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The Estate of H. Fred Clark By Karen Clark and Alan F. Markowitz, Esq., Co-Executors v. the Toronto Dominion Bank

March 20, 2013


The opinion of the court was delivered by: Joyner, C.J.


The Court is here presented with yet another Motion seeking dismissal of the Plaintiff's First Amended Complaint - now on behalf of TD Bank, N.A. For the reasons which follow, this motion, too, shall be granted in part and denied in part *fn1

History of the Case

This case arises out of a series of unauthorized withdrawals from a bank account which the late Dr. H. Fred Clark had at TD Bank. These withdrawals were allegedly used to pay outstanding balances owed by numerous unidentified customers of the various retail defendants. These withdrawals are further alleged to have commenced in November 2008 when, according to the First Amended Complaint (hereafter described as the "FAC"), one or more of the John and Jane Doe Defendants 1-20, improperly obtained access to Dr. Clark's account and began initiating the withdrawals through a series of Electronic Funds Transfers ("EFTs") and/or Remotely Created Checks ("RCCs"). As a result, the Retail Defendants were paid some $490,000 for bills and other charges not incurred by Dr. Clark. All told, more than $638,000 was purportedly stolen from Dr. Clark's account between November 2008 and May 2010, when the improper transfers ceased. (FAC, ¶s 34, 36, 37).

Dr. Clark initially commenced this suit on October 29, 2010 by filing a Praecipe for a Writ of Summons in the Court of Common Pleas of Philadelphia County. Dr. Clark died in April 2012 and following the substitution of his Estate as the Plaintiff, a Complaint was filed in the Court of Common Pleas on October 5, 2012. While several of the defendants filed preliminary objections, Moving Defendant TD Bank removed the action to this Court on November 5, 2012. Defendants then essentially re-filed their preliminary objections as Rule 12(b)(6) motions in this Court. In response, Plaintiff filed the First Amended Complaint, thereby effectively mooting the original motions to dismiss, and Defendants thereafter again filed the motions to dismiss which were most recently adjudicated by this Court and the last of which is the subject of this Memorandum.

Standards Governing Rule 12(b)(6) Motions to Dismiss

It is well established that in considering motions to dismiss under Fed. R. Civ. P. 12(b)(6), the district courts must accept as true the factual allegations in the complaint and all reasonable inferences that can be drawn therefrom, viewing them in the light most favorable to the plaintiff. Great Western Mining & Mineral Co. v. Fox, Rothschild, LLP, 615 F.3d 159, 161 n.1 (3d Cir. 2010); Krantz v. Prudential Investments Fund Management, 305 F.3d 140, 142 (3d Cir. 2002); Hamilton v. Allen, 396 F. Supp.2d 545, 548-549 (E.D. Pa. 2005). In so doing, the courts must consider whether the complaint has alleged enough facts to state a claim to relief that is plausible on its face. Bell Atlantic v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929, 949 (2007). "It is therefore no longer sufficient to allege mere elements of a cause of action; instead a complaint must allege facts suggestive of the proscribed conduct." Umland v. Planco Financial Services, Inc., 542 F.3d 59, 64 (3d Cir. 2008), quoting Philips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).

In assessing plausibility, in addition to the complaint itself, the court can review documents attached to the complaint and matters of public record; a court may also take judicial notice of a prior judicial opinion. McTernan v. City of York, PA, 577 F.3d 521, 526 (3d Cir. 2009); Buck v. Hampton Township School District, 452 F.3d 256, 260 (3d Cir. 2006).

Now when presented with a motion to dismiss, district courts should conduct a three-step analysis. First, the court must "take note of the elements a plaintiff must plead to state a claim." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011)(quoting Iqbal, 129 S. Ct. at 1947) Next, the factual and legal elements of a claim should be separated. The District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)(citing Iqbal, 129 S. Ct. at 1949). Third, a District Court must determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "plausible claim for relief." Id. (citing Iqbal, 129 S. Ct. at 1950). In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to "show" such an entitlement with its facts. Id.


A. Is Count One Barred by Operation of EFTA's Statute of Limitations and Failure to Comply with its Notice Provision?

By this motion, TD Bank first challenges the viability of Count One of the FAC, alleging violations of the Electronic Funds Transfer Act, 15 U.S.C. §1601, et. seq. ("EFTA") inasmuch as the EFTA has a one-year statute of limitations and a 60-day notice provision. In response, Plaintiff invokes the doctrine of equitable tolling.

According to 15 U.S.C. §1693(b), the purpose of the EFTA is the provision of "a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund and remittance transfer systems," with the "primary objective" being "the provision of individual consumer rights." The statute covers a wide range of electronic money transfers -- from ATM withdrawals and debit-card payments to banking by phone, and subjects them to a litany of procedural requirements designed to protect consumers from transactions made in error or without their consent. Wike v. Vertrue, Inc., 566 F.3d 590, 592 (6 th Cir. 2009). This is evinced by the following language in 15 U.S.C. §1693a:

(7) the term "electronic fund transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point of sale transfers, automated teller machine transactions, direct deposits or withdrawals of funds, and transfers initiated by telephone...

(12) the term "unauthorized electronic fund transfer" means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate such transfer and from which the consumer receives no benefit, but the term does not include any electronic fund transfer (A) initiated by a person other than the consumer who was furnished with the card, code, or other means of access to such consumer's account by such consumer, unless the consumer has notified the financial institution involved the transfers by such other person are no longer authorized, (B) initiated with fraudulent intent by the consumer or any person acting in concert with the consumer, or (C) which constitutes an error committed by a financial institution.

Pursuant to 15 U.S.C. §1693g, a consumer is liable for an unauthorized electronic fund transfer involving his or her account: only if the card or other [means] of access utilized for such transfer was an accepted card or other [means] of access and if the issuer of such card, code, or other means of access has provided a means whereby the user of such card, code or other means of access can be identified as the person authorized to use it, such as by signature, photograph, or fingerprint or by electronic or mechanical confirmation. In no event, however, shall a consumer's liability for an unauthorized transfer exceed the lesser of- (1) $50; or

(2) the amount of money or value of property or services obtained in such unauthorized electronic fund transfer prior to the time the financial institution is notified of, or otherwise becomes aware of, circumstances which lead to the reasonable belief that an unauthorized electronic fund ...

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