibank executed the wire transfer according to the request.
On December 21, 2005, Medina submitted a written request to Citibank to recall the May 24 wire transfer and credit the funds to the account from which they came, his Citibank money market account. Citibank executed the recall request, but Fleet Bank was unable to return the funds because it could not get debit authorization from Forex Capital Market.
On December 22, 2005, Medina’s Citibank checking account had a balance of $6,504.15. The next day, Medina wrote check 111 drawn on his Citibank checking account in the amount of $157,000 and deposited it into his World Savings Bank account. He asked World Savings Bank to execute an international wire transfer of $157,000, but World Savings Bank could not do so immediately. Medina then wrote check 113 drawn on his World Savings Bank account in the amount of $157,000 and deposited it into his Citibank checking account. Citibank immediately credited his account with the amount of check 113, but only $50,100 of the funds were immediately available. Citibank notified Medina that additional funds in the amount of $4,900 would be available on December 28, and the remaining funds in the amount of $102,000 would be available on December 29.
On December 27, Medina used online banking to request an international wire transfer of $50,000 from his Citibank checking account to his account at a bank in Spain. Citibank executed this request. That same day, World Savings Bank presented check 111 to Citibank for payment. When World Savings Bank presented check 111, Medina’s Citibank checking account balance was approximately $107,000. Citibank refused payment because there were insufficient funds in Medina’s Citibank checking account to cover check 111 in the amount of $157,000.
Also on December 27, World Savings Bank paid check 113 and debited Medina’s account in the amount of $157,000. The next day, the payment was reversed. Lisa Lemus, World Savings Bank’s district manager, explained that “checks are paid through the federal reserve system.... [T]he federal reserve pays checks that are presented by banks for banks in bulk.... [A]s long as the account can support that payment, then the payment is made; however, there could be a correction within 24 hours after the payment of a check.”
On December 29, Medina again used online banking to request an international wire transfer of $50,000 from his Citibank checking account to his account at a bank in Spain. Citibank executed the request. A few hours later, Citibank received a telephone call from World Savings Bank advising Citibank that its check 113 would not be paid. Medina’s Citibank checking account was immediately “blocked by risk control and loss processing,” which was standard procedure in such a circumstance. Check 113 was returned to Citibank on December 30 marked “UNCOLLECTED FUNDS.” The next day, Citibank was told the funds in Medina’s World Savings Bank account were on hold because Citibank check 111 had not cleared and the account had insufficient funds to cover check 113.
Citibank debited Medina’s checking account for the amount of World Savings Bank check 113, $157,000, on December 30, 2005. Because the account was blocked, however, the debit was not automatically posted on that date but was “manually forced onto the account on January 3[, 2006].” Consequently, on January 3, Medina’s checking account was overdrawn by $100,174.87. World Savings Bank presented Citibank check 111 a second time for payment on January 3; Citibank refused payment for insufficient funds and cancelled Medina’s endorsement. Although Medina was notified of his account’s status, he never repaid Citibank the amount of the overdraft.
Medina testified he called Citibank on November 4 and requested a recall of the May 24 wire transfer; he was told the request would be executed and he was given a confirmation number (53081453338). Medina testified he thought he had enough money in his checking account to cover check 111 because he checked the balance online on December 29. He claimed the printout of the online “Account Details and Activity” dated December 29, which was admitted into evidence, showed an average daily balance of $162,000 from November 4 through December 22. He also claimed he thought the balance was the result of the wire transfer recall. He admitted, however, that the printout did not show any credit for the return of those funds and he had not received any notice of such a credit from Citibank.
Medina admitted he was convicted of bank fraud “in the 1990’s,” but asserted the conviction “was set aside.” The trial court took judicial notice of United States v. Antonio Medina Puerta (1st Cir. 1994) 38 F.3d 34, which showed the bank fraud conviction was affirmed and Medina was sentenced to 18 months in prison. Medina was then questioned about his arrest arising out of a dispute with Bank of America. After he denied having “multiple pieces of identification in different names” at the time of his arrest, the court took judicial notice of Medina v. United States (9th Cir. 1997) 121 F.3d 1338, which showed otherwise. After Medina denied having a previous dispute with Home Federal Savings based on an alleged check kiting scheme, the court took judicial notice of Antonio Medina Puerta v. Resolution Trust Corporation (9th Cir. 1997) 121 F.3d 716, which described such a dispute.
At oral argument, Medina insisted his conviction had been set aside. But he presented no evidence of that in this court or the trial court.
Medina has quite a history with this court as well. Six opinions have been authored by Justices Rylaarsdam, Fybel, and Ikola.
