Burnard et al v. Wells Fargo Advisors, Llc et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.March 27, 2017

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : JOHN W. BURNARD and KURT B. : BURNARD, as Administrator of the : ESTATE OF ELLA E. BURNARD, : Deceased, : : v. : CIVIL ACTION NO. 16-06648-EGS : Plaintiffs, : : WELLS FARGO BANK, N.A. : AND STIFEL, NICOLAUS & : COMPANY, INCORPORATED, : : Defendants. : : O R D E R AND NOW this ___________ day of ______________________, 2017, upon consideration of Defendant Wells Fargo Bank, N.A.’s Motion to Dismiss, and any response thereto, it is hereby ORDERED that the Defendant’s Motion is GRANTED. BY THE COURT: J. Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 1 of 23 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : JOHN W. BURNARD and KURT B. : BURNARD, as Administrator of the : ESTATE OF ELLA E. BURNARD, : Deceased, : : v. : CIVIL ACTION NO. 16-06648-EGS : Plaintiffs, : : WELLS FARGO BANK, N.A. : AND STIFEL, NICOLAUS & : COMPANY, INCORPORATED, : : Defendants. : : DEFENDANT WELLS FARGO BANK, N.A.’S, MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT Defendant Wells Fargo Bank, N.A. (“Wells Fargo”), hereby moves this Court to dismiss Counts I, III, and IV of Plaintiffs’ Amended Complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). The grounds for this Motion are set forth at length in the accompanying Brief in Support. /s/ Molly Q. Campbell Andrew J. Soven, Esq. Molly Q. Campbell, Esq. Reed Smith LLP Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 P: (215) 851-8100 Counsel for Defendant Wells Fargo Bank, N.A. March 27, 2017 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 2 of 23 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : JOHN W. BURNARD and KURT B. : BURNARD, as Administrator of the : ESTATE OF ELLA E. BURNARD, : Deceased, : : v. : CIVIL ACTION NO. 16-06648-EGS : Plaintiffs, : : WELLS FARGO BANK, N.A. : AND STIFEL, NICOLAUS & : COMPANY, INCORPORATED, : : Defendants. : : BRIEF IN SUPPORT OF DEFENDANT W WELLS FARGO BANK, N.A.’S, MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT /s/ Molly Q. Campbell Andrew J. Soven, Esq. Molly Q. Campbell, Esq. Reed Smith LLP Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 P: (215) 851-8100 Counsel for Defendant Wells Fargo Bank, N.A. March 27, 2017 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 3 of 23 - i - TABLE OF CONTENTS Page I. INTRODUCTION ...............................................................................................................1 II. PROCEDURAL HISTORY .................................................................................................2 III. STATEMENT OF ALLEGED FACTS ...............................................................................2 IV. STANDARD OF REVIEW .................................................................................................3 V. ARGUMENT .......................................................................................................................4 A. Plaintiffs Fail to Plead Fraud With Particularity Under Fed. R. Civ. Pro. 9(b) ...........................................................................................................................4 B. Plaintiffs’ Claim for Willful, Reckless, And Malicious Conduct Should Be Dismissed. ................................................................................................................5 1. To The Extent Plaintiffs Allege Wells Fargo Aided and Abetted Picone’s Fraud, Such A Cause of Action Fails as a Matter of Law. ............6 2. Any Negligence Claim Subsumed in Count I Fails as a Matter of Law ..............................................................................................................8 C. Plaintiffs Fail to State a Claim for Civil Conspiracy ...............................................9 D. Each of Plaintiff’s Claims is Barred by the Applicable Two-Year Statute of Limitations .........................................................................................................11 VI. CONCLUSION ..................................................................................................................14 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 4 of 23 - ii - TABLE OF AUTHORITIES Page(s) Cases Benak ex rel. Alliance Premier Growth Fund v. Alliance Capital Mgmt. L.P., 435 F.3d 396 (3d Cir. 2006).....................................................................................................14 Appel v. Kidder, Peabody & Co. Inc., 628 F. Supp. 153 (S.D.N.Y. 1986)...........................................................................................14 Ashcroft v. Iqbal, 6 U.S. 662, 129 S. Ct. 1937 (2009) ............................................................................................3 Bell Atl. Corp. v. Twombly, 550 U.S. 545 (2007) ...................................................................................................................3 Berman v. Morgan Keegan & Co., No. 10 Civ. 5866, 2011 WL 1002683 (S.D.N.Y. Mar. 14, 2011), aff’d 455 Fed. Appx. 92 (2d Cir. Jan. 19, 2012)........................................................................................8 Bortz v. Noon, 729 A.2d 555 (Pa. 1999) ............................................................................................................4 Boyanowski v. Capital Area Intermediate Unit, 215 F.3d 396 (3d Cir. 2000).....................................................................................................11 Brown v. Cosby, 433 F. Supp. 1331 (E.D. Pa. 1977) ..........................................................................................11 Bruno v. Erie Ins. Co., 630 Pa. 79, 106 A.3d 48 (2014) .................................................................................................6 Cehula v. Janus Distributors, LLC, No. CIV.A. 07-113, 2007 WL 3256840 (W.D. Pa. Nov. 2, 2007) ..........................................14 Cetel v. Karan Fin. Grp., Inc., 460 F.3d 494 (3d Cir. 2006).....................................................................................................13 Clayton v. McCullough, 670 A.2d 710 (Pa. Super. 