Demello, Jr. v. Bank of America, N.A.

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 9 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT NATIONWIDE LEGAL, LLC, No. 24-3059 D.C. No. Plaintiff - Appellant, 2:23-cv-00599-MEMF-MRW v. MEMORANDUM* JPMORGAN CHASE BANK, N.A., a Nationally Chartered Bank, Defendant - Appellee. Appeal from the United States District Court for the Central District of California Maame Ewusi-Mensah Frimpong, District Judge, Presiding Submitted May 12, 2025** Pasadena, California Before: IKUTA, R. NELSON, and LEE, Circuit Judges. Nationwide Legal, LLC appeals the district court’s order dismissing its negligence claim against JPMorgan Chase Bank, N.A. Nationwide sued Chase after one of Nationwide’s employees stole company funds by changing the payee on * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). company checks and depositing the checks into personal checking accounts at Chase. Nationwide alleges that Chase acted negligently when it permitted Nationwide’s employee to deposit the checks.1 The district court dismissed Nationwide’s claim against Chase after finding that it was barred by the one-year statute of limitations under Section 340(c) of the California Code of Civil Procedure. We have jurisdiction under 28 U.S.C. § 1291, and we review de novo a district court’s dismissal based on statutes of limitations. Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1149 (9th Cir. 2000). We affirm. California state law governs this diversity action, and the California Supreme Court “is the final arbiter of what is state law.” West v. Am. Tel. & Tel. Co., 311 U.S. 223, 236 (1940). We “follow a published intermediate state court decision . . . unless we are convinced that the California Supreme Court would reject it.” Muniz v. United Parcel Serv., Inc., 738 F.3d 214, 219 (9th Cir. 2013). 1. The plain language of Section 340(c) covers Nationwide’s claim. In California, an action “by a depositor against a bank for payment of a forged or raised check” must be filed within one year. Cal. Civ. Proc. Code § 340(c). First, the 1 The district court also dismissed Nationwide’s other two claims against Chase: (1) violation of Section 4401 of the California Commercial Code and (2) breach of contract. Nationwide did not address either of those claims in its opening brief, so we conclude that Nationwide forfeited any arguments regarding those claims. See Ind. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 2003). 2 24-3059 district court correctly found that the checks at issue in this case were “forged” such that Section 340(c) may apply, see Union Tool Co. v. Farmers’ & Merchs.’ Nat’l Bank of Los Angeles, 218 P. 424, 429 (Cal. 1923), and Nationwide does not challenge that finding on appeal. Second, Nationwide’s claim is an action “by a depositor against a bank.” Cal. Civ. Proc. Code § 340(c). We must give the statutory language its “plain and commonsense meaning.” Smith v. LoanMe, Inc., 483 P.3d 869, 872 (Cal. 2021). The plain language of Section 340(c) covers an action brought by a depositor against the bank where the depositor deposits its funds. Nationwide is a depositor with Chase, so Section 340(c) applies to its claim against Chase for “payment of a forged or raised check.” Nationwide points us to a footnote in Roy Supply, Inc. v. Wells Fargo Bank that states Section 340(c) “applies only to an action by a depositor against a payor bank.” 46 Cal. Rptr. 2d 309, 321 n.20 (Ct. App. 1995). Here, Nationwide does not allege that Chase acted negligently in its role as “payor” bank by paying the forged checks. Rather, Nationwide claims Chase negligently accepted the checks from the employee for deposit as the “depositary” bank. But the footnote in Roy Supply stating that Section 340(c) applies only in actions against payor banks is dicta, see 46 Cal. Rptr. at 323 n.25 (explaining that “the statute of limitations issue was not resolved in the trial court and is not at issue 3 24-3059 in this appeal”), and a different lower court

