URS CH2M Oak Ridge LLC v. Bank of New York Mellon (TV3)
Filing
25
MEMORANDUM OPINION. Signed by Chief District Judge Thomas A Varlan on 9/26/16. (JBR)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
URS CH2M OAK RIDGE, LLC,
Plaintiff,
v.
THE BANK OF NEW YORK MELLON,
Defendant.
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No.: 3:15-CV-465-TAV-CCS
MEMORANDUM OPINION
This civil matter is before the Court on the motion to dismiss of defendant The
Bank of New York Mellon (“BNYM”) [Doc. 5]. Plaintiff URS CH2M Oak Ridge, LLC
(“UCOR”) responded in opposition [Doc. 15]; BNYM replied in turn [Doc. 17]. Also
before the Court is UCOR’s request for a hearing on the motion to dismiss [Doc. 18].
BNYM responded in opposition to the request [Doc. 10]. To date, plaintiff has yet to file
a reply and the time in which to do so has passed. E.D. Tenn. L.R. 7.1, 7.2. For the
reasons that follow, the motion for hearing [Doc. 18] will be denied and motion to
dismiss [Doc. 5] will be granted.
I.
Background1
On or about August 1, 2011, UCOR entered into an agreement naming BNYM
trustee of the defined benefit plan for the grandfathered employees of the east Tennessee
1
For the purposes of the motion to dismiss, the Court takes plaintiff’s factual allegations
as true. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (noting that “when ruling on a
defendant’s motion to dismiss, a judge must accept as true all factual allegations contained in the
complaint” (citations omitted)).
Technology Park Pension Plan (“Trust Agreement”) [Doc. 1-1 ¶ 6; Doc. 5-2].2 Under the
Trust Agreement, BNYM was responsible for handling retiree pension payrolls,
withholding retiree insurance premiums owed to service providers, and remitting checks
to UCOR for the sum total of the premium withholdings [Doc. 1-1 ¶ 6]. UCOR was
responsible for funding the plan, paying benefits to qualified recipients, and delivering
the remitted premium withholdings to the insurance providers [Id.]. As trustee, BNYM
agreed to hold assets of the benefit plan “for the purposes of providing health, welfare[,]
and pension payments . . . to [p]lan participants and their beneficiaries” [Id. ¶ 7]. The
parties further contracted “that none of the funds [BNYM] received [under the Trust
Agreement] could be used . . . [for] any purpose other than [to] benefit” the plan
beneficiaries or be paid to “any person or entity” other than UCOR [Id.].
On June 6, 2012, in accordance with the terms of the Trust Agreement, BNYM
negotiated five checks for a total of $214,022.59 [Doc. 1-1 ¶ 9; Doc. 5-1]. Each check
listed UCOR’s predecessor in interest, Bechtel Jacobs, as named payee and included the
following language under the phrase “endorse here” on the reverse side of the instrument:
2
While matters outside the pleadings are generally not considered when ruling on a Rule
12(b)(6) motion, the Court is permitted to consider certain pertinent documents as “part of the
pleadings” when the documents are attached to the motion to dismiss, referred to in the
plaintiff’s complaint, and central to a claim. Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th
Cir. 1997) (quoting Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.
1993)). “Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss
simply by failing to attach a dispositive document upon which it relied.” Id. Here, UCOR
referenced the checks and Trust Agreement throughout its complaint [Doc. 1-1]. BNYM
attached the both sets of documents to its motion to dismiss [Docs. 5-1, 5-2], and the contents of
the both sets of documents are central to resolution of UCOR’s claims. The Court therefore
considers the documents in its analysis.
2
“DEPOSIT TO THE ACCOUNT OF THE WITHIN NAMED PAYEE. This benefit is
payable only to the payee named on the reverse side of this instrument” [Doc. 5-1].
Despite BNYM forwarding the checks to Bechtel Jacobs, they never reached
UCOR [Doc. 1-1 ¶ 10]. Instead, the checks came into the possession of a stranger to the
transaction who then deposited the same into an account at Enrichment Federal Credit
Union (“EFCU”) [Id.].
EFCU accepted the deposit despite the language limiting
payment of the checks “to the [named] payee” and the absence of an endorsement from
Bechtel Jacobs or successor in interest UCOR [Id.]. Shortly thereafter, EFCU—the
depositary bank—presented all five checks to BNYM—the drawee and payor bank [Id. ¶
11].3 Despite the circumstances outlined above, BNYM honored the checks in full [Id.].
