George Rittenmeyer v. Wells Fargo, N.A.

Opinion

1 2 3

6 UNITED STATES DISTRICT COURT

7 EASTERN DISTRICT OF CALIFORNIA

9 GEORGE RITTENMEYER, Case No. 1:25-cv-00621-EPG

10 Plaintiff, ORDER GRANTING, IN PART, AND DENYING, IN PART, DEFENDANT’S 11 v. MOTION TO DISMISS

12 WELLS FARGO, N.A., (ECF No. 8)

13 Defendant. 14 15 16 I. INTRODUCTION 17 Plaintiff’s complaint brings claims under California’s Elder Abuse and Dependent 18 Adult Civil Protection Act (the Elder Abuse Act) and California’s Commercial Code, generally 19 alleging that Defendant Wells Fargo, N.A., failed to stop a fraudulent wire transfer from his 20 savings account. (ECF No. 1). 21 Defendant now moves to dismiss Plaintiff’s complaint under Federal Rule of Civil 22 Procedure 12(b)(6), arguing that Plaintiff fails to state any claims upon which relief may be 23 granted. (ECF No. 8).1 24 For the reasons given below, the Court will grant the motion in part and deny it in part. 25 /// 26 /// 27 28 1 The parties have consented to the undersigned handling this case for all purposes. (ECF No. 16). 1 II. BACKGROUND 2 A. Plaintiff’s Complaint 3 Plaintiff filed his complaint on May 27, 2025, asserting diversity jurisdiction under 28 4 U.S.C. § 1332. (ECF No. 1). He alleges that he is a senior citizen who maintained a savings 5 account with Defendant. 6 On April 28, 2025, a representative claiming to be from Wells Fargo telephoned Plaintiff asking if Plaintiff had made a $73,063.75 wire out of Plaintiff’s savings 7 account to Beverly Hill Watch Company. Plaintiff informed the supposed Wells Fargo representative that he had not made such a wire transfer and that he was 8 coming to the local branch immediately to dispute the wire in person. 9 While Plaintiff was driving to the local Wells Fargo branch, Plaintiff . . . 10 received repeated incoming calls from a number Plaintiff did not recognize (877-870-0064). The caller again claimed they were . . . calling on behalf of 11 Wells Fargo. Plaintiff hung up and blocked the caller repeatedly. 12 Once Plaintiff arrived at the local branch, representatives Colleen Cacciapo and Anthony Furst were able to contact the corporate representatives at Wells Fargo 13 office to supposedly stop, or block, the wire transfer. 14 A Lost/Stolen Transfer was made on Plaintiff’s checking and savings accounts, as his accounts were deemed to be compromised, so that Plaintiff received new 15 accounts. 16 Plaintiff was assured by the Wells Fargo branch representatives that though the wire transfer appeared as “pending” in his account, the money would be 17 returned to Plaintiff’s account. 18 The wire transfer was noted as “pending” in Plaintiff’s savings account until on 19 April 30, 2025, the wire transfer was allowed to go through to “JPMORGAN CHASE BAN /FTR/BNF=BEVERLY HILLS WATCH CO.” 20 (Id. at 4-5). 21 The complaint thereafter describes Plaintiff’s efforts to recover his funds through 22 Defendant’s fraud department and by filing a police report. However, to date, Defendant has 23 not returned the funds, nor has Plaintiff otherwise recovered them. 24 Plaintiff asserts claims under the Elder Abuse Act and California’s Commercial Code 25 § 11202.2 26 27 28 2 While Plaintiff’s complaint generally cites the Uniform Commercial Code, both parties recognize Plaintiff’s claim as being brought under California’s Commercial Code § 11202 in their briefing on 1 B. Defendant’s Motion to Dismiss 2 Defendant filed its motion to dismiss on July 18, 2025. (ECF No. 8). 3 As for Plaintiff’s Elder Abuse Act claims, Defendant argues that Plaintiff fails to allege 4 that Defendant (1) retained any portion of the funds; or (2) assisted the third-party in obtaining 5 the funds. (ECF No. 8-1, pp. 6-7). Regarding Plaintiff’s Commercial Code claim, Defendant 6 argues that Plaintiff fails to specifically allege what security procedures exist, whether the 7 parties agreed to them, and how those procedures are not commercially reasonable. (Id. at 7). 8 Plaintiff filed his opposition on August 15, 2025. (ECF No. 12). As for his Elder Abuse 9 Act claims, he argues that Defendant (1) retained his funds by refusing to reimburse him for the 10 unauthorized wire transfer; and (2) assisted the third-party in obtaining the funds because it had 11 actual notice that the transfer was unauthorized and still allowed it to proceed. (Id. at 12-13). 12 Regarding his Commercial Code claim, he argues that no security procedures existed, and 13 because he did not authorize the transfer, Defendant must bear the loss under the Commercial 14 Code’s general rule. (Id. at 15-17). 