Dean v. Wells Fargo Bank, National Association, et al

Filing 25

ORDER denying as moot 7 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 13 Motion to Dismiss for Failure to State a Claim. Signed by Chief Judge Frank D. Whitney on 9/19/18. (clc)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:18-cv-00213-FDW-DLH
RONALD G. DEAN,

)
)
Plaintiff,
)
)
vs.
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)
DENISE DEAN, and
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WELLS FARGO BANK, NATIONAL )
ASSOCIATION,
)
)
Defendants.
)
)

ORDER

THIS MATTER is before the Court on Defendant Wells Fargo Bank’s Motion to Dismiss
for Failure to State a Claim. (Doc. No. 13). Plaintiff has responded, (Doc. No. 15), Defendant has
replied, (Doc. No. 16), and this motion is now ripe for review. For the reasons stated below,
Defendant’s Motion is GRANTED IN PART and DENIED IN PART. Defendant’s earlier Motion
to Dismiss (Doc. No. 7) is hereby DENIED AS MOOT.
I. BACKGROUND
This action arises out of a disputed transaction involving a home equity line of credit. (Doc.
No. 1, p. 7). Plaintiff was purportedly married to Defendant Denise Dean in 1982. Id. at 3. From
1982 through 2016, Defendant Dean was allegedly responsible for managing Plaintiff’s finances.
Id. Plaintiff alleges that Defendant Dean forged his signature on a deed of trust for a home equity
line of credit in 2007. Id. at 4–5. Plaintiff alleges that this transaction was made without his
knowledge or approval, and Plaintiff was never able to access or use this line of credit. Id. at 6–7.
In addition, Plaintiff alleges that a Wells Fargo employee and notary public, Carol Everett, allowed
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such a forgery to take place by notarizing the document without the personal appearance of a
signatory. Id. at 5. Plaintiff alleges that Wells Fargo had a custom, policy, or practice to allow
notary publics to notarize documents without the signatory present. Id. Furthermore, Plaintiff
alleges that Defendants worked to conceal the existence of this home equity line of credit and deed
of trust by failing to communicate the details of the transaction with him. Id. at 7. According to
Plaintiff, this line of credit was for $95,000 and resulted in a lien on his home, interest and late fee
costs, and emotional distress. Id. at 12–13.
Plaintiff commenced this action against Defendants Denise Dean and Wells Fargo Bank in
state court on March 12, 2018. (Doc. No. 1-1, p. 2). On April 23, 2018, Defendant Wells Fargo
removed the case to Federal Court. (Doc. No. 1). Wells Fargo now moves this Court to dismiss
Plaintiff’s Amended Complaint under Rule 12(b)(6) for failure to state a claim. (Doc. No. 13).
II. LEGAL STANDARD
Rule 12(b)(6) allows a defendant to move for dismissal when a plaintiff has not stated a
claim that is recognized by law. To survive a Rule 12(b)(6) motion to dismiss for failure to state a
claim, a plaintiff's "complaint must contain sufficient factual matter, accepted as true, to 'state a
claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U S. 662, 678 (2009) (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint is plausible “when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable." Id. While a high level of factual detail is not required, a complaint needs more
than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (citation omitted).
“When there are well-pleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. On the other
hand, a plaintiff’s legal conclusions are not entitled to a presumption of truth. Id. at 678.
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III. ANALYSIS
Plaintiff’s Amended Complaint (Doc. No. 9) states the following claims against
Defendants: 1) Civil Conspiracy (Against All Defendants); 2) Breach of Fiduciary Duty (Against
Defendant Wells Fargo); 3) Fraud (Against All Defendants); 4) Constructive Fraud (Against
Defendant Wells Fargo); 5) Negligence and/or Gross Negligence (Against Defendant Wells
Fargo); 6) Rescission (Against All Defendants); 7) Action to Quiet Title (Against All Defendants);
8) Unfair and Deceptive Trade Practices (Against Defendant Wells Fargo); and 9) Punitive
Damages (Against All Defendants).1 (Doc. No. 9, pp. 8–19). Except for the action to quiet title,
Defendant Wells Fargo has moved to dismiss all of Plaintiff’s claims under Rule 12(b)(6) of the
Federal Rules of Civil Procedure. (Doc. No. 13-1, p. 1).
A. Plaintiff’s Claims for Breach of a Fiduciary Duty and Constructive Fraud
Defendant Wells Fargo argues that Plaintiff’s complaint fails to plead facts showing that
Wells Fargo owed Plaintiff a fiduciary duty. (Doc. No. 13-1, p. 5).
Under North Carolina Law, “[f]or a fiduciary duty to exist, there must be a fiduciary
relationship between the parties.” CommScope Credit Union, v. Butler & Burke, LLP, 790 S.E.2d
657, 660 (N.C. 2016) (citing Dalton v. Camp, 548 S.E.2d 704, 707 (N.C. 2001)). A fiduciary
relationship is one where “there has been a special confidence reposed in one who in equity and
good conscience is bound to act in good faith and with due regard to the interests of the one
reposing confidence.” Dalton, 548 S.E.2d at 707. There are two ways that North Carolina courts
recognize the existence of a fiduciary relationship between two parties. First, “[t]he very nature of
some relationships . . . gives rise to a fiduciary relationship as a matter of law.” CommScope, 790

