Lundgren v. Bank of America N.A. et al
Filing
25
ORDER by Judge Claudia Wilken granting in part and denying in part 4 Motion to Dismiss (cwlc3, COURT STAFF) (Filed on 10/4/2011)
1
IN THE UNITED STATES DISTRICT COURT
2
FOR THE NORTHERN DISTRICT OF CALIFORNIA
3
4
5
ULLA LUNDGREN, dba A STEP FORWARD
SHOES,
8
9
United States District Court
For the Northern District of California
10
11
12
13
14
ORDER GRANTING IN
PART BANK OF
AMERICA'S MOTION
TO DISMISS AND
DENYING IT IN PART
(Docket No. 4)
Plaintiff,
6
7
No. C 11-00758 CW
v.
BANK OF AMERICA, N.A., a National
Banking Association; BANK OF
AMERICA CORPORATION, a Delaware
Corporation,
Defendants.
________________________________/
Defendants Bank of America, N.A. and Bank of America
Corporation (collectively, Bank of America) move pursuant to
Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff Ulla
15
16
Lundgren's complaint.
Docket No. 4.
Plaintiff opposes the
17
motion.
18
oral argument, the Court GRANTS IN PART Bank of America's motion
19
to dismiss, and DENIES IT IN PART.
20
21
22
Having considered all of the parties' submissions and
BACKGROUND
Plaintiff has alleged causes of action based on the following
facts.
23
In 2003, Plaintiff opened a checking account at a branch of
24
25
Bank of America located in Oakland, California.
The deposits in
26
the account stood to Plaintiff's credit, for her use and benefit,
27
and were governed by the terms and conditions set forth in the
28
passbook and a signature card contract.
Withdrawals were
1
permitted from the account only by check or other order bearing
2
Plaintiff's signature.
3
Bullard as a bookkeeper for her business.
4
2010, Bullard prepared checks without Plaintiff's knowledge and
5
authorization payable to various vendors from which Plaintiff
6
7
purchased inventory.
Also in 2003, Plaintiff hired Catherine
From about 2005 through
The checks were not made in response to
invoices from said vendors and were not intended by Bullard to be
8
9
paid to the vendors.
The checks were never tendered to the
United States District Court
For the Northern District of California
10
vendors.
11
personal account or that of others, using Bank of America's ATM
12
machines.
13
forged checks, including those without endorsements, were paid by
14
Bank of America.
15
Instead, Bullard deposited the checks into her own
Many of these forged checks lacked an endorsement.
The
Although the number of forged checks and their
total amount is not alleged, Plaintiff believes that she was
16
17
18
19
defrauded of at least $250,000.
Plaintiff alleges that Bank of
America acted both as the payor and depositary bank1 with respect
to the forged checks.
20
In or about early 2009, Plaintiff discovered the forged
21
checks and demanded that Bank of America replace and re-credit to
22
her account the total sum of all of the forged checks.
23
Bank of
America, however, credited to Plaintiff's account only certain
24
25
26
27
28
The "payor bank" is the bank which has the check writer's
checking account from which the check is to be paid. In re
McMullen Oil Co., 251 B.R. 558, 566 (C.D. Cal. 2000). The
"depositary bank" is the "first bank to take an item even though
it is also the payor bank, unless the item is presented for
immediate payment over the counter." Cal. Com. Code § 4105(2).
1
2
1
checks, totaling $2,300, and refused to restore the remaining
2
amount.
3
reported the forged checks to Bank of America, but the Court
4
assumes that she reported them in early 2009, when she discovered
5
them.
6
7
Plaintiff does not specifically allege the date when she
On or about May 31, 2009, Plaintiff submitted a complaint
against Bullard, although not against Bank of America, to the
8
9
Comptroller of the Currency, Administrator of National Banks,
United States District Court
For the Northern District of California
10
regarding the forged checks.
11
number, but, as of the date this action was filed, the
12
administrative complaint had not been resolved.
