The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer
MEMORANDUM OPINION AND ORDER
Plaintiff Lori Geimer brought this action for damages against Defendant Bank of America ("BOA") in connection with Defendant's alleged failure to prevent unauthorized fund transfers from Plaintiff's personal checking and credit accounts. In her First Amended Complaint, Plaintiff alleges that she received a bank statement from BOA on May 28, 2008, reflecting electronic transfers on May 14 (in the amount of $31,851.35) and May 21 (in the amount of $19,500.11) that she had not authorized. (Second Am. Compl. ¶¶ 8-10.) Plaintiff notified the bank in June 2008. (Id. ¶ 11.) Then on September 9, Plaintiff learned that FIA Card Services, which she alleges is controlled by BOA, had opened a credit card in her name and that an unknown user had attempted to use it to transfer funds in the amount of $64,000. (Id. ¶¶ 7, 12.) Plaintiff alleges that the Bank never investigated these transactions and has instead advised her that the "money was gone and could not be recovered." (Id. ¶ 15.)
Plaintiff's amended complaint presents a claim of breach of fiduciary duty purportedly based on the Illinois Fiduciary Obligations Act ("FOA"), 760 ILCS 65/1 et seq. (Count I); a claim of negligence (Count II); and a breach of contract claim (Count III). A claim under the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. § 1693 et seq., asserted in Plaintiff's original complaint, has been withdrawn. Because there is diversity of citizenship, however, the court retains jurisdiction. Defendant has moved to dismiss, arguing that the EFTA preempts Plaintiff's state law claims and that her allegations otherwise fail to state a cause of action. For the reasons explained here, the motion is granted in part and denied in part.
In addressing Defendant's motion, the court construes Plaintiff's allegations in the light most favorable to her and draws all reasonable inferences in her favor. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). The Supreme Court has explained that "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint need not contain detailed factual allegations, but it must provide more than "a formulaic recitation of a cause of action's elements" supported by merely conclusory statements. Twombly, 550 U.S. at 555. Even after Twombly, the federal notice-pleading standard requires that a plaintiff provide "only 'enough detail [in her complaint] to give the defendant fair notice of what the claim is and the grounds upon which it rests, and, through [her] allegations, show that it is plausible, rather than merely speculative, that [s]he is entitled to relief.'" Reger, 592 F.2d at 764 (quoting Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008)).
I. EFTA Preemption of State-Law Claims
Defendant argues, first, that the EFTA preempts all of Plaintiff's state-law claims. (Def.'s Mot. to Dismiss Sec. Am. Compl. [hereinafter "Def.'s Mot."] ¶ 3.) As noted, Plaintiff discovered the electronic transfers in May 2008 and learned of the credit account in September 2008. Her original complaint in this action, filed in January 2010, included a claim under EFTA, but that claim is barred by EFTA's one-year statute of limitations. Plaintiff has withdrawn that claim, but Defendant urges that her state law claims must be dismissed, as well. To allow those claims to proceed, Defendant argues, would "effectively eviscerate the EFTA's one-year statute of limitations" and thereby enable Plaintiff to "get around" the Act's time bar. (Def.'s Mot. ¶ 3.)
The Electronic Funds Transfer Act establishes the "rights, liabilities, and responsibilities of participants in electronic fund . . . transfer systems." 15 U.S.C. § 1693(b). The Act's primary purpose is to provide for individual consumer rights, and to that end its preemption language is limited: EFTA expressly preempts state laws only "to the extent that those laws are inconsistent with the provisions of this subchapter," and explains that "[a] State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection afforded by this subchapter." 15 U.S.C. § 1693q. This language demonstrates that "Congress did not intend for the Act to provide the exclusive cause of action for claims relating to unauthorized fund transfers"; to the contrary, "[t]he Act contemplates the application of state law that is not preempted by its provisions." Bernhard v. Whitney Nat'l Bank, 523 F.3d 546, 553 (5th Cir. 2008).
