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Stone v. Wells Fargo Bank, N.A.

United States District Court, D. Maryland

January 17, 2019

WELLS FARGO BANK, N.A., Defendant.


          Ellen L. Hollander, United States District Judge

         Plaintiff Meghan Stone filed suit in the Circuit Court for Baltimore City against defendant Wells Fargo Bank, N.A. (“Wells Fargo, ” or the “Bank”). ECF 1-3 (the “Complaint”). She alleges, inter alia, that defendant improperly took funds from her account, in violation of the terms of the service agreement (ECF 5-2, the “Agreement”) for her account. ECF 1-3. Wells Fargo removed the case to this Court, based on diversity jurisdiction under 28 U.S.C. § 1332. ECF 1 (“Notice of Removal”).[1]

         The Complaint contains ten claims: “Unjust Enrichment” (Count I); “Conversion” (Count II); “Breach of Fiduciary Duty” (Count III); “Accounting” (Count IV); “Aiding and Abetting” (Count V); “Civil Conspiracy” (Count VI.A); “Breach of Contract” (Count VI.B); “Negligence” (Count VII); “Respondeat Superior” (Count VIII); and “Malicious Prosecution” (Count IX).[2] Id. at 3-13. Stone seeks compensatory and punitive damages, in addition to attorney's fees and costs. Id. at 13.

         Wells Fargo has filed a “Motion to Compel Arbitration and Dismiss Action, ” pursuant to Fed.R.Civ.P. 12(b)(1). ECF 5. It is supported by a memorandum of law (ECF 5-1) (collectively, the “Motion”) and an exhibit. ECF 5-2. According to Wells Fargo, the Agreement's arbitration provision requires arbitration of plaintiff's claims, and therefore the Complaint should be dismissed. ECF 5-1 at 3.

         Stone filed an opposition to the Motion (ECF 8) (the “Opposition”), along with exhibits. See ECF 8-2 (list of Stone's accounts with Wells Fargo); ECF 8-3 at 2 (“Arrest Warrant” for Stone); ECF 8-3 at 3-5 (“Statement of Charges” against Stone); ECF 8-4 (“Application for Statement of Charges” against Stone). Notably, Stone concedes that Counts I through VI.B are subject to arbitration. ECF 8, ¶¶ 1-2. However, she maintains that Counts VII through IX are not governed by the Agreement. Id. ¶ 3. Wells Fargo has replied. ECF 9 (the “Reply”).

         The Motion is fully briefed, and no hearing is necessary to resolve it. See Local Rule 105.6. For the reasons set forth above, I shall grant Wells Fargo's Motion.

         I. Factual Background

         In 2014, Stone was a Wells Fargo customer with two checking accounts (accounts 1984747996 and 5549168515), a savings account (account 5549491651), and a secure line of credit (account 6031400929) with the Bank. ECF 1-3, ¶ 9. The Agreement governed her use of these Wells Fargo accounts. Among other things, the Agreement included an expansive arbitration provision, stating that any “dispute” that cannot be resolved informally “will be resolved through the arbitration process as set forth in this part.” ECF 5-2 at 8.

         The Agreement defines a “‘dispute'” as “any unresolved disagreement” between the parties. Id. “It includes any disagreement relating in any way to services, accounts or matters; to [Stone's] use of any of the Bank's banking locations or facilities; or to any means [she] may use to access [her] accounts.” Id. Of import here, “dispute” also includes “claims based on broken promises, contracts, torts, or other wrongful actions” as well as “statutory, common law and equitable claims.” Id. The arbitration provision also applies to “disputes” about the “meaning, application or enforceability of this arbitration agreement.” Id. “As the sole exception to the Agreement's arbitration provision, [Stone] and the Bank retain the right to pursue in small claims court any dispute that is within that court's jurisdiction.” Id.

         The Agreement also incorporates the American Arbitration Association (“AAA”) Rules, id.:

Each arbitration, including the selection of the arbitrator(s) shall be administered by the American Arbitration Association (AAA), or such other administrator as you and the Bank may mutually agree to (the AAA or such other mutually agreeable administrator to be referred to hereinafter as the “Arbitration Administrator”), according to the Commercial Arbitration Rules and the Supplemental Procedures for Consumer Related Disputes (“AAA Rules”).

         By extension, the Agreement incorporates AAA Rule R-7(a). See ECF 9-1 (AAA Rules) at 14. It provides: “The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.” Id.

         Stone alleges that “[s]ometime after December 17, 2014, ” Wells Fargo removed approximately $45, 000 from her accounts without her knowledge or consent. Id. ¶ 11. It also denied her use of her secure line of credit. Id. She alleges that upon learning of the withdrawal, she notified Wells Fargo of the “improper taking of approximately $45, 000.00” from her accounts and demanded that Wells Fargo return the funds. Id. ¶¶ 11-12. But, it has allegedly refused to do so. Id. ¶ 13.

