Defendants Hatem and Yousef Akanan are brothers. Both Yousef and Hatem maintained a checking account. In October 2016, the Defendants undertook a series of transfers using their Wells Fargo accounts that resulted in the Defendants improperly obtaining \($100,000\) at Wells Fargo’s expense. To carry out this scheme, Yousef first sent Hatem blank checks linked to Yousef’s Wells Fargo checking account. Then, Yousef directed Hatem to transfer \($97,100\) from Yousef’s Wells Fargo savings account into Yousef’s Wells Fargo checking account. Yousef then directed Hatem to transfer \($100,000\) from Yousef’s Wells Fargo checking account into Hatem’s Wells Fargo checking account via check. Yousef further directed Hatem to withdraw the cash from Hatem’s Wells Fargo checking account and deposit it into an account with another bank.
After Hatem obtained the \($100,000\) from Yousef’s account, Yousef filed a signed and notarized Affidavit of Check Fraud with Wells Fargo, alleging that Hatem stole Yousef’s checks and forged Yousef’s signature on the check. Upon receiving the affidavit, Wells Fargo debited \($100,000\) to Hatem’s Wells Fargo checking account and credited \($100,000\) to Yousef’s Wells Fargo checking account.
After Wells Fargo received the affidavit and credited \($100,000\) to Yousef’s account, Yousef wrote a letter to Wells Fargo stating that when he submitted the Affidavit of Check Fraud, he had forgotten that he gave his brother Hatem authorization to withdraw funds from Yousef’s checking account. Wells Fargo demanded that Yousef return the misappropriated \($100,000,\) but no money was ever returned.
Wells Fargo initiated this action on August 30, 2017. Wells Fargo brought claims against the Defendants under Pennsylvania law for breach of presentment warranties and unjust enrichment.
JUDGE GIBSON Wells Fargo alleges that Defendants breached presentment warranties under the Pennsylvania Commercial Code. Under § 3417, every person that obtains payment on a written instrument makes certain warranties regarding the authenticity and enforceability of the written instrument. Specifically, §
3417

(a) provides that:
[i]f an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, the person obtaining payment or acceptance, at the time of presentment, and a previous transferor of the draft, at the time of transfer, warrant to the drawee making payment or accepting the draft in good faith that:
the warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft;
the draft has not been altered; and the warrantor has no knowledge that the signature of the drawer of the draft is unauthorized. § 3417(a).
If a person obtains payment on a written instrument in violation of§ 3417(a), the drawee-payor (Wells Fargo here) is entitled to recover “for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment.”
Additionally, the drawee is entitled to compensation for expenses “and loss of interest resulting from the breach.”
The plain language of § 3417

(a) indicates that Wells Fargo is entitled to judgment as a matter of law. By presenting the \($100,000\) check to Wells Fargo, Hatem warranted to Wells Fargo under § 3417

(a) that he presented the check in good faith, that he was authorized to obtain payment on the check, and that he had no knowledge that the signature on the check was unauthorized or improper.
There is no genuine dispute that Hatem presented the check to Wells Fargo in bad faith and in violation of the § 3417

(a) presentment warranties. In his deposition, Hatem admitted that he posed as his brother Yousef when he made the series of transfers, withdrawals, and presentments on November 21, 2016.
Hatem admitted that he forged Yousef’s signature on the check. Hatem further admitted that when he signed and cashed the check for \($100,000\) in his own bank account, he was aware that Yousef intended to fraudulently induce Wells Fargo to return the \($100,000\) to Yousef’s account by filing the Affidavit of Check Fraud.
These circumstances unambiguously establish that Defendants acted in bad faith and breached the presentment warranties.
Because there is no genuine dispute of material fact that Defendants breached the § 3417

(a) presentment warranties, Wells Fargo is entitled to damages under§
3417

(b) as a matter of law.
CRITICAL THINKING:
What are the key facts responsible for the court’s decision? Why were those crucial to the decision?
ETHICAL DECISION MAKING:
Think about the ethical theories you were presented with earlier. Part of the above case, and the issue of presentment warranties, is who should bear the burden for a fraudulent check. Which party would a deontologist hold responsible for the cashing of a forged check? What about a consequentialist?