BPi Bright Power, Inc. v. Umpqua Holding Corporation d/b/a Umpqua Bank

Background

BPi alleged that scammers impersonated its business partner and persuaded BPi to transfer more than $150,000 to the scammers’ bank account. BPi sued the unidentified scammers as Doe defendants, along with Umpqua Bank and Wells Fargo N.A., which BPi alleged failed to prevent the fraud.

Against Umpqua, BPi asserted negligence and breach of implied contract. Against Wells Fargo, BPi asserted negligence and a claim under section 11207 of the California Commercial Code. The court had previously dismissed BPi’s second amended complaint but allowed an amendment. BPi then filed a third amended complaint, and Umpqua and Wells Fargo moved to dismiss it under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not plausibly state a claim for relief.

Claims Against Umpqua

The court had previously ruled that division 11 of the California Commercial Code provides the exclusive statement of a bank’s duties when it executes a transfer, displacing BPi’s common-law negligence and implied-contract claims against Umpqua. The third amended complaint repeated the same allegations and did not overcome that earlier conclusion. The court also noted that BPi’s opposition brief did not cite a case supporting a different result.

Claims Against Wells Fargo

The court had previously dismissed BPi’s negligence claim against Wells Fargo because BPi had not plausibly alleged that it was a Wells Fargo customer. Under the California cases discussed by the court, banks generally do not owe duties to non-customers absent extraordinary circumstances. The court found that BPi added no new facts showing such circumstances and made only conclusory allegations that Wells Fargo should have known its customer was a scammer. Allegations about account-opening procedures were not meaningfully tied to what Wells Fargo did or failed to do in this case.

The court also dismissed the section 11207 claim. BPi did not plausibly allege that Wells Fargo had actual knowledge that the beneficiary’s name and the account number referred to different people. The court observed that BPi itself alleged that the fraudulent account was opened in the intended beneficiary’s name. It further stated that a beneficiary’s bank has no duty to determine whether the name and account number in a wire transfer refer to the same person.

Ruling

Judge James Donato dismissed all claims against Umpqua and Wells Fargo with prejudice and without leave to amend, finding that BPi had multiple opportunities to plead plausible claims and that further amendment would be futile.

The Doe defendants were treated separately. The court said the docket did not show that any Doe defendant had been served. It gave BPi until October 27, 2023, to serve them. If service was not completed by that deadline, the Doe defendants would be dismissed without prejudice and the case would be closed.