A couple (the depositors) claimed their accounts with the bank were hacked after two fraudulent transfers of substantial amounts occurred. The depositors visited a local bank branch to resolve the issue and discovered that, in their initial attempt to contact the bank over the phone, they had been communicating with the hacker. The bank investigated for a few days, and upon completion, declined to return the fraudulently withdrawn amounts. Subsequently, the depositors filed ten common law claims and a single claim under the Texas Deceptive Trade Practices Consumer Protection Act (DTPA) against the bank. In response, the bank filed a motion to dismiss all the claims.
In Barge v. Wells Fargo Bank, N.A., Civil Action No. 1:23-CV-00189, 2025 WL 1242327, 2025 U.S. Dist. LEXIS 85452 (E.D. Tex. Feb. 25, 2025) (opinion not yet released for publication), the court granted in part and denied in part the bank’s motion to dismiss. The bank first argued that the attached expert report did not cure the depositor’s deficient complaint. The court disagreed, holding that prior case law allowed the court to disregard the opinions of the report and only consider the recitation of the facts of the case included within the report. Second, the court dismissed the breach of contract claim against the bank because “broad and general claims” without proof of any substance of a contract between the parties were insufficient. Third, the court cited similar reasons for dismissing the claim for breach of implied warranty, noting that the depositors fell short of the federal pleading standards. Fourth, the court declined to dismiss the breach of express warranty claim due to its previous denial, and the bank failed to address why the court should reconsider its prior ruling. Fifth, the court addressed the negligence claim against the bank, declining to dismiss it because the court concluded that the depositors had alleged sufficient facts regarding the bank’s duty owed to them and had alleged a sufficient causal connection. Sixth, the court dismissed the depositor’s claim of gross negligence, finding no corporate liability because the bank did not authorize or ratify the branch manager’s alleged gross negligence, and further, no evidence indicated the bank was “negligent in hiring an unfit agent.” Seventh, the court dismissed the breach of fiduciary duty claim because the depositors failed to establish a special relationship, and “a banking relationship, ‘does not usually create a special or fiduciary relationship.’” Eighth, the court dismissed the depositors’ claim for negligent undertaking because they failed to prove they suffered a physical injury, a necessary burden of the claim in Texas. Ninth, the court declined to dismiss the negligent misrepresentation claim, citing the same reason for the claim of breach of express warranty, namely that it had already declined to dismiss the claim. Tenth, the court dismissed the depositor’s fraud and fraudulent misrepresentation claims because they failed to allege sufficient facts showing the bank possessed fraudulent intent. Finally, the court declined to dismiss the DTPA cause of action, finding that the depositors had standing under the statute. Further, the court noted that in plausibly alleging breach of express warranty and negligent misrepresentation claims, the depositors appropriately brought a cause of action under the DTPA. Thus, the court denied in part and granted in part the bank’s motion to dismiss.
By Jace Brown [email protected]
Edited By Taylor O’Brien [email protected]
Edited By Hayden Mariott [email protected]