13
14
15
The Comptroller assigned a case
On December 30, 2010, Plaintiff filed this suit in Alameda
County Superior Court.
Bank of America removed the action to
federal court on February 18, 2011.
Essentially, through this
16
17
18
action, Plaintiff seeks to recover from Bank of America the
amounts Bullard allegedly stole from her.
Plaintiff seeks to
19
recover the amounts paid through the forged checks, as well as
20
general damages, not less than $1,000,000, resulting from her
21
inability to pay her creditors, injury to her reputation and
22
difficulty in obtaining credit.
23
24
Plaintiff's complaint alleges four causes of action.
The
first cause of action is asserted against the Bank of America, as
25
26
payor bank, to recover payments charged to Plaintiff's account
27
based on the forged checks.
The first cause of action refers to
28
California Uniform Commercial Code sections 3401, 3403 and 4401.
3
1
Plaintiff's second cause of action, alleged against Bank of
2
America as depositary bank, seeks recovery based on the bank's
3
failure to exercise ordinary care in accepting for deposit into
4
Bullard's account checks that were not made out to her and were
5
not endorsed.
6
7
This cause of action cites California Uniform
Commercial Code sections 3103(a)(7), 3404(d), 3405(b) and 4401.
Plaintiff's third cause of action is for "negligence per se"
8
9
against Bank of America, both as the payor and the depositary
United States District Court
For the Northern District of California
10
bank.
The claim cites California Evidence Code section 669 and
11
incorporates the provisions of the California Uniform Commercial
12
Code referred to in the first and second causes of action.
13
Finally, Plaintiff alleges a fourth cause of action for a
14
constructive trust.
15
LEGAL STANDARD
16
17
18
A complaint must contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.”
Fed. R.
19
Civ. P. 8(a).
20
failure to state a claim, dismissal is appropriate only when the
21
complaint does not give the defendant fair notice of a legally
22
cognizable claim and the grounds on which it rests.
23
24
On a motion to dismiss under Rule 12(b)(6) for
Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Bell Atlantic
In considering
whether the complaint is sufficient to state a claim, the court
25
26
will take all material allegations as true and construe them in
27
the light most favorable to the plaintiff.
NL Indus., Inc. v.
28
Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).
However, this
4
1
principle is inapplicable to legal conclusions; "threadbare
2
recitals of the elements of a cause of action, supported by mere
3
conclusory statements," are not taken as true.
4
129 S.Ct. 1937, 1949-50 (2009) (citing Twombly, 550 U.S. at 555).
5
6
7
Ashcroft v. Iqbal,
DISCUSSION
I. Untimeliness and Preclusion of Plaintiff's Claims
Bank of America argues that two statutory provisions bar
8
9
Plaintiff's claims based on untimeliness and issue preclusion.
United States District Court
For the Northern District of California
10
A. California Code of Civil Procedure § 340(c)
11
First, Bank of America contends that the statute of
12
limitations set forth in California Code of Civil Procedure
13
section 340(c) applies to all of Plaintiff's claims.
14
340(c) establishes a one year statute of limitations for an action
15
Section
by a depositor against a bank for the payment of a forged check.
16
17
18
The one year limitations period under section 340(c) begins to run
when the bank furnishes to its customer a bank statement
19
addressing the check at issue and the cancelled check.
20
Bank of America, 76 Cal. App. 4th 562, 565 (1992).
21
22
23
24
Mac v.
Plaintiff counters that the three year statute of limitations
period established by California Uniform Commercial Code § 4111
applies to all of her claims.
Section 4111 applies to disputes
between banks and their depositors in connection with the
25
26
27
28
collection and payment of items.
