In contrast, claims not based on the mechanics of the transfer itself-such as claims “based on Defendant's actions before and after the processing of the wire transfer”-are not always preempted. Jakob v. JPMorgan Chase Bank, N.A., 639 F.Supp.3d 406, 412 (E.D.N.Y. 2022) (emphasis in original) (internal quotation marks omitted) (citing Pedersen v. MidFirst Bank, 527 F.Supp.3d 188, 193 (N.D.N.Y. 2021)); see also Beck v. Metro. Bank Holding Corp., No. 23-CV-7564, 2024 WL 3849461, at *10 (E.D.N.Y. Aug. 16, 2024) (holding a common law contract claim was not preempted by Article 4-A where it concerned an agreement that a bank conduct an internal review for all authorized wire transfers); Sheerbonnet, 951 F.Supp. at 412 (noting allegations unrelated to “transactional” funds transfer errors were not preempted as they “d[id] not fit neatly into any of Article 4-A's ‘precise and detailed rules'”).
In any event, each of Volmar's claims fails for at least one other reason as well. Its first claim for “fail[ure] to properly monitor, and therefore, detect, that the account at Truist to which the funds were wired was fraudulent,” TPC ¶ 8 is plainly preempted by the U.C.C. Article 4-A of the U.C.C., which New York has adopted, “displaces any common law claim if the UCC's provisions squarely cover the transactions at issue, . . . and was intended to be the exclusive means of determining the rights, duties and liabilities of banks and their customers with respect to [wire] transfers.” Pedersen v. MidFirst Bank, 527 F.Supp.3d 188, 193 (N.D.N.Y. 2021) (internal quotation marks omitted); see Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84, 89 (2d Cir. 2010). Courts have interpreted that to mean that claims “based on the bank's processing of the wire transfer” that is, concerning “the mechanics of an electronic fund transfer” are barred. Huang v. Hong Kong & Shanghai Banking Corp. LTD, No. 20-CV-03548 (LTS) (SN), 2022 WL 4123879, at *3 (S.D.N.Y. Sept. 9, 2022) (cleaned up); see Beck v. Metro. Bank Holding Corp., No. 23-CV-07564 (NJC), 2024 WL 3849461, at *10 (E.D.N.Y. Aug. 16, 2024) (holding that a breach-of-contract claim similar to Volmar's was preempted by Article 4-A).
See N.Y.U.C.C. Law, § 4A-207, cmt 2 (standard format may allow inclusion of name of beneficiary and other information which can be useful to beneficiary's bank, but which plays no part in process of payment).See e.g. generally Wellton Int'l Express, 612 F.Supp.3d 358; Golden Door V & I, Inc. v. TD Bank, 123 A.D.3d 976, 977, 999 N.Y.S.2d 510; accord Pedersen v. MidFirst Bank, 527 F.Supp.3d 188, 192-93 (N.D.N.Y. 2021)(applying California law as jurisdiction where receiving bank was located, but noting that New York and California law are same). The Court finds no merit in Bud' assertion that its claims are not barred by the UCC given that as a result of the notation, HSBC had actual knowledge that Merton was not the proper beneficiary of the wire transfer (because, among other reasons, M. Holland and Son's Construction Inc. is a business and Merton's Account is a personal account).