15 Defendant filed its reply on August 25, 2025, reiterating its arguments from its motion 16 to dismiss. (ECF No. 14). 17 After briefing on Defendant’s motion to dismiss was completed, the parties consented 18 to the undersigned handling the case for all purposes, and it was reassigned on December 17, 19 2025. (ECF No. 16). 20 III. LEGAL STANDARDS 21 Motions to dismiss under Fed. R. Civ. P. 12(b)(6) may be based on “the lack of a 22 cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal 23 theory.” Godecke v. Kinetic Concepts, Inc., 937 F.3d 1201, 1208 (9th Cir. 2019) (citation 24 omitted). To survive such a motion, “a complaint must contain sufficient factual matter, 25 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 26 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim 27 28 Defendant’s motion to dismiss. (ECF No. 8-1, p. 7; ECF No. 12, p. 15). Accordingly, this order refers to Plaintiff alleging a violation of California’s Commercial Code. 1 is plausible when a plaintiff pleads facts that permit the court to reasonably infer the 2 defendant’s liability for the alleged misconduct. Id. A complaint does not suffice if it offers 3 only “labels and conclusions,” a “formulaic recitation of the elements,” or “naked assertion[s] 4 devoid of further factual enhancement.” Id. (quoting Twombly, 550 U.S. at 555, 557). 5 When ruling on a motion to dismiss, the court must accept all well-pleaded factual 6 allegations as true and construe all inferences in the light most favorable to the non-moving 7 party. Barker v. Riverside Cnty. Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (citations 8 omitted). The court need not, however, “accept as true allegations that are merely conclusory, 9 unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State 10 Warriors, 266 F.3d 979, 988, opinion amended on denial of reh’g, 275 F.3d 1187 (9th Cir. 11 2001). 12 IV. ANALYSIS 13 A. Elder Abuse Claims 14 Plaintiff’s complaint alleges two ways that Defendant violated the Elder Abuse Act: (1) 15 Defendant directly retained his funds; and (2) Defendant assisted another in taking his funds. 16 (ECF No. 1, p. 6 – “Wells Fargo violated the ‘direct retention’ aspect of this law and also 17 violated the ‘assistance’ aspect of the Elder Abuse law.”). The Court addresses each in turn. 18 1. Direct retention 19 First, financial abuse of an elder person occurs when an entity “[t]akes, secretes, 20 appropriates, obtains, or retains real or personal property of an elder or dependent adult for a 21 wrongful use or with intent to defraud, or both.” Cal. Welf. & Inst. Code § 15610.30(a)(1) 22 (emphasis added). In turn, an entity retains property for wrongful use if it “retains the property 23 and the person or entity knew or should have known that this conduct is likely to be harmful to 24 the elder or dependent adult.” Cal. Welf. & Inst. Code § 15610.30(b). 25 Defendant argues that “Plaintiff does not allege that [it] ‘retained’ any portion of the 26 disputed wire” but rather “concedes that the wire was sent to a third-party account at JPMorgan 27 Chase” and thus “[t]he funds would therefore be ‘retained’ by the owner of the JPMorgan 28 Chase account, not [Defendant].” (ECF No. 8-1, p. 6). 1 Citing cases discussed further below, Plaintiff counters that “[c]ourts have held that 2 withholding funds owed to an elder under a contract or due back following fraud can support a 3 finding of wrongful retention” and that because Defendant has not returned the funds, it can be 4 considered to be wrongfully retaining them. (ECF No. 12, p. 12). 5 Defendant’s reply argues that Plaintiff’s cited cases are distinguishable because they 6 “arise from the insured-insurer context and include clear contractual obligations.” (ECF No. 14, 7 p. 3). 8 Upon consideration, the Court concludes that Plaintif’s complaint fails to allege facts 9 supporting a violation of the Elder Abuse Act. 10 Under the Elder Abuse Act, an entity “retains” property “when an elder . . . is deprived 11 of any property right, including by means of an agreement, donative transfer, or testamentary 12 bequest, regardless of whether the property is held directly or by a representative of an elder.” 