Sharon Murray, a Citibank operations manager, testified that Citibank’s policy in November 2005 did not allow wire transfer recall requests to be made by telephone. And the confirmation number Medina provided was not a wire recall confirmation number. “[I]t’s more like a customer service center control number for ordering copies of a check or ordering copies of statements or placing a stop payment, some kind of control number like that.” Murray also testified that the monthly bank statement was the official record for a customer’s account, not the printout of the online account detail. Comparing the printout provided by Medina and the official bank statements for the same period, Murray testified the printout showed the checking account had a balance of $162,473.47 at the close of business on November 4, and the bank statement showed a balance of $5,510.08. All of the remaining end-of-day balances on the two documents likewise failed to match. Murray pointed out the year-to-date interest paid amount of $9.99, shown on Medina’s printout, was consistent with the daily balances shown on the official bank statements. If the daily balances had been as shown on Medina’s printout, the interest for that period alone would have exceeded $40.
Howard Schechtman, the technology director for Citibank online, testified the online printout and the official bank statement should be identical because both documents are produced from the same master data file. He demonstrated to the court how a person could easily alter the online document by printing the document to “an adobe pdf printer,” naming the file and saving it on the computer, open the document “using adobe acrobat,” and edit the document with the “touchup text tool.” The altered document could then be printed out or saved for later editing and printing.
The trial court filed a statement of decision finding that Citibank’s duties to Medina were defined by the client manual and the written funds transfer agreement. It found against Medina on his complaint, holding that Citibank neither breached its contract with Medina nor wrongfully dishonored payment orders when it cancelled the May 18, 2005 wire transfer and refused to pay Medina’s check 111. The court further found in favor of Citibank on its cross-complaint, finding Medina made false representations that he had sufficient funds in his World Savings Bank account to pay check 113 and that he had sufficient funds in his Citibank account to cover the two wire transfers of $50,000 each. The presentation of check 113 also constituted breaches of warranties under the California Uniform Commercial Code.
The trial court stated, “[Medina’s] testimony completely lacks any credibility. [Medina] has a history of similar fraudulent transactions with banks. Even if the court did not consider [Medina’s] character/prior history in accessing his credibility, the court does not believe any portion of his testimony....” The court cited as reasons its “observations of [Medina] while testifying,” the forged online record of his Citibank checking account, and the “timing of [the] two online international wire transfers,” which demonstrated his “knowledge of the banking system and his efforts to bilk Citibank out of these funds.”
DISCUSSION
Medina contends the evidence shows Citibank breached its contract with him when it cancelled the wire transfer request of May 18, 2005. He claims the funds were available for the transfer as a matter of law because they came from a cashier’s check on which no hold had been placed. We disagree.
The May 18 wire transfer request is governed by the terms of Citibank’s client manual, which Medina received in December 2002, and the terms of the transfer order, which Medina signed on May 18. The client manual provides that Citibank “reserve[s] the right to reject your order for a funds transfer. We may reject the order if you have insufficient funds in your account. We may reject the order if your order is unclear or incomplete or if for any other reason the order is unsatisfactory to us.” A withdrawal request may be refused “[i]f the funds you wish to withdraw are not yet available.”
Although Citibank had credited Medina’s checking account with the amount of the cashier’s check, the funds had not yet been collected from World Savings Bank. Without those funds, there was an insufficient amount in Medina’s checking account to cover the wire transfer request. A wire transfer request over $50,000 needed to be approved by two bank officers, and “the operations manager, Luz Gamez, thought that there was enough risk in the transaction that she preferred that the wire be canceled and the immediate credit not be given.”
Medina complains that Citibank verified the cashier’s check, so the funds should have been immediately available to him. Murray testified that verifying a cashier’s check means “that the officer has called the bank that the cashier’s [check] is drawn on and verified that the check was actually issued, that it’s not a counterfeit.” Such a verification of funds does not necessarily assure that Citibank would ultimately receive the funds, because the customer could still stop payment on the cashier’s check.
Medina next contends the trial court should have found that Citibank wrongfully dishonored Citibank check 111 because there were sufficient funds in his Citibank account when it was presented on December 27. He arrives at that conclusion by first pointing out he deposited World Savings Bank check 113 into his Citibank checking account on December 23, 2005, and World Savings Bank did not dishonor the check until seven days later, on December 30. He then reasons that check 113 was paid by World Savings Bank as a matter of law under California Uniform Commercial Code section 4302, subdivision (a)(1), which states that the payor bank is accountable for a check “if the bank... retains the item beyond midnight of the banking day of receipt without settling for it or... does not pay or return the item or send notice of dishonor until after its midnight deadline.”
Medina has waived the midnight deadline argument because he did not raise it below. (Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1129.) In any event, the evidence suggests that World Savings Bank received check 113 on Tuesday, December 27, the first banking day following Medina’s deposit on Friday, December 23. World Savings Bank paid check 113 on December 27, then reversed its payment on December 28. California Uniform Commercial Code section 4301 “allows a payor bank that has settled for an item on the day of receipt to return a dishonored item on the next day before its midnight deadline.” (Official Comments on U. Com. Code, com. 1, West’s Ann. Cal. U. Com. Code (2002 ed.) foll. § 4301, p. 136.)