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports. STATE OF MICHIGAN COURT OF APPEALS DART BANK, UNPUBLISHED August 13, 2025 Plaintiff-Appellee, 10:57 AM v No. 368841 Ingham Circuit Court POLLICELLA PLLC, LC No. 23-000495-CB Defendant-Appellant. Before: K. F. KELLY, P.J., and MARIANI and ACKERMAN, JJ. PER CURIAM. Defendant, Pollicella PLLC, was the victim of an advance-fee scam. The money it lost came out of its account with plaintiff Dart Bank. When defendant’s account balance became negative, plaintiff invoked the mediation and arbitration provisions of the agreement governing the account. The arbitrator ruled in favor of plaintiff, and the trial court confirmed the award. We affirm. I. BACKGROUND Defendant is a law firm, and a significant portion of its clients are marijuana businesses. When defendant opened an account with plaintiff, the parties executed a marijuana-related business (MRB) addendum, which included a provision that required arbitration for disputes arising out of the agreement. In 2021, defendant was contacted by a person posing as a client who wanted defendant to broker a sale of heavy machinery. Acting in accordance with its correspondence with this supposed client, defendant deposited several Canadian checks into its account with plaintiff and then wired funds to a New York bank account, which in turn sent the money to an entity in Lagos, Nigeria. Defendant wired approximately $650,000 in total before the first check was rejected as fraudulent. Once the checks were rejected, and accounting for the outgoing wire transfers, defendant’s account had a deficit of $372,859.19. The parties attempted mediation, but it was unsuccessful. They then entered binding arbitration as required by the MRB addendum. The arbitrator awarded $372,859.19 to plaintiff— -1- in effect, holding defendant responsible for the entire loss. When defendant did not pay the award, plaintiff brought an action in the trial court for a judgment against defendant in the amount of the arbitrator’s award as well as attorney’s fees, expert witness costs, and other costs incurred. Plaintiff moved to modify the arbitrator’s award, confirm the award as modified, and enter a corresponding judgment. Defendant moved to vacate the award. The trial court granted plaintiff’s motions and denied defendant’s motion. This appeal followed. II. ANALYSIS “We review de novo a trial court’s decision to enforce, vacate, or modify a statutory arbitration award.” Tokar v Albery, 258 Mich App 350, 352; 671 NW2d 139 (2003). However, “[a] court may not review an arbitrator’s factual findings or decision on the merits.” Police Officers Ass’n of Mich v Manistee Co, 250 Mich App 339, 343; 645 NW2d 713 (2002) (citation omitted). “Instead, a court may only review an arbitrator’s decision for errors of law.” TSP Servs, Inc v Nat’l-Standard, LLC, 329 Mich App 615, 620; 944 NW2d 148 (2019). As a result, notwithstanding our de novo review of the trial court’s decision, “[a] court’s power to modify, correct, or vacate an arbitration award . . . is very limited.” Gordon Sel-Way, Inc v Spence Bros, Inc, 438 Mich 488, 495; 475 NW2d 704 (1991). Defendant raises two arguments, but both rest on the premise that plaintiff had an obligation to protect defendant from its own mistakes and that the arbitrator erred in failing to recognize that obligation. Defendant’s arguments have no merit. A. ARBITRATOR’S AUTHORITY Defendant first argues that the arbitrator exceeded his authority by failing to address the MRB addendum. “The scope of an arbitrator’s remedial authority is limited to the contractual agreement of the parties.” Nordlund & Assoc Inc v Hesperia, 288 Mich App 222, 228; 792 NW2d 59 (2010) (quotation marks and citation omitted). “Arbitrators exceed their power when they act beyond the material terms of the contract from which they primarily draw their authority, or in contravention of controlling principles of law.” Id. (cleaned up). This Court therefore “must apply the same legal principles that govern contract interpretation to the interpretation of an arbitration agreement.” Beck v Park West Galleries, Inc, 499 Mich 40, 45; 878 NW2d 804 (2016). Our primary task in construing a contract is

