May v. Bank of
Filed 4/2/13 May
v. Bank of America CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE
DISTRICT
DIVISION THREE
DONNA MAY et al.,
Plaintiffs and
Appellants,
v.
BANK OF AMERICA,
Defendant and
Respondent.
G046893
(Super. Ct.
No. 30-2011-00484717)
O P I N I O
N
Appeal from a judgment
of the Superior Court
of
County, Robert J. Moss, Judge.
Affirmed.
Jeffrey S. Benice for
Plaintiffs and Appellants.
Severson & Werson,
Jan T. Chilton and Jonathan D. Dykstra for Defendant and Respondent.
INTRODUTION
Appellants Donna May and
Shellie May appeal from a judgment of dismissal in favor of Bank of America
(BofA) after the trial court sustained BofA’s demurrer without leave to
amend. Appellants accused BofA of
negligence after they were defrauded in a real estate scheme.
We affirm. BofA owed no duty of care to appellants, who
were not BofA customers. The special
circumstances that might create a duty of care are not present here. The trial court properly sustained BofA’s
demurrer and dismissed it from the case.
FACTS
to the first amended complaint, the
only document other than the notice of appeal they included in their appendix,
appellants fell victim to a real estate scam perpetrated by defendants other
than BofA. These defendants persuaded
appellants to wire $130,000 to a BofA escrow account in the name of Golden Gate
Escrow as the purchase price of a house in San Bernardino. Golden Gate Escrow allegedly does not exist,
and the people behind the scam absconded with appellants’ money.
Appellants sued 14
defendants, including BofA. The other
defendants were sued for several causes of action based on fraud. BofA was sued only for negligence. The negligence theory was that BofA should
have checked out Golden Gate Escrow’s legitimacy, and its failure to do so
breached a duty of care to appellants.
BofA evidently demurred
to the first amended complaint.
name="_ftnref1" title="">[1] The trial court sustained BofA’s demurrer and
dismissed BofA from the lawsuit.
name="_ftnref2" title="">[2] The grounds for dismissal were that
appellants were not BofA’s customers and BofA therefore owed no duty to
them.
DISCUSSION
At the risk of sounding
like a broken record (an allusion that may escape our younger readers), we
repeat that an order sustaining a demurrer is not an appealable order. (City
of Morgan Hill v. Bay Area Air Quality Management Dist. (2004) 118
Cal.App.4th 861, 867, fn. 3; Hood v.
Hacienda La Puente Unified School Dist. (1998) 65 Cal.App.4th 435, 437, fn.
1; see also 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 154, pp.
230-231.) The appeal is taken from the
judgment of dismissal. (
(2001) 89 Cal.App.4th 603, 611.)
On appeal from the
has been sustained, we review a complaint de novo to determine whether any
facts have been alleged that would constitute a cause of action under any
theory, regardless of labels. (
(2001) 87 Cal.App.4th 73, 79.) In a
multiparty lawsuit, a final judgment against one defendant leaving no issue to
be determined as to that defendant is appealable. (Nguyen
v. Calhoun (2003) 105 Cal.App.4th 428, 437.) Because appellants’ sole claim against BofA
was for negligence, we can review the judgment dismissing the bank.
The trial court
sustained BofA’s demurrer because BofA owed appellants no duty of care. Whether a duty of care exists is a question
of law. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 397.)
Two cases directly on
point dispose of appellants’ contentions on appeal. Software
Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49
Cal.App.4th 472 (Software Design)
recounts a virtually identical fact pattern.
The plaintiff in Software Design
entrusted a portfolio of investments to a financial consultant, who then opened
accounts under fake limited partnership names in two brokerage houses. He looted the two accounts over the course of
about two years, by transferring plaintiff’s funds from the brokerage houses to
two bank accounts, also in fake names.
He then withdrew the money from the banks and disappeared from
view. (Id. at pp. 476-478.)
The plaintiff sued the
banks and the brokerage houses for negligence, on the theory they owed him a
duty to investigate the entity opening the accounts and then monitor account
transactions. (Software Design, supra, 49 Cal.App.4th at p. 478.) Both the trial and the appellate courts held
the banks had no such duty. A bank’s
duty of care derives from its contract with its customer, and plaintiff was not
the bank’s customer. In the absence of
suspicious instruments, a bank has no duty to supervise transactions such as
deposits and withdrawals. (
Rodriguez v. Bank of the West (2008) 162 Cal.App.4th 454 (
a law firm, who opened an account at a bank in her boss’s name, deposited
client funds in the account, and then made off with the money. The lawyer sued the bank for negligence. (Id.
at p. 460.) As in Software Design, the holding was that the bank owed plaintiff no
duty of care, because he was not its customer.
He had no contract with the bank; the contract was with the faithless
office manager. (Id. at p. 466.)
Appellants stand in the
same relationship to BofA as the plaintiffs in Software Design and Rodriguez
to the banks they sued, which is to say no relationship at all. They were not BofA customers, and BofA owed
no duty of care to them. Without a duty
of care, no cause of action for negligence can survive a demurrer. (Bily
v. Arthur Young & Co., supra, 3 Cal.4th at p. 397 [existence of duty of
care “essential prerequisite†of negligence cause of action].)
Appellants argue they
have stated a cause of action under Sun
‘n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671 (
legitimate company checks to be made out to UCB for small amounts, which she
altered to much larger amounts. She then
somehow persuaded UCB to deposit these checks, payable to the bank, in her
personal account. (Id. at p. 678.)
The defrauded company
sued UCB for negligence, among other theories; the trial court sustained the
bank’s demurrers and dismissed the action.
The Supreme Court reversed as to negligence, finding that UCB did in
fact have a “narrowly circumscribed†duty of care: “it is activated only when checks, not insignificant
in amount, are drawn payable to the order of a bank and are presented to the
payee bank by a third party seeking to negotiate the checks for his own
benefit.†(Sun ‘n Sand, supra, 21 Cal.3d 671.)
an irregular transaction is reasonably foreseeable; indeed, it is glaringly
obvious. (Id. at pp. 695-696.)
Watching out for such transactions imposes no undue burdens on
banks. (Ibid.)
Obviously, appellants’
case is quite dissimilar to the facts presented in Sun ‘n Sand. Their wire
transfer was made to Golden Gate Escrow, not BofA. And no one made any attempt to divert an
instrument made payable to BofA into his personal account. Even if Sun
‘n Sand still supports a common-law negligence claim against banks, it does
not support appellants’ claim.
Appellants argue BofA
was at fault for not determining whether Golden Gate Escrow actually existed,
as it could have done with “‘minimal’
inquiry.†But appellants too could have
made a “minimal inquiry†to find out who or what they were dealing with before
they parted with $130,000. For instance,
a visit to the California Department of Corporations website provides a link
whereby licenses for persons and companies regulated by the Department of
Corporations, the Department of Real Estate, the Office of Real Estate
Appraisers, and the Department of Financial Institutions can be checked in one
go. If there was something wrong with
Golden Gate Escrow in this transaction, it was appellants’ responsibility to discover
it, not BofA’s.
DISPOSITION
judgment dismissing BofA is affirmed.
Respondent is to recover its costs on appeal.
BEDSWORTH,
J.
WE CONCUR:
O’LEARY, P.
J.
MOORE, J.
name="_ftn1" title=""> [1] The moving, opposition, and reply
papers are not part of the record on appeal.
name="_ftn2" title=""> [2] The appellants’ appendix included
neither the order sustaining the demurrer nor the judgment of dismissal for
BofA. We had to issue two orders to
appellants to get a copy of the judgment.
