Mel-Jen, Inc. v. Bank of America CA2/7

DISCUSSION

I. The Court Properly Sustained the Demurrer to Mel-Jen’s Cause of Action for

Negligence. Mel-Jen asserts that the trial court erred in sustaining BofA’s demurrer. Mel-Jen argues that it may assert a common law negligence cause of action against BofA under the principles articulated in Sun ‘n Sand v. United California Bank (1978) 21 Cal.3d 671. As we shall explain, in view of the circumstances of this case, Mel-Jen does not have claims against BofA under the Commercial Code or pursuant to the circumscribed

1 Mel-Jen’s complaint also contained causes of action against its bank, PBOC, alleging claims for violation of Commercial Code section 4401 [unauthorized withdrawals], and common law claims for negligence, misrepresentation, breach of fiduciary duty and the duty to act in good faith, and unjust enrichment. 2 PBOC filed a demurrer to the complaint. The trial court sustained the demurrer without leave to amend as to the common law causes of action, finding that the Commercial Code section 4401 “displaces the common law claims” and was intended to be the “exclusive means for determining the rights, duties and liabilities” of the affected parties in the case. The…