2025 UT App 102 THE UTAH COURT OF APPEALS VIVINT SOLAR, INC., Appellant, v. JIM LUNDBERG, Appellee. Opinion No. 20230335-CA Filed July 3, 2025 Third District Court, Salt Lake Department The Honorable Richard D. McKelvie No. 200907106 Peggy A. Tomsic, Jennifer Fraser Parrish, and Geoffrey K. Biehn, Attorneys for Appellant Alan C. Bradshaw and Mitch M. Longson, Attorneys for Appellee JUDGE JOHN D. LUTHY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and RYAN D. TENNEY concurred. LUTHY, Judge: ¶1 Jim Lundberg left Vivint Solar, Inc. (Solar) as its associate general counsel after receiving multiple awards of nonrestricted stock options and restricted stock units from Solar. When he left Solar, Lundberg began working for Vivint Smart Home, Inc. (Smart Home), believing that his nonrestricted stock options and restricted stock units would continue to vest. However, when he asked Solar to deliver the stock underlying those equity awards, Solar informed Lundberg that it had canceled the awards when he left Solar for Smart Home. ¶2 After nearly two years of ensuing litigation of claims and counterclaims related to the equity awards—which claims were  Vivint Solar v. Lundberg subject to forum selection agreements requiring litigation of the claims in Utah and Delaware courts—Solar filed an arbitration demand alleging claims of attorney malpractice against Lundberg and citing a mandatory arbitration provision from Lundberg’s separate employment contract with Solar. Lundberg responded by arguing that Solar’s litigation of the equity award claims for nearly two years acted as a waiver of its contractual right to arbitrate its malpractice claims. The district court agreed and issued an order precluding arbitration of Solar’s malpractice claims. ¶3 Solar now appeals, urging four reasons for reversal of the district court’s order. Because we are unpersuaded by any of Solar’s arguments, we affirm the order. BACKGROUND 313 Acquisition Acquires Solar and Smart Home and Lundberg Begins Working for Solar ¶4 In 2012, 313 Acquisition, LLC (313 Acquisition) became the majority owner of both Solar and Smart Home. In May 2014, under the terms of a written employment agreement, Solar hired Lundberg as its associate general counsel. The employment agreement included an incentive in the form of a potential grant to Lundberg of a nonqualified stock option 1 to purchase 30,000 shares of Solar stock. 1. “A non-qualified stock option (NSO) is a type of employee stock option that allows an employee to purchase company shares at a set price (also known as the grant price) within a specified period.” James Chen, What Is a Non-Qualified Stock Option (NSO) and How Is It Used?, Investopedia, https://www.investopedia.com/ terms/n/nso.asp [https://perma.cc/G3MM-J2WV]. 20230335-CA 2 2025 UT App 102  Vivint Solar v. Lundberg The First Equity Award and the 2013 Plan ¶5 In July 2014, Lundberg received the nonqualified option to purchase 30,000 shares of Solar common stock (the First Equity Award). The First Equity Award was governed by Solar’s 2013 Omnibus Incentive Plan and an accompanying nonqualified stock option agreement (collectively, the 2013 Plan). Under the 2013 Plan, as long as Solar met certain performance benchmarks (which it apparently did), the First Equity Award would fully vest in 2019 if at that time Lundberg remained an “individual employed by [Solar] or an Affiliate.” If he ceased to be “employed” by Solar or an “Affiliate” before the First Equity Award vested, Lundberg would forfeit the award. The 2013 Plan defined “Affiliate” to include “any corporation, trade or business [wherein] 50% or more of the combined voting power of such entity’s outstanding securities [was] directly or indirectly controlled by [Solar] or any . . . Parent Corporation.” And “Parent Corporation” was defined to include a corporation that owned “50 percent or more of the total combined voting power of all classes of stock” in another corporation. The 2013 Plan also contained the following forum selection provision: “Any suit, action or proceeding with respect to this Plan . . . shall be brought exclusively in any court of competent jurisdiction in Salt Lake City, Utah.” The New Employment Agreement ¶6 In September 2014, Lundberg signed a new employment agreement with Solar (the Employment Agreement). Under the Employment Agreement, Solar and Lundberg agreed that “any and all controversies, claims, o