Wells Fargo successfully dismisses customer’s claims

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Where a customer sued Wells Fargo after a fraudster allegedly stole her life savings of $727,957 by making electronic wire transfers from her account, convincing her to make wire transfers and taking a cash advance from her credit card, but she did not allege that the transactions were not authorized and did not provide sufficient facts to plausibly establish that Wells Fargo was liable to refund the transferred amounts, her suit was dismissed.

Background

Janice Carter filed suit against Wells Fargo Bank National Association, alleging a violation of the Uniform Commercial Code, or UCC, and negligence after losing her life savings, a total of $727,957, in a fraud scheme. Wells Fargo moves to dismiss Carter’s amended complaint, arguing that her claim for violation of the UCC fails as a matter of law and that UCC Article 4A preempts her negligence claim.

UCC

In her amended complaint, Carter states that “the fraudster was able to access [her] account and make … online electronic wire transfers from her account[.]” The fraudster allegedly further “convinced [Carter] to make five different wire transfers … in person at the Wells Fargo branch bank.” The fraudster also allegedly “made a $10,000 cash advance from [Carter’s] Wells Fargo Propel American Express card which had expired in June of 2022.”

Carter does not allege sufficient facts to state a claim for relief that is plausible on its face. To succeed on her claim for a refund, Carter must show that the wire transfers were neither authorized nor effective.

Carter only alleges that the fraudster made electronic wire transfers, convinced Carter to make wire transfers and took a cash advance from Carter’s Wells Fargo Propel American Express card. Carter does not allege that the transactions were not authorized and does not provide sufficient facts to plausibly establish that Wells Fargo is liable to refund the transferred amounts. Accordingly, Carter has failed to state a cause of action under the UCC.

Negligence

UCC Article 4A provides a customer, such as Carter, a remedy for acceptance of an unauthorized and ineffective payment order. Article 4A is “intended to be the exclusive means of determining the rights, duties and liabilities of the affected parties in any situation covered by particular provisions of the Article.”

Here, Carter asserts a negligence claim against Wells Fargo for the nine allegedly unauthorized and ineffective payment orders. Section 8.4A-204 addresses a receiving bank’s liability if it accepts a payment order that is not authorized and not effective under § 8.4A-202. The alleged unauthorized and ineffective payment orders for which Carter seeks reimbursement are covered by the particular provisions of § 8.4A.

“In other words, to allow [Carter] to proceed on [her] common law [claim] with regard to the unauthorized payment orders would create rights, duties and liabilities inconsistent with those stated” in § 8.4A. Accordingly, Carter has failed to state a common law negligence cause of action.

Defendant’s motion to dismiss granted.

Carter v. Wells Fargo Bank National Association, Case No. 1:23-cv-00007, June 14, 2023. WDVA at Abingdon (Ballou). VLW 023-3-334. 7 pp.