Whether the enactment of section 4111 abrogated the earlier
established one year limitations period set forth in section
5
1
340(c) is addressed in Chatsky and Associates v. Superior Court,
2
117 Cal. App. 4th 873, 880 (2004).
3
in the language or history of section 4111 indicated that the
4
legislature intended to repeal section 340(c), and the provisions
5
were reconcilable because section 4111 generally applies to
6
7
Chatsky reasoned that nothing
actions arising between banks or a bank and its customers "to
enforce an obligation, duty, or right," whereas section 340(c)
8
9
United States District Court
For the Northern District of California
10
11
expressly concerns an action by a depositor against its bank for
the payment of a forged check.
Id. at 878-879.
Plaintiff also asserts the doctrine of equitable tolling to
12
argue that the statute of limitations on her claims should be
13
tolled as of May 31, 2009, the approximate date when she initiated
14
her administrative complaint against Bullard with the
15
Comptroller's office.
Plaintiff represents that the Comptroller
16
17
18
advised her not to file a civil action during the administrative
investigation because the administrative complaint would enable
19
her to seek restitution from Bullard.
She does not represent that
20
the Comptroller advised her not to file suit against the bank.
21
The doctrine of equitable tolling generally focuses on a
22
plaintiff's excusable ignorance of the limitations period and on a
23
24
lack of prejudice to the defendant.
649 F.2d 691, 696 (9th Cir. 1981).
Naton v. Bank of California,
Equitable tolling may also
25
26
apply "'[w]hen an injured person has several legal remedies and,
27
reasonably and in good faith, pursues one.'"
28
Columbia/HCA Healthcare Corp., 241 F.3d 1131, 1136 (9th Cir. 2001)
6
Daviton v.
1
(citing Elkins v. Derby, 12 Cal. 3d 410, 414 (1974)).
Bank of
2
America responds that equitable tolling is unwarranted in the
3
present case.
4
an alternative remedy requires that the plaintiff seek the
5
alternative remedy against the same defendant as named in the
6
7
It contends that equitable tolling for pursuit of
second proceeding.
In Cervantes v. City of San Diego, 5 F.3d
1273, 1276 n.3 (1993), the Ninth Circuit stated that, although
8
9
several of the defendants in the federal action were not parties
United States District Court
For the Northern District of California
10
to the plaintiff's prior administrative proceeding, there was a
11
sufficiently close relationship between them and the party named
12
in the prior proceeding that a "kind of evidentiary privity would
13
justify overlooking their nominal absence" for purposes of
14
determining whether equitable tolling was warranted.
15
Id.
Here,
however, there does not appear to be a close relationship between
16
17
18
Bullard and the Bank of America.
Equitable tolling does not
apply.
19
Because Plaintiff concedes that her first cause of action is
20
a claim to recover for the bank's payment of forged checks, under
21
Chatsky, the one year limitations period in section 340(c) governs
22
that cause of action.
23
24
Accordingly, Plaintiff may not recover on
her first cause of action for checks which Bank of America
included in a statement before December 30, 2009, one year before
25
26
27
28
the date she filed this lawsuit.
As noted above, Bank of America also contends that section
340(c) applies to Plaintiff's second cause of action against it as
7
1
depositary bank, for accepting for deposit checks not made out to
2
Bullard and unendorsed.
3
at 565; Roy Supply, Inc. v. Wells Fargo Bank, 39 Cal. App. 1051,
4
1064, 1065 (1995); and Union Tool Company v. Farmers' & Merchants'
5
National Bank, 192 Cal. 40, 51 (1923).
6
7
The Bank relies on Mac, 76 Cal. App. 4th
The Bank's authorities are
unavailing because these cases involved claims against payor banks
for payment of checks on forged signatures and endorsements, as
8
9
United States District Court
For the Northern District of California
10
opposed to claims for depositing checks with no endorsement.
Bank of America argues that forgery is defined to include
11
checks deposited without endorsements.
12
Commercial Code sections 1-201(41) and 3-403(b), and comment ¶ 4
13
to § 3-403(b), in support of this proposition.
14
Uniform Commercial Code sections analogous to these provisions do
15
It cites Uniform
The California
not define forgery, but rather establish that forgeries are
16
17
18
included within the California Uniform Commercial Code's
definition of unauthorized signature, and address authorized
19
signatures in the context of checks requiring more than one
20
signature to authorize payment.
