The opinion of the court was delivered by: Buckwalter, S. J.
Presently before the Court is the Motion of Defendants Wells Fargo Bank, N.A., Wells Fargo & Company, Inc., The Bank of New York Mellon Corporation, and Mellon Investor Services, LLC's to Dismiss the Complaint of Plaintiff Raymond A. Ferki pursuant to Federal Rules of Civil Procedure 12(b)(6). For the following reasons, the Motion is granted in part and denied in part.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Raymond A. Ferki, a resident of Richboro, Pennsylvania, is a long-time
employee of the United Parcel Service, Inc. ("UPS"). (Am. Compl. ¶¶ 3, 12.) Throughout Plaintiff Ferki's employment with UPS, he accumulated "substantial shares" of UPS Class A Common Stock via UPS's Incentive Compensation Plan ("Stock Plan") -- a program through which UPS employees may purchase company stock. (Id. ¶ 13.) Defendant The Bank of New York Mellon Corporation ("BNYM"), "as stock transfer and registrar for the Stock Plan," held Plaintiff's UPS shares "in a fiduciary capacity as custodian and trustee." (Id. ¶ 15.) Plaintiff avers that he "intended to keep the stock to support him and his family in retirement," and that he expected to receive dividend payments and future incentive payments from UPS. (Id. ¶ 14.)
Wachovia Bank, N.A. ("Wachovia") offers a program through which UPS employees can obtain lines of credit using their UPS stock as security.*fn1 (Id. ¶ 16.) In June of 2005, Plaintiff pledged 3,283 shares of his UPS stock to secure a $130,000 line of credit with Wachovia. (Id. ¶¶ 16, 22, Ex. B ("Wachovia Bank, N.A. Stock Equity Line Agreement and Disclosure Statement").) On June 15, 2005, Wachovia presented Plaintiff with a form agreement ("Stock Line Agreement") prepared by Wachovia and commonly used by the company for transactions of this kind. (Id. ¶ 17.) The Stock Line Agreement provided that, if a drop in UPS stock prices caused the balance of Plaintiff's line of credit to be more than 80% of the value of his UPS stock (referred to as the "Trigger LTV" in the Stock Line Agreement),
[Plaintiff] must elect within six (6) days of the date of written notice sent by [Wachovia] (the "Notice Period") to do one or more of the following to reduce the Outstanding Balance to 60% of the Fair Market Value of the Securities: (i) pledge additional Securities; (ii) pay a portion of the Outstanding Balance; (iii) agree to a reduction in the potential maximum amount of the Outstanding Balance, through a reduction in the Credit Limit applicable to [Plaintiff's] Account; or (iv) liquidate all or part of [Plaintiff's UPS stock] as necessary to pay the Outstanding Balance, apply the proceeds of such liquidation to the Outstanding Balance, and close [Plaintiff's] Account. (Id. ¶ 24.) If Plaintiff did not "elect one, or a combination of several, of these options" within the six-day notice period, the Agreement stated that Wachovia would liquidate Plaintiff's stock as necessary to pay the outstanding balance and close Plaintiff's account. (Id. ¶ 24.) According to the Agreement, the notice period began to run when Wachovia placed written notice to Plaintiff Ferki in the mail. (Id. ¶ 25, Ex. B ¶ 19.) Plaintiff signed the Stock Line Agreement without consulting an attorney, and the Agreement went into effect on June 21, 2005. (Id. ¶¶ 19, 20.)
On November 8, 2006, Plaintiff executed a Stock Line Modification Agreement, which increased Plaintiff's credit limit to $155,000. (Id. ¶¶ 26-27.) Pursuant to this agreement, Plaintiff agreed to pledge 466 additional shares of UPS stock, bringing the total number of shares pledged to 3,749. Plaintiff avers that Wachovia never requested, nor did Plaintiff execute, any hypothecation form to effectuate the pledge of Plaintiff's 3,749 shares of UPS stock. (Id. ¶ 28.)
On May 1, 2009, Plaintiff Ferki received a check from Wachovia in the amount of $16,718.51. (Id. ¶ 31.) According to the Amended Complaint, Plaintiff had not received notice, oral or written, from Wachovia, Defendant Wells Fargo, or Defendant Wells Parent of a Trigger LTV requiring him to take action to preserve his stock. (Id. ¶ 30.) When Plaintiff contacted Wachovia to inquire as to why he had received the check, he learned that Wachovia had liquidated his stock on March 17, 2009 -- six weeks before he received the check. (Id. ¶ 32.) Wachovia claimed that it had sent Plaintiff a letter on February 10, 2009 notifying him of the Trigger LTV and advising Plaintiff that he had six business days to elect one of the four options listed in the Stock Line Agreement to cure this deficiency. (Id.) Wachovia subsequently provided Plaintiff with the copy of the purported February 10, 2009 letter (see Exhibit D), but Plaintiff alleges that the letter was neither signed, nor did it indicate how or when it was transmitted. (Id. ¶ 33.) Plaintiff avers, upon information and belief, that Defendants either failed to mail the letter, or, if they did, that Plaintiff did not receive the letter before the liquidation. (Id. ¶ 35.)