Medina contends the judgment against him on Citibank’s cross-complaint is not supported by substantial evidence. The cross-complaint includes causes of action for breach of warranty, intentional and negligent misrepresentation, fraud based on suppression of fact, and money had and received. Medina attacks the judgment for Citibank on the causes of action for breach of warranty, money had and received, and fraud. None of his attacks has merit.
“‘The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ [Citations.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Medina claims Citibank failed to prove he made a misrepresentation because “the deposit of a check is simply an instruction to the bank to present the check to the drawee bank to collect the funds and it does not imply that the drawee bank has the funds,” citing Williams v. United States (1982) 458 U.S. 279.
In Williams, the petitioner had engaged in “check kiting” by transferring checks unsupported by sufficient funds between his accounts in two federally insured banks, first writing a check in excess of his balance in the one account, depositing it into the other account, then reversing the process. He was convicted in federal court of violating 18 U.S.C. § 1014, which “makes it a crime to ‘knowingly mak[e] any false statement or report, or willfully overvalu[e] any land, property or security, for the purpose of influencing in any way the action of [certain enumerated financial institutions, among them banks whose deposits are insured by the Federal Deposit Insurance Corporation], upon any application, advance, discount, purchase, purchase agreement, repurchase agreement, commitment, or loan....’” (458 U.S. at p. 282.)
The Supreme Court reversed the conviction, holding that a check is not a false statement. “[A] check is literally not a ‘statement’ at all. In any event, whatever the general understanding of a check’s function, ‘false statement’ is not a term that, in common usage, is often applied to characterize ‘bad checks.’” (Williams v. United States, supra, 458 U.S. at p. 286.) Because the statute did not expressly prohibit the deposit of a check drawn on insufficient funds, the court declined to expand its coverage, noting that state law comprehensively dealt with fraudulent checking activities. “Absent support in the legislative history for the proposition that § 1014 was ‘designed to have general application to the passing of worthless checks,’ [citation], we are not prepared to hold petitioner’s conduct proscribed by that particular statute.” (Id. at p. 287, fn. omitted.)
The Williams case applies to the interpretation of a federal criminal statute, not the common law tort of fraud. Here, the trial court correctly relied on Wilson v. Lewis (1980) 106 Cal.App.3d 802, which held that a check’s “unqualified tender is a representation that there are sufficient funds to cover it on deposit with the drawee bank which will pay it instantly on demand.” (Id. at p. 808.) When Medina deposited World Savings Bank check 113 in his Citibank checking account, he falsely represented to Citibank that he had enough in his World Savings Bank account to pay it. The trial court also found that Medina falsely represented to Citibank that he had sufficient funds in his World Savings Bank account to pay the two domestic wire transfers he requested in December 2005. These false representations caused Citibank to transfer $100,000 to Medina’s account in Spain, which overdrew his checking account by $100,174.87. Medina has not repaid the overdrawn amount.
Medina contends there is no evidence that he intended to defraud Citibank; rather, he asserts the evidence shows he reasonably believed there were sufficient funds in his World Savings Bank account as a result of the deposit of Citibank check 111, and there were sufficient funds in the Citibank account as a result of the recalled wire transfer. The trial court, however, found otherwise. Based on evidence that Medina doctored the online printout of his Citibank checking account, he had received no notice that the recall of the wire transfer had been successful, and his credibility was impeached repeatedly, the trial court concluded that Medina knew exactly what he was doing. This determination is supported by substantial evidence. Because the judgment for fraud is supported by substantial evidence, we need not discuss Medina’s contentions regarding the remaining causes of action.
Medina complains the judgment is based on incompetent evidence because the trial court erroneously took judicial notice of the prior cases in which he was involved in disputes with other banks. He claims the facts of the prior cases were used to prove his conduct in this case, which is improper.
Evidence Code section 1101 provides that “evidence of a person’s character or a trait of his or her character... is inadmissible when offered to prove his or her conduct on a specified occasion.” (Evid. Code, § 1101, subd. (a).) But otherwise admissible evidence that “a person committed a crime, civil wrong, or other act” can be admitted to show “motive, opportunity, intent, preparation, plan, knowledge, identity... other than his or her disposition to commit such an act.” (Evid. Code, § 1101, subd. (b).) And “[n]othing in this section affects the admissibility of evidence offered to support or attack the credibility of a witness.” (Evid. Code, § 1101, subd. (c).)
When it rendered its oral decision, the trial court specifically stated it considered the prior cases “only as [they relate] to the credibility of the Plaintiff and also to impeach the plaintiff’s statement that his prior convictions had been overturned. [¶] I did not consider the facts... that were recited in those cases.” The admission of the evidence for these purposes did not run afoul of Evidence Code section 1101. Furthermore, the trial court stated it did not rely on this evidence to determine Medina’s lack of credibility. In the statement of decision, it detailed the evidence supporting its conclusion: observations of the witness, evidence of the altered printout, and the precise timing of the deposits and transfer requests.
DISPOSITION
The judgment is affirmed. Citibank is entitled to its costs on appeal.
WE CONCUR: BEDSWORTH, J., O’LEARY, J.