Chavez v. Mercantil Commercebank, N.A.

Filing 182

FINDINGS OF FACT AND CONCLUSIONS OF LAW AND FINAL JUDGMENT in favor of Roger Chavez against Mercantil Commercebank, N.A. Signed by Magistrate Judge Edwin G. Torres on 5/23/2014. (EGT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 10-23244-CIV-TORRES
CONSENT CASE
ROGER CHAVEZ,
Plaintiff,
v.
MERCANTIL COMMERCEBANK, N.A.,
Defendant.
________________________________________/

FINAL JUDGMENT AND
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This matter is before the Court following a multi-day bench trial conducted in
this action. Plaintiff Roger Chavez filed the original complaint in the Circuit Court of
the Eleventh Judicial Circuit in and for Miami-Dade County, Florida on August 6,
2010. Defendant, Mercantil Commercebank, N.A. properly removed this action to the
United States District Court for the Southern District of Florida on September 8, 2010.
On April 14, 2011, pursuant to 28 U.S.C. § 636(c), the parties consented to the
jurisdiction

of the undersigned United States Magistrate Judge for all further

proceedings, including trial and entry of final judgment. Based on the following
Findings of Fact and Conclusions of Law, Judgment is entered in favor of Plaintiff
Roger Chavez.

I.
A.
1.

FINDINGS OF FACT

Background
Roger Antonio Chavez (“Chavez”) was born March 3, 1968. He is a citizen

and resident of Venezuela. He has lived in Venezuela his entire life and obtained
degrees in Mechanical and Automotive Maintenance from a Venezuelan university.
He has been married for about 24 years and has two children.
2.

Chavez owns a construction company which specializes in civil works

products, such as the drainage of roadways. Additionally, Chavez owns a farm where
he grows oranges, lemons, and sugar cane. He also owns stock in another Venezuelan
sugar cane company and sells livestock.
3.

Mercantil Commercebank, N.A. (“MCB”) is a national bank organized and

existing under the laws of the United States doing business in Miami.
4.

Chavez opened a money market checking account with MCB in Miami on

or about September 25, 2002. To open this account, Chavez executed a Deposit
Agreement and a signature card, signaling his agreement with the terms of MCB’s
“Understanding Your Deposit Agreement.” Chavez is the only authorized signatory on
the account.
5.

Chavez intended to use the account for retirement, protecting his savings

from the currency depreciation common in Venezuela. He also used the account to buy
parts for his construction company. Past wire transfers made from Chavez’s MCB
account, prior to the transfer at issue, were a $10,000 transfer in 2004 for construction

equipment and transfers of $13,860 and $20,640 to purchase construction equipment
on August 17, 2006.
6.

On or about March 7, 2003, Chavez and MCB entered into a Funds

Transfer Agreement (“FTA”).

The FTA contains terms and conditions for the

disbursement of funds by wire transfer from the Chavez Account.
B.

Chavez’s February 2008 Trip to Miami
1.

7.

Travel Arrangements

Chavez, along with his wife, left Venezuela on February 2, 2008. [Exhibit

P-9; Chavez Testimony at 23]. He arrived in Miami in the late afternoon on February
2nd, rented a vehicle and stayed in a hotel. The purpose of this trip was to do personal
shopping, purchase items for his construction company, and visit MCB to obtain past
account statements that were not received.
8.

On February 6, 2008, Chavez returned his rental car to the Dollar Rent-A-

Car location on 25th Street in Miami, Florida at 640 AM. [Exhibit P-10]. He waited
at the Miami International Airport until his flight departed and arrived in Venezuela
later that day. [Exhibit P-9; Chavez Testimony at 31-32]
9.

A travel itinerary, Exhibit P-8, was provided to Chavez by the Venezuela

travel agency Brujula. The itinerary is consistent with Chavez’s recollection that he
departed Venezuela aboard Aeropostal Flight No. 502 on February 2, 2008 and
returned on Aeropostal Flight No. 501 on February 6, 2008. It is also consistent with
the Dollar Rent-A-Car receipt, Exhibit P-10, which reflects that Chavez’s rental car

left the Dollar Rent-A-Car location at 9:15 PM on February 2 and was returned at 6:40
AM on February 6.
2.

Visits to MCB on February 4 and 5, 2008

10.

During Chavez’s visit to Miami, he made two trips to MCB.

11.

On his first trip, February 4, 2008, Chavez made a $20,000 cash deposit

into the Account. The deposit slip reflects that the deposit was made at 11:03 AM.
[Exhibit P-12]. To make this deposit, according to MCB’s policies and procedures,
Chavez was required to complete a Currency Transaction Report.
12.

Chavez was required to present his passport and a copy of his business

card to verify his identity. The bank made a copy of these documents for its file, but
did not provide Chavez with a copy. Next to the image of his passport and business
card are “$20,000,” the amount of the transaction, and “8302738312,” the account
number. [Exhibit P-13]. The Court finds that neither of these were written by Chavez.
[Chavez Testimony at 27:12-14].
13.

During this February 4 visit, but after making the cash deposit, Chavez

requested that Alejandro Agnati, an MCB customer service representative, print copies
of statements that he had not received. The MCB employee provided Chavez with
copies of his account statements for August-December of 2007 and January 2008.
[Exhibit P-11].
14.

On February 5, 2008, Chavez again visited MCB’s Doral Branch. At

12:54 PM, he deposited $3,700 into his Account. [Exhibit P-14]. He deposited this
extra money because it was left over from the purchases he and his wife had planned

to make in Miami, and he did not wish to bring extra US Dollars to Venezuela. [Chavez
Testimony at 30:9-11].
C.