At some point after BNYM made payment to EFCU, UCOR notified BNYM that
the checks it honored were “most likely stolen and deposited to the account of a stranger”
[Id. ¶ 15]. In an attempt to ensure that plan coverage continued uninterrupted, UCOR
paid the full value of the remitted premiums to insurer, Aetna, out of its own funds. [Id.].
UCOR filed the instant action in the Circuit Court for Anderson County,
Tennessee in August of 2015 [Doc. 1-1]. The complaint contains the following causes of
action against BNYM: (1) common law negligence (“Claim One”); (2) common law
3
The “drawee” is the “person ordered in a draft to make a payment.” Tenn. Code Ann. §
47-3-103(a)(4). Here, the checks ordered BNYM to pay an amount to Bechtel Jacobs, the
designated payee [Doc. 5-1]. Therefore, BNYM is the drawee bank.
The “depositary bank” is “the first bank to take an item even though it is also the payor bank,
unless the item is presented for immediate payment over the counter.” Tenn. Code Ann. § 47-4105(2). The “payor bank” is the “bank that is the drawee of a draft.” Id. § 47-4-105(3). Here,
EFCU was the bank with which the stranger deposited the checks and therefore the depositary
bank. BNYM, the drawee bank, is also the payor bank.
3
conversion (“Claim Two”); (3) common law breach of contract (“Claim Three”); (4)
common law breach of duty of good faith and fair dealing (“Claim Four”); (5) “strict
liability” under the Tennessee Uniform Commercial Code (“TUCC”) (“Claim Five”); and
(6) common law breach of fiduciary duty (“Claim Six”) [Id. ¶¶ 19–49]. All six theories
focus on BNYM’s decision to honor the unendorsed checks and seek damages equal to
the value of the same, $214,222.59 [Id.]. Two months after UCOR filed the action, BNYM
removed it to the United States District Court for the Eastern District of Tennessee.
II.
Request for a Hearing and Oral Argument
In addition to BNYM’s motion to dismiss, the Court is in possession of UCOR’s
request that the matter be set “for oral argument so that the parties can fully advise the
[C]ourt of the issues” and “provide any other information the [C]ourt may find useful in
reaching its decision” [Doc. 18 p. 2]. BNYM argues no hearing is necessary [Doc. 20].
The Court’s preferences regarding oral argument on motions provide that the
Court: “considers requests for oral argument on a case by case basis and may set a motion
for oral argument even absent a request by the parties.” Where the request is made by
one of the parties, granting that motion is entirely at the Court’s discretion. Nam v. U.S.
Xpress, Inc., No. 1:11-cv-116, 2012 WL 10161528, at *8 (E.D. Tenn. June 25, 2012).
For the reasons discussed herein, the Court finds that UCOR and BNYM have
briefed the matter in a manner that makes additional argument unnecessary. Because the
Court is capable of resolving the matter without a hearing and because UCOR has failed
to identify what, if any, benefit oral argument would provide, the request will be denied.
4
III.
BNYM’s Motion to Dismiss
BNYM moves to dismiss all claims contained in UCOR’s Complaint.
A.
Standard of Review
Federal Rule of Civil Procedure 8(a)(2) sets out a liberal standard, Smith v. City of
Salem, 378 F.3d 566, 576 n.1 (6th Cir. 2004), requiring only “‘a short and plain statement
of the claim showing that the pleader is entitled to relief,’ in order to ‘give the [opposing
party] fair notice of what the . . . claim is and the grounds upon which it rests,’” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47
(1957)). Detailed factual allegations are not required, but a party’s “obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions.”
Twombly, 550 U.S. at 555. “[A] formulaic recitation of the elements of a cause of action
will not do,” neither will “naked assertion[s]’ devoid of ‘further factual enhancement[,]”
nor “an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555, 557).
Motions to dismiss pursuant to Rule 12(b)(6) are uniformly directed at the
complaint itself. When faced with such a motion, courts must construe the complaint in
the light most favorable to the plaintiff, accept all factual allegations as true, draw all
reasonable inferences in favor of the plaintiff, and determine whether the complaint
contains “enough facts to state a claim to relief that is plausible on its face.” Twombly,
550 U.S. at 570; Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citation
omitted). “A claim has facial plausibility when the plaintiff pleads factual content that
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allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. “Determining whether a complaint states a
plausible claim for relief will [ultimately] . . . be a context-specific task that requires th[is
Court] to draw on its judicial experience and common sense.” Id. at 679.
B.