Although there have been no Illinois state or federal cases interpreting this provision of the EFTA, a Missouri decision is instructive. In Stegall v. Peoples Bank of Cuba, a Missouri appellate court reversed the lower court's dismissal of the plaintiff's complaint and held that the EFTA-for which the statute of limitations had already run-did not preempt the plaintiff's state-law breach of contract claim. 270 S.W.3d 500, 508 (Mo. Ct. App. 2008). Plaintiff's claims in that case, as in this one, allegedly arose from a series of unauthorized electronic fund transfers from her bank account, see id. at 502, subject matter that falls squarely within the domain of the EFTA, see 15 U.S.C. § 1693(b). The Stegall court reasoned that the relevant Missouri state law provided plaintiffs with greater rights than EFTA because state law breach of contract claims relating to electronic fund transfers could be considered timely filed, even where EFTA claims would be barred by the Act's statute of limitations. 270 S.W.3d at 505.
In the case before this court, Plaintiff's state law claims-specifically, breach of fiduciary duty, breach of contract, and negligence-are timely under Illinois law.*fn1 Illinois state law thus affords Plaintiff greater protection than the EFTA because the Act has a shorter statute of limitations than Plaintiff's other state law claims. See Stegall, 270 S.W.3d at 505; 15 U.S.C. § 1693m(g). The court concludes Plaintiff's state law claims are preserved by the express language of 15 U.S.C. § 1693q, and denies Defendant's motion to dismiss on these grounds.
II. Breach of Fiduciary Duty Claim
Defendant moves to dismiss Plaintiff's breach of fiduciary duty claim, which relies on the Illinois Fiduciary Obligations Act ("FOA"), on the grounds that Defendant did not owe Plaintiff a fiduciary duty and that the facts of this case do not implicate the FOA. (Def.'s Mot. ¶ 4(a).) The Fiduciary Obligations Act governs a financial institution's liability for participation in a breach of fiduciary duty by a third party. As a general rule, the Fiduciary Obligations Act shields a bank from liability, specifically providing that a bank does not have an obligation to inquire whether a fiduciary is committing a breach when it permits fiduciaries to make withdrawals, so long as the bank acts without bad faith or actual knowledge of the fiduciary's breach. See Setera v. Nat'l City Bank, No. 07 C 2978, 2008 WL 4425446, at *2-3 (N.D. Ill. Sept. 26, 2008). In essence, the Act provides a defense for banks when a fiduciary misappropriates his principal's funds, unless "the bank ha[d] actual knowledge of the fiduciary's misappropriation" or "knowledge of sufficient facts that its action in paying the checks amount[ed] to bad faith." Appley v. West, 832 F.2d 1021, 1031 (7th Cir. 1987) (discussing the Uniform Fiduciaries Act, which was adopted in Illinois and codified as 760 ILCS 65/1 et seq.). The FOA does not appear relevant here, in an action where no third-party fiduciary plays a role.
The Act does apply in circumstances like those of Continental Cas. Co., Inc. v. American National Bank & Trust Co.,329 Ill. App. 3d 686, 704-05, 768 N.E.2d 352, 366-67 (1st Dist. 2002), cited by Plaintiff. In that case, the defendant bank allegedly acted in bad faith by paying checks to the personal account of an employee who had misappropriated funds from plaintiff, his principal. Neither that case, nor the FOA itself, provides any support for Plaintiff's contention that "Illinois courts have recognized statutory fiduciary duties relative to bank deposits." (Pl.'s Resp. at 7.)
To the contrary, under Illinois law, banks generally owe no fiduciary duty to their depositors because the relationship among the parties is no more than "an arms-length transaction between debtor and creditor." Miller v. Am. Nat'l Bank & Trust Co.., 4 F.3d 518, 520 (7th Cir. 1993). Likewise, the contractual relationship between a lender and a borrower is not fiduciary in ...