According to Plaintiff, had Wachovia or the aforementioned Defendants notified Plaintiff of the alleged deficiency in February 2009, Plaintiff "would have elected to cure the situation by one of the other three options, and would not have consented to the liquidation of his shares in UPS stock." (Id. ¶ 39.) Plaintiff further alleges that this failure to provide notice represents a breach of the Stock Line Agreement by Wachovia, Wells Fargo, and Wells Parent. (Id. ¶ 40.) Similarly, Plaintiff claims that Defendant BNYM "breached its legal and fiduciary obligations to [Plaintiff] as custodian of his stock by allowing Wachovia's unauthorized liquidation of [Plaintiff's] UPS shares" under inappropriate circumstances. (Id. ¶ 41.)
In addition, Plaintiff alleges that Wachovia liquidated Plaintiff's stock at less than its true market value. (Id. ¶ 43.) According to Plaintiff, "Wachovia sold [Plaintiff's] stock on March 17, 2009, at a price of $42.982 per share, for a total of $161.177.56." (Id.) Had Wachovia sold Plaintiff's stock at the market close price of $46.240 per share on March 17, 2009, Plaintiff avers that Wachovia would have obtained $173,394.68 -- $12,217.12 more than the company actually received. (Id.) Moreover, Plaintiff avers that UPS "continued to climb in value after Wachovia liquidated it." (Id. ¶ 44.) On May 1, 2009, when Plaintiff received the liquidation proceeds, UPS stock allegedly closed at $51.660 per share. According to Plaintiff, this "would have made his shares more than $32,000 more than the actual liquidation price." (Id.)
As a result of the alleged unauthorized liquidation and transfer of Plaintiff's stock, Plaintiff suffered "the loss of his stock and its value. . . . future incentive payment from UPS, which through age 60 would have equaled $90,000, and future additional dividends, which through age 60 would have eqauled $95,000." (Id. ¶ 45.) Consequently, Plaintiff alleges that Defendants have "deprived [Plaintiff] of a substantial portion of his retirement nest egg and a substantial portion of the value of his years of labor for UPS, his employer." (Id. ¶ 45.) According to Plaintiff, Defendants' actions "demonstrated reckless indifference for the rights and interest of [Plaintiff], and were commercially unreasonable." (Id. ¶ 46.) Plaintiff alleges that he has asked Defendants to compensate for their breaches, but they have refused to do so. (Id. ¶ 47.)
Plaintiff commenced this action in the Philadelphia Court of Common Pleas in May of 2010 against Defendants Wells Fargo Bank, N.A., as successor in interest to Wachovia Bank, N.A.; Wells Fargo & Company, Inc., as successor in interest to Wachovia Corporation; The Bank of New York Mellon Corporation; and Mellon Investor Services ("MIS"). Defendants filed a Notice of Removal to federal court on June 8, 2010, and subsequently filed a Motion to Dismiss Plaintiff's Complaint on June 21, 2010. Plaintiff filed an Amended Complaint on July 7, 2010, which Defendants then moved to dismiss on July 21, 2010. Plaintiff filed a Response in Opposition to Defendants' Motion on August 9, 2010, and Defendants filed a Reply on August 24, 2010.
In the Amended Complaint, Plaintiff alleges (1) breach of contract against all Defendants (id. ¶¶ 48-54); (2) conversion against all Defendants (id. ¶¶ 55-61); (3) civil conspiracy against all Defendants (id. ¶¶ 62-72); (4) breach of common law fiduciary duties against all Defendants (id. ¶¶ 73-77); (5) state law unfair trade practices against Defendants Wells Fargo and Wells Parent (id. ¶¶ 78-81); (6) tortious interference with a prospective economic relationship against all Defendants (id. ¶¶ 82-98); (7) rescission against Defendants Wells Fargo and Wells Parent (id. ¶¶ 99-104); (8) liability under Article VIII of the Uniform Commercial Code against Defendants BNYM and MIS (id. ¶¶ 105-09); and (9) liability under Article IX of the Uniform Commercial Code against Defendants Wells Fargo and Wells Parent. (Id. ¶¶ 110-15.) Defendants move to ...