Analysis
BNYM articulates two arguments in favor of dismissal. First, BNYM argues that
all five of UCOR’s common law causes of action are displaced by the TUCC and that the
sole remaining claim—which UCOR suggests should be construed as an action for
conversion under Tennessee Code Annotated § 47-3-410—is barred by expiration of the
statute of limitations contained in Tennessee Code Annotated § 47-3-118(g) [Doc. 6 pp.
2, 5–10]. In alternative, should the Court determine that the breach of contract, duty of
good faith and fair dealing, and fiduciary duty claims are not displaced, BNYM argues
that UCOR has failed to allege the facts necessary for success on those claims [Id. at 10–
14]. Because the Court agrees with the former, it finds that it need not opine on the latter.
1.
Displacement of Common Law Causes of Action
“The drafters of the [T]UCC set out to preserve and, where necessary, clarify and
conform the law [of] merc[antilism] with modern commercial practice.”
C-Wood
Lumber Co. v. Wayne Cty. Bank, 233 S.W.3d 263, 280 (Tenn. Ct. App. 2007) (citing
Tenn. Code Ann. § 47-1-102 cmt. 1).4 While the TUCC does not purport to codify the
entire body of law affecting the rights and obligations of parties to commercial
4
For purposes of the instant action, all relevant provisions of the TUCC are identical to
their sister provisions with the model UCC code.
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transactions, it does constitute “the primary source of commercial law rules for the areas
it governs because it represents the considered choices of its drafters and of the
Tennessee General Assembly about the appropriate policies to be furthered in the
transactions it covers.” Id. These policies include: (1) simplification, clarification, and
modernization of the law governing commercial transactions; (2) facilitation of the
continued expansion of commercial practices through custom, usage, and agreement; and
(3) imposition of a uniform set of rules among the various jurisdictions. Id. at 280–81.
“The question of whether the [T]UCC has displaced other principles of law and
equity in a given situation is one that must be decided in each case.”
Dean v.
Commonwealth Bank & Tr. Co., 434 S.W.3d 489, 506 (Ky. 2014) (citation omitted). “A
common law claim is displaced when the [T]UCC ‘provides a comprehensive remedy for
the parties to a transaction.’” Crawford v. JP Morgan Chase Bank, N.A., No. 08-cv12634, 2009 WL 1913415, at *5 (E.D. Mich. June 30, 2009) (quoting New Jersey Bank v.
Bradford, Inc., 690 F.2d 339, 346–47 (3rd Cir. 1982)); see also C-Wood Lumber Co., 233
S.W.3d at 281 (noting that “the prevailing view now is that when the UCC provides a
comprehensive remedy for the parties to a transaction, common-law and other non-Code
claims and remedies should be barred”).
The TUCC provides a comprehensive remedy, and thus displaces parallel common
law causes of action, wherever (1) the claim under the TUCC “would be rendered
meaningless by allowing the common law claims” or (2) “reliance on the common law
would thwart the purposes of [adopting the uniform provision].” Crawford, 2009 WL
7
1913415, at *5 (citations omitted). The Tennessee Supreme Court has made clear that
“courts dealing with ‘hard cases’ should be hesitant to recognize common law . . . claims
or to employ common law . . . remedies in the mistaken belief that they are dealing with
one of the rare transactions not covered by the [TUCC].” C-Wood Lumber Co., 233
S.W.3d at 281.
“Articles 3 and 4 of the [T]UCC embody a delicately balanced statutory scheme
governing the endorsement, negotiation, collection and payment of checks.” Id. The
provisions “provide discrete loss-allocation rules uniquely applicable to banks” and,
while “not comprehensive, [are] nearly so.” Id. Relevant here, the TUCC provides that
“[t]he law applicable to conversion of personal property applies to instruments,” that a
check qualifies as an instrument, and, as a result, that a check “is converted if . . . a bank
makes or obtains payment with respect to the instrument for a person not entitled to
enforce the instrument or receive payment.” Tenn. Code Ann. § 47-3-420(a); see also Id.
§§ 47-3-104(e), (f) (defining “instrument” as “negotiable instrument” and check as a type
of “negotiable instrument”).
All five of UCOR’s common law causes of action ground liability in BNYM’s
decision to honor unendorsed checks presented by a depositary back that improperly
accepted the same from an individual other than the named payee [Doc. 1–1 ¶¶ 19–49].