The Payment Order
1.

15.

MCB’s General Procedures for Payment Orders

MCB employees were given training on the proper procedures to accept

a wire transfer form or “payment order.” In February 2008, the procedure would
include:
•

A customer would either bring a completed payment order or be provided
with a blank payment order to complete in their own handwriting.

•

The customer would be required to include a date, his or her name and
account number, the amount of the transfer, the receiving bank’s name,
location, and Swift Code, the payee’s name and account number, and any
additional information. The customer would then sign the payment order
and print his or her name below.

•

A MCB employee would check the form to make sure it had been properly
completed, verify the customer’s ID (if he or she did not personally know
the customer), verify the signature, verify the account balance, and
confirm that a Funds Transfer Agreement was on file. To confirm that
these procedures were completed, a stamp would be placed and initialed
near the signature noting its verification, a stamp would be placed on the
form and the available balance would be written in, accompanied by the

verifiers name, and the representative would write on the form “F.T.A. on
file” to denote that a Funds Transfer Agreement was on file.
•

After the initial steps, an officer would receive the form and had to give
approval.

Approval was noted by a stamp with the officer’s name

accompanied by his or her signature. The number of officers needed to
approve a wire transfer varied based on the amount to be transferred.
16.

MCB employees utilized a computer system known as AS400 in order to

confirm account balances and ensure that it was sufficient to cover the payment order.
The system would also indicate if a FTA was on file. The AS400 system does not
permit access to images stored in the bank’s file, such as images of a customer’s
identification. The system tracks and records user log-ins.
17.

A customer’s signature would be verified by checking the SQN system.

The SQN system is MCB’s database for signature verification.

It displays the

signature associated with a customer’s account. SQN does not contain or permit access
to images, such as images of a customer’s complete signature card, identification, or
funds transfer agreement. SQN does not generate or keep activity or trace records that
would permit MCB to generate a log of user access.
18.

During 2008, MCB had a 2:00 PM cut-off time for the processing and

execution of payment orders. Customers were also advised that the funds would be
wired within 24 to 48 hours of the payment order’s completion and submission.
Accordingly, verification that the account holder had a sufficient balance, that an FTA

was on file, and approval by officers could be completed after the customer left the
bank.
19.

Officers had access to a third system, called InfoImage. This system

displays images of customer information such as signature cards, FTAs, and other
images. Although not required, officers were permitted to use the InfoImage system
to conduct an independent review of the payment order.
2.
20.

The Subject Payment Order’s Creation

The Payment Order at issue, dated February 6, 2008, provided for the

wire transfer of $329,500 from Chavez’s MCB Account to the account of a beneficiary
at Banco BHD, S.A. in the Dominican Republic.
21.

Rosanna Gutierrez worked as a greeter at MCB. Her duties were to

welcome customers, ask them sign in a log book, and assist customers in obtaining
bank statements, checking balances, and wire transfers (also known as payment
orders). She would help customers in person and also could assist customers who
called the bank. As part of her training, she was instructed on the proper methods to
accept these wire transfers. The procedures are the same as outlined above.
22.

Gutierrez was the MCB employee who accepted the subject payment

23.

Surveillance video that would have shown Gutierrez accepting the

order.

payment order on either February 5 or 6, 2008 was not captured. The Court draws no
inference against MCB for the absence of any surveillance footage that should have,
ostensibly, corroborated MCB’s version of the events.

24.

Gutierrez does not specifically recall accepting the subject payment order

and cannot identify the person who provided it to her. Her testimony regarding the
acceptance of the payment order is based on the general practices and procedures of
what she would normally do, as required by MCB policy.
25.

Bank policy does not require an employee to make a copy of a customer’s

identification before receiving a payment order.
26.

Gutierrez wrote “F.T.A. on File” signifying that a Funds Transfer

Agreement was on file with the bank. She also placed a stamp on the form and
initialed the stamp, confirming she had verified the signature purporting to be Roger
Chavez. Gutierrez also placed a stamp on the Payment Order and hand wrote the
available balance of the Chavez account before the wire transfer.
27.

Gutierrez accessed the AS400 system to view Mr. Chavez’s account at

9:52, 9:53, and 9:57 on the morning of February 6. [Exhibit P-44]. Chavez was not at
the Doral branch of MCB in the morning of February 6. However, the bank had a
common practice to examine the account balance on the date that the wire transfer was
going to be processed, which was not always the day that the payment order was
received. [Gutierrez Testimony at 136:4-13].
28.

Gutierrez, or someone using her AS400 account, also accessed Chavez’s

account information on February 1, 2008. Chavez was in Venezuela at the time.
Gutierrez would, after confirming a customer’s identity by telephone, access their
account to provide his or her account balance. However, Chavez’s telephone records
do not show a call to MCB on February 1 and he credibly denies making such a call.

It is more likely than not that Chavez did not call MCB to get his account balance on
February 1.
29.

The amount of the Payment Order, $329,500, required the approval of two

officers. Talia Pina, an Operations Manager at MCB in Doral, stamped and signed the
Payment Order, signaling that the order was properly completed and that she checked
the available balance and signature. Ms. Pina could, and more likely than not did,
review a print out from the AS400 provided by Ms. Gutierrez to confirm the account
balance. [Pina Testimony at 143:8]. Ms. Pina was not required to verify the customer’s
identification because she would rely on the training of Gutierrez, the greeter, to do so.
Lolita Peroza was the second officer to stamp and approve the Payment Order with her
signature.
30.

