In re JD Services, 284 B.R. 292 (Bankr.D.Utah)
PUBLISHED
This dispute involves a transfer that resulted in $725,000.00 being credited to debtor's bank account instead of $7,250.00 because of a bank encoding error. The encoding error and transfer of disputed funds took place postpetition. The Court finds that the debtor was unjustly enriched in the amount of $717,750.00. Unjust enrichment will support a constructive trust. The funds were commingled with other funds to which general creditors have a claim. Therefore, the bank must trace its funds held in constructive trust utilizing the lowest intermediate balance rule. Because the funds held in constructive trust have always belonged to the bank, it is entitled to the interest actually earned by the $394,460.53 in constructive trust funds held. The bank is entitled to a postpetition administrative priority claim in the amount of $323,289.53 which represents the difference between the $717,750.00 originally transferred by mistake and the amount successfully traced using the lowest intermediate balance method. Because the $323,289.53 is unsecured, it is not entitled to the accrual of interest.