In Claims One and Two, UCOR alleges that BNYM’s decision to honor the
checks amounted to a deviation from the standard of care established by “state and
federal laws” [Id. ¶¶ 19–23], and resulted in a conversion of funds rightfully due to
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UCOR [Id. ¶¶ 24–28]. The express language of Tennessee Code Annotated § 47-3-420
makes clear that the law applicable to the conversion of personal property is intended to
apply under the TUCC and that a bank commits a conversion within the meaning of that
provision when it makes payment on a check to someone other than the lawful holder.
The fact that other provisions of the TUCC specifically address what, if any,
impact negligence has on the obligations of a payor bank, Tenn. Code Ann. § 47-3-406,
leads the Court to conclude that the Tennessee General Assembly intended the TUCC
conversion provision to govern even in those cases where the improper payment of a
check amounts to a deviation from professional banking standards. Because, at their
core, UCOR’s common law conversion and negligence claims hinge on the propriety of
BNYM’s decision to honor the unendorsed checks and because the TUCC articulates a
specific set of loss-allocation rules for injuries arising from improper payment of checks,
the latter would be rendered meaningless if Counts One and Two were allowed to
proceed. See, e.g., Bucci v. Wachovia Bank, N.A., 591 F. Supp. 2d 773, 780 (E.D. Pa.
2008) (“Permitting a parallel common law conversion claim where recovery is
specifically provided for by the [PUCC] would render the [PUCC] meaningless.”); CWood Lumber Co., 233 S.W.3d at 281–82 (explaining that conversion and negligence
claims were displaced where the plaintiff grounded liability in the defendant bank’s
decision to honor checks upon presentment); Am. Liberty Ins. Co. v. AmSouth Bank, 825
S.2d 786, 796 (Ala. 2002) (finding conversion claim based “upon payment of an
instrument” was specifically addressed by the AUCC and thus displaced).
9
In Counts Three, Four, and Six, UCOR argues that payment of the checks
amounted to a breach of contractual and fiduciary obligations, i.e., BNYM’s promise to
ensure that funds held under the Trust Agreement were “properly paid” to UCOR [Doc.
1-1 ¶¶ 29–37], and fiduciary obligation under the same to avoid the “diversion
of . . . funds intended for [plan beneficiaries]” [Id. ¶¶ 38–49]. Again, the claims focus on
a single instance of conduct—BNYM’s decision to honor the checks. Because parallel
breach of contract and fiduciary duty claims would frustrate a core principle supporting
adoption of the uniform code, the Court finds that it need not address whether recognition
of those claims would render one or more of the provisions of the TUCC redundant.
It is well established that a key goal of the uniform commercial code is to establish
uniformity among state commercial laws, thereby easing transactional costs.
See
Menichini v. Grant, 995 F.2d 1124, 1231 (3d Cir. 1993) (noting that “uniform application
of legal principles . . . is a fundamental objective of the Code”).
Displacement of
common law claims by a comprehensive statutory scheme promotes interstate commerce
by allowing business to rely on one set of loss-allocation rules. Id.
While Tennessee has a six-year statute of limitations for contract actions, Tenn.
Code Ann. 28-3-109(a)(3), other states have different schemes. See, e.g., Hansen v.
Stanley Martin Cos., 585 S.E.2d 567, 573 (Va. 2003) (noting the difference between
Virginia’s five-years statute of limitations for breach of contract claims and Maryland’s
three-year statute of limitations). Allowing parallel claims for breach of contract and
fiduciary duty where the alleged breach resulted from a drawee bank’s decision to honor
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checks presented by a depositary bank would permit the application of non-uniform state
law statutes of limitations and condone the use of creative pleading to circumvent the
uniform loss-allocation scheme envisioned by the drafters of the uniform code. See
Menichini, 995 F.2d at 1231 (“The finality of transactions promoted by an ascertainable
definite period of liability is essential to the free negotiability of instruments on which
commercial welfare so heavily depends.” (internal citation omitted)).
Because the TUCC provides a comprehensive remedial scheme for the duties and
obligations related to the payment of checks and because the purpose of a uniform code
“cannot be served if parties [are allowed to] avoid the requirements of the [that code] by
pleading common law cause of action along with [uniform code] claims for the same
alleged transgressions,” Metz v. Unizan Bank, 416 F. Supp. 2d 568, 582 (N.D. Ohio
2006), Counts Three, Four, and Six are displaced. See Envtl. Equip. & Serv. Co. v.
