IN RE JD SERVICES, INC.
284 B.R. 292 (Bankr.D.Utah 2002)
NATURE OF THE CASE: This was a dispute over a constructive trust.
FACTS: JD Services, Debtor, filed for reorganization on August 24th. On the 28th it
deposited a check for $7,250 into a subsidiary account and Bank of America (P) improperly
coded the check for $725,000. Debtor then wired $800,000 to a new account at First Security.
P noticed the error on September 5th. Debtor and First Security agreed to put a hold on the
$717,750 overage. The court held that Debtor was unjustly enriched by the mistake and that
the funds so held were in constructive trust for P. If the funds in the account were
analyzed by the collected balance method, the lowest intermediate balance would be no less
than $717,750. If analyzed by available balance the lowest intermediate balance would be no
less than $394,460.17. The account balance may have dropped as low as $162,524.28. It is
undisputed that at the end of the day on September 6th, the available balance was
$394,460.47.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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