         Stone contends that Wells Fargo employees were “improperly taking/converting money” from her accounts and “otherwise improperly using” her accounts and personal information “for improper purposes.” ECF 1-3, ¶ 32. She also alleges that a Bank employee “improperly accepted] and receive[d] debit cards approved for the Plaintiff and improperly approve[d] large cash withdrawals.” Id. ¶ 45.

         According to Stone, Wells Fargo knew that she “had not committed any crime, ” but nonetheless caused Anne Arundel County Police Department to investigate her. ECF 1-3, ¶ 14, 61. The investigation, she maintains, resulted in the police wrongfully charging her with fifteen felony counts and two misdemeanor counts relating to theft, fraud, and identity theft. Id. ¶ 15; see also ECF 8-3; ECF 8-4. Further, she “was booked, fingerprinted, photographed and detained [by the police] for approximately twenty-four (24) hours all while pregnant.” ECF 1-3, ¶ 59. According to Stone, the case against her was terminated on February 15, 2015. Id. ¶ 60.

         Wells Fargo tells a different story. It claims that Stone entered a “Wells Fargo branch in Severna Park, Maryland, in April of 2014 and met with a bank employee.” ECF 9 at 2. During this meeting, plaintiff falsely presented herself as a Wells Fargo customer from California, who was also named Meghan Stone. Plaintiff allegedly told the Wells Fargo employee that she had just moved from California to Maryland and needed help changing the basic information on her California accounts. Id. In so doing, the “Wells Fargo bank accounts belonging to a different person [also] named Meghan Stone in California were modified so that the other customer's contact phone numbers and date of birth were changed to that of the Plaintiff in Maryland.” Id. Plaintiff also allegedly ordered new debit cards tied to the California accounts, allowing her to access the funds of the other Meghan Stone. Id. Further, the Bank alleges that plaintiff used these cards to make purchase and cash withdrawals against the other Meghan Stone's accounts. Id. After the Meghan Stone in California discovered over $10, 000 had been withdrawn from her accounts, she notified Wells Fargo, which restored her funds and conducted a fraud investigation. Id.

         Plaintiff contests defendant's recitation of these events, claiming that a Wells Fargo employee negligently initiated the changes and she engaged in no wrongdoing. ECF 1-3, ¶¶ 31-32, 44-45. Nevertheless, as Wells Fargo correctly notes, “[i]t is not necessary for the Court to resolve any part of this dispute in order to rule on the pending Motion to Compel Arbitration.” ECF 9 at 2 n.1.

         Additional facts are included in the Discussion.

         II. Legal Standards

         A. The Federal Arbitration Act

         Under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., Wells Fargo moves to compel arbitration and to dismiss this action. The FAA, which was enacted in 1925, “provides for the enforceability of arbitration agreements and specifies procedures for conducting arbitrations and enforcing arbitration awards . . . .” McCormick v. Am. Online, Inc., 909 F.3d 677, 679 (4th Cir. 2018). Under § 2 of the FAA, an arbitration contract is “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Thus, “the FAA elevates the arbitration of claims as a favored alternative to litigation when the parties agree in writing to arbitration.” McCormick, 909 F.3d at 680 (citing Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)).

         In Adkins v. Labor Ready, Inc., 303 F.3d 496, 500-01 (4th Cir. 2002) (quoting Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir. 1991)), the Fourth Circuit explained.

In the Fourth Circuit, a litigant can compel arbitration under the FAA if he can demonstrate “(1) the existence of a dispute between the parties, (2) a written agreement that includes an arbitration provision which purports to cover the dispute, (3) the relationship of the transaction, which is evidenced by the agreement, to interstate or foreign commerce, and (4) the failure, neglect or refusal of the defendant to arbitrate the dispute.”

         In Adkins, the Court also said, 303 F.3d at 500: “A district court . . . has no choice but to grant a motion to compel arbitration where a valid arbitration agreement exists and the issues in a case fall within its purview.” Accordingly, a court must “engage in a limited review to ensure that the dispute is arbitrable-i.e., that a valid agreement exists between the parties and that the specific dispute falls within the substantive scope of that agreement.” Murray v. United Food and Commercial Workers Int'l Union, 289 F.3d 297, 302 (4th Cir. 2002).

         Nevertheless, there must be an “independent jurisdictional basis” for suit in federal court. Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 581-82 (2008). Of significance here, “diversity jurisdiction would authorize a federal court to resolve disputes concerning the arbitration process. . . .” McCormick, 909 F.3d at 681.

         Section 3 of the FAA is also relevant. It provides, 9 U.S.C. § 3:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the ...

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