Gutierrez left work at 2:05 PM on February 6, so she did not have an

opportunity to fax the Payment Order to MCB’s wire department on that day. Instead,
it was sent the following morning, February 7, 2008 at 10:15 AM.
31.

On February 7, 2008 at 1:16 PM, MCB sent an outgoing payment order

through Fedwire to Bank of America as intermediary bank, as instructed by the
Payment Order, debiting Mr. Chavez’s account. The beneficiary of this transfer was
Nilda Margarita Fernandez-Campillo in Santo Domingo, Dominican Republic. The
bank receiving the funds was Banco BHD, S.A., also in the Dominican Republic.
[Exhibit D-18].

D.

Forensic Document Analysis of the Payment Order
1. Plaintiff’s Expert

32.

Plaintiff’s expert Charles L. Haywood has worked as a Forensic Document

Examiner for approximately 26 years. He currently owns and operates Haywood
Forensic Document Examination, LLC. He has operated that company for the past 11
years.
33.

Beginning in 1981, he was employed as a Special Agent with the Federal

Bureau of Investigation, spending 15 years at the FBI laboratory. While at the FBI,
he completed a two-year training program for Forensic Document Examiners and
worked as a Forensic Document Examiner with the FBI for 13 of his 15 years.
34.

The FBI Laboratory certification program, which Haywood completed in

1983, includes formal class instruction, reading and research assignments, practical
exercises, and field work under the guidance and supervision of experienced and
qualified examiners. Instruction is given by FBI Special Agents as well as experts
from the Smithsonian Institute, Bureau of Engraving and Printing, and the Library
of Congress. At the end of the two-year training program, each examiner trainee
undergoes a series of tests regarding examination of documents and being examined
on his or her findings in a moot court. Haywood completed these exercises. He was
recommended for, and received, FBI approval as a forensic document examiner.
35.

While at the FBI laboratory in Washington D.C., Haywood was

responsible for training new examiners, testified in approximately 100 cases, and was

responsible for the examination and comparison of handwriting, typewriting, printing,
copying, and alterations of questioned documents.
36.

Haywood obtained a Bachelor of Science degree in Criminal Justice from

Georgia State University in 1975. While working for the FBI in Washington, D.C.,
Haywood obtained a Master of Forensic Science degree from the George Washington
University in 1987.
37.

He left the FBI Laboratory in Washington D.C. in 1996 and was

reassigned to the FBI Miami Field Office, where he also worked as a Special Agent in
investigative work, including two years as coordinator of the evidence response team.
He held that position until 2002, when he began his private practice.
38.

In 2007, Haywood was certified by the American Board of Forensic

Document Examiners. To obtain this certification, applicants must hold a bachelor
degree, complete a recognized training program, have two years experience after
completion of the training program, and have a record of integrity. Applicants are
subjected to a written test, practical problems, and an oral interview.
39.

Haywood is a Diplomate of the American Board of Forensic Document

Examiners (ABFDE), an associate member of the American Academy of Forensic
Science (AAFS), and a member of the American Society of Questioned Document
Examiners (ASQDE), Southeastern Association for Forensic Document Examination,
Florida Division of the International Association for Identification (FDIAI), and the
International Association for Identification (IAI).

40.

With over 26 years of experience, education, and expertise, Haywood is a

highly qualified expert in the field of forensic document examination. The Court
received his expert testimony at trial.
2. Defendant’s Expert
41.

Defendant’s expert, Dianne C. Flores, is a Forensic Document Examiner

with Hart Questioned Document Laboratory, Inc. She has worked with the lab since
September 2004 as a Forensic Document Examiner. From August 1999 until August
2004, she was a laboratory technician.
42.

Ms. Flores obtained an Associates Degree in Science in Legal Assisting

and an Associates in Art in Business Administration from Miami Dade Community
College in 2002. She received a Bachelor of Science in Business Management from
Florida International University in 2005. In 2008, Ms. Flores obtained a Master of
Science in Forensic Sciences Administration and a Graduate Certificate in Forensic
Examination of Questioned Documents from Oklahoma State University.
43.

Ms. Flores has been trained by Ms. Linda Hart, a well known and

respected forensic examiner, since 1999. During this time, she assisted Ms. Hart in the
examination of documents, preparation of comparison charts, processing documents in
the laboratory, and office work. She was officially trained beginning in 2004 and
underwent a two-year training in the examination of questioned documents, including
signatures, printed writing, cursive writing, inks, typewritten documents, and other
topics. This training was completed in 2006.

44.

Ms. Flores is a Certified Forensic Consultant with the American College

of Forensic Examiners Institute, an Associate Member of the American Academy of
Forensic Sciences (AAFS) and Association of Forensic Document Examiners (AFDE),
and a member of the American Society for Testing and Materials (ASTM), the
Southeastern Association of Forensic Document Examiners (SAFDE), and the
Association of Certified Fraud Examiners (ACFE).

She has attended numerous

professional meetings and trainings.
45.

Ms. Flores first testified in Florida state court in February of 2007. Since

then, she has testified numerous times, including in the Southern District of Florida.
46.

Ms. Flores has started the certification process with the Board of Forensic

Document Examiners. She has passed the two-year training and practical portion, but
has yet to complete a computerized test.
47.

When Ms. Flores is required to present letters of recommendation from

Certified Document Examiners to an association, she uses the recommendations of
Linda Hart and Charles Haywood.
48. Like Haywood, Ms. Flores is also a qualified expert in the field of Forensic
Document Examination. The Court also received and considered her expert testimony
at trial.
49.