13 Cal. Welf. & Inst. Code § 15610.30(c) (emphasis added). An entity does not violate 14 § 15610.30(a)(1) when it simply processes a transaction involving a third party. See, e.g., Bortz 15 v. JP Morgan Chase Bank, N.A., No. 22-55582, 2023 WL 4700640, at *1 (9th Cir. July 24, 16 2023) (unpublished) (finding no direct retention claim where “[p]laintiffs’ complaint alleges 17 that the scammers took their life savings, not [the defendant]”); Miller v. Bank of Am., N.A., 18 No. 1:21-cv-00337-JLT, 2022 WL 3704093, at *5 (E.D. Cal. Aug. 26, 2022) (concluding that 19 where “an account owner initiated the transfers, third party scammers obtained the funds, and 20 the defendant bank merely processed the transactions, there is no claim for a ‘direct taking’”). 21 Moreover, Plaintiff’s cited cases do not support his claim. In Paslay v. State Farm Gen. 22 Ins. Co., 248 Cal. App. 4th 639 (2016), the plaintiff alleged that an insurance company 23 committed elder “abuse by failing to pay policy benefits” due under a homeowner’s policy, id. 24 at 643, and the Court concluded that “a party may engage in elder abuse by misappropriating 25 funds to which an elder is entitled under a contract,” id. at 656, but “wrongful conduct occurs 26 only when the party who violates the contract actually knows that it is engaging in a harmful 27 breach, or reasonably should be aware of the harmful breach,” id. at 658. Here, Plaintiff does 28 not allege that Defendant is breaching any contract by failing to pay the funds. 1 Further, Plaintiff’s other cited cases similarly are based on failures to pay amounts due 2 under private contracts. See O’Brien as Tr. of Raymond F. O'Brien Revocable Tr. v. XPO CNW, 3 Inc., 362 F. Supp. 3d 778, 786 (N.D. Cal. 2018) (concluding that facts regarding breach of 4 contract for monthly retirement payments, coupled with sufficient dispute as to improper 5 motive, supported allowing elder abuse claim to proceed); Mahan v. Charles W. Chan Ins. 6 Agency, Inc., 14 Cal. App. 5th 841, 866 (2017) (finding cognizable elder abuse claim in case 7 involving life insurance policy where defendants had improper pecuniary motive in influencing 8 transaction). 9 Accordingly, the Court concludes that Plaintiff’s complaint fails to allege that 10 Defendant retained Plaintiff’s property for a wrongful use or with intent to defraud under the 11 Elder Abuse Act. Cal. Welf. & Inst. Code § 15610.30(a)(1). 12 2. Assistance 13 Second, financial abuse of an elder person can also occur when an entity “[a]ssists in 14 taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or 15 dependent adult for a wrongful use or with intent to defraud, or both.” Cal. Welf. & Inst. Code 16 § 15610.30(a)(2) (emphasis added). 17 Defendant argues that “there are no allegations that [it] had advance knowledge that a 18 third-party fraudster intended to initiate the wire; and there are no allegations that [it] assisted 19 the third-party fraudster with initiating the wire;” and thus Plaintiff has failed to allege that it 20 ‘“assisted’ the fraudster with his alleged scheme.” (ECF No. 8-1, p. 6). 21 Plaintiff counters that “the complaint alleges that Defendant had actual knowledge of 22 the fraud when it processed the wire transfer” because it “details how Plaintiff immediately 23 stated that he had not authorized the transfer and went to the local branch to dispute it in 24 person, where branch representatives were able to contact the corporate representatives at 25 Defendant office to supposedly stop, or block, the wire transfer.” (ECF No. 12, p. 13-14). 26 Defendant’s reply argues that Plaintiff fails to explain how it could have stopped the 27 funds transfer while it was already pending nor “allege that [it] had advance notice of the wire 28 or otherwise aided the bad actor.” (ECF No. 14, p. 2). 1 Courts have held that a Defendant must have actual knowledge of a third party’s 2 wrongful use in order to be liable for assisting another in taking property under the Elder Abuse 3 Act: 4 A defendant may be found liable for assisting in financial elder abuse under an aiding and abetting standard. Das v. Bank of Am., N.A., 186 Cal. App. 4th 727, 5 744–45 (2010). To state such a claim, the plaintiff must plead that the defendant “knows the other’s conduct constitutes a breach of duty and gives substantial 6 assistance or encouragement to the other to so act.” Id. at 744. When “a bank 7 provides ordinary services that effectuate financial abuse by a third party, the bank may be found to have ‘assisted’ in the financial abuse only if it knew of the 8 third party’s wrongful conduct.” Id. at 745. To be liable for elder abuse, there 9 must be actual knowledge, not constructive knowledge. Bortz v. JPMorgan Chase Bank, N.A., No. 21-cv-618-TWR, 2021 WL 4819575, at *5 (S.D. Cal. 10 Oct. 15, 2021). 