State Street Bank International, defendant and third party plaintiff-appellant, appeals from a judgment entered in the United States District Court for the Southern District of New York (Owen, J.) in favor of plaintiff-appellee Middle East Banking Company ("MEBCO"). MEBCO claimed in the district court that State Street breached its contract of deposit with MEBCO. MEBCO sought recovery of one million dollars transferred by Citibank to MEBCO's account at State Street, which State Street subsequently, and without authorization, returned to Citibank. The district judge awarded MEBCO $536,601.83 — an amount representing the total withdrawals MEBCO had honored against the transferred funds, and $144,133.83 in prejudgment interest. MEBCO cross-appeals from the judgment, seeking to recover the full one million dollars it originally claimed.
State Street also appeals from dismissal of its complaint against third party defendants Citibank and Saudi American Bank, Al-Khobar ("SAMBA"). State Street asserted claims for indemnification or contribution, contending that the third party defendants improperly had induced the return of the funds in question through use of interbank electronic funds transfer rules. State Street also asserted claims of tortious conversion against both Citibank and SAMBA, and brought actions for breach of contract, misrepresentation, and money had and received against Citibank. Concluding that no wrongful inducement had occurred, Judge Owen dismissed all third party claims against Citibank and SAMBA.
We affirm as to the finding of State Street's liability to MEBCO and as to the dismissal of the third party complaint. We vacate and remand for recalculation of damages awarded to MEBCO.
Miner '56, Roger J., "Middle East Banking v. State Street Bank Intern., 821 F. 2d 897 - Court of Appeals, 2nd Circuit 1987" (1987). Circuit Court Opinions. 62.