1996) .................................................................................................7 Cochran v. GAF Corp., 666 A.2d 245 (Pa. 1995) ..........................................................................................................13 Crouse v. Cyclops Indus., 745 A.2d 606 (Pa. 2000) ..........................................................................................................12 Cunningham v. M&T Bank Corp., 814 F.3d 156 (3d Cir. 2016).....................................................................................................13 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 5 of 23 - iii - Dalicandro v. Legalgard, Inc., No. 99-3778, 2004 WL 250546 (E.D. Pa. Jan. 21, 2004) ........................................................12 Denison v. Kelly, 759 F. Supp. 199 (M.D. Pa. 1991) ...........................................................................................14 Ebrahimi v. E.F. Hutton & Co., Inc., 852 F.2d 516 (10th Cir. 1988) .................................................................................................14 France v. Wachovia, No. 0726., 2012 WL 3527447 (Pa. Com. Pl July 23, 2012) ......................................................9 Fulton Bank, N.A. v. UBS Securities, LLC, No. 10-1093, 2011 WL 5386376 (E.D. Pa. Nov. 7, 2011) ....................................................6, 7 GEO Group, Inc. v. Community First Services, No. 11-cv-1711, 2012 WL 1077846 (E.D.N.Y. Mar. 30, 2012) ................................................8 Goodman v. Shearson Lehman Bros., 698 F. Supp. 1078 (S.D.N.Y. 1988) .........................................................................................13 Gress v. PNC Bank, 100 F. Supp. 2d 289 (E.D. Pa. 2000) .........................................................................................9 Grose v. P&G Paper Prods. (In re Grose), 866 A.2d 437 (Pa. Super. Ct. 2005) .........................................................................................10 Hayward v. Med. Ct. of Beaver Cty., 608 A.2d 1040 (Pa. 1992) ........................................................................................................12 Heritage Surveyors and Eng’rs, Inc. v. National Penn Bank, 801 A.2d 1248 (Pa. Super. Ct. 2002) .........................................................................................4 Kach v. Hose, 589 F.3d 626 (3d Cir. 2009).....................................................................................................12 Knopick v. Connelly, 639 F.3d 600 (3d Cir. 2011)...............................................................................................12, 13 United States ex rel. LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227 (3d Cir. 1998).......................................................................................................4 Lawrence v. Bank of America, N.A., No. 8:09-cv-2162, 2010 WL 3467501 (M.D. Fla. Aug. 30, 2010) ............................................7 Lum v. Bank of America, 361 F.3d 217 (3d Cir. 2004)...................................................................................................4, 6 McComb v. Morgan Stanley & Co., No. CIV.A. 07-1049, 2007 WL 4150786 (W.D. Pa. Nov. 19, 2007) ......................................12 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 6 of 23 - iv - McKeeman v. Corestates Bank, N.A., 751 A.2d 655 (Pa. Super. Ct. 2000) ...........................................................................................9 Mercado v. Bank of America, N.A., No. 2:12-01123, 2012 WL 5629749 (D.N.J. Nov. 15, 2012) ....................................................8 Nelson v. deVry, Inc., No. 07-4436, 2008 WL 2845300 (E.D. Pa. July 22, 2008) .......................................................7 Nicks v. Temple Univ., 596 A.2d 1132 (Pa. Super. Ct. 1991) .......................................................................................11 Petula v. Mellody, 588 A.2d 103 (Pa. Cmwlth. Ct. 1991) .....................................................................................10 Pocono Int’l Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d 468 (Pa. 1983) ..........................................................................................................13 S. Kane & Son Profit Sharing Trust v. Marine Midland Bank, No. 95-7058, 1996 WL 325894 (M.D. Pa. June 13, 1996) ........................................................7 Santiago v. Warminster Twp., 629 F.3d 121 (3d Cir. 2010).......................................................................................................3 Sarpolis v. Tereshko, 26 F. Supp. 3d 407 (E.D. Pa. 2014) .........................................................................................10 Sarpolis v. Tereshko, 625 Fed. App’x 594 (3d Cir. 2016) ......................................................................................9, 10 Sebastian v. D&S Express, Inc., 61 