Alexander v. Wells Fargo Bank, N.A. et al, No. 3:2023cv00617 - Document 15 (S.D. Cal. 2023)
Court Description: ORDER granting in part and denying in part 10 Defendant's Motion to Dismiss. Signed by Chief District Judge Dana M. Sabraw on 12/1/2024. (jpp)
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Alexander v. Wells Fargo Bank, N.A. et al Doc. 15 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ARMANDO J. ALEXANDER, Case No.: 23-cv-617-DMS-BLM Plaintiff, 12 13 v. 14 WELLS FARGO BANK, N.A.; and DOES 1 through 10, inclusive, 15 16 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS Defendants. 17 18 Pending before the Court is Wells Fargo Bank’s motion to dismiss Plaintiff’s First 19 Amended Complaint for failure to state a claim (ECF No. 10). Plaintiff filed an opposition, 20 (ECF No. 11), and Wells Fargo Bank (“Defendant”) filed a reply (ECF No. 12). The Court 21 previously granted in part and denied in part Defendant’s motion to dismiss the original 22 complaint (ECF No. 8), which raised the same claims as the current operative complaint. 23 The Court provided Plaintiff leave to amend the dismissed claims, and Plaintiff filed a First 24 Amended Complaint (ECF No. 9). For the following reasons, Defendant’s motion to 25 dismiss is granted in part and denied in part. 26 27 28 1 23-cv-617-DMS-BLM Dockets.Justia.com 1 I. BACKGROUND 2 3 Plaintiff was a 29-year customer of Wells Fargo. (First Am. Compl. (“FAC”) ¶ 5, 4 ECF No. 9.) On or about December 15, 2022, Plaintiff and his son went to a Wells Fargo 5 location in San Diego County with the intention of depositing funds in Plaintiff’s account. 6 (Id. ¶¶ 6–7.) Upon arrival, Plaintiff was “shocked to discover his accounts were practically 7 depleted.” (Id. ¶ 8.) Plaintiff alleges he had close to $35,000 in his account, but “the Wells 8 Fargo representative unilaterally closed his accounts and provided him with two checks 9 totaling around $200 that did not reflect the money that he had deposited there.” (Id.) 10 Plaintiff informed Wells Fargo that he did not authorize the activity which depleted his 11 accounts, and Wells Fargo representatives told Plaintiff to return in two weeks so it could 12 investigate the issue. (Id. ¶ 10.) Plaintiff did not use any online or mobile banking 13 applications. (Id. ¶ 9.) 14 Plaintiff returned to the Wells Fargo branch two weeks later as instructed and spent 15 nearly an entire day there. (Id. ¶ 11.) Bank employees told Plaintiff “that an unknown 16 individual accessed his accounts and switched Plaintiff’s contact information, such as his 17 email address, and changed his account pin numbers as well.” 18 “unauthorized person(s) also obtained new account cards to make purchases without 19 Plaintiff’s knowledge, consent, or benefit.” (Id.) After this interaction, Wells Fargo 20 returned approximately $5,738 to Plaintiff following his complaint. (Id. ¶ 14.) As a result, 21 Plaintiff filed suit. Plaintiff has suffered emotional distress in the form of “fright”, “shock,” 22 “nervousness, worry, anxiety, and humiliation.” (Id. ¶ 27.) Plaintiff has also “suffered 23 actual damages including the loss of money and time . . . .” (Id. ¶ 26). Plaintiff asserts 24 four causes of action: (1) violation of the California Customer Records Act (“CCRA”); (2) 25 violation of the California Consumer Privacy Act (“CCPA”); (3) negligence; and (4) elder 26 abuse. (Id. ¶ 12.) The 27 28 2 23-cv-617-DMS-BLM 1 II. LEGAL STANDARD 2 3 Under Federal Rule of Civil Procedure 12(b)(6), a party may file a motion to dismiss 4 on the grounds that a complaint “fail[s] to state a claim upon which relief can be granted.” 5 Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) “tests the legal 6 sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To survive 7 a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, 8 to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 9 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim 10 has facial plausibility when the plaintiff pleads factual content that allows the court to draw 11 the reasonable inference that the defendant is liable for the misconduct alleged.” Id. 12 “Determining whether a complaint states a plausible claim for relief will . . . be a context- 13 specific task that requires the reviewing court to draw on its judicial experience and 14 common sense.” Id. at 679. “Factual allegations must be enough to raise a right to relief 15 above the speculative level.” Twombly, 550 U.S. at 555. If Plaintiff “ha[s] not nudged 16 [his] claims across the line from conceivable to plausible,” the complaint “must be 17 dismissed.” Id. at 570. 