Both Haywood and Ms. Flores conducted an examination of the Payment

Order, Exhibit D-1. The process each expert used to analyze the document was
similar. The writing is first examined to determine if it was naturally and freely
executed in order to determine if it could be compared with Chavez’s known writing

samples.

The sample writings were also examined to determine if they were

comparable to the disputed writing in wording or letter combination, and if they were
naturally and freely executed. Next, a side-by-side comparison of the disputed writing
with the sample writing was conducted. The experts compared portions of the known
sample to the disputed writing to determine if the two show similarities or divergences.
Each expert made a determination if fundamental or significant differences existed in
the writing.
50.

Document examiners indicate their degree of certainty on a continuum,

which is generally as follows, in order of strongest identification to strongest
elimination:
•

Definitive Statement of Identification, meaning that the writer of the
sample document was the writer of the questioned document

•

Highly (or very) probable identification

•

Probably written by the same person

•

Inconclusive

•

May have been written by another person

•

Highly probably written by another person

•

Definitive statement of elimination, meaning that the writer of the
sample document was not the writer of the questioned document.

51.

After completing his examination, Haywood reached the conclusion that

the writing and signature on the Payment Order was not that of Mr. Chavez. He
reached a definitive statement of elimination, without qualification. [Exhibit P-42].

52.

Ms. Flores reached the conclusion that Chavez “very probably” filled out

the Payment Order and signed the document. [Exhibit D-23; Flores Transcript at
31:15-17].
3. Reconciling Competing Expert Opinions
53.

Focusing on the record as a whole, the Court finds that it is more likely

than not that Chavez did not sign the Payment Order. The Court finds more credible
and persuasive the testimony of the Plaintiff’s forensic examiner, his analysis and
reasoning supporting that analysis, together with the supporting materials in the
record that he relied upon.
54.

Specifically, the Court finds that, while there are pictorial similarities

between the handwritten signature on the payment order and the various specimens
that the examiners reviewed, there were too many fundamental differences observed
in letter formations and beginning and terminal strokes. The Court in particular found
Haywood’s explanation and description of those fundamental differences quite
persuasive. By contrast, though Ms. Flores’s testimony was equally impressive and
credible, her explanations and her efforts to discount those fundamental differences
identified by Haywood simply lacked persuasive support in light of the relevant record.
55.

For instance, Ms. Flores’s explanation for why the middle letter “A” was

formed on the payment order in such a unique way from almost all of the comparison
specimens located with Chavez’s signature fell flat. This is but one example, of course,
for why Haywood’s testimony was more persuasive. But the strength of his testimony
was in his collective examination of all the relevant factors, in accordance with the

accepted practices in this field, which pointed in favor of a definitive determination
that Mr. Chavez, more likely than not, did not sign the payment order at issue.
56.

As a further example, Ms. Flores placed significance on the extended hand

printing on the Payment Order, noting in her report that “the form does not indicate
that it must be filled in by an account holder. That is, anyone could have completed
the questioned document without raising any suspicions, yet the same person appears
to have very probably filled out and signed the document.” [Exhibit D-23 (June 2, 2011
Report) at 7]. Her statement reflects the belief that a forger would not need to
simulate Chavez’s writing on the form, except for the signature, and it was therefore
significant to her that the extended writing appeared similar to Chavez’s and appeared
to be completed by the same person.
57.

The Court finds, however, that this assumption is contradicted by

Defendant’s own evidence. Ms. Gutierrez stated she would never fill out a wire
transfer request form on behalf of a customer. [Gutierrez Testimony at 111:20]. Ms.
Pina confirmed that the customer would complete and sign the payment order. [Pina
Testimony at 140:18]. The significance Ms. Flores placed on this factor was based on
an incorrect assumption that the same person need not complete the entire form.
58.

Moreover, the Court must consider the record as a whole in adjudicating

the factual question. The disputed forensic examinations are but one part of that
record. In carefully evaluating that supporting record in the intervening period since
the end of the trial, the Court consistently reached the conclusion that the most
persuasive direct and circumstantial evidence all pointed in favor of a finding that
Chavez did not sign the payment order. Someone else, either one formerly affiliated

with MCB or some other unknown person, more likely than not forged his signature
to defraud Chavez and MCB. If nothing else, the Court can rely upon the credibility
of Chavez himself. The Court’s careful evaluation of his testimony yielded but one
result: that he was fully credible in his denial that he had authorized that wire
transfer. The Court can, of course, rely entirely on its credibility determination as to
Chavez’s testimony. He did not sign that payment order. But apart from that, the
overwhelming weight of all the evidence presented, both direct and circumstantial,
point in Chavez’s favor and satisfies his burden of persuasion.
E.

Chavez’s Notice to the Bank

59.

After his February 5, 2008 cash deposit into his MCB account, Chavez

made no further deposits in February, March, or April of 2008. He similarly did not
write any checks on that account or initiate any wire transfers during those months.
60.

Chavez claims that he did not receive a February or March bank

statement from MCB in Venezuela. Although he had notified the MCB customer
service representative in Miami on February 4th that he had not been receiving
statements, the issue was not immediately corrected according to him.
61.

In 2008, the statement period for Chavez’s account closed in the middle

of each month. Chavez’s account statement for February 2008 closed on February 18,
2008. In 2008, within not more than one or two days of the statement closing period,
MCB would print the bank statements, which would then be mailed to the address
Chavez provided MCB for correspondence: 4th Ave. con Calle 13, Edf. Capoi Piso 3, Ofc

3-3, San Felipe, Yaracuy, Venezuela. There is no dispute that this was his mailing
address at the relevant time.
62.

