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Doe v. Bank of America Corp.

United States District Court, District of Columbia

August 11, 2017

JOHN DOE, et al., Plaintiffs,
v.
BANK OF AMERICA CORPORATION, et al., Defendants.

          OPINION

          ROSEMARY M. COLLYER United States District Judge.

         John Doe, “a well-known international figure with a political background, ” and his daughter, Jane Doe, sue the Bank of America Corporation for negligence and breach of contract (Counts I and II) because, after Mr. Doe's 34-year personal banking relationship with Bank of America, both his and his daughter's accounts were summarily closed.[1] Mr. Doe claims damage to his reputation, alleging that the abrupt and unexplained closing of his account may suggest to international corporations on whose boards he might serve, that he was engaged in illegal financial activities, such as money laundering, which he vehemently denies. See Compl., Introduction. Plaintiffs demand an explanation and money damages “for the embarrassment, reputational damage, and business-related damages” they have suffered.[2] See id. ¶¶ 21, 27. Defendant, Bank of America Corporation, moves to dismiss the complaint. See Mot. to Dismiss [Dkt. 14].

         The Complaint initially named Merrill Lynch, presumably Merrill Lynch, Pierce, Fenner & Smith, Inc., as a Defendant. In the Opposition, however, Plaintiffs agree to dismiss all allegations against Merrill Lynch (Counts III and IV) with prejudice. See Opp'n [Dkt. 16] at 2-3 (“In the interest of judicial expediency, Plaintiff agrees to drop Counts III and IV against Defendant Merrill Lynch with prejudice.”). The Court will dismiss Plaintiffs' remaining counts against the Bank of America Corporation for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).

         I. FACTS

         John Doe is an American citizen and a resident of Florida. His daughter, Jane Doe, is an American citizen and a resident of Georgia. Plaintiffs bring this suit against Bank of American Corporation (BAC)[3] as “an attempt by an experienced world diplomat to ascertain the reason why the banking relationship he had with [BAC] was summarily terminated even though he had an excellent 34-year banking record with them.” Compl., Introduction. “The only reason Plaintiff has filed this lawsuit is [BAC's] adamant refusal to tell him the reasons why his account was closed.” Id. Therefore, “certain parties (like international conglomerates seeking the services of reputable board members like [Mr. Doe]) . . . [may] speculate that [Mr. Doe] had engaged in or was complicit in money-laundering activities.” Id.

         Mr. Doe states that during his 34 years of a continuous banking relationship with BAC, “[t]here were no incidents of bounced checks or incidents of misdirected wire transfers, and no need to generate any Suspicious Activity Reports (SARs) in connection with activity in either [his or his daughter's] account.” Id. ¶ 8. “On March 23, 2015, [Mr. Doe] received notice of his [BAC] account's closure, with no reason cited.” Id. ¶ 9. Jane Doe's account was “closed at the same time” without explanation. Id. “After much difficulty, explaining, and frustration, Plaintiff John Doe was finally able to transfer his funds to J.P. Morgan Chase, where he now has an account.” Id. ¶ 10.

         The Complaint alleges that BAC received information during 2014 from “a newspaper clipping or an inquiry from the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) or another financial institution like Merrill Lynch[, ] . . . [which] appeared to implicate [Mr. Doe] in potential illicit activity.” Id. ¶ 12. Plaintiffs complain that BAC summarily closed their accounts with no effort to inform them of the accusations against Mr. Doe or investigate them. Plaintiffs allege that “the bank should have immediately contacted [Mr. Doe] and investigated the matter in a comprehensive manner . . . to ascertain the veracity of the allegations of misconduct made about him.” Id. ¶ 13. Through these actions and inactions BAC is alleged to have violated its “duty to act with reasonable care at all times . . . [b]y closing the accounts before affording [Mr. Doe] an opportunity to explain any alleged wrongdoing disclosed to the bank by federal authorities or other sources.” Id. ¶ 15. Plaintiffs allege that:

[BAC] decided not to investigate the spurious charges because: (a) [Mr. Doe] maintained a home outside of America where money-laundering guidelines were not as stringent as in America; (b) there were additional requirements to maintain this account since he was a politically exposed person (“PEP”), i.e., SARs would have to be prepared and sent to Treasury on a regular basis; and (c) [BAC] knew because monthly SARs would have to be prepared that there would be an ongoing additional administrative expense to maintain these accounts.

Id. ¶ 16. In so doing, BAC allegedly breached its covenant of good faith and fair dealing with Plaintiffs because it chose the less-expensive alternative of unilaterally closing their accounts without investigation and without informing them of its reasons. See Id. Plaintiffs seek a court order requiring BAC to explain in writing why it closed their accounts and a monetary award to compensate “for the embarrassment, reputational damage, and business-related damages” suffered. Id. ¶¶ 21, 27.

         BAC responds that that “[t]he Complaint is devoid of any facts alleging any kind of cognizable relationship at all, contractual or otherwise, between Plaintiffs and BAC.” Mot. to Dismiss at 8. It explains that BAC is a holding company that, at the time of Plaintiffs' account closures, indirectly owned BANA, which is a nationally chartered bank based in North Carolina with retail banking centers throughout the country. See id. at 2-3. The relevant bank accounts were opened at BANA, not BAC, and the documents governing those accounts were between Plaintiffs and BANA. See id. at 8; Reply, Ex. 3, BANA Deposit Agreement and Disclosures Feb. 6, 2015 [Dkt. 17-3] (2015 BANA Agreement); Reply, Ex. 1, BANA Deposit Agreement and Disclosures June 19, 2010 [Dkt. 17-1] (2010 BANA Agreement).[4] BANA is not a named defendant in this action. BAC urges the Court to dismiss the Complaint against BAC on this basis alone. See Mot. to Dismiss at 8.

         Plaintiffs request leave to amend the Complaint against BAC “or against [BANA] if that is deemed necessary by the Court as the proper named party against whom these claims should be asserted.” Opp'n at 3. The Court will grant BAC's Motion to Dismiss and will deny Plaintiffs' request to amend because, upon analysis, such an amendment would prove futile.

         II. LEGAL STANDARDS

         A. Motion to Dismiss

         A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the adequacy of a complaint on its face. Fed.R.Civ.P. 12(b)(6). A complaint must be sufficient “to give a defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). Although a complaint does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. A court must treat the complaint's factual allegations as true, “even if doubtful in fact, ” id., but a court need not accept as true legal conclusions set forth in a complaint, see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is “plausible on its face.” Twombly, 550 U.S. at 570. A complaint must allege sufficient facts that would allow the court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678-79.

         In deciding a motion under Rule 12(b)(6), a court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits or incorporated by reference, and matters about which the court may take judicial notice. ...


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