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declining to recognize a common law duty of care predicated upon the BSA's requirements
Summary of this case from Marchak v. JPMorgan Chase & Co.Opinion
05 Civ. 5503 (LAP).
July 5, 2006
MEMORANDUM AND ORDER
Francis Brendan Aiken ("Plaintiff") brings this action claiming misrepresentation, fraud, and breach of contract in connection with a stock transaction involving defendants Interglobal Mergers and Acquisitions ("Interglobal") and InterTransfers, Inc. ("Intertransfers"). Plaintiff alleges that an account manager at Interglobal contacted him with an offer to purchase Plaintiff's shares of Advanced Technologies Group ("ATG") for a total price of $107,200. (Compl. ¶ 13). Among other things, Plaintiff alleges that he was induced to wire $10,720 to an account maintained at Bank of America in New York for the benefit of LeSpan S/A, (Compl. ¶ 14-15), $21,172 to an account maintained at Espirito Santo Bank of Florida ("Espirito Santo Bank") for the benefit of Emilor S/A, (Compl. ¶ 20-21), $50,000 to an account maintained at Bank of America in Texas for the benefit of Intertransfers, (Compl. § 29), and $12,000 to an account maintained at Bank of America in New York for the benefit of Distell Intertrade, (Compl. ¶ 32-33). According to the complaint, Interglobal failed to purchase Plaintiff's ATG stock, leaving Plaintiff with damages in excess of $100,000. (Compl. at p. 14). In short, Plaintiff alleges that he was swindled and that Bank of America was used, albeit unwittingly, as an intermediary in the swindle.
Plaintiff's claims against Espirito Santo Bank have been dismissed with prejudice by stipulation. Bank of America moves to dismiss pursuant to Rule 12 (b) (6) for failure to state a claim upon which relief may be granted. For the reasons stated herein, Bank of America's motion is granted.
On a motion to dismiss on the pleadings, the Court accepts the factual allegations in Plaintiff's Complaint and draws all inferences in favor of Plaintiff. See Karedes v. Ackerly Group, 423 F.3d 107, 113 (2d Cir. 2005). It is well-settled that a case may not be dismissed "unless the court is satisfied that the complaint cannot state any set of facts that would entitle the plaintiff to relief." Miller v. Wolpoff Abramson, 321 F.3d 292, 300 (2d Cir. 2002) (citing Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001). The Court, however, need not give "credence to plaintiff's conclusory allegations" or legal conclusions offered as pleadings. Cantor Fitzgerald v. Lutnik, 313 F.3d 704, 709 (2d Cir. 2002) (citing Dawes v. Walker, 239 F.3d 489, 491 (2d Cir. 2001)).
Plaintiff's single claim against Bank of America sounds in negligence. (Compl. ¶¶ 69-79). Plaintiff alleges that Bank of America was negligent in allowing funds to be wired through Bank of America accounts for payment on the stock purchase. Specifically, Plaintiff alleges that Bank of America breached a duty to Plaintiff by failing to monitor and report suspicious transactions, failing to investigate the legitimacy of Interglobal and Intertransfers, failing to heed advisory warnings about Interglobal and Intertransfers, and failing to adopt "know your customer" policies to prevent fraud. (Compl. ¶¶ 70-76). In addition, Plaintiff alleges that Bank of America was "negligent in utilizing graphics that could be easily manipulated by fraudulent customers" and in "allowing the misrepresentation among foreign investors that Bank of America is the official bank depository of the United States of America." (Compl. ¶¶ 78-79). These allegations are insufficient to state a claim.
Under New York law, which both sides agree applies here, a bank generally owes no duty of care to a non-customer third party.See, e.g., Century Bus. Credit Corp. v. North Fork Bank, 246 A.D.2d 395, 396 (1st Dep't 1998)); Stuart v. Tommasino, 148 A.D.2d 370 (1st Dep't 1989). Plaintiff does not allege that he was a customer of Bank of America but argues for an expansion of the scope of the duty of care based upon the monitoring and reporting requirements imposed under the Bank Secrecy Act, 31 U.S.C. § 5318 (as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT ACT), Pub.L. 107-56, § 326). Defendant contends, and Plaintiff concedes, however, that neither the Bank Secrecy Act nor the Patriot Act affords a private right of action. This Court may not announce a duty of care where the New York courts have declined to do so; nor may this Court impose a duty of care based upon a statute that does not permit a private right of action. See New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 318 (1995) (observing that "[i]f the statute does not permit a private right of action in favor of an insured . . . it cannot be construed to impose a tort duty of care flowing to the insured").
Accordingly, Defendant Bank of America's motion to dismiss (dkt. no. 10) is granted. Plaintiff's counsel shall inform the Court by letter no later than July 14, 2006 of the status of the action.
SO ORDERED.