The February 18, 2008 monthly statement, which covered debits made on

February 7, 2008, showed the Payment Order and resulting debit of Chavez’s account.
Chavez did not notify the bank of any problem with that statement within fourteen
days of this date. Chavez’s testimony that he did not actually see his statements was
credible.
63.

Though he claims he did not review the written statement, Chavez was

able to check the total balance of his MCB bank account on line by going to the website
of Banco Mercantil in Venezuela. Chavez did not review his account during this
period.
64.

On April 14, 2008, Chavez was planning a trip to Miami to purchase spare

parts for his construction equipment. He routinely reviews the status of his account
online before making trips to Miami. He noticed, while checking his account on April
14, 2008, that there was money missing. [Chavez Testimony at 34:9-15].
65.

Within approximately five minutes of noticing that money was missing

from his MCB account, Chavez contacted Jesus Diaz, a MCB employee, to inquire
about the $329,500.00 debit from his account. [Exhibit P-15].
66.

After several attempts to reach her, Chavez was finally able to discuss the

issue with Anna Stefanelli, an account manager at MCB. Chavez retained the services
of Squire, Sanders, & Dempsey, LLP to represent him in his communication with the
bank regarding the alleged fraud on his account. On April 21, Raul Manon, Chavez’s

attorney, was informed by Ms. Stefanelli that the matter was being handled by MCB’s
antifraud department. [Exhibit P-15].
67.

Chavez visited MCB in April of 2008, but the bank did not agree to re-

credit his account for the $329,500 debit.
68.

On April 29, 2008, Mr. Manon sent a letter to Ms. Mariola Sanchez,

General Counsel to MCB, regarding Chavez’s attempts to have the bank re-credit his
account. [Exhibit P-15]. After receiving this letter, the bank denied Chavez’s claim for
a refund.
69.

In support of the denial of Chavez’s claim, MCB provided materials

regarding a land purchase in the Dominican Republic. [Exhibits P-21; P-22]. The
materials were received from a representative of Banco BHD, S.A., a Dominican bank,
during the course of MCB’s investigation.1 The materials include:

1

During the trial, the Court heard argument and received trial briefs
regarding the admissibility of Plaintiff’s Exhibits 26 and 27. Exhibit P-26 is a “Death
Record” from the Dominican Republic and includes the “Extracto de Acta de Defuncion”
written in Spanish, its translation, and an Apostille that attests to the validity of the
translator’s signature, but not the signature of Ynda Yudelka Martinez Nunez, the
officer whose signature appears on the original document. Exhibit P-27 is a Certificate
of Title from the Dominican Republic, including the “Certificacion Del Estado Juridico
Del Inmueble” in Spanish, its translation into English, and an Apostille attesting again
to the validity of the translator’s signature.
MCB to these exhibits, claiming that they are not properly authenticated as
required by Fed. R. Evid. 902(3) and the Hague Convention Abolishing the
Requirement of Legalization of Foreign Public Documents, 1981 WL 375769 (U.S.
Treaty). On July 23, 2013, this Court provisionally admitted the documents and
overruled the hearsay and relevancy objections, but let the issue of authentication run
with the case. See Trial Transcript, July 23, 2013, at 20. Having reviewed counsels’
arguments and legal authorities, MCB’s objection to Plaintiff’s Exhibits 26 and 27 for
failure to properly authenticate the foreign public documents is Sustained. Exhibits
P-26 and P-27 are inadmissible and have not been considered in these Findings of Fact.

•

a sales contract reflecting that “Roger Antonio Chavez” purchased land
from “Rafael Ruiz” for $329,500.00;

•

a United States Passport of Rafael Ruiz;

•

a copy of Chavez’s Venezuelan Passport and business card, which
appears to be the same documents in the same position as Plaintiff’s
Exhibit 13;

•

a copy of Chavez’s expired Venezuelan Passport, that appears to be the
exact copy of the passport presented to MCB in 2002 when Chavez opened
the account. The document, including the handwritten name “Roger
Antonio Chavez” beneath the passport copy, is similar to the image as it
appears in the bank’s file (which by itself supports suspicions that
someone affiliated with the bank may have been involved in some way in
the fraudulent scheme);

•

a forged letter from February 12, 2006 on what purports to be MCB
letterhead regarding the satisfactory status of Chavez’s account.

The

letterhead is not the letterhead MCB used in 2006 and is a clearly
fraudulent document. [Sanchez Testimony at 23:7-15].
70.

Both forensic document experts agree the signature “Roger Chavez” on

the sales contract is a forgery. [Sanchez Testimony at 20:2].
71.

A Massachusetts Death Certificate certifies that Rafael Suarez Ruiz died

on September 24, 2004, years before the fraudulent land purchase. [Exhibit P-25]. The
date of birth on the death certificate matches the date of birth on the United States
Passport of Rafael Ruiz presented to MCB during its investigation.

72.

The denial of Chavez’s claim was based on MCB’s belief that he had in

fact signed the payment order. [Sanchez Testimony at 24:15-16].
73.