F. Supp.2d. 386 (D.N.J. 1999) ..............................................................................................5 Silverstein v. Percudani, 422 F. Supp. 2d 468 (M.D. Pa. 2006), aff’d, 207 F. App’x 238 (3d Cir. 2006) ........................4 Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466 (1979) ............................................................................................................9, 10 Travelers Indem. Co. v. Stedman, 895 F. Supp. 742 (E.D. Pa. 1995) ..............................................................................................9 Travis v. The Vanguard Grp., Inc., No. CIV.A. 07-3484, 2008 WL 2073372 (E.D. Pa. May 15, 2008) ..................................13, 14 Weiss v. Bank of Am. Corp., No. CV 15-62, 2016 WL 6879566 (W.D. Pa. Nov. 22, 2016) ..........................................12, 13 Weshnak v. Bank of America, N.A., 451 Fed. Appx. 61 (2d Cir. 2012) ..............................................................................................7 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 7 of 23 - v - WM High Yield Fund v. O’Hanlon, No. 04-3423, Slip Copy, 2005 WL 6788446, at *15 (E.D. Pa. May 13, 2005) .........................7 Zafarana v. Pfizer, Inc., 724 F. Supp.2d 545 (E.D.Pa. 2010) ...........................................................................................6 Statutes 13 Pa.C.S.A. § 4406 .........................................................................................................................1 13 Pa.C.S.A. § 4406(f) .....................................................................................................................9 42 Pa. C.S.A. § 5224 ......................................................................................................................11 Rules Fed. R. Civ. P. 9(b) ..................................................................................................................3, 4, 6 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 8 of 23 - 1 - I. INTRODUCTION Plaintiffs John W. Burnard and Kurt B. Burnard, as Administrator of the Estate of Ella E. Burnard, (“Plaintiffs” or the “Burnards”) assert claims against Wells Fargo Bank, N.A. (“Wells Fargo”) in connection with the recent criminal conviction of Alfonse Picone. Mr. Picone was convicted in the fall of 2016 in connection with purported misappropriation of assets belonging to the Burnards prior to the death of Ms. Burnard. Plaintiffs allege that Wells Fargo failed to protect their assets and/or assisted Mr. Picone. The Amended Complaint consists almost entirely of a description of Picone’s criminal activity and is vague at best in support of the claims against Wells Fargo. Although Plaintiffs allege fraud by Wells Fargo, the Amended Complaint fails to plead any misrepresentations to Plaintiffs upon which Plaintiffs relied. These allegations fail to meet Rule 9(b)’s particularity requirement and fail to state a claim against Wells Fargo. Plaintiffs’ other claims against Wells Fargo also fail as any one of the theories expressed in Count I of Plaintiffs’ Amended Complaint for “willful, reckless, malicious conduct”, including aiding and abetting and negligence, cannot withstand a motion to dismiss. Finally, without factually supported allegations of malice, an agreement between Wells Fargo and Picone, or a cognizable underlying claim of illegal or wrongful conduct, Plaintiffs’ conspiracy claim necessarily fails. For these reasons, this Court should dismiss Plaintiffs’ claims against Wells Fargo.1 Alternatively, Wells Fargo seeks an order compelling Plaintiffs to file a more definite statement pursuant to Rule 12(e) as to Counts I, III, and IV, pleading with particularity the specific facts concerning the alleged fraudulent transactions, including evidence of any agreement with Wells Fargo, the specific tortious causes of action Plaintiffs are attempting to assert, as well as the date and amount of each allegedly improper transaction. 1 Such facts are critical not only for purposes of Rule 9(b), but also because if, as Wells Fargo suspects, some of the subject transactions took place over one ago, Plaintiffs’ claims may be time-barred. See 13 Pa.C.S.A. § 4406. Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 9 of 23 - 2 - II. PROCEDURAL HISTORY Plaintiffs initiated this action by filing their Complaint on December 28, 2016 alleging tort claims of Willful, Reckless, and Malicious Conduct (Count I), Civil Conspiracy (Count III), and Fraud (Count IV) against Wells Fargo. Plaintiffs also assert claims against Stifel Nicolaus & Co., Inc. (“Stifel Nicolaus”), for Willful, Reckless, and Malicious Conduct (Count II), Civil Conspiracy (Count III), and Fraud (Count IV). Wells Fargo was served with the Original Complaint on or around January 11, 2017 and Plaintiffs filed an Amended Complaint on or about February 27, 2017. III. STATEMENT OF ALLEGED FACTS The vast majority of Plaintiffs’ allegations relate to the fraudulent conduct of Picone who, according to Plaintiffs, preyed upon the Burnards because he thought he could take advantage of the elderly couple. Amended Complaint (“Am. Compl.”) ¶ 20. According to the Complaint, on September 22, 2016, a jury convicted Picone of theft by unlawful taking and receiving stolen property for stealing the Burnards’ money. Id. at ¶ 16. Plaintiffs allege that Picone was the owner of a restaurant that the Burnards frequented and allegedly convinced the couple he was a successful businessman. Id. at ¶ 18-19. The Amended Complaint alleges the Burnards provided Picone a loan, which Picone allegedly used as a pretext to drain one or more Wells Fargo account(s) owned by the Burnards as well as stock accounts maintained at Stifel Nicolaus, by using temporary checks and withdrawal slips made out to him and his restaurant. Id. at ¶¶ 21-23, 67. The Amended Complaint alleges that Mr. Picone worked with Wells Fargo employee Brian Keich to perpetrate this fraud. Id. at ¶ 25. According to the Amended Complaint, Mr. Keich testified at Picone’s trial and stated that the transactions at issue “were at the request and consent of the Burnards; that there was nothing suspicious about Picone’s activity; and that there were no reporting requirements for such high value withdrawals, deposits and transfers.” Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 10 of 23 - 3 - Plaintiffs allege that that Mr. Keich aided and abetted Picone by not filing Currency Transaction Reports (“CTR”) allegedly required by the U.S. Department of Treasury and approving the transactions. Id. at ¶¶ 26-34. IV. STANDARD OF REVIEW The Supreme Court has made clear that the federal pleading standard “asks for more than a sheer possibility that a defendant has acted unlawfully,” and “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 6 U.S. 662, 129 S. Ct. 1937, 1949 (2009). Nor may a plaintiff rely on “an unadorned, the-defendant- unlawfully-harmed-me accusation.” Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 545, 555 (2007)). Thus, “only a complaint that states a plausible claim for relief survives a motion to dismiss.” Iqbal, 129 S. Ct. at 1950. In evaluating a motion to dismiss under Rule 12(b)(6), courts typically will: (1) take note of the elements a plaintiff must plead to state a claim; (2) identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth”; and (3) where there are well-pleaded factual allegations, the court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief. Santiago v. Warminster Twp., 629 F.3d 121, 129-30 (3d Cir. 2010). The Court should not accept as true conclusory or unsupported assertions that are not well-pleaded facts. Twombly, 467 U.S. 752. Additionally, it is well-settled that when alleging fraud or mistake, a party must state with particularity the circumstances constituting the alleged fraud or mistake. Fed. R. Civ. P. 9(b). This particularity requirement is intended to ensure that a defendant has adequate notice of “the precise misconduct” it is charged with, and to safeguard against “spurious charges” of fraud that a defendant did not commit. Silverstein v. Percudani, 422 F. Supp. 2d 468, 471 (M.D. Pa. 2006), aff’d, 207 F. App’x 238 (3d Cir. 2006). To satisfy the Rule 9(b) heightened pleading standard, a plaintiff must specify the time, place, and substance of the defendant’s allegedly fraudulent Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 11 of 23 - 4 - conduct. See United States ex rel. LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 234 (3d Cir. 1998). V. ARGUMENT A. Plaintiffs Fail to Plead Fraud With Particularity Under Fed. R. Civ. Pro. 9(b) Under the Federal Rule of Civil Procedure Rule 9(b), Plaintiffs must plead fraud with particularity: In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally. Fed. R. Civ. P. 9(b). The essential elements in an action for fraud are: (1) A representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance. Heritage Surveyors and Eng’rs, Inc. v. National Penn Bank, 801 A.2d 1248, 1250-51 (Pa. Super. Ct. 2002) (quoting Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999)). The Amended Complaint fails to plead with specificity the basis of the fraud claim against Wells Fargo. See Lum v. Bank of America, 361 F.3d 217, 227 (3d Cir. 2004) (affirming dismissal of claims for failure to plead fraud with particularity under Rule 9(b)). Plaintiffs’ fraud claim is predicated upon an unspecified “investigation,” following the testimony of a Wells Fargo employee at Picone’s trial, which purportedly related to one or more of the Burnards’ Wells Fargo accounts. Am. Compl. ¶¶ 26-27. Other than Picone’s conduct, the Burnards do not set forth with particularity what facts were misrepresented to them, if any, by Wells Fargo and when such misrepresentations occurred. Plaintiffs also do not plead scienter, and do not identify a misrepresentation by Wells Fargo upon which they justifiably relied. By only referring vaguely to misrepresentations, Plaintiffs’ allegations fail to rise above mere conclusions. Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 12 of 23 - 5 - In Sebastian v. D&S Express, Inc., 61 F. Supp.2d. 386, 391-392 (D.N.J. 1999), the plaintiffs tried to defeat a motion for judgment on the pleadings made by defendant bank by arguing that the court should make the “obvious possible inference” that the individual embezzling funds was able to cash the large quantity of checks at the bank through the assistance of one or more of the bank’s employees. Sebastian, 61 F. Supp.2d at 389. The court outright rejected plaintiffs’ argument and stated: “That a ‘possible’ inference can be made is of no moment.” Having failed to adequately plead fraud, the district court refused to accept “legal or unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations.” Id. Much like the plaintiff in Sebastian, the Burnards make sweeping allegations that by processing the checks, Wells Fargo concealed Picone’s fraudulent scheme from them. See Am. Compl. ¶¶ 31-33. However, there are no facts alleged that support this conclusion. To the contrary, Plaintiffs do not allege that