In a wire fraud claim raised by a bank's customer, the United States District Court for the Western District of Pennsylvania recently granted in part and denied in part a motion to dismiss filed by the customer's bank, P.N.C. Bank ("PNC"), regarding claims brought by plaintiff Richard Tracy ("Tracy") for breach of contract, promissory estoppel, violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL") and violation of Pennsylvania's Uniform Commercial Code ("UCC"). See Tracy v. P.N.C. Bank, N.A., No. 2:20-cv-1960-NR, 2022 U.S. Dist. LEXIS 111095 (W.D. Pa. June 23, 2022). While the Court dismissed the statutory claims, it held that PNC's post-notice conduct of erroneously informing its customer that the majority of the funds had been recovered and ignoring the customer's subsequent requests could set forth a breach of contract claim.

In December 2019, Tracy sought to purchase a home from a third party, but the title agent suffered a data breach, resulting in Tracy receiving fraudulent instructions for the transaction. Tracy instructed PNC, with whom he was a customer, to initiate a wire transfer in the amount of $143,585.59 for the purchase of the property, unknowingly instructing the wire to a fraudster's account. Tracy learned of the fraud the next day, and requested that PNC return any recoverable funds and freeze the account. About ten days after the wire transfer, PNC credited Tracy's account with $141,763.20, and after Tracy's inquiry, PNC confirmed this was the amount that it retrieved. Believing this money had been returned to him, Tracy closed on the purchase of the property on January 3, 2020. However, PNC later posted a "pending withdrawal" of $70,236 in Tracy's account. Tracy attempted to communicate with PNC about the pending withdrawal, but PNC ignored him and eventually withdrew $70,200 from his account. Tracy brought suit.

The Court dismissed Tracy's UCC and UTPCPL claims. Regarding Tracy's UCC claim, the Court noted that Tracy brought claims under sections 4A:203 and 4A:204 of the UCC. However, the Court further noted that these sections of the UCC protected against wire transfers that are not authorized. Since Tracy had, in fact, authorized the wire transfer, the Court dismissed the count with prejudice.

The Court then found that to state a claim under the UTPCPL, Tracy was required to allege that he "purchase[d] ... goods or services" and "thereby" suffered a loss by PNC's deceptive conduct. The Court held that the closest that Tracy could come to pleading the purchase of a service is if he had alleged that he paid PNC a fee for the wire transfer as part of his account or wire-transfer agreements, but that even if he had paid for the service, his claim still fell short, as he did not allege that PNC engaged in deceptive conduct in initiating the wire transfer, but rather post-transfer when it was seeking to retrieve the money, and thus the alleged deception and injury arose from a separate, unpaid service – PNC's attempted retrieval of the money. The Court held that since Tracy had not plausibly plead to have paid for the post-transfer service or conduct at issue, the Court dismissed the count with prejudice.

However, the Court allowed Tracy's breach of contract claim to survive on the theory that PNC breached its duty of good faith and fair dealing, as Tracy's allegation that PNC assured him that almost all of the wire transfer had been retrieved and returned to him, and then ignored him when their information turned out to be incorrect, stated a plausible good faith and fair dealing claim. The Court also allowed Tracy's promissory estoppel claim to survive, holding that PNC's arguments that a contract controlled the parties' relationship, that Tracy had not sufficiently alleged what PNC told him, and that a deed of trust purchased by Tracy foreclosed the claim were unavailing.

Originally published October 11, 2022

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