Wachovia Bank, N.A., 741 F. Supp. 2d 705, 712–16 (E.D. Pa. 2010) (finding that breach
of contract and breach of the duty of good faith and fair dealing claims were displaced
where the claims disturbed the uniform loss-allocation scheme established by the PUCC);
Ajjarapu v. AE Biofuels, Inc., 728 F. Supp. 2d 1154, 1164 (D. Colo. 2010) (finding that
CUCC “displace[d] . . . common law tort claims of conversion and breach of fiduciary
duty.”); Dean, 434 S.W.3d at 509–10 (rejecting the plaintiff’s attempt to recast the
KUCC claim—improper payment of a check—as claims for breach of contract and
diversion of funds); see also Crawford, 2009 WL 1913415, at *6 (finding the MUCC
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displaced common law breach of contract claim where recognition would “undermine the
purpose of the code”).
Because Counts One, Two, Three, Four, and Six are displaced by the TUCC, those
causes of action will be dismissed as a result of UCOR’s failure to state a viable claim.
2.
Proper Characterization of UCOR’s TUCC Claim
In the sole remaining cause of action—Count Five, UCOR seeks to hold BNYM
“strictly liable . . . for conversion” [Doc. 1-1 ¶¶ 38–44]. In support of its claim, UCOR
cites numerous provisions of the TUCC, including provisions addressing: (1) lost,
destroyed, or stolen certified checks, Tenn. Code Ann. § 47-3-312(b); (2) claims to an
instrument, Tenn. Code Ann. § 47-3-306; (3) enforcement of a stolen instrument, Tenn.
Code Ann. § 47-3-309; (4) unauthorized signatures, Tenn. Code Ann. § 47-3-403; and (5)
negligence contributing to a loss, Tenn. Code Ann. § 47-3-406 [Id. ¶¶ 41, 42].
To the extent that UCOR suggests that BNYM should be held liable for failing to
make payment on a missing check under Tennessee Code Annotated § 47-3-312 [Id. ¶
42], the Court disagrees. UCOR alleges that a stranger deposited all five checks into a
private account [Id. ¶¶ 9–11], and asserts that BNYM made payment on those checks
when they were presented by EFCU—the depositary bank that accepted the same without
an endorsement by the named payee [Id. ¶¶ 41–42]. The instant case is not one in which
the designated payee on a misplaced or missing check, having adequately proven its
content and existence, seeks payment on that check. Instead, this is a case in which the
rightful holder of a check seeks to hold the drawee bank liable for making payment to a
12
party that was not entitled to receive it. The Court interprets Count Five as one for
conversion under Tennessee Code Annotated § 47-3-420. See Tenn. Code Ann. § 47-3420 cmt. 1 (describing UCOR’s scenario as a conversion claim under the TUCC that may
be brought against both the depositary bank—EFCU—and payor bank—BNYM)].
3.
Applicable Statute of Limitations
After arguing that UCOR’s strict liability conversion claim should be interpreted
as an action for conversion under Tennessee Code Annotated § 47-3-420, BNYM argues
that the claim is barred by expiration of the three-year statute of limitations in Tennessee
Code Annotated § 47-3-118(g) [Doc. 6 pp. 8–10; Doc. 17 pp. 3–6]. UCOR articulates
two arguments in response. First, UCOR argues that the dispute involves failure to pay
“an accepted check other than a certified check” and thus is governed by the six-year
statute of limitations under Tennessee Code Annotated § 47-3-118(f) [Doc. 15 pp. 6–7].
In alternative, because the “gravamen” of the action lies in breach of the Trust
Agreement, UCOR suggests that the Court apply the six-year statute of limitations
applicable to common law breach of contract actions under Tennessee Code Annotated §
28-3-109(a)(3) [Id. at 7–8]. Upon review, the Court agrees with BNYM.
Subsection (g) of Tennessee Code Annotated § 47-3-118 provides that “an action
for conversion of an instrument . . . must be commenced within three years after the
cause of action accrues.” Tenn. Code Ann. § 47-3-118(g). The sole remaining claim—
Count Five, which this Court has interpreted as an attempt to hold BNYM liable for
making payment on a check to a party not entitled to relieve that payment, i.e.
13
conversion, falls squarely within the scope of that provision. Pero’s Steak & Spaghetti
House v. Lee, 90 S.W.3d 614, 620 (Tenn. 2002).
To the extent UCOR urges the Court to apply the six-year statute of limitations set
forth in Tennessee Code Annotated § 47-3-118(f), it declines to do so. Subsection (f) of
Tennessee Code Annotated provides a six-year window for bringing an “action to enforce
the obligation of a party to pay an accepted draft, other than a certified check.” Tenn.
