The administrator of the estate filed suit against the banks, claiming negligence and breach of the implied covenant of good faith and fair dealing. The account holder, normally frugal with his assets, suffered from a stroke affecting his cognitive abilities. Consequently, he fell victim to a scam, leading him to send multiple wires to a fraudulent third party. One of the banks alerted a state protective services agency to potential elderly financial exploitation. The agency opened an investigation, and the account holder refused to cooperate, which resulted in the investigation being closed and referred to a federal investigative agency to investigate further. One of the banks, which was aware of the potential fraud and federal agencies inspecting the transfers, continued to allow the account holder to wire money until his death. The district court dismissed the administrator of the estate’s complaint under Rule 12(b)(6) for failure to state a claim. The administrator of the estate appealed.
In Satterfield v. Wells Fargo Bank, N.A. (In re Estate of Cook), No. 23-1945, 2025 WL 2237439, 2025 U.S. App. LEXIS 19802 (4th Cir. Aug. 6, 2025) (opinion not yet released for publication), the Fourth Circuit affirmed the dismissal of the administrator of the estate’s claims, finding the banks had no contractual obligation to prevent the account holder’s wire transfers. The court explained that Article 4A of the Virginia UCC generally governs wire transfer agreements, and a bank does not have an obligation to reject a transfer or investigate one even if it appears to be fraudulent. The fact that a state protective services agency, as well as a federal agency, suspected fraudulent transfers did not establish “a duty of care between the banks and elderly customers.” The court also rejected the administrator of the estate’s arguments under the Bank Secrecy Act, which imposes duties only the government can enforce. Similarly, it rejected the implied covenant of good faith and fair dealing claims, which do not create duties beyond the established contractual obligations. Lastly, the court held that the bank’s report to a state agency did not initiate a voluntary duty to protect the account owner. Ultimately, the court held that the banks were not liable for halting the transfers and affirmed the district court’s dismissal.
By Keeley Giles [email protected]
Edited By Conor Doris [email protected]
Edited By Hayden Mariott [email protected]