California law: Davis v. Maryland Bank

David A. Szwak

California law: Davis v. Maryland Bank

Postby David A. Szwak » Sat Dec 03, 2005 11:23 am

Davis v. Maryland Bank
Not Reported in F.Supp.2d, 2002 WL 32713429
N.D.Cal.,2002.

Common law claims on behalf of Ace
The Court finds that Ace has failed to state any common law claims against Defendant MBNA for negligence, defamation, and intentional interference with economic advantage. As a preliminary matter, the Court finds that Defendant had no duty to Ace such that Ace cannot plead any claims arising under a negligence theory of liability. Under California law, except in very limited circumstances, banks do not owe a duty to noncustomers. See e.g., Chazen v. Centennial Bank, 61 Cal.App.4th 532, 543-45, 71 Cal.Rptr.2d 462 (1998); Software Design and Application, Ltd., v. Hoefer & Arnett, Inc., 49 Cal.App.4th 472, 479, 482-83, 56 Cal.Rptr.2d 756 (1996). The duty owed by the bank is an implied term of the contract between the bank and the depositor. Chazen, 61 Cal.App.4th at 543, 71 Cal.Rptr.2d 462. Thus, because an account agreement is not intended to benefit third parties unknown to the bank, a third party cannot allege a claim for negligence or breach of contract against a bank. See id. at 543-45, 71 Cal.Rptr.2d 462; see also Software Design, 49 Cal.App.4th at 482-83, 56 Cal.Rptr.2d 756.
*7 The Court finds this reasoning is persuasive and applicable to the present facts. The account was opened in the name of Plaintiff Davis, not Ace. Nor did the account list Ace as an entity authorized to obtain credit on the account. Further, the FAC does not allege that Defendant was aware that the account was also for the benefit of Ace. Accordingly, the Court finds that MBNA owed no duty to Ace and thus Ace has failed to state a claim for negligence against Defendant. Similarly, Ace has failed to allege that MBNA has published any information about Ace which supports a claim of defamation. Thus, Ace has also failed to state a claim for defamation.
Finally, the Court finds that Ace has failed to plead a claim for intentional interference with prospective economic advantage. The elements of the tort of intentional interference with prospective economic advantage are as follows: "(1) [T]he existence of a prospective business relationship advantageous to plaintiff, (2) defendants' knowledge of the existence of the relationship, (3) defendants' intentional conduct designed to disrupt the relationship, (4) actual causation, and (5) damages to plaintiff proximately caused by defendants' conduct." Maheu v. CBS, Inc., 201 Cal.App.3d 662, 667, 247 Cal.Rptr. 304 (1988) (citing Institute of Veterinary Pathology, Inc. v. California Health Laboratories, Inc., 116 Cal.App.3d 111, 126, 172 Cal.Rptr. 74 (1981)); see also McHugh v. Board of Educ. of the Milford School Dist., 100 F.Supp.2d 231, 247 n. 15 (D.Del.2000). It is alleged in the FAC that it was Davis, not Ace, who had existing and prospective contracts which were terminated due to Defendant's willful conduct. Thus, the FAC fails to allege that Ace had any contracts, that Defendant's knew of these contracts, or that Ace was otherwise harmed. As such, Ace has failed to state a claim for intentional interference with prospective economic advantage. See e.g., Billmeyer v. Plaza Bank of Commerce, 42 Cal.App.4th 1086, 1099, 50 Cal.Rptr.2d 119 (1995) (finding third party did not have standing for claim of intentional interference with prospective economic advantage because no claim that third party injured by defendant's conduct).

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