Wells Fargo affirmatively concealed Picone’s activities from Plaintiffs. Instead, Plaintiffs allege, again without factual support, that Wells Fargo “intended to deceive them.” Am. Compl. ¶¶ 129(a), 133. Even if there was a factual basis for accepting this contention as true, and there is not, Plaintiffs have failed to plead fraud with the required particularity. Because Plaintiffs have supplied no facts whatsoever about the alleged fraud by Wells Fargo, Plaintiffs have not met the rigorous federal pleading standard, warranting dismissal. Lum, 361 F.3d 217 at 227; Fed. R. Civ. Pro. Rule 9(b). Therefore, the Court must dismiss Count IV of Plaintiffs’ Amended Complaint. B. Plaintiffs’ Claim for Willful, Reckless, And Malicious Conduct Should Be Dismissed. Count I seeks to recover from Wells Fargo for alleged damages arising out of Picone’s fraudulent withdrawals under the common law tort theory captioned “willful, reckless, and Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 13 of 23 - 6 - malicious conduct.” Therein, Plaintiffs allege numerous legal theories, including aiding and abetting fraud, negligence and breach of contract.2 1. To The Extent Plaintiffs Allege Wells Fargo Aided and Abetted Picone’s Fraud, Such A Cause of Action Fails as a Matter of Law. To the extent that this Court views Plaintiffs’ claim for “willful, reckless, and malicious conduct” as one for aiding and abetting fraud, the claim should be dismissed under Pennsylvania law or re-pled.3 As a starting point, Pennsylvania courts disagree over the existence of a cause of action for aiding and abetting under Pennsylvania law. See Fulton Bank, N.A. v. UBS Securities, LLC, No. 10-1093, 2011 WL 5386376, at *15-16 (E.D. Pa. Nov. 7, 2011). Wells Fargo respectfully urges the Court to follow these decisions declining to create an aiding and abetting claim under Pennsylvania law. See, e.g., Zafarana v. Pfizer, Inc., 724 F. Supp.2d 545, 560 (E.D.Pa. 2010) (finding no cause of action for aiding and abetting fraud); WM High Yield Fund v. O’Hanlon, No. 04-3423, Slip Copy, 2005 WL 6788446, at *15 (E.D. Pa. May 13, 2005) (“declining to expand Pennsylvania law” and holding that “the Pennsylvania Supreme Court would not permit such an action” for aiding and abetting fraud); S. Kane & Son Profit Sharing Trust v. Marine Midland Bank, No. 95-7058, 1996 WL 325894, at *9 (M.D. Pa. June 13, 1996) (noting that Pennsylvania has not adopted a claim for aiding and abetting liability); Clayton v. McCullough, 2 To the extent Plaintiffs allege, “Wells Fargo consciously, willfully, and maliciously disregarded any previous agreements with the Burnards related to” the “good faith banking relationship,” this claim appears to be a breach of contract claim and must be dismissed as Plaintiffs have failed to identify any such “agreements.” Additionally, in the event a contract does cover Plaintiffs’ claim, any tortious causes of action for Wells Fargo’s alleged nonfeasance must be dismissed under the gist of the action doctrine. Bruno v. Erie Ins. Co., 630 Pa. 79, 106 A.3d 48 (2014) (holding whenever a plaintiff's complaint sets forth allegations which substantially constitute assertions of a defendant's complete failure to perform duties originating from a contract, the plaintiff's action will be deemed to be a breach of contract and an asserted tort claim will be barred by the gist of the action doctrine.”). 3 The Amended Complaint is clear that Plaintiffs allege Wells Fargo “aided and abetted” Picone’s fraud. Ad. Compl. ¶ 79 (alleging Wells Fargo employees “aided and abetted” Keich in concealing the scheme to steal from the Burnards”); id., at ¶ 83 (“Picone would not have been able to make the [transactions] from the Burnards’ Wells Fargo account without the assistance of Keich”); id., at ¶ 86 (“But for Keich’s intent to assist, aid, and abet Picone’s scheme,” Picone would not have succeeded); id., at ¶ 88, 90, 93 (Wells Fargo “assisted” Picone). Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 14 of 23 - 7 - 670 A.2d 710, 713 (Pa. Super. 1996) (finding “no duty or obligation recognized by the law of Pennsylvania” under Section 876(b) of the Restatement (Second) of Torts). But even assuming that the court would recognize a cause of action for aiding and abetting, Plaintiffs here must allege facts sufficient to make a claim for relief more than just speculative. An aider and abettor “must willfully and knowingly associate himself with another’s unlawful act.” Fulton Bank, 2011 WL 5386376, at *16 (dismissing aiding abetting claim for failure to plead with particularity). “Conclusory allegations of agreement or concerted behavior in [a] complaint” are not sufficient. Nelson v. deVry, Inc., No. 07-4436, 2008 WL 2845300, at *4 (E.D. Pa. July 22, 2008) (allegations set forth in complaint did not suggest facts necessary to support a claim for aiding and abetting under Pennsylvania law where plaintiffs did not provide factual allegations as to “any agreement between the defendants . . . or other facts that plausibly suggest that the defendants acted with a common purpose . . .”). Other jurisdictions addressing aiding and abetting claims have dismissed claims for failing to plead facts with sufficient detail. See, e.g., Weshnak v. Bank of America, N.A., 451 Fed. Appx. 61 (2d Cir. 2012) (affirming dismissal of aiding and abetting conversion claim, noting that a bank’s usual services to a customer do not rise to the level of substantial assistance under New York law); Lawrence v. Bank of America, N.A., No. 8:09-cv-2162, 2010 WL 3467501 (M.D. Fla. Aug. 30, 2010) (dismissing aiding and abetting conversion claim where allegations simply supported that bank provided basic banking services).4 Here, Plaintiffs have asserted nothing more than a recitation of the elements of an aiding and abetting claim in two allegations, namely knowledge and substantial assistance, involving an 4 See also Mercado v. Bank of America, N.A., No. 2:12-01123, 2012 WL 5629749, at *6 (D.N.J. Nov. 15, 2012) (dismissing aiding and abetting claim for failure to plead sufficiently under Section 876); GEO Group, Inc. v. Community First Services, No. 11-cv-1711, 2012 WL 1077846, at *10 (E.D.N.Y. Mar. 30, 2012) (dismissing aiding and abetting conversion claim where allegations were “little more than conclusory restatements, upon information and belief, of the elements of aiding and abetting claims”); Berman v. Morgan Keegan & Co., No. 10 Civ. 5866, 2011 WL 1002683 (S.D.N.Y. Mar. 14, 2011) (dismissing aiding and abetting conversion claim under Fed. R. Civ. P. 9(b) where complaint made only conclusory allegations of knowledge), aff’d 455 Fed. Appx. 92 (2d Cir. Jan. 19, 2012). Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 15 of 23 - 8 - action as simple as accepting a check for collection. See Am. Compl. at ¶¶ 81-83. Considering Plaintiffs’ allegations in the entirety, there is no factual basis for Plaintiffs’ claim that Wells Fargo intentionally aided or abetted the purported thief. Plaintiffs’ allegations regarding aiding and abetting Picone’s fraud, even if recognized as a cause of action under Pennsylvania law, fall far short of pleading a claim for relief that is anything more than just speculative. 2. Any Negligence Claim Subsumed in Count I Fails as a Matter of Law Any negligence claim of course requires allegation of a breach of legal duty which caused damage. Plaintiffs’ focus with respect to negligence appears to be Wells Fargo’s purportedly improper failure to view the transactions as suspicious and file certain reports reflecting as much. Am. Compl. ¶ 85-86 (describing disregard for reporting requirements and failure to report suspicious transactions). Even assuming such reports should have been filed, which Defendants accept only for sake of argument, the alleged failure to do so did not breach a legal duty owed by Wells Fargo to Plaintiffs. Moreover, it is implausible that the alleged failure to file CTR reports was the proximate cause of the harm suffered by Plaintiffs as the general nature of those reports is to track cash exchanges to combat money laundering. Accordingly, Plaintiffs’ negligence claim related to CTR reports should be dismissed. To the extent that Plaintiff is alleging claims for misprocessing of instruments by Wells Fargo, Pennsylvania’s Commercial Code (the “Code”) likely supplants Plaintiff’s negligence claim – and may very well time-bar such claims. See Gress v. PNC Bank, 100 F. Supp. 2d 289, 292 (E.D. Pa. 2000) (“[D]isplacing common law tort liability ... is vital to [the U.C.C.] project.”); see also 13 Pa.C.S.A. § 4406(f) (“Without regard to care or lack of care of either the customer or the bank, a customer who does not within one year after the statement or items are made available to the customer (subsection (a)) discover and report the customer’s unauthorized signature on or any alteration on the item is precluded from asserting against the bank the Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 16 of 23 - 9 - unauthorized signature or alteration”).5 If Plaintiffs are contending that Wells Fargo did not properly process one or more transactions, their claim should be re-pled. See, e.g., Travelers Indem. Co. v. Stedman, 895 F. Supp. 742, 748 (E.D. Pa. 1995) (“the UCC has codified the grounds for assessing liability in the transfer of negotiable instruments”). C. Plaintiffs Fail to State a Claim for Civil Conspiracy In Pennsylvania, a claim for civil conspiracy requires the plaintiff to show “that two or more persons combined or agreed with intent to do an unlawful act or to do an otherwise lawful act by unlawful means.” Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466, 472 (1979); see also McKeeman v. Corestates Bank, N.A., 751 A.2d 655, 660 (Pa. Super. Ct. 2000). “Proof of malice, i.e., an intent to injure, is essential in proof of a conspiracy.” Sarpolis v. Tereshko, 625 Fed. App’x 594, 601 (3d Cir. 2016); Thompson, 412 A.2d at 472. The intent must be without justification, so only conduct intended “solely to injure” the plaintiff is actionable. Thompson Coal Co., 412 A.2d at 472. Thus, “where the facts show that a person acted to advance his own business interests, and not solely to injure the party injured, those facts negate any alleged intent to injure.” Sarpolis, 625 Fed. App’x at 601. For example, the Sarpolis Court affirmed the district court’s decision dismissing a claim for civil conspiracy where the plaintiffs complaint “explicitly” averred that “all parties reaped financial or career benefits” at the plaintiff’s expense as a result of the alleged conspiracy. Id. (affirming Sarpolis v. Tereshko, 26 F. Supp. 3d 407, 423 (E.D. Pa. 2014)). The district court thus determined that because “the intent of the conspiracy was not to harm” the plaintiff, but for the defendants “to advance their respective personal and business interests,” the plaintiff had not and could not allege that the defendants solely intended to harm the plaintiff. Sarpolis, at 423- 24. 