18 In reviewing the plausibility of a complaint on a motion to dismiss, a court must 19 “accept factual allegations in the complaint as true and construe the pleadings in the light 20 most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 21 519 F.3d 1025, 1031 (9th Cir. 2008). But courts are not “required to accept as true 22 allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable 23 inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting 24 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). 25 When a court grants a motion to dismiss a complaint, it must then decide whether to 26 grant leave to amend. Leave to amend “shall be freely given when justice so requires,” 27 Fed. R. Civ. P. 15(a), and “this policy is to be applied with extreme liberality.” Morongo 28 Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). A court should 3 23-cv-617-DMS-BLM 1 grant leave to amend where there is no (1) “undue delay,” (2) “bad faith or dilatory motive,” 2 (3) “undue prejudice to the opposing party” if amendment were allowed, or (4) “futility” 3 in allowing amendment. Foman v. Davis, 371 U.S. 178, 182 (1962). Dismissal without 4 leave to amend is proper only if it is clear that “the complaint could not be saved by any 5 amendment.” Intri-Plex Techs. v. Crest Grp., Inc., 499 F.3d 1048, 1056 (9th Cir. 2007). 6 “A district court’s decision to deny leave to amend is ‘particularly broad’ where the 7 plaintiff has previously amended.” Salameh v. Tarsadia Hotel, 726 F. 3d 1124, 1133 (9th 8 Cir. 2013). 9 10 III. DISCUSSION 11 A. California Consumer Records Act Claim 12 The CCRA, codified at Cal. Civ. Code § 1798.82, “requires businesses to notify 13 customers of a breach ‘without unreasonable delay’ after the business ‘discovers’ or is 14 ‘notified’ of the breach.” In re Bank of Am. Cal. Unemp. Benefits Litig., No. 21-md-2992, 15 2023 WL 3668535, at *16 (S.D. Cal. May 25, 2023). Plaintiff alleges Defendant violated 16 the CCRA by failing to timely notify Plaintiff that Defendant was subject to a security 17 breach. However, Plaintiff again fails to allege facts stating when Defendant discovered, 18 or was notified of, the alleged breach of Defendant’s security system. Plaintiff alleges that 19 this is because Defendant “failed to provide and withheld any additional information on 20 when Wells Fargo discovered or was notified of this breach,” but Plaintiff’s allegations 21 (FAC ¶ 33) are speculative. Because “factual allegations must be enough to raise a right 22 to relief above the speculative level,” the Court finds Plaintiffs’ assertions are insufficiently 23 pled. Twombly, 550 U.S. at 555 (2007). 24 Additionally, Plaintiff has failed to plead sufficient facts that Defendant’s security 25 system was subject to a breach. Plaintiff seems to allege that the unauthorized individual 26 received Plaintiff’s personal information from Defendant’s security system thereby 27 alleging a breach of Defendant’s security system. However, Plaintiff fails to plead facts to 28 support how the unauthorized individual acquired Plaintiff’s personal information from 4 23-cv-617-DMS-BLM 1 Defendant’s security system. Plaintiff makes only a conclusory allegation that a breach 2 occurred. Such a conclusory statement is insufficient to plausibly state a claim. Iqbal, 556 3 U.S. 662 at 681. Because Plaintiff has failed to plead sufficient facts to plausibly state that 4 a breach occurred or that Defendant had knowledge of the alleged breach, the Court 5 GRANTS Defendant’s motion as to the CCRA claim. 6 The Court dismisses this claim without prejudice, as Plaintiff has twice failed to 7 adequately plead this claim. “[A] district court does not abuse its discretion in denying a 8 motion to amend where the movant presents no new facts but only new theories and 9 provides no satisfactory explanation for his failure to fully develop his contentions 10 originally.