United States Court of Appeals For the Seventh Circuit ____________________ No. 22-3163 APPROVED MORTGAGE CORPORATION, Plaintiff-Appellant, v. TRUIST BANK, formerly known as SUNTRUST BANK, Defendant-Appellee. ____________________

Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:22-cv-00633 — Jane Magnus-Stinson, Judge. ____________________

ARGUED SEPTEMBER 20, 2023 — DECIDED JUNE 28, 2024 ____________________

Before RIPPLE, JACKSON-AKIWUMI, and LEE, Circuit Judges. RIPPLE, Circuit Judge. Before Approved Mortgage Corpora- tion (“Approved Mortgage”) could initiate two wire transfers, the instructions for the transactions were altered surrepti- tiously by a third party. Truist Bank (“Truist”), formerly known as SunTrust Bank, ultimately received the transfers, deposited the funds into an account it previously had flagged as suspicious, and then allowed the withdrawal of a half-mil- lion dollars in cashier’s checks from that account. 2 No. 22-3163

With the funds unrecoverable, Approved Mortgage brought this action against Truist, seeking damages in the amount of the transfers. Approved Mortgage asserted two claims under Section 207 of Article 4.1 of the Indiana Uniform Commercial Code (“UCC”), which governs the rights, duties, and liabilities of banks and their customers with respect to electronic funds transfers. It also asserted a common law neg- ligence claim. The district court dismissed the Section 207 claims for lack of privity between Approved Mortgage and Truist. The court dismissed the negligence claim as preempted by Article 4.1. 1 Approved Mortgage’s Section 207 claims were properly dismissed. Section 207 does not establish an independent remedy. It must be read with Section 402 and, under Section 402, a sender is entitled to a refund only from the bank which received its payment. The district court erred, however, in its dismissal of Approved Mortgage’s negligence claim. To the extent that the negligence claim arises from Truist’s issuance of the cashier’s checks after Truist credited the funds to the suspicious account, the claim is not preempted by Article 4.1. We therefore affirm in part and reverse in part the judg- ment of the district court. The case is remanded to the district court for further proceedings consistent with this opinion.

1 The jurisdiction of the district court is predicated on its diversity juris- diction. See 28 U.S.C. § 1332. No. 22-3163 3

I BACKGROUND A. Because this case comes to us from the district court’s grant of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, we present the facts as alleged in Approved Mortgage’s amended complaint. Approved Mortgage is a mortgage originator that pro- vides loans to residential and commercial customers. In the summer of 2021, Approved Mortgage received payoff re- quests from two of its customers. These customers directed, in both situations, that the payments be made to Huntington Mortgage Company (“Huntington”). Before Approved Mort- gage acted on these requests, however, the instructions for both payoffs were altered by unknown perpetrators who had accessed illegally Approved Mortgage’s system. These hack- ers had modified the wire instructions to substitute SunTrust Bank, Truist’s former name, as the beneficiary instead of Hun- tington. Approved Mortgage therefore unwittingly provided these altered wire instructions to MVP National Title Company (“MVP Title”) when it sought to fulfill the payoff req