Submitted November 18, 2015
[Copyrighted Material Omitted]
Appeal from United States District Court for the District of Minnesota - Minneapolis.
For Rent-A-Center East, Inc., Appellant: Paul Laurin Ratelle, Nathan R. Sellers, FABYANSKE & WESTRA, Minneapolis, MN.
For Brian F. Leonard, Trustee, Appellee: Matthew R. Burton, Andrea M. Hauser, LEONARD & O'BRIEN, Minneapolis, MN.
Brian F. Leonard, Trustee, Appellee, Pro se, Minneapolis, MN.
Before SMITH, BYE, and BENTON, Circuit Judges.
BENTON, Circuit Judge.
WEB2B Payment Solutions, Inc. provided automated clearinghouse and electronic-check conversion services to Rent-A-Center East, Inc. (" RAC" ). In 2011, WEB2B filed for bankruptcy. North American Bank turned over WEB2B's balances to the Chapter 7 trustee, Brian F. Leonard. RAC filed a complaint, claiming $801,378.76 of the balances as an express trust, resulting trust, or constructive trust. The Bankruptcy Court dismissed RAC's claims, granting summary judgment to the Trustee. The District Court affirmed. RAC appeals. Having jurisdiction under 28 U.S.C. § 158(d)(1), this court affirms.
RAC's primary business is renting furniture and appliances. For check-processing, RAC made a Processing Client Agreement with WEB2B in March 2007. For about 100 customers, including RAC, WEB2B provided automated clearinghouse, electronic-check conversion, credit verification, and credit-card services.
The Processing Agreement prescribed how checks are processed: WEB2B " has contracted with a financial institution where [WEB2B] maintains an account on behalf of third parties such as [RAC] to accept electronic credit and debit entries for [RAC]." WEB2B permitted RAC " to initiate electronic signals for paperless credit and debit entries through the Processor [WEB2B] to accounts maintained by [RAC] at one or more Originating Depository Financial Institutions (ODFIs) and in other banks and financial institutions, by means of the Automated Clearing House (ACH) or other applicable check and funds transfer clearing systems." (Emphasis added). In an exhibit to the Agreement, WEB2B agreed to " initiate debit and/or credit entries to [RAC's] Checking Account indicated below at the depository financial institution . . . and to debit and/or credit the same to such an account." This checking account was at Intrust Bank, RAC's bank.
Before reaching Intrust's checking account, WEB2B processed RAC's checks by ACH or Check 21. In ACH, an originator converts a check to a text file for transmission by an ODFI to an automated clearinghouse, which transmits the entries to a receiving depository financial institution. Check 21, an imaging system, allows financial institutions to clear checks ...