21
unendorsed checks as forgeries.
22
23
24
These sections do not define
Bank of America also relies on California Uniform Commercial
Code section 3404, which assigns liability to payor and depositary
banks that fail to exercise ordinary care with respect to a check
25
26
issued to a fictitious payee.
This provision likewise does not
27
define an unendorsed check as a forgery for purposes of bringing
28
it within the scope of section 340(c).
8
1
Thus, section 340(c) does not apply to a claim for a bank's
2
negligence in accepting for deposit checks without an endorsement
3
into an account held by a person or entity other than the payee
4
named on the check.
5
limitations of California Uniform Commercial Code section 4111
6
Instead, the three year statute of
applies to Plaintiff's second cause of action for negligence.2
7
8
9
Section 4111 bars Plaintiff's second claim with respect to checks
negligently deposited by Bank of America where the checks were
United States District Court
For the Northern District of California
10
deposited, and the claim accrued, more than three years prior to
11
the date this lawsuit was filed, that is, December 30, 2007.
12
B. California Uniform Commercial Code § 4406
13
Bank of America also argues that California Uniform
14
Commercial Code sections 4406 (d) and (f) preclude Plaintiff's
15
first and second causes of action.
Section 4406, under certain
16
17
circumstances, bars a customer's assertion of claims against a
18
bank for payment of an unauthorized item.
Section 4406(a)
19
provides that a bank issuing an account statement to a customer
20
showing items paid from the account shall provide information in
21
the statement sufficient to allow the customer reasonably to
22
identify the items paid.
Cal. Com. Code. § 4406(a).
Section
23
24
25
26
27
28
Plaintiff also appears to argue that a three year statute
of limitations period applies based on section 338 of the
California Code of Civil Procedure. Plaintiff relies on Sun 'n
Sand v. United California Bank, 21 Cal. 3d 671 (1978). However,
that case is not authority establishing that the limitations
period in section 338 governs Plaintiff's negligence claim. Roy
Supply, 39 Cal. App. at 1070 n.20.
2
9
1
4406(c) states that, if a bank issues an account statement
2
pursuant to subdivision (a), the customer is obliged to examine
3
the statement promptly to determine whether any payment was not
4
actually authorized.
5
a customer fails to comply with subdivision (c), the customer is
6
7
8
9
United States District Court
For the Northern District of California
10
11
Cal. Com. Code § 4406(c).
In the event that
precluded by section 4406(d)(2) from asserting against the bank
[t]he customer's unauthorized signature or alteration
. . . on any item paid in good faith by the bank if
the payment was made before the bank received notice
from the customer of the unauthorized signature or
alteration and after the customer had been afforded a
reasonable period of time, not exceeding 30 days, in
which to examine the item or statement of account and
notify the bank.
12
13
14
Cal. Com. Code § 4406(d)(2).
Plaintiff argues that her claims are not precluded by
15
section 4406(d)(2) due to section 4406(e).
16
states,
17
18
19
20
21
22
23
Section 4406(e)
If subdivision (d) applies and the customer proves
that the bank failed to exercise ordinary care in
paying the item and that the failure contributed to
loss, the loss is allocated between the customer
precluded and the bank asserting the preclusion
according to the extent to which the failure of the
customer to comply with subdivision (c) and the
failure of the bank to exercise ordinary care
contributed to the loss. If the customer proves that
the bank did not pay the item in good faith, the
preclusion under subdivision (d) does not apply.
24
Cal. Com. Code § 4406(e).
25
America explained that preclusion under section 4406(d) may be
26
avoided "by establishing that the bank failed to exercise ordinary
27
Espresso Roma Corporation v. Bank of
care in paying the item and that the failure contributed to the
28
10
1
loss."
100 Cal. App. 4th 525, 528 (2002) (internal quotation
2
marks and alterations omitted).
