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Venture General Agency, LLC v. Wells Fargo Bank, N.A.

United States District Court, N.D. California

October 16, 2019

VENTURE GENERAL AGENCY, LLC, et al., Plaintiffs,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

          ORDER RE: MOTION TO DISMISS RE: DKT. NO. 19

          THOMAS S. HIXSON UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION

         Plaintiffs Venture General Agency, LLC and Old American County Mutual Fire Insurance Co. bring a negligence claim against Defendant Wells Fargo Bank, N.A. after a third party fraudulently induced Venture to transfer $1, 708, 112.86 into an account held by the third party at Wells Fargo. Pending before the Court is Wells Fargo's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 19. Plaintiffs filed an Opposition (ECF No. 20) and Defendant filed a Reply (ECF No. 21). The Court finds this matter suitable for disposition without oral argument and VACATES the October 17, 2019 hearing. See Civ. L.R. 7-1(b). Having considered the parties' positions and the relevant legal authority, the Court GRANTS Wells Fargo's motion for the following reasons.

         II. BACKGROUND

         The Court laid out in detail the allegations in this case in its order granting Wells Fargo's motion to dismiss Plaintiffs' original complaint. ECF No. 16. Because the First Amended Complaint (“FAC”) is largely identical to the original complaint, the Court assumes familiarity with those allegations and will not repeat them in full here. Summarizing the dispute, however, Plaintiff Venture General Agency, acting as a managing general agent (“MGA”) for Old American, was fraudulently induced by an unknown, third-party fraudster into transferring $1, 708, 112.86 of Old American's funds into a fraudulent account opened with Wells Fargo in Old American's name. Plaintiffs' original complaint (ECF No. 1), filed on May 21, 2019, asserted one count of negligence and one count of negligence per se against Wells Fargo. Wells Fargo moved for dismissal of that complaint on June 25, 2019. ECF No. 8.

         On reviewing Wells Fargo's motion to dismiss the original complaint, the Court found that a bank does not owe a duty of care to noncustomers. It found that because the complaint did not allege that Plaintiffs were customers of Wells Fargo, it failed to plead allegations showing a duty of care owed by Wells Fargo to Plaintiffs. Thus, the Court found Plaintiffs failed to state a valid claim of negligence. It dismissed that claim with leave to amend. Regarding Plaintiffs' negligence per se claim, the Court noted that the claim was based on Wells Fargo's alleged failure to comply with the Bank Secrecy Act (“BSA”) as amended by the USA PATRIOT Act, 31 U.S.C. §§ 5311-32. The Court found that there is no private right of action under the BSA or Patriot Act, and that because there is no private right of action, there can be no duty of Wells Fargo to Plaintiffs arising out of those acts. The Court dismissed Plaintiffs' negligence per se claim without leave to amend.

         Plaintiffs' FAC makes the same factual allegations in support of the negligence claim as the original complaint did, save for the addition of the following:

During the relevant time periods herein, Old American maintained two premium trust accounts with Wells Fargo, which were joint accounts shared by Old American as well as its MGAs. One such premium trust account, ending in *7076, was opened in or about August 2012, while the other such premium trust account, ending in *3430, was opened in or about September 2015. These accounts remain open and active between Old American and/or its MGAs and Wells Fargo.

FAC ¶ 7.

         Wells Fargo has moved for dismissal of the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 19.

         III. LEGAL STANDARD

         A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To survive a Rule 12(b)(6) motion to dismiss, a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plausibility does not mean probability, but it requires “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009). A complaint must provide a defendant with “fair notice” of the claims against it and the grounds for relief. Twombly, 550 U.S. at 555 (quotations and citation omitted); Fed.R.Civ.P. 8(a)(2) (A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”). In considering a motion to dismiss, the court accepts factual allegations in the complaint as true and construes the pleadings in the light most favorable to the nonmoving party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).; Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). However, “the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678.

         If a Rule 12(b)(6) motion is granted, the “court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (citations and quotations omitted). However, the Court may deny leave to amend for several reasons, including “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

         IV. ...


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