Chavez was informed by Mariola Sanchez in 2010 that his claim was

officially denied.
II. CONCLUSIONS OF LAW2
The Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and
1441(a), and 12 U.S.C. § 632.
A.
Article 4A, as adopted in Florida, “governs a specialized method of payment
referred to in the Article as a funds transfer but also commonly referred to in the
commercial community as a wholesale wire transfer.” Fla. Stat. § 670.102 cmt. The
article is meant to govern the rights, duties and liabilities of banks and their customers
with respect to funds transfers, which may be initiated by a written payment order. Id.
§ 670.103.
Ordinarily, the bank receiving a payment order bears the risk of loss of any
unauthorized funds transfer. Specifically, section 670.204 provides: “(1) If a receiving
bank accepts a payment order issued in the name of its customer as sender which is
not authorized and not effective as the order of the customer under s. 670.202 or is not
enforceable, in whole or in part, against the customer under s. 670.203, the bank shall
refund any payment of the payment order received from the customer to the extent the

2

To the extent that any conclusions of law constitute findings of fact, they
are hereby adopted as such. To the extent any findings of fact constituted conclusions
of law, they are also adopted as such.

bank is not entitled to enforce payment and shall pay interest on the refundable
amount calculated from the date the bank received payment to the date of the refund.”
Fla. Stat. § 670.204.
Section 202 referenced above addresses when a bank can shift the risk of loss to
the customer, i.e., the safe-harbor provision. The bank may shift the risk of loss to the
customer by showing one of two things: (1) the “payment order received . . . is the
authorized order of the person identified as sender if that person authorized the order
or is otherwise bound by it under the law of agency,” id. § 670.202(1), or (2) the parties
agreed to a security procedure that is commercially reasonable and that the bank
followed in good faith, id. § 670.202(2).
In the summary judgment motion adjudicated at an earlier stage in the case, the
Court found that MCB could rely upon the security procedure in place for Chavez’s
account that it followed in good faith. The risk of loss, therefore, shifted to Chavez.
[D.E. 106]. The Court of Appeals, however, reversed that judgment and found that the
parties’ agreed-upon security procedure did not satisfy the requirements of section
670.201; the safe harbor provision in section 202 could thus not apply. [D.E. 147].
On remand, therefore, the only relevant issue was whether the payment order
MCB received was in fact authorized by Chavez, thereby negating any liability under
sections 670.204(1) and 670.202(1). The Court has found that Chavez did not in fact
authorize this wire payment order, nor is he bound to that order under any law of
agency. Under section 670.204(1), therefore, “the bank shall refund any payment of
the payment order received from the customer to the extent the bank is not entitled to

enforce payment and shall pay interest on the refundable amount calculated from the
date the bank received payment to the date of the refund.”
Accordingly, at a minimum Chavez is legally entitled to judgment against MCB
under Florida law for the full principal amount of the wire transfer – $329,500.00.
B.
The remaining issue is whether MCB is also bound to refund interest on the
refundable amount calculated from the date the bank received payment to the date of
the refund. This final question also implicates section 670.204 that obligates a bank
customer to report an unauthorized payment order within a reasonable period, not to
exceed 90 days, in order to preserve a claim for interest on the principal amount of the
payment. The parties may, however, shorten this period by agreement. Specifically,
section 670.204(2) provides that a “[r]easonable time under subsection (1) may be fixed
by agreement, but the obligation of a receiving bank to refund payment as stated in
subsection (1) may not otherwise be varied by agreement.” Florida law permits the
parties to vary its provisions and define “reasonable time” so long as the variation is
not manifestly unreasonable. Id. § 671.102(2)(b).
In the Depositor’s Agreement, MCB and Chavez modified § 670.204(1) to require
Chavez to notify MCB of an allegedly unauthorized payment order within 14 days.
Specifically, the Agreement provides, in pertinent part:
6. Statement of Account. . . . The Depositor shall exercise reasonable care
and promptness in examining each statement of account and shall report
to the Bank, within 14 calendar days (60 days for EFT's) after receipt of
such statement, any irregularities found therein, including, but not
limited to, any unauthorized signatures and alterations. Unless the
Depositor notifies the Bank of an irregularity in a statement within 14

days (60 days for EFT's) after receiving it, the Depositor will be deemed
to have admitted its correctness and will have waived any right to object
to it.
[Exhibit P-4].
That same modification is incorporated into the Funds Transfer Agreement that
provides, in pertinent part:
10.
Notifications/Client’s Duty to Report Discrepancies. The Bank
shall mail or deliver to the Client, at the most recent address of the Client
reflected in the Bank’s records, a confirmation or periodic statement
stating the date and amount of each Transfer, and the account to which
the Transfer was made. The Client shall examine such notification and
advise the Bank within a reasonable period of time, not to exceed
fourteen (14) calendar days after the Client receives the confirmation or
statement, whichever is received first, of any unauthorized, duplicate,
erroneous, or erroneously executed Payment Order. The Client’s failure
to timely notify the Bank discharges the Bank of any obligation to pay the
Client interest on any principal amount to be refunded to the Client.
[Exhibit P-5].
There is no dispute that the failure to meet the 14-day notice provision results
in the loss of interest by the bank customer. [D.E. 156 ¶26]. What is at issue, however,
is whether Chavez satisfied that modified notification period. Chavez argues that he
did because he contacted MCB immediately after learning that his account had been
improperly debited two months earlier. Chavez contends that he had no actual notice
of that fact prior to April 2008 because he was not receiving monthly written
statements during that period and he had not reviewed his online records during that
period as well. Because he did not have actual knowledge, he never violated the 14-day
notification period.

We first turn to analyze what Florida law deems to be sufficient notice for
purposes of sections 671.102 and 671.204. Article 4 defines “notice” expressly:
(1) Subject to subsection (6), a person has “notice” of a fact if the person:
(a)

Has actual knowledge of it;

(b)

Has received a notice or notification of it; or

(c)

From all the facts and circumstances known to
the person at the time in question, has reason
to know that it exists.