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Plaintiff’s FAC is devoid 11 of new facts or a satisfactory explanation for his failure to address the Court’s concerns 12 identified in its prior order. Nonetheless, the Court notes that Plaintiff believes Defendant 13 is withholding information that could provide Plaintiff with the necessary information to 14 sufficiently plead this claim. Plaintiff may move for leave to amend if he identifies new 15 facts during discovery which would allow him to plausibly state a CCRA claim. See Fed. 16 R. Civ. P. 15(a)(2) (“The court should freely give leave [to amend] when justice so 17 requires.”); see e.g., Wawanesa Gen. Ins. Co. v. Jaguar Land Rover N. Am., LLC, No. 22- 18 cv-1943-BAS-DDL, 2023 WL 4918295 (S.D. Cal. July 31, 2023) (granting plaintiff leave 19 to amend complaint to add three additional defendants based on new information that the 20 plaintiff learned during discovery). 21 B. California Consumer Privacy Act Claim 22 Plaintiff alleges that Defendant violated the CCPA, Cal. Civ. Code § 1798.100 et 23 seq., by breaching its “duty to implement and maintain reasonable security procedures and 24 practices appropriate to the nature of Plaintiff’s personal information.” (FAC ¶ 43.) As a 25 result, Plaintiff alleges he “suffered unauthorized access and disclosure of [his] personal 26 information” and “was injured and lost money and privacy interests.” (Id. ¶¶ 44–45.) The 27 Court previously denied Defendant’s motion to dismiss finding that Plaintiff sufficiently 28 5 23-cv-617-DMS-BLM 1 alleged a violation of the CCPA. Defendant again asks the Court to dismiss Plaintiff’s 2 CCPA claim. 3 “A defendant may bring a Rule 12(b) motion objection to an amended complaint 4 only to the extent the challenges asserted in that motion are based on the new matter in the 5 amended complaint.” Pascal v. Concentra, Inc., No. 19-cv-02559-JCS, 2020 WL 4923974 6 at *2 (N.D. Cal. Aug. 21, 2020). The filing of an amended complaint “does not revive” a 7 defendant’s “right to file a post-answer motion to dismiss, with the exception that new 8 claims may be attacked.” Brooks v. Caswell, No. 3:14-cv-01232-AC, 2016 WL 866303 at 9 *3 (D. Or. Mar. 7, 2016). This Court will only consider Defendant’s motion as it responds 10 to new allegations in Plaintiff’s amended complaint. The CCPA claim Plaintiff pleads in 11 his FAC is identical to the CCPA claim he pled in his original complaint. Thus, the Court 12 will not consider Defendant’s arguments against this claim and DENIES the motion to 13 dismiss as to the CCPA claim. 14 C. Negligence Claim 15 To state a claim for negligence, Plaintiff must allege “(1) the defendant’s legal duty 16 of care to the plaintiff; (2) breach of that duty; (3) causation; and (4) resulting injury to the 17 plaintiff.” Merrill v. Navegar, Inc., 26 Cal. 4th 465, 500 (2001). Defendant argues that 18 Plaintiff’s negligence claim is barred by California’s economic loss doctrine. In California, 19 “liability in negligence for purely economic losses . . . is the exception, not the rule.” S. 20 Cal. Gas Leak Cases, 7 Cal. 5th 391, 400 (2019). The economic loss doctrine precludes 21 recovery for purely economic losses in tort actions. NuCal Foods, Inc. v. Quality Egg LLC, 22 918 F.Supp.2d 1023, 1028 (E.D. Cal. 2013). 23 Plaintiff’s FAC asserts Plaintiff has suffered actual damages including loss of 24 money, loss of time, and emotional distress. (FAC ¶¶ 26-27). Plaintiff alleges he spent 25 nearly an entire business day at Wells Fargo attempting to learn how his bank accounts 26 were depleted. (FAC ¶ 13.) “[T]ime spent responding to a data breach is a non-economic 27 injury, that when alleged to support a negligence claim, defeats an economic loss doctrine 28 argument.” Stasi v. Immediata Health Grp. Corp., 501 F.Supp.3d 898, 913 (S.D. Cal. 6 23-cv-617-DMS-BLM 1 2020). The Court finds Plaintiff has sufficiently pled a “loss of time” injury thereby barring 2 application of the economic loss doctrine. 3 Additionally, Plaintiff alleges he has “suffered emotional distress” including 4 “fright”, “shock,” “nervousness,” “worry,” “anxiety,” and “humiliation.” (FAC ¶¶ 26–27). 