Where a claim for negligence against a bank fell within the parameters of the UCC, the common law negligence claim was preempted and summary judgment for defendants was affirmed.
In Mark IV Enterprises, Inc. v. Bank of America, N.A., No. M2017-00965-COA-R3-CV (Tenn. Ct. App. June 26, 2018), plaintiff sued defendant bank for aiding and abetting fraud and conversion, as well as for common law negligence. Plaintiff’s bookkeeper had embezzled money from plaintiff by taking checks written to plaintiff’s vendors and depositing them into her own personal account at defendant bank. Plaintiff alleged that defendant was negligent because the checks were not payable to the bookkeeper, many were not endorsed, and defendant bank had failed to safeguard against such issues when checks were deposited through its ATMs.
The trial court dismissed the conversion and fraud claims on a motion to dismiss, and granted summary judgment to the bank on the negligence claim based on its finding that the bank did not owe plaintiff a duty. The Court of Appeals affirmed, but on different grounds.