United States District Court, N.D. Illinois, Eastern Division
June 2, 2005.
KENNETH THOMPSON, Plaintiff,
CAPITAL ONE BANK, INC., Defendant.
The opinion of the court was delivered by: ELAINE E. BUCKLO, District Judge
MEMORANDUM OPINION AND ORDER
In October 2003, plaintiff Kenneth Thompson noticed that
defendant Capital One Bank, Inc. ("Capital One") was offering a
higher interest rate on certificates of deposit ("CDs") than his
then-current bank, Northern Trust. Mr. Thompson notified Northern
Trust that it should close out his CDs. On November 2, 2003,
Northern Trust issued a cashier's check in the amount of
$89,559.84, payable to Capital One and listing Mr. Thompson as
the remitter. Mr. Thompson then instructed an employee of his,
Kelly Woods, to pick up the check from Northern Trust and open a
new CD in his name at Capital One.
Ms. Woods did pick up the check as instructed, but instead of
opening a new account in Mr. Thompson's name, she opened one in
her own name. In December 2003, Mr. Thompson began contacting
Capital One, via telephone calls and letters, attempting to find
out the status of his CD. On February 24, 2004, an employee of
Capital One informed Mr. Thompson that the funds in question had
been used to open an account in the name of Ms. Woods. The funds were sent
from Capital One to Ms. Woods on or around March 3, 2004.
After learning that the account had been opened in Ms. Woods'
name, Mr. Thompson repeatedly contacted Capital One, asking for
its help in recovering his funds. Mr. Thompson also
unsuccessfully attempted to contact Ms. Woods. The funds have not
been returned to Mr. Thompson.
In his amended complaint, Mr. Thompson alleges that Capital One
engaged in conversion by fraud, pursuant to § 3-419 of the
Uniform Commercial Code ("UCC") (Count I), and was negligent in
its acceptance of the cashier's check from Ms. Woods (Count II).
Capital One moves to dismiss the complaint. I grant that motion,
for the reasons stated below.
Count I alleges that Capital One engaged in conversion by
fraud, pursuant to UCC § 3-419. Mr. Thompson alleges that Ms.
Woods was not authorized to open an account in her own name; that
she was not authorized to endorse checks on behalf of Mr.
Thompson or his company; that Mr. Thompson did not endorse the
cashier's check; and that Capital One did not verify the
endorsement of the check with Mr. Thompson. Capital One argues
that Count I must be dismissed, as Mr. Thompson has failed to
plead it with the required specificity. Allegations of fraud must
be plead with specificity, pursuant to Fed.R.Civ.P. 9(b).
Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918, 923
(7th Cir. 1992). The plaintiff must allege "the identity of
the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by
which the misrepresentation was communicated to the plaintiff."
Id. There is no misrepresentation alleged here. Reading Mr.
Thompson's amended complaint liberally, the only potential
misrepresentation might be if Ms. Woods had purported to endorse
the cashier's check in Mr. Thompson's name. But Mr. Thompson does
not so allege, and even if he had, it would not be a
misrepresentation by Capital One and would not support this
claim. Mr. Thompson in no way alleges fraudulent behavior on the
part of Capital One, let alone with the specificity required by
Mr. Thompson argues that he has properly alleged the elements
for a claim of conversion, under UCC § 3-420. To state a claim
for conversion, the plaintiff must allege "(1) that [he] owned,
held an interest in, or had the right to possess a negotiable
instrument; (2) that someone forged or without authority placed
the plaintiff's endorsement on the instrument; and (3) that the
defendant financial institution negotiated the check without
[plaintiff's] authorization." Rodrigue v. Olin Employees Credit
Union, Nos. 03-C-2470, 03-C-2607, 2005 WL 949061 (7th Cir.
Apr. 19, 2005). Mr. Thompson has not done so. While he alleges
that Ms. Woods was not authorized to endorse the cashier's check,
he does not allege that she actually did so. Additionally, the
check was a cashier's check, made payable to Capital One, and so
required no endorsement from Ms. Woods for negotiation. Mr.
Thompson has not pleaded the required elements of his claim. Capital One's motion to dismiss
Count I is granted.
Count II alleges that Capital One was negligent in accepting
the cashier's check and later sending funds to Ms. Woods. To
state a claim for negligence, the plaintiff must allege (1) a
duty running from the defendant to him, (2) a breach of that
duty, and (3) damages resulting from that breach. See, e.g.,
Ziemba v. Mierzwa, 566 N.E.2d 1365, 1366 (Ill. 1991). Mr.
Thompson alleges that Capital One owed him a fiduciary duty, and
breached that duty to his detriment. Mr. Thompson later argues
that even if Capital One did not have a fiduciary duty toward
him, it at the least had a duty of care towards him as a
depositor. Capital One had no duty to Mr. Thompson. First, no
fiduciary duty exists between a bank and its depositor. Obras
Civiles, S.A. v. ADM Securities, Inc. 32 F. Supp. 2d 1018, 1024
(N.D. Ill. 1999) (Gettleman, J.). Second, even if a bank does owe
its depositors a general duty of care, Mr. Thompson makes no
allegation that he was a depositor or otherwise a customer of
Capital One. Indeed, Mr. Thompson's allegations claim that he was
wronged in that Ms. Woods did not open an account in his name,
as instructed. Without a duty, there can be no negligence.
Capital One's motion to dismiss Count II is granted.
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