Fla. Stat. § 671.209(1) (“Notice; knowledge”).
This statutory definition of notice further provides:
(4) A person “notifies” or “gives a notice or notification to” another person
by taking such steps as may be reasonably required to inform the other
person in ordinary course, regardless of whether the other person actually
comes to know of it.
(5) Subject to subsection (6), a person “receives” a notice or notification
when:
(a)

It comes to that person’s attention; or

(b)

It is duly delivered in a form reasonable under the circumstances
at the place of business through which the contract was made or at
another location held out by that person as the place for receipt of
such communications.

Id. § 671.209(4)-(5).

There is no dispute that for the majority of the time that Chavez maintained his
account, MCB had a regular practice of mailing statements. MCB’s position is that it
followed that regular practice continuously until Chavez’s account was closed. The
general rule in a variety of contexts is that evidence of a standard practice of mailing
raises a presumption of receipt. “The common law has long recognized a rebuttable
presumption that an item properly mailed was received by the addressee. The
‘presumption of receipt’ arises upon proof that the item was properly addressed, had
sufficient postage, and was deposited in the mail. The presumption is, of course,
rebuttable.” Konst v. Fla. E. Coast Ry. Co., 71 F.3d 850, 851 (11th Cir. 1996). This
common law presumption may not be rebutted by a mere denial of receipt. See, e.g.,
Barnett v. Okeechobee Hosp., 283 F.3d 1232, 1239 (11th Cir. 2002) (“[T]he common law
has long recognized a rebuttable presumption that an item properly mailed was
received by the addressee. . . . As other courts have noted, a party’s failure to uncover
an item, which it was presumed to have received, does not mean that it never received
the item and does not rebut the presumption of delivery.”); In re Farris, 365 F. App’x
198, 199-200 (11th Cir. 2010) (mere denial of receipt without more insufficient to rebut
presumption of receipt); Rivera v. AT&T Corp., 420 F. Supp. 2d 1312, 1320-21 (S.D.
Fla. 2006) (plaintiffs’ mere denial of receipt of document containing arbitration
agreement not sufficient to overcome presumption of receipt through mailing and
evidence that mail was not returned).
Here, MCB established its regular practice of mailing statements to the address
Chavez provided MCB, and Chavez admitted receiving statements at such an address

before February 2008 and as late as May 2008. There is no evidence that MCB’s
uniform and regularly-followed procedure of mailing Chavez his monthly statements
was terminated or suspended. There is no evidence that the statements at issue were
returned to the sender during any period of time. Under the common law rule,
therefore, we can presume that Chavez received the statements at his Venezuelan
mailing address even though we may find his testimony credible that he never actually
saw or read them at the time.
The common law presumption of receipt has not been superseded in this case by
statute. To the contrary, section 671.209(5) supports a finding on these facts that
Chavez received notification from MCB as to his account status in February 2008. This
provision sanctions a finding of notice where “[i]t is duly delivered in a form reasonable
under the circumstances at the place of business through which the contract was made
or at another location held out by that person as the place for receipt of such
communications.”

That is precisely what we have here because the February

statement of account was delivered by mail, which is reasonable under the
circumstances, to the location that Chavez identified and agreed to contracted for
receipt of communications from MCB.
Relying upon both the common law and the relevant statutory provision, we
have a sound basis to conclude that Chavez was “notified” of the wire transfer in
February 2008, but did not timely challenge the transaction within the 14-day window
he agreed to.
To overcome the legal presumption that he was notified of the transaction,
Chavez’s denials are insufficient. Instead, the burden falls on him to show affirmative

proof of non-receipt. See, e.g., Barnett, 283 F.3d at 1240-41 (citing Bailey v. United
States, 642 F.2d 344, 347 n.1 (9th Cir. 1981) (“[T]he presumption [that the plaintiff's
FTCA claim was received], assuming that it exists, [was] rebutted by proof of
non-receipt”)). Direct testimony of non-receipt, combined with other evidence, may be
sufficient to rebut the presumption. Farris, 365 F. App’x at 200 (citing In re Prescott,
285 B.R. 763, 767 (Bankr. S.D. Ga. 2001) (“The presumption of receipt may be rebutted
. . . by producing evidence which would ‘support a finding of the non-existence of the
presumed fact.’ ”); In re Hobbs, 141 B.R. 466, 468 (Bankr. N.D. Ga. 1992)).
Apart from Chavez’s denials that he did not actually review any statements in
February or March 2008, we have little evidence in the record that shows affirmative
proof of non-receipt. We have no evidence from the bank’s records that suggests that
the documents were never printed or distributed in the normal course. We have no
evidence that the mailing system in Venezuela was shut down during the relevant
period. We have no evidence that any other mail addressed to Chavez did not make
it as well. We only are left to speculate as to why Chavez did not see his statements.
Certainly, speculation lacking affirmative evidence is not sufficient to overcome the
common law and statutory presumptions that support MCB’s position, much like
Chavez’s denials, no matter how credible, are insufficient as well.
This conclusion that Chavez has failed to rebut the presumption of mailing and
receipt is reinforced by the fact that Chavez never took the simple steps necessary to
receive and view his statements online. Tellingly, Chavez did go online with MCB’s
Venezuela affiliate to find his account balance, but this web site did not provide access