5 Plaintiff claims his “worry and anxiety is further exacerbated by the fact that the money 6 depleted was being saved in case of future medical necessities given Plaintiff’s elder age.” 7 (Id. ¶ 27). The Court finds that Plaintiff has sufficiently pled damages beyond purely 8 economic loss. See Flores-Mendez v. Zoosk. Inc., No. c-20-04929-WHA, 2021 WL 9 308543, at *3 (N.D. Cal. Jan. 30, 2021) (determining that plaintiffs did not allege pure 10 economic loss because they alleged “loss of time, risk of embarrassment, and enlarged risk 11 of identity theft”). Because the Court finds that the economic loss rule does not bar this 12 claim, the Court need not address the special relationship exception to the economic loss 13 rule. Thus, the Court DENIES Defendant’s motion as to the negligence claim. 14 D. Elder Abuse Claim 15 Lastly, Plaintiff alleges that Defendant violated the Elder Abuse Act, codified at Cal. 16 Welf. & Inst. Code § 15610.30(a)(2). Financial abuse of an elder occurs “when a person 17 or entity . . . [t]akes, secretes, appropriates, obtains, or retains . . . [or] [a]ssits in taking, 18 secreting, appropriating, obtaining, or retaining real or personal property of an elder . . . for 19 a wrongful use or with intent to defraud, or both.” Id. §§ 15610.30(a)(1)–(2). The statute 20 defines an “elder” as a person, residing in California, 65 years of age or older. Id. § 21 15610.27. Plaintiff is over 65 years old. (FAC ¶ 54.) A defendant may be found liable for 22 assisting in financial elder abuse under an aiding and abetting standard. Das v. Bank of 23 Am., N.A., 186 Cal. App. 4th 727, 744–45 (2010). To state such a claim, the plaintiff must 24 plead that the defendant “knows the other’s conduct constitutes a breach of duty and gives 25 substantial assistance or encouragement to the other to so act.” Id. at 744. When “a bank 26 provides ordinary services that effectuate financial abuse by a third party, the bank may be 27 found to have ‘assisted’ in the financial abuse only if it knew of the third party’s wrongful 28 conduct.” Id. at 745. To be liable for elder abuse, there must be actual knowledge, not 7 23-cv-617-DMS-BLM 1 constructive knowledge. Bortz v. JPMorgan Chase Bank, N.A., No. 21-cv-618-TWR, 2021 2 WL 4819575, at *5 (S.D. Cal. Oct. 15, 2021). 3 Here, Plaintiff alleges Defendant violated § 15610.30(a)(2) “by taking, secreting, 4 appropriating, obtaining, or retaining personal property of an elder, or assisting in those 5 activities for a wrongful use or with intent to defraud, or both.” (FAC ¶ 53.) Plaintiff 6 alleges Defendant informed him “that an unknown individual accessed his accounts and 7 switched Plaintiff’s contact information.” (Id. ¶ 14.) Plaintiff maintains that “Defendant’s 8 malicious and oppressive conduct [] was authorized and/or ratified by a high-ranking 9 officer, director, or managing agent as Plaintiff disputed unauthorized transactions which 10 were not reversed.” (Id. ¶ 56.) However, the Court finds this allegation to be conclusory 11 and insufficiently pled. Plaintiff does not plead facts that “suppor[t] improper or fraudulent 12 motive on the part of the Defendant.” Gray v. JPMorgan Chase Bank, N.A., No. 22-cv- 13 03090-DSF, 2023 WL 2471381 at *4 (C.D. Cal. Mar. 13, 2023). Ultimately, Plaintiff has 14 failed to plead facts establishing that Defendant had actual knowledge and provided 15 substantial assistance or encouragement to the unauthorized individual in carrying out the 16 tortious conduct. The Court therefore GRANTS Defendant’s motion to dismiss as to 17 Plaintiff’s elder abuse claim under § 15610.30(a)(2). Because Plaintiff has not been able 18 to cure the deficiencies in pleading the elder abuse claim, the Court finds that any additional 19 amendment would be futile. Intri-Plex Techs., 499 F.3d 1048 at 1056. This claim is 20 therefore dismissed without leave to amend. 21 22 23 24 25 26 IV. CONCLUSION AND ORDER Based on the foregoing, the Court GRANTS IN PART and DENIES IN PART Defendant’s Motion to Dismiss. Specifically, the Court GRANTS the motion as to the CCRA (Cal. Civ. Code § 1798.82) and elder abuse (Cal. Welf. & Inst. Code § 15610.30(a)(2)) claims. These claims are dismissed without leave to amend at this time. 27 28 8 23-cv-617-DMS-BLM 1 For good cause, Plaintiff may move for leave to amend the CCR claim if he identifies new 2 facts in discovery, as explained above. 3 The Court DENIES the motion to dismiss as to the remaining claims. 4 IT IS SO ORDERED. 5 6 Dated: December 1, 2023 ____________________________ Hon. Dana M. Sabraw, Chief Judge United States District Court 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 23-cv-617-DMS-BLM
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