3
regular monthly statements and failed to detect the fraud for over
4
six years, Bank of America would still be liable for a portion of
5
the loss if it also failed to exercise ordinary care in making
6
7
Although Plaintiff received
payment and that failure contributed to Plaintiff's loss.
Plaintiff's complaint alleges that Bank of America's payment of
8
9
the checks was contrary to the duty of care it owed to her.
United States District Court
For the Northern District of California
10
Compl. at ¶¶ 15, 22 & 28.
11
preclude any of Plaintiff's claims at the pleading stage.
12
Therefore, section 4406(d) does not
Bank of America also cites section 4406(f) for its preclusive
13
effect.
14
"Without regard to the care or lack of care of either the customer
15
In contrast to subdivision (d), section 4406(f) states,
or the bank," a customer who does not, within one year after the
16
17
18
19
statement is issued pursuant to subdivision (a), discover and
report the unauthorized signature is precluded from asserting the
signature against the bank.
Cal. Com. Code § 4406(f).
20
Plaintiff first appears to argue that Espresso Roma Corp.
21
stands for the proposition that section 4406(e) trumps section
22
4406(f).
23
24
This is unpersuasive given the plain language of both
provisions.
In addition, Espresso Roma Corp. did not address the
defendant bank's section 4406(f) arguments because the court
25
26
27
resolved the appeal based on sections 4406(d) and (e).
App. 4th at 528 n.2.
28
11
100 Cal.
1
Plaintiff also appears to rely upon Sun 'n Sand v. United
2
California Bank, 21 Cal. 3d 671 (1978), for the proposition that
3
section 4406(f) does not apply to her claims.
4
held that section 4406(4), the precursor to section 4406(f),3 "did
5
not suffice to displace the three-year statute of limitations
6
Indeed, Sun 'n Sand
ordinarily applicable" to the plaintiff's negligence claim.
21
7
8
9
Cal. 3d at 700.
The court in Roy Supply agreed with this holding,
39 Cal. App. 4th at 1069, but distinguished the negligence claim
United States District Court
For the Northern District of California
10
against the depositary bank in Sun 'n Sand from the negligence
11
claim before it, which alleged that the payor bank had negligently
12
made payment of certain checks over a forged signature, id. at
13
1068-70.
14
Although Roy Supply did not decide the applicability of
section 4406(f) to claims based on missing endorsements, it noted
15
that "any claim that is not dependent upon proof of forgery will
16
17
not be precluded by section 4406[f], although the customer will
18
still be precluded from asserting forgery in pursuing that claim."
19
39 Cal. App. 4th at 1073.
20
Bank of America incorrectly asserts that all of Plaintiff's
21
claims rely on the existence of a forgery, and that checks
22
deposited with missing endorsements should be treated as forged or
23
otherwise unauthorized checks.
However, as noted earlier, the
24
25
26
27
28
provisions cited by Bank of America, California Uniform Commercial
3Section
4406(4)'s renumbering as section 4406(f) in 1993 did
not materially change the provision. Roy Supply, 39 Cal. App. at
1064 n.13.
12
1
Code sections 1201(b)(41) and 3403(b), do not establish a broad
2
enough definition of forgery or unauthorized signature to
3
encompass Plaintiff's claims against Bank of America as a
4
depositary bank for depositing checks without endorsements.
5
6
7
Thus, section 4406(f) precludes Plaintiff from asserting
against Bank of America forgeries which were not discovered and
reported to the bank within one year after the bank statement or
8
9
items were otherwise made available to Plaintiff.
As noted
United States District Court
For the Northern District of California
10
earlier, Plaintiff has not alleged the precise date when she
11
reported the forged checks to Bank of America, but presumably she
12
reported them in early 2009 when she discovered them.
13
section 4406(f) precludes Plaintiff from asserting forged checks
14
paid by Bank of America prior to early 2008.
15
Thus,
This preclusion is
likely moot in light of the one year statute of limitations
16
17
18
addressed above.