5 The statute of limitation is not subject to the discovery rule and, therefore, must be strictly construed and that a cause of action involving negotiable instruments, the claim “accrues” and the statute begins to run at the moment in time when the instrument is negotiated. See France v. Wachovia, No. 0726., 2012 WL 3527447 (Pa. Com. Pl July 23, 2012) (“discovery rule is inimical to UCC policies”). Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 17 of 23 - 10 - Plaintiffs fail to allege facts from which a conspiracy can be inferred. They do not allege that the intent of the conspiracy was for the sole purpose of harming them. They fail to adequately explain any “combination” or “agreement” between Picone and Wells Fargo to do an illegal act or set forth no conspiratorial communications or contact between Wells Fargo and Picone. The do not identify any purported meetings or phone calls with any factual specificity, and they fail to otherwise describe the supposed conspiracy between Picone and Wells Fargo.6 See Petula v. Mellody, 588 A.2d 103, 107 (Pa. Cmwlth. Ct. 1991) (holding plaintiff failed to state a civil conspiracy claim where, though he alleged parallel conduct between defendants, he did not allege any facts from which one could infer conspiratorial conduct). Further, a claim for civil conspiracy cannot be plead without alleging an underlying tort. See, e.g., Nicks v. Temple Univ., 596 A.2d 1132, 1137 (Pa. Super. Ct. 1991). The Third Circuit has further determined that this particular requirement necessarily means that a claim for civil conspiracy under Pennsylvania law is not “independently actionable.” See Boyanowski v. Capital Area Intermediate Unit, 215 F.3d 396, 405-07 (3d Cir. 2000). As such, if the underlying tort is found not to exist, the related claim for civil conspiracy to commit that tort necessarily fails. Brown v. Cosby, 433 F. Supp. 1331, 1343 (E.D. Pa. 1977) (in order to maintain a cause of action for civil conspiracy, there also must be an act in furtherance of the conspiracy, which is itself a tort). As set forth herein, Plaintiffs have failed to allege the existence of any cognizable underlying claim of illegal or wrongful conduct against Wells Fargo. As such, Plaintiffs claim for civil conspiracy must be dismissed. 6 Without support Plaintiffs claim that “Meetings, conferences, telephone, email, and other communications were held between and among the Defendants, and their employees, agents, and servants, for the purpose of discussing the improper practices set forth herein and the concealment of the truth alleged herein.” However, this is not sufficient to allege an agreement. See Petula, 588 A.2d at 107. Moreover, it is well-established that “a single entity cannot conspire with itself and, similarly, agents of a single entity cannot conspire among themselves.” Grose v. P&G Paper Prods. (In re Grose), 866 A.2d 437, 441 (Pa. Super. Ct. 2005). Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 18 of 23 - 11 - D. Each of Plaintiff’s Claims is Barred by the Applicable Two-Year Statute of Limitations Plaintiffs’ fraud, negligence, and civil conspiracy claims are all subject to a two-year statute of limitations. See 42 Pa. C.S.A. § 5224. Therefore, Plaintiff’s claims based on the alleged fraudulent signature, which changed the ownership of the Account, or the allege fraudulent transactions, which occurred from January, 2014 through the end of June, 2014, Am. Compl. ¶¶ 35, 48, expired (at the latest) on or about June 31, 2016. Because Plaintiffs did not file this Action until well over two years (December 28, 2016) after each of the disbursements had been made by, and clearly confirmed to, the Burnards in their monthly account statements, their claims are plainly barred by Pennsylvania’s two-year statute of limitations applicable to them. To try to toll the statute of limitations, Plaintiffs will argue that they did not discover any claims against Wells Fargo until Picone’s trial in September 22, 2016. See Amend. Compl. ¶¶ 16, 24. However, neither Pennsylvania’s “discovery rule” or the “doctrine of fraudulent concealment” toll the accrual of the two-year limitations period on the facts as they are alleged. The discovery rule excludes the “period of time during which the injured party is reasonably unaware that injury has been sustained so that people in that class essentially have the same rights as those who suffer immediately ascertainable injury.” Hayward v. Med. Ct. of Beaver Cty., 608 A.2d 1040, 1043 (Pa. 1992). When the discovery rule applies, the statute of limitations does not begin to run until the injured party knows on in the exercise of reasonable diligence Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 19 of 23 - 12 - should have known of the injury and its cause.” Crouse v. Cyclops Indus., 745 A.2d 606, 611 (Pa. 2000).7 The Third Circuit has held that “reasonable diligence” is an objective test. Kach v. Hose, 589 F.3d 626, 642 n.17 (3d Cir. 2009). “Reasonable diligence” is “what is expected from a party who has been given a reason to inform himself of the facts upon which his right to recovery is premised.” Knopick v. Connelly, 639 F.3d 600, 611 (3d Cir. 2011). “Where the plaintiff has no reason to investigate, the statute will be tolled.” Id. at 612. If a plaintiff fails to investigate, the statute of limitations begins to run at the time that objective storm warnings appeared.8 Id. (citing Dalicandro v. Legalgard, Inc., No. 99-3778, 2004 WL 250546, at *4-5 (E.D. Pa. Jan. 21, 2004)) (emphasis added). Thus, “if something exists to trigger the inquiry, then the plaintiff must demonstrate that he conducted an investigation, and despite doing