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Plaintiff’s Complaint has two “Count IV’s, thus, the claims are renumbered in this Order.

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S.E.2d at 660. Second, a fiduciary relationship may arise in fact when “there is confidence reposed
on one side, and resulting domination and influence on the other.” Id. (citing Abbitt v. Gregory,
160 S.E. 896, 906 (N.C. 1931)).
Typical borrower-lender transactions “are considered arm’s length and do not typically
give rise to fiduciary duties.” Dallaire v. Bank of America, N.A., 760 S.E.2d 263, 266 (N.C. 2014).
North Carolina courts have declined to find a fiduciary duty in law or fact between a bank and its
customers in a variety of contexts. See Dallaire, 760 S.E.2d at 267 (refusing to find a fiduciary
relationship between a bank’s loan officer and customers); Lynn v. Fed. Nat’l Mortg. Ass’n, 760
S.E.2d 372, 376 (N.C. Ct. App. 2014) (finding that no fiduciary relationship existed between a
debtor and a bank in a mortgage dispute). Several federal courts in this district have similarly
refused to find a fiduciary duty between a bank and a customer when applying North Carolina law.
See Landmar, LLC v. Wells Fargo Bank, N.A., 978 F. Supp. 2d 552, 564 (W.D.N.C. 2013);
Synovus Bank v. Karp, 887 F. Supp. 2d 677, 690 (W.D.N.C. 2012).
For example, in Branch Banking & Trust Company v. Thompson, a bank sued debtors for
a debt under a promissory note. 418 S.E.2d 694, 696 (N.C. Ct. App. 1992). The debtors
counterclaimed, claiming that their signatures on the promissory note were forgeries and alleging
that the bank had breached a fiduciary duty to them. Id. The North Carolina Court of Appeals
found that the relationship between the two parties was merely a debtor-creditor relationship, and
there was no indication that the debtors “reposed any sort of special confidence in [the bank] which
would serve to give rise to a fiduciary relationship.” Id. at 699.
Here, Plaintiff pleads no facts that would suggest that he had a fiduciary duty with Wells
Fargo. By Plaintiff’s own set of facts, which this Court presumes to be true, his wife managed his
finances and Wells Fargo did not consult with him in any way regarding the home line of equity.
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(See Doc. No. 9, p. 5 (“Plaintiff had no knowledge of the transaction and did no participate in,
consent to, authorize, approve, ratify, and/or condone the transaction.”)). There is no indication
from the facts pled in the complaint that Plaintiff placed a special confidence in the bank to move
the relationship beyond a normal debtor-creditor relationship. See Branch Banking, 418 S.E.2d at
699.
To support the existence of a fiduciary duty, Plaintiff only claims that “[t]he banking
relationship between the Plaintiff and Defendant Wells Fargo created a fiduciary relationship” and
that Defendant Wells Fargo breached this fiduciary duty by not “protect[ing] Plaintiff’s interests
or assets” and by exploiting “its position of special trust and confidence . . . for financial gain.”
(Doc. No. 9, p. 9–10). However, these statements are legal conclusions, and therefore not entitled
to a presumption of truth. See Iqbal, 556 U S. at 678. As a matter of law, the fact that Plaintiff was
a customer of the bank is not enough to create a fiduciary relationship. Branch Banking, 418 S.E.2d
at 699. For these reasons, Plaintiff has failed to plausibly plead the existence of a fiduciary
relationship for a breach of fiduciary duty claim.
Plaintiff has also failed to plausibly plead a claim for constructive fraud. Under North
Carolina law, the pleading of a constructive fraud claim is essentially predicated on the existence
of a fiduciary duty. See Terry v. Terry, 273 S.E.2d 674, 677 (N.C. 1981) (requiring the pleading
of facts and circumstances “(1) which created the relation of trust and confidence, and (2) which
led up to and surrounded the consummation of the transaction in which defendant is alleged to
have taken advantage of his position of trust to the hurt of plaintiff” to sustain a claim for
constructive fraud) (citation omitted). Since Plaintiff has not made a plausible showing that a
relationship of special trust and confidence existed between himself and Wells Fargo Bank, he has
also not plausibly pled a claim for constructive fraud. See Landmar, 978 F. Supp. 2d at 568 (“There
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being no fiduciary duty between these parties, plaintiffs have failed to state a claim for constructive
fraud.”).
Therefore, Defendant’s 12(b)(6) motion with respect to Plaintiff’s breach of fiduciary duty
and constructive fraud claims is hereby GRANTED and these claims against Defendant Wells
Fargo are DISMISSED WITHOUT PREJUDICE.
B. Plaintiff’s Claims for Rescission and Punitive Damages
Defendant Wells Fargo argues that Plaintiff’s claims for rescission and punitive damages
fail to state a cause of action because they are not stand-alone claims. (Doc. No. 13-1, p. 14). The
Court agrees with Defendant. See Morris v. Scenera Research, LLC, 788 S.E.2d 154, 161 (N.C.
2016) (“Rescission is an equitable contract remedy . . . .”); Holland v. Wells Fargo Home Mortg.,
No. 5:14-cv-00176-MOC, 2015 WL 1432458 at *6 (W.D.N.C. Feb. 13, 2015) (“[R]escission is a
remedy and not a cause of action . . . .”); Oestreicher v. American Nat’l Stores, Inc., 225 S.E.2d
797, 808 (N.C. 1976) (“As a rule you cannot have a cause of action for punitive damages by
itself.”). To the extent that Plaintiff is alleging rescission and punitive damages as separate causes
of action, Defendant’s motion to dismiss for failure to state a claim is GRANTED, and these claims
are DISMISSED WITHOUT PREJUDICE. However, this ruling does not preclude Plaintiff from
seeking these remedies under his other claims if such remedies are available by law.
C. Plaintiff’s Remaining Claims
The Court has reviewed the remaining four claims and arguments regarding their dismissal
in the briefs. In light of applicable law, the Court finds Plaintiff has sufficiently stated plausible
claims against Defendant. For that reason, Defendant’s Motion to Dismiss Plaintiff’s Civil
Conspiracy, Fraud, Negligence/Gross Negligence, and Unfair and Deceptive Trade Practices