to the statements. If it were true that Chavez’s statements were not arriving on a
regular basis, one would expect Chavez to sign up for online statements or to review
his online balance sooner than he did. He did not do so. That only bolsters MCB’s
position that the 14-day notice provision was not satisfied.
Accordingly, Chavez has failed to rebut the presumption that he received his
monthly statements, including the statement for the period ending February 15, 2008,
which would have been mailed well before the end of that month, thereby rendering
untimely his April 14, 2008 claim that the Payment Order was unauthorized. Chavez’s
denials are insufficient to rebut that presumption. Therefore, Chavez received timely
notice of the subject wire for purposes of section 670.204.
This analysis is not without precedent in the Article 4A context. In Covina 2000
Ventures Corp. v. Merrill Lynch, 2008 WL 1821738 (S.D.N.Y. 2008), that district court
entered summary judgment for a financial institution on the entire claim of a customer
who did not timely report unauthorized payment orders. The customer denied receipt
of various account statements mailed to the customer’s address reflecting the debits.
But because mere denials were insufficient to rebut the presumption of receipt, the
customer was unable to rebut that presumption that he received the monthly
statements during the relevant time period. Id. at *1, *4 (“In order to rebut the
presumption, an intended recipient claiming not to have received the notice must
adduce specific evidence that the office procedure was not followed or that the notice
was not received.”).

For similar reasons, we conclude that Chavez did not satisfy his contractual
obligation of providing timely objection to the fraudulent wire transfer. Under section
670.204(1), this conclusion creates an absolute bar to recovering interest:
[T]he customer is not entitled to interest from the bank on the amount to
be refunded if the customer fails to exercise ordinary care to determine
that the order was not authorized by the customer and to notify the bank
of the relevant facts within a reasonable time not exceeding 90 days [as
modified to 14 days, see discussion above] after the date the customer
received notification from the bank that the order was accepted or that
the customer’s account was debited with respect to the order.
Based on the plain language of this provision, Chavez is statutorily precluded
from recovering interest despite satisfying his burden to show that the payment order
was unauthorized.

Chavez, however, citing the official comments to § 670.204,

contends that if the customer fails to satisfy the duty to report, no interest is
recoverable for any part of the period before the bank learns that it accepted an
unauthorized order. In other words, interest would be tolled only through April 2008,
when undisputably MCB learned of the claim.
Chavez’s position is not unreasonable as a factual matter, nor is it without legal
foundation. But an “‘official comment’ is only that—a comment. It has not been
adopted as the law of Florida and is at best persuasive only.” Solitron Devices, Inc. v.
Veeco Instruments, Inc., 492 So. 2d 1357, 1359 (Fla. 4th DCA 1986). Section 670.204
says nothing whatsoever about limiting the loss of interest to the period preceding
notification. Instead, by its plain terms, the customer is “not entitled to interest from
the bank on the amount to be refunded.” The use of the term “not” in that text is
telling, as is the failure to qualify “interest” in any way. The intent of the legislature

is paramount and that intent is to be taken from the ordinary meaning of the words
the legislature chose to use. See id. at at 1359 (declining to conform a different UCC
provision to an official comment because that construction would contradict the
statute’s plain language).3
Because section 670.240 does not limit the forfeiture of interest to any period,
because the wording of the statute is stated in absolute terms, and because no Florida
or other state court decision interpreting this provision holds otherwise, we conclude
that the failure to satisfy the notice requirements bars any recovery of interest here.
See also In re Ludlum Enterprises, Inc., 510 F.2d 996, 999 (5th Cir. 1975) (“Our role in
this case is to define state law [by] considering first, the wording of the statute itself;
second, the title of the statute and the Florida Constitutional provision pertinent to the
title; and third, the interpretation given to similar statutes in other states.”); Fla. Dept.
of Children & Family Servs. v. P.E., 14 So. 3d 228, 234 (Fla. 2009) (“Legislative intent
guides statutory analysis, and to discern that intent we must look first to the language
of the statute and its plain meaning.”); Continental Cas. Co. v. Ryan, Inc. Eastern, 974
So. 2d 368, 374 (Fla. 2008) (“legislative intent is determined primarily from the
[statutory] text”).

3

A federal district court in a diversity case is obligated to apply the law of
that state as it would be applied by the highest court of that state or, absent such
guidance, the court must follow an intermediate state appellate court “unless there is
persuasive evidence that the highest state court would rule otherwise.” Bravo v. United
States, 577 F.3d 1324, 1326 (11th Cir. 2009); see also Newberger v. United States
Marshals Serv., 751 F.2d 1162, 1165 (11th Cir. 1985) (“the interpretations of Florida
statutes by Florida courts, which have long experience in interpreting these statutes,
are entitled to great weight in deciding what Florida law to apply.”).

III. FINAL JUDGMENT
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED as
follows:
A.

Judgment is entered in favor of Plaintiff Roger A. Chavez, and against

Defendant Mercantil Commercebank, N.A., as to the sole count of the Complaint.
B.

Plaintiff Roger A. Chavez shall recover THREE HUNDRED TWENTY

NINE THOUSAND FIVE HUNDRED DOLLARS ($329,500.00) from Defendant
Mercentil Commercebank, N.A., for which sum let execution issue, and for which postjudgment interest shall begin to accrue at the rate of 0.09 percent per annum pursuant
to 28 U.S.C. § 1961. No prejudgment interest shall be awarded.
C.

The Court reserves jurisdiction to enforce this Final Judgment and enter

any other Orders or Judgments contemplated herein or address any matters timely
raised by the parties in accordance with the Federal Rules of Civil Procedure.
D.

This case is now CLOSED.

DONE AND ORDERED in Chambers, Miami, Florida, this 23rd day of May,
2014.

____________________________________
EDWIN G. TORRES
United States Magistrate Judge