However, section 4406(f) does not apply to Plaintiff's second
19
cause of action alleging negligence independent of the bank's
20
payment of forged checks and based instead on the bank's deposit
21
of checks without any endorsement.
22
II. Negligence Per Se
23
24
Plaintiff's third cause of action alleges a claim for
"negligence per se."
Bank of America argues that the California
25
26
Uniform Commercial Code broadly precludes common law claims for
27
negligence per se alleged against banks in relation to payment and
28
collection of fraudulent checks.
13
1
The third cause of action cites California Evidence Code
2
section 669.
3
failed to exercise due care if he or she has violated a statute,
4
ordinance or regulation.
5
Plaintiff's claim incorporates citations to California Uniform
6
7
Under section 669, it is presumed that a person has
Cal. Evid. Code § 669(a)(1).
Commercial Code sections 3401, 3403, 3404 and 3405.
Plaintiff
invokes the evidentiary presumption to establish negligence based
8
9
on Bank of America's alleged statutory violations--specifically,
United States District Court
For the Northern District of California
10
its payment of Bullard's forged checks, and its failure to
11
exercise ordinary care in accepting for deposit checks without
12
endorsements that were not made out to Bullard.
13
14
15
The California Uniform Commercial Code does preempt claims
for negligence against Bank of America as a payor bank for paying
forged checks.
Roy Supply held that the California Uniform
16
17
18
Commercial Code precluded common law claims for negligent payment
of forged checks, brought in that case against the payor bank by
19
owners of the account from which the payments were drawn.
20
App. 4th at 1058.
21
22
23
24
39 Cal.
To the extent Bank of America argues that the California
Uniform Commercial Code preempts Plaintiff's negligence claim in
her second cause of action, that argument fails.
The bank cites
Gil v. Bank of America, N.A., 138 Cal. App. 4th 1371, 1377-78
25
26
(2006).
Gil does not apply to Plaintiff's claim.
There the court
27
found that California Uniform Commercial Code section 3420,
28
authorizing a claim for conversion, preempted a negligence claim
14
1
by a payee against a depositary bank for accepting a check without
2
an endorsement.
3
on the checks; she is the owner of the account from which the
4
checks were drawn.
5
6
7
However, Plaintiff in this case was not the payee
Instead, this case is analogous to Joffe v. United California
Bank, 141 Cal. App. 3d 541 (1993).
In Joffe, the California Court
of Appeal reversed the trial court's dismissal of the plaintiffs'
8
9
cause of action for negligence.
The plaintiffs were owners of the
United States District Court
For the Northern District of California
10
account from which the check at issue was drawn, and alleged their
11
negligence claim against the depositary bank for acceptance of a
12
check in which the named payee on the check differed from the
13
endorsement and name of the account into which the check was
14
deposited.
15
The court held that sections 1103 and 3406 of the
California Uniform Commercial Code did not preempt the claims, and
16
17
18
that the claim was cognizable.
Id. at 556-57.
See also E.F.
Hutton & Co. v. City Nat. Bank, 149 Cal. App. 3d 60, 69 (1982)
19
(holding that plaintiff's claim for negligence against a
20
collecting bank was not preempted by California Uniform Commercial
21
Code section 3405).
22
23
24
Plaintiff’s third cause of action is dismissed and leave to
amend is unwarranted.
A negligence claim as to the forged checks
paid by Bank of America is statutorily preempted, and a claim as
25
26
27
to the negligent deposit of the unendorsed checks, although not
preempted, is duplicative of Plaintiff's second cause of action.
28
15
1
2
III. Constructive Trust
Plaintiff's fourth cause of action seeks to impose a
3
constructive trust on Bullard's account.
4
an equitable remedy to compel a person who has property to which
5
he is not justly entitled to transfer it to the person entitled
6
thereto."
"A constructive trust is
Weiss v. Marcus, 51 Cal. App. 3d 590, 600 (1975).