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claims is DENIED WITHOUT PREJUDICE. Defendant may reassert any applicable arguments
regarding these claims at summary judgment.
D. Defendant’s Earlier Motion to Dismiss
Defendant Wells Fargo Bank made an earlier Motion to Dismiss for Failure to State a
Claim (Doc. No. 7). After Defendant made this Motion, Plaintiff amended his complaint. (Doc.
No. 9). It is well settled law that a timely-filed amended pleading supersedes the original pleading,
and motions directed at superseded pleadings may be denied as moot. See Young v. City of Mount
Ranier, 238 F.3d 567, 573 (4th Cir. 2001) (“The general rule . . . is that an amended pleading
supersedes the original pleading, rendering the original pleading of no effect.”); Colin v. Marconi
Commerce Sys. Emps.’ Retirement Plan, 335 F. Supp. 2d 590, 614 (M.D.N.C. 2004) (finding that
Defendants’ earlier motion to dismiss was rendered moot by the filing of plaintiff’s second
amended complaint); Turner v. Kight, 192 F. Supp. 2d 391, 397 (D. Md. 2002) (denying as moot
motion to dismiss original complaint on grounds that amended complaint superseded original
complaint). Since Plaintiff’s Amended Complaint was timely filed, Defendant’s Motion to
Dismiss Plaintiff’s original pleading (Doc. No. 7) is DENIED AS MOOT.
IV. CONCLUSION
IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss (Doc. No. 13) is
GRANTED IN PART and DENIED IN PART. As stated above, Plaintiff fails to allege sufficient
facts to support his claims of Breach of Fiduciary Duty and Constructive Fraud. Plaintiff also
cannot plead Rescission and Punitive Damages as separate causes of action. Thus, these claims are
hereby DISMISSED WITHOUT PREJUDICE. The Defendant’s Motion to Dismiss regarding
Plaintiff’s other claims is DENIED and Defendant’s earlier Motion to Dismiss (Doc. No. 7) is
DENIED AS MOOT.
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IT IS SO ORDERED.
Signed: September 19, 2018

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