so, did not discover his injury.” Id. (emphasis added). The burden is on the plaintiff to show “reasonable diligence.” Cochran v. GAF Corp., 666 A.2d 245, 248 (Pa. 1995) (courts should “not hesitate” to reject discovery rule where a party has not used reasonable diligence”). Moreover, for the statute of limitations to run, a plaintiff need not know the “exact nature” of his injury, as long as it objectively appears that the plaintiff “is reasonably charged with the knowledge that he has an injury caused by another.” Id.; see also Pocono Int'l Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d 468, 471 (Pa. 1983) (“A court presented with an assertion of applicability of the ‘discovery rule’ must, before applying the exception of the rule, address the ability of the damaged party, exercising reasonable diligence, to ascertain the fact of a cause of action”); Weiss, 2016 WL 6879566, at *1 (“[A] reasonably diligent plaintiff is on inquiry 7 The three elements which must be alleged to establish fraudulent concealment are (1) wrongful concealment of its actions by defendant; (2) failure of the plaintiff to discover the operative facts or the basis of his cause of action within the limitations periods; and (3) plaintiff's due diligence until discovery of the facts. See, e.g., McComb v. Morgan Stanley & Co., No. CIV.A. 07-1049, 2007 WL 4150786, at *4 (W.D. Pa. Nov. 19, 2007). 8 The equitable tolling doctrine also does not apply. As explained in Weiss v. Bank of Am. Corp., No. CV 15-62, 2016 WL 6879566 (W.D. Pa. Nov. 22, 2016), like the discovery rule, equitable tolling also requires due diligence. Weiss, 2016 WL 6879566, at *2; see also Cunningham v. M&T Bank Corp., 814 F.3d 156 (3d Cir. 2016); Cetel v. Karan Fin. Grp., Inc., 460 F.3d 494, 506-07 (3d Cir. 2006). Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 20 of 23 - 13 - notice when she would have discovered general facts about the fraudulent scheme rather than specific facts about the fraud perpetrated on her.”). Though plaintiffs allege the defendants “acted in concert to conceal their fraudulent and unlawful conduct,” “engaged in a continuing conspiracy to deceive the Burnards” and “mislead the Burnards to believe they were acting in good faith.” Am. Compl., ¶¶ 119-20, 129(a), Plaintiffs do not identify an affirmative act of concealment by Keich or Wells Fargo that was made to prevent the Burnards from discovering the withdrawals from their Account. See Cehula v. Janus Distributors, LLC, No. CIV.A. 07-113, 2007 WL 3256840, at *6 (W.D. Pa. Nov. 2, 2007) (“Plaintiffs' purported assertion of fraudulent concealment is merely conclusory in nature and wholly lacking in any specificity; thus, the Court finds that Plaintiffs' Amended Complaint fails to meet the particularity requirements of Rule 9(b) as to the fraudulent concealment doctrine.”); see also Denison v. Kelly, 759 F. Supp. 199, 210 (M.D. Pa. 1991) (providing that plaintiffs’ complaint spoke in “conclusional language” and lacked “sufficiently specific” allegations; for example, while they listed some specific examples, “the examples given [we]re not specific enough because the plaintiffs have also not set forth how often these events happened, when they happened, and the circumstances under which these communications were made to the plaintiffs, including who initiated the contact leading to the communications and whether they were written or oral”). As a result, the Burnards were required to assert any negligence, fraud, or conspiracy claims by June 31, 2016. Accordingly, plaintiffs’ fraud claim is barred by the same two-year limitations period as their negligence claim, and should be dismissed.9 9 Wells Fargo hereby incorporates by reference all applicable arguments made by Co-Defendant Stifel, Nicolaus & Company, Incorporated in its Motion to Dismiss filed on March 27, 2017. See Doc. No. 17. Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 21 of 23 - 14 - VI. CONCLUSION For all the foregoing reasons, Defendants respectfully requests that the Court grant this Motion and dismiss Plaintiffs’ Amended Complaint in its entirety, and enter judgment in favor of Defendants Wells Fargo and against Plaintiffs. Respectfully submitted, /s/ Andrew J. Soven Andrew J. Soven, Esq. Molly Q. Campbell, Esq. Reed Smith LLP Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 P: (215) 241-7953 Counsel for Defendant Wells Fargo Bank, N.A. Dated: March 27, 2017 Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 22 of 23 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : JOHN W. BURNARD and KURT B. : BURNARD, as Administrator of the : ESTATE OF ELLA E. BURNARD, : Deceased, : : v. : CIVIL ACTION NO. 16-06648-EGS : Plaintiffs, : : WELLS FARGO BANK, N.A. : AND STIFEL, NICOLAUS & : COMPANY, INCORPORATED, : : Defendants. : : CERTIFICATE OF SERVICE The undersigned hereby certifies that the Defendant Wells Fargo Bank, N.A. electronically filed a Motion to Dismiss Amended Complaint on March 27, 2017, which is available for viewing and downloading from the federal court’s Electronic Case File system. A copy of the foregoing has been served via ECF today upon the following counsel: James E. Beasley, Jr., Esq. Lane R. Jubb, Jr. The Beasley Firm 1125 Walnut Street Philadelphia, Pa 191017 Attorneys for Plaintiffs David C. Franceski, Jr. Andrew S. Esler Stradley Ronon Stevens & Young, LLP 2005 Market Street, Suite 2600 Philadelphia, PA 19103 Attorneys for Defendant, Stifel, Nicolaus & Company, Inc. /s/ Molly Q. Campbell Case 5:16-cv-06648-EGS Document 18 Filed 03/27/17 Page 23 of 23