By Jerry Carter. The Washoe County Business Court entered a January 17, 2013 Order dismissing a third-party complaint brought by check fraud defendants. Earlier in the case, in an August 23, 2012 Summary Judgment Order, the Business Court found that there was no genuine dispute that Defendant Davis received a check from A4 Diamond (“A4”) and then drafted a check in the amount of $200,000.00 (Canadian Dollars) made payable to the trust account of Plaintiff Tiras. In the meantime, A4 placed a stop payment on the check it sent to Davis and notified Davis of the stop payment. Nevertheless, knowing of the stop payment and concealing the information from Tiras, Davis directed Tiras to electronically transfer $202,000.00 in Tiras’s trust account to a third party, Defendant Ocean water Consultants, LLC (“Oceanwater”).
Defendants, Davis, Oceanwater, and Sandra Ramirez (collectively, the “Oceanwater Defendants”) filed an amended third party complaint against Wells Fargo and its employee, Kevin McDonald. The Oceanwater Defendants complained that Wells Fargo accessed Oceanwater’s confidential bank account and divulged that information to the plaintiffs. The Oceanwater Defendants attempted to state claims for breach of contract, breach of fiduciary duty, invasion of privacy, and breach of the implied duty of good faith and fair dealing.
The Business Court dismissed the third party complaint because it did not seek contribution or indemnity, as contemplated by Nevada Rule of Civil Procedure 14. The Business Court also offered an advisory opinion as to the merits of the Oceanwater Defendants’ claims “[i]n the interests of judicial economy, and the possibility the Third-Party Defendants will attempt to bring their claims against Wells Fargo and McDonald through other means.”
Breach of Contract: The Court held that the breach of contract claim failed because it did not allege the existence of a contract that included a term preventing dissemination of the defendants’ account information
Breach of Fiduciary Duty: The Court dismissed the breach of fiduciary duty claim because, absent special circumstances, “a bank generally does not owe any fiduciary duties to its depositors.”
Invasion of Privacy: The Court dismissed the claims of Davis and Ramirez for invasion of privacy because the account was in the name of Oceanwater Consulting, LLC. The Court dismissed the claim of Oceanwater Consulting, LLC because a claim for invasion of privacy can be maintained only by a living individual whose privacy is invaded.
Breach of the Covenant of Good Faith and Fair Dealing: The Court held that the complaint failed to allege a tortious breach of the covenant of good faith and fair dealing because no fiduciary relationship or other special element of reliance was alleged. In addition, the complaint failed to allege a contractual breach of the covenant of good faith and fair dealing because the complaint consisted merely of conclusory allegations.
The Business Court appears to have held the pleading in this case to a slightly higher standard than is usually applied at the pleading stage. To the extent that happened in this case, it can probably be explained by the audacity of the check fraud defendants. Some of these defendants were previously found to be liable for perpetrating a check fraud scheme on the plaintiff. To allow them to turn around and blame the bank for helping to expose their fraudulent scheme would be perverse. Moreover, it would possibly discourage banks from vigorously protecting the integrity of the banking system.