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February 4, 1994


The opinion of the court was delivered by: JAMES F. MCCLURE, JR.


 Plaintiffs Robert D. Waye and B. Joan Waye d/b/a Medfax-Sentinel filed this action to recover for alleged improprieties of defendant Commonwealth Bank d/b/a Commonwealth Bancshares Corporation and Subsidiaries (Commonwealth or the bank) in the handling of a business checking account which plaintiffs maintained with the bank. Plaintiffs' allegations arise out of the bank's notification, in October, 1989, to federal authorities of suspected check kiting by plaintiff Barbara Joan Waye and the events which preceded and followed that notification.

 Plaintiffs' complaint alleges five claims against the bank: 1) Count I alleges negligence and bad faith on the part of the bank based on allegedly false reports to federal authorities regarding the status of, and transactions linked to, the Medfax-Sentinel and Barbara Joan Waye's suspected involvement in a check kiting scheme; 2) Count II alleges the violation of the federal Right to Financial Privacy Act (the Act), 12 U.S.C. §§ 3401-3422, based on the bank's release of information to federal authorities regarding a suspected check kiting scheme involving the Medfax-Sentinel account; 3) Count III alleges that the bank violated the Uniform Commercial Code (the Code or the UCC), 13 Pa. Const. Stat. §§ 4201-4214, by failing to notify plaintiffs in a timely manner of dishonor of checks deposited in the Medfax-Sentinel account at Commonwealth; 4) Count IV asserts a claim for punitive damages; and 5) Count V alleges claims of libel and slander based on a newspaper article about plaintiff Barbara Joan Waye's indictment on federal criminal charges for check kiting.

 Before the court are: 1) a Rule 12(b)(6) motion filed by defendant to dismiss plaintiffs' complaint for failure to state a cause of action or, in the alternative, a motion for summary judgment; and 2) a motion by plaintiffs to strike alleged misrepresentations of fact in defendant's reply.

 For the reasons below, defendant's motion will be treated as a motion for summary judgment, and the motion will be granted. Summary judgment will be entered in defendant's favor and against plaintiffs on all Counts of their complaint. Plaintiffs' motion to strike will be denied.



 Summary judgment standard

 Defendant moved for dismissal under Rule 12(b)(6) or, in the alternative, for summary judgment under Rule 56. Both sides submitted documents outside the pleadings for the court's consideration. Both make arguments based on such documents and rely on them to support their respective positions. We will, therefore consider the motion as a motion for summary judgment.

 Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c)

. . . The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be 'no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is 'entitled to judgment as a matter of law' because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.

 Celotex v. Catrett, 477 U.S. 317, 323-24, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. He or she can discharge that burden by "showing . . . that there is an absence of evidence to support the nonmoving party's case." Celotex, supra, 477 U.S. at 323 and 325.

 Issues of fact are "'genuine' only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 693-94 (3rd Cir. 1988), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Material facts are those which will affect the outcome of the trial under governing law. Anderson, supra, 477 U.S. at 248. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3rd Cir. 1988).

 Claims of negligence and bad faith

 Count I of plaintiffs' complaint alleges a claim of negligence and bad faith based upon defendant's report to federal authorities that plaintiff Barbara Joan Waye was involved in a check kiting scheme and upon defendant's alleged acquiescence in plaintiffs' conduct.

 Plaintiffs allege, inter alia, that: 1) the defendant permitted and acquiesced in the course of conduct which led to charges of check kiting, by permitting plaintiffs to overdraw their checking account repeatedly through the use of overdraft protection made available to plaintiffs by the defendant bank; and 2) filed a report with the Federal Bureau of Investigation which stated that Dr. Waye had been asked to close out his account when this was, in fact, not true. Plaintiffs allege that defendant breached an alleged fiduciary duty and that by "secretly reporting" to federal authorities plaintiffs' suspected involvement in check kiting, defendant acted negligently and in bad faith.

 Plaintiffs' claims based on the report made to federal authorities are barred by section 3403(c) of the Right to Financial Privacy Act, which authorizes such notification and declares financial institutions exempt from claims such as those asserted here. Section 3403(c) provides, in relevant part:

Nothing in this chapter shall preclude any financial institution . . . from notifying a Government authority that such institution . . . has information which may be relevant to a possible violation of any statute or regulation . . . Any financial institution making a disclosure of information pursuant to this subsection, shall not be liable to the customer under any law or regulation of the United States or any constitution, law, or regulation of any State or political subdivision thereof, for such disclosure or for any failure to notify the customer of such disclosure.

 Under the plain language of the section 3403, plaintiffs have no cause of action against Commonwealth for its notification to federal authorities of suspected check kiting by plaintiffs.

 Not only is the bank protected from civil liability for reporting such conduct, but federally chartered banks, such as the defendant, *fn1" have an obligation under federal regulations to report suspected criminal activity to federal authorities. 12 C.F.R. § 21.11. The willful failure to report such conduct may subject the bank to civil penalties. 12 C.F.R. § 21.11(h).

 Plaintiffs' negligence claim also fails because no duty was owed. A bank customer relationship is not a fiduciary one. See: Temp-Way Corp. v. Continental Bank, 139 Bankr. 299, 319 (E.D.Pa. 1992) and Bohm v. Commerce Union Bank of Tennessee, 794 F. Supp. 158, 164 (W.D.Pa. 1992). Banks have, in any event, no fiduciary obligation to refrain from reporting suspected illegal activity on the part of their customers.

 Finally, any negligence claim asserted by plaintiffs is barred by Pennsylvania's two-year statute of limitations governing tort actions, 42 Pa. Cons. Stat. Ann. § 5524(7). The latest date on which plaintiffs allege wrongdoing by the bank is December, 1990. *fn2" Plaintiffs' complaint was not filed until March 2, 1993. Any tort claim based on events which occurred prior to March 2, 1991 is, therefore, time-barred.

 Summary judgment will be granted in favor of defendant on Count I of ...

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