7
8
9
United States District Court
For the Northern District of California
10
11
California Code of Civil Procedure section 2223 provides, "One who
wrongfully detains a thing is an involuntary trustee thereof, for
the benefit of the owner."
Cal. Code Civ. Proc. § 2223.
Originally Plaintiff alleged that Bullard had an account at
12
Bank of America.
13
America represented that Bullard's account had been closed.
14
At the hearing on the present motion, Bank of
Accordingly, Plaintiff withdrew her constructive trust claim
15
because it was apparently moot.
16
17
18
IV. Conversion
Plaintiff seeks to add a claim for conversion against Bank
19
of America.
20
negligence claim by the payee against a depositary bank for
21
acceptance of checks with missing endorsements.
22
the common law claim was precluded by the California Uniform
23
Gil, 138 Cal. App. 4th at 1377, addresses a
After ruling that
Commercial Code, Gil held that section 3420 of the Code, providing
24
25
26
that the law applicable to conversion of personal property also
applies to negotiable instruments, permits an action for
27
conversion based on the acceptance for deposit of checks without
28
endorsements.
In addition, In re McMullen Oil Co., 251 B.R. 558,
16
1
569 (C.D. Cal. 2000), states, "A bank may be liable for conversion
2
when it permits the deposit of a check into a third party's
3
account without the indorsement of the payee."
4
does not object to allowing Plaintiff to amend her complaint to
5
add a cause of action for conversion.
Bank of America
6
CONCLUSION
7
8
9
United States District Court
For the Northern District of California
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Bank of America's motion to dismiss is GRANTED in part.
Plaintiff's first claim, to the extent that it is based on Bank of
America's payment of forged checks, is barred under section 340(c)
with respect to forged checks which were furnished and reported in
a bank statement before December 30, 2009, one year prior to the
date this lawsuit was filed.
Further, section 4406(f) precludes
Plaintiff from asserting forged checks paid by Bank of America,
where Plaintiff did not discover and report the forgeries to the
bank within one year after the related bank statement was issued.
Cal. Com. Code § 4406(f).
Plaintiff's second claim, alleging Bank of America's
negligent deposit of checks without endorsements, is subject to a
three-year statute of limitations.
Accordingly, Plaintiff may not
recover on her second cause of action for checks negligently
deposited by Bank of America where the claim accrued more than
three years prior to the date this lawsuit was filed, that is,
prior to December 30, 2007.
Section 4406(f) does not preclude
this claim.
The third claim, for negligence per se, is dismissed.
To the
extent the third cause of action is a common law negligence claim
against Bank of America as a payor bank for paying forged checks,
17
1
the claim is preempted by the California Uniform Commercial Code.
2
To the extent that the cause of action is a common law claim
3
against Bank of America for negligently accepting for deposit
4
checks missing endorsements and payable to payees other than
5
Bullard, the claim is dismissed because it is duplicative of
6
Plaintiff's second cause of action.
7
Plaintiff’s fourth cause of action, for constructive trust,
is dismissed as moot.
9
Plaintiff may amend her complaint to state a claim for conversion.
10
United States District Court
For the Northern District of California
8
Pursuant to the parties' agreement,
Plaintiff must file her amended complaint within fourteen
11
days from the date of this order.
Bank of America shall submit an
12
answer or motion to dismiss within twenty-one days from the date
13
Plaintiff files her amended complaint.
14
motion to dismiss is filed, the hearing shall be noticed for the
15
first Thursday the Court is available, at least thirty-five days
16
after the opening brief has been submitted.
17
schedule a case management conference for the date the motion is
18
heard.
19
on November 29, 2011 at 2:00 pm if no further motion to dismiss is
20
filed.
21
to the case management conference.
In the event a second
The Clerk will
The parties shall appear for a case management conference
A joint case management statement is due seven days prior
22
23
IT IS SO ORDERED.
24
25
26
Dated: 10/4/2011
CLAUDIA WILKEN
United States District Judge
27
28
18
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?