In a case involving loss of funds from a bank account, the Southern District of California stops two of the four claims from moving forward because they are conclusory. In Alexander v. Wells Fargo Bank (S.D. Cal. 23-cv-617-DMS-BLM, Dec. 1, 2023).
Mr. Armando Alexander, an adult over 65 years of age, discovered that $35,000 had vanished from his account at Wells Fargo Bank. He spent a full day at the bank trying to understand what happened. According to Mr. Alexander, the loss was very distressing because he intended to use the money to cover future medical bills.
Mr. Alexander sued Wells Fargo. After an initial motion to dismiss, he amended his complaint. His amended complaint included four claims against Wells Fargo: violations of the California Consumer Records Act (CCRA) and the California Consumer Privacy Act, negligence, and elder abuse.
The bank brought a Federal Rule of Procedure 12(b)(6) motion to dismiss.
A complaint must present plausible claims to survive a rule 12(b)(6) motion to dismiss. Courts need not accept conclusory allegations. If an amendment could save the complaint, courts should give leave to amend.
The first claim alleges that Wells Fargo violated the California Consumer Records Act, which requires businesses to provide notice of breaches without unreasonable delay. The complaint alleges that Wells Fargo failed to notify Mr. Alexander of the withdrawals from his account on time.
Yet, these allegations are merely conclusory because the complaint does not state when the bank discovered the alleged breach. The assertion that Wells Fargo withheld information is speculative. No facts establish a security breach or demonstrate how an unauthorized person got Mr. Alexander’s personal information.
Because the complaint fails to demonstrate that a breach took place and that the bank knew about it, the court grants the bank’s motion to dismiss the CCRA claim. Yet the court will allow him to amend it.
Next, the complaint asserts that Wells Fargo violated the California Consumer Privacy Act by not maintaining security procedures. The district court previously denied the bank’s motion to dismiss this claim. The second complaint presented an identical claim. As the court already found that the CCPA claim survived a rule 12(b)(6) motion, it refuses to consider the bank’s arguments against the claim.
The third claim alleges Wells Fargo’s negligence. In response, the bank points to California’s economic loss doctrine, which bars tort actions for purely economic losses. However, Mr. Alexander asserts more than a purely economic loss. He claims a loss of time, as he spent all day at the bank, as well as emotional distress and worry because he intended to use the money to pay his future medical bills. As the alleged harm suffered was not purely financial, the district court denies the bank’s motion to dismiss the negligence claim.
With his final claim, Mr. Alexander contends that Wells Fargo committed elder financial abuse by helping a third-party take money from his account. The court may find someone liable for facilitating elder abuse. Still, there must be knowledge of the wrongful conduct. This knowledge must be actual, not constructive. Mr. Alexander failed to state why the bank would help someone financially abuse him. He also failed to plead that the bank had actual knowledge of the purported financial abuse or that it provided substantial assistance to the wrongdoer.
The district court dismisses the elder abuse claim. It will also not allow Mr. Alexander to amend the claim because he already had an opportunity to fix the elder abuse claim.
Since the amended complaint fails to plead a violation of the California Consumer Records Act and elder abuse, the Southern District of California dismisses these claims. The California Consumer Privacy Act and negligence claims can move forward because the complaint demonstrated that these allegations were plausible.