California Appellate Court Rules on Issue of First Impression: Who Bears the Risk of Loss When a Scammer Misdirects Settlement Funds to the Wrong Recipient?

A settlement is reached. As in most settlements, the parties are uncomfortably comfortable with the resolution. The day comes to pay.  Payment is made but goes to the wrong account. The money is gone and the settlement agreement remains. Which party bears the risk of loss when the settlement funds are wired to and received by the wrong recipient, potentially a scammer, instead of the settling party? This is the question a California appellate court addressed this week.