Code Ann. § 47-3-118(f). There are two reasons that the provision is inapplicable here.
First, UCOR is not suing BNYM to enforce an obligation for BNYM to pay an
unpaid, accepted check. To the contrary, UCOR is suing BNYM to recover the full value
of the five checks that it claims BNYM “converted” by improperly making payment on
the same to an individual who was not entitled to receive such payment.
Second, the checks presented by EFCU were not “accepted drafts.” Although
checks are a type of “draft,” Tenn. Code Ann. § 47-1-104(f), “acceptance” of a draft
requires that the “drawee sign[] [an] agreement to pay [the] draft as presented” and
“becomes effective when notification pursuant to instructions is given or the accepted
draft is delivered for the purpose of giving rights on the acceptance to any person,” Tenn.
Code Ann. § 47-3-409(a). Further, the agreement to accept a draft “must be written on
the draft.” Id. Here, BNYM—not EFCU—is the drawee and nothing in the complaint
suggests that BNYM ever “accepted” the five checks by way of a written agreement,
much less an agreement displayed or inscribed on the checks themselves [Doc. 1-1; Doc.
5-1]. Even if the parties had executed such an agreement, BNYM’s status as a bank
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would have converted any accepted check into a certified check. See Tenn. Code Ann. §
47-3-409(d) (explaining that any time a bank “accepts a check,” i.e., when a bank turns a
check into an “accepted check,” the check becomes a “certified check”).
Thus,
Tennessee Code Annotated § 47-3-118(f), which expressly limits its application to
accepted drafts “other than certified drafts,” is inapplicable.5
The Court declines UCOR’s alternative request as well [Doc. 15 pp. 7–8]. As
previously discussed, UCOR’s parallel actions for breach of contract and fiduciary duty
are displaced, see supra III. B. 1., and UCOR’s sole remaining TUCC claim constitutes
an action for conversion under Tennessee Code Annotated § 47-3-420(a), see supra III.
B. 2. UCOR has failed to cite, and the Court is unaware of, any authority that supports
foregoing application of a TUCC statute of limitations in favor of the longer, general
statute of limitations applicable to a displaced common law claim. See Lopez v. SunTrust
Bank, No. 3:13-cv-01216, 2014 WL 7238645, at *6 (M.D. Tenn. Dec. 17, 2014) (finding
breach of contract claim displaced by parallel claim under the uniform commercial code
and applying the statute of limitations applicable to the latter).
The three-year window for requesting timely relief under Tennessee Code
Annotated § 47-3-118(g) begins to run from the time that a converted check is negotiated.
Lee, 90 S.W.3d at 620. In the instant case, BNYM negotiated all five of the checks in
5
The TUCC provides a three-year statute of limitations for actions that attempt to enforce
an obligation to pay a certified check. See Tenn. Code Ann. § 47-1-118(d) (“An action to
enforce the obligation of the acceptor of a certified check . . . must be commenced within three
years after demand for payment is made to the acceptor.”). Because the three year statutory
period for enforcing certified checks mirrors the window for filing an action for conversion,
Tenn. Code Ann. § 47-3-118(g), the Court need not determine which provision applies.
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June of 2012 [Doc. 5-1]. UCOR did not bring suit against BNYM for conversion until
August of 2015—several months after expiration of the three-year window for requesting
relief under Tennessee Code Annotated § 47-3-118(g) [Doc. 1-1]. Because the statutory
action for conversion—Count Five in the complaint—is barred by operation of Tennessee
Code Annotated § 47-3-118(g), it will be dismissed.6
IV.
Conclusion
For these reasons, UCOR’s request for a hearing and oral argument [Doc. 18] will
be DENIED. BNYM’s Motion to Dismiss [Doc. 5] will be GRANTED and this case
will be DISMISSED. The Clerk of Court will be DIRECTED to CLOSE the case.
ORDER ACCORDINGLY.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
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To the extent that UCOR requests that the Court grant it leave to amend the complaint
to avoid dismissal for the grounds raised in BNYM’s motion to dismiss, the request will be
denied. The sole non-displaced cause of action—UCOR’s claim for conversion under Tennessee
Code Annotated § 47-3-420—is patently barred by the statute of limitations contained in
Tennessee Code Annotated § 47-3-118(g). As such, no amendment would save it. See, e.g.,
Lopez, 2014 WL 7238645, at *6–7.
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