Zengen, Inc. v. Comerica Bank

In Zengen, Inc. v. Comerica Bank, 41 Cal. 4th 239, 59 Cal. Rptr. 3d 240, 158 P.3d 800, 802 (Cal. 2007) Zengen brought common-law claims against its originating bank for processing four wire transfers ordered by the corporation's chief financial officer, who was embezzling funds from the corporation. The California Supreme Court affirmed summary judgment for the bank in part because Article 4A displaced those claims. Id. at 808. However, in Zengen, the corporation's theory was that the bank, as Zengen's originating bank, had failed to realize that the orders were unauthorized. Id. at 808-09. In Zengen and the other cases relied upon by American Express, the misconduct arose out of irregularities in the wire transfer process. Thus, the critical inquiry in those cases was whether common-law claims could properly supplement the remedies provided by Article 4A without creating responsibilities and liabilities that were inconsistent with Article 4A.