Breach of contract; Statutory conversion; Automated Clearing House (ACH)

The court concluded the trial court did not err by granting defendant-Huntington’s summary disposition motion and dismissing plaintiff-Garco’s breach-of-contract claim under MCR 2.116(C)(10). But it held that because conflicting evidence was presented as to Huntington’s “retention of funds fraudulently debited from Garco’s account, the trial court erred, on the current record, by granting” Huntington summary disposition on the statutory-conversion claim. The case arose “out of a series of fraudulent transactions that debited funds from Garco’s commercial bank account at” Huntington. The trial court did not err by granting Huntington’s summary disposition motion and dismissing Garco’s common-law breach-of-contract claim under MCR 2.116(C)(10) because Garco failed to establish a genuine issue of material fact as to whether there was a breach of contractual duty. “In response to Huntington’s summary disposition motion, Garco proffered two documents that Huntington purportedly breached. The first document was Garco’s corporate resolution to open and maintain a bank account at Huntington. The corporate resolution addressed Huntington’s designation as Garco’s bank and the individuals authorized to transact on Garco’s behalf. The second document was an authorization and agreement for Garco’s receipt of Huntington’s treasury management services. The authorization incorporated by reference a separate treasury management services agreement and provided that Garco declined to implement Huntington’s recommended dual-authorization security procedure for ACH transactions. Neither document addressed Huntington’s obligations in the event of one or more unauthorized transactions debiting funds from Garco’s account. And Garco failed to identify any provision of the separate treasury management services agreement that it claims Huntington breached.” As a result, Garco “failed to establish a genuine issue of material fact as to whether Huntington breached any of the parties’ alleged contracts.” However, the court determined that “Garco established a genuine issue of material fact as to whether Huntington retained and possibly thus converted a portion of the funds fraudulently debited from Garco’s account to its own use.” Affirmed in part, reversed in part, and remanded.