11 Alexander v. Wells Fargo Bank, N.A., No. 23-CV-617-DMS-BLM, 2023 WL 8358550, at *4 12 (S.D. Cal. Dec. 1, 2023). 13 While Plaintiff points to “the suspicious circumstances” of the funds transfer, courts in 14 analogous cases have concluded that suspicion of fraud is not enough to state a claim for elder 15 abuse. (ECF No. 12, p. 13); see Smith v. Wells Fargo Bank, N.A., No. 25-CV-00719-HSG, 16 2025 WL 2781738, at *9 (N.D. Cal. Sept. 30, 2025) (concluding that plaintiff failed to plead 17 actual knowledge even though plaintiff notified defendant of the fraud as “[t]his notice may 18 have put Defendants on alert that ‘something fishy was going on,’ but it does not establish that 19 Defendants had actual knowledge that Robert Jr. had breached his fiduciary duty by stealing 20 Plaintiff’s money”); Rahimian v. Wells Fargo Bank N.A., No. CV 24-03787 KS, 2024 WL 21 4818797, at *13 (C.D. Cal. Sept. 20, 2024) (concluding that plaintiff failed to allege that 22 defendant assisted a fraudulent transaction with actual knowledge of the fraudster’s conduct 23 where plaintiff alleged that he never authorized wire transactions, a representative from 24 defendant’s fraud department contacted plaintiff about suspicious activity, plaintiff confirmed 25 he did not know about the suspicious activity, and the representative insisted that defendant 26 would take care of the matter and return funds); Alexander, 2023 WL 8358550, at *4 27 (concluding that plaintiff failed to allege that defendant had actual knowledge and provided 28 substantial assistance or encouragement to fraudster despite plaintiff alleging that “Defendant 1 informed him ‘that an unknown individual accessed his accounts and switched Plaintiff’s 2 contact information,’” that defendant’s conduct was authorized by a higher-up, and that the 3 disputed transactions were not reversed). 4 Accordingly, the Court concludes that Plaintiff’s complaint fails to allege that 5 Defendant violated the Elder Abuse Act by assisting the fraudster in taking his funds. Cal. 6 Welf. & Inst. Code § 15610.30(a)(2). 7 B. Commercial Code Claim 8 Plaintiff’s complaint also claims that Defendant violated the Commercial Code “by 9 permitting the unauthorized wires to proceed” and by “fail[ing] to maintain security procedures 10 specifically designed to protect customers such as [him].” (ECF No. 1, pp. 6-7). 11 Under the California Commercial Code, a bank must refund a customer for 12 unauthorized fund transfers: 13 If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and not effective as the order of the 14 customer under Section 11202 . . . the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled 15 to enforce payment and shall pay interest on the refundable amount calculated 16 from the date the bank received payment to the date of the refund. 17 Cal. Com. Code § 11204(a). 18 However, a bank need not refund fund transfers where an order is (1) authorized or (2) 19 effective as the order of the customer, although unauthorized, because of reasonable available 20 security procedures: 21 (a) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise 22 bound by it under the law of agency.

23 (b) If a bank and its customer have agreed that the authenticity of payment 24 orders issued to the bank in the name of the customer as sender will be verified pursuant to a security procedure, a payment order received by the receiving bank 25 is effective as the order of the customer, whether or not authorized, if (i) the security procedure is a commercially reasonable method of providing security 26 against unauthorized payment orders, and (ii) the bank proves that it accepted 27 the payment order in good faith and in compliance with the bank’s obligations under the security procedure and any agreement or instruction of the customer, 28 evidenced by a record, restricting acceptance of payment orders issued in the name of the customer. The bank is not required to follow an instruction that 1 violates an agreement with the customer, evidenced by a record, or notice of 2 which is not received at a time and in a manner affording the bank a reasonable opportunity to act on it before the payment order is accepted. 3 Cal. Com. Code § 11202(a)-(b) (emphasis added). 4 In turn, a “security procedure” is defined as 5 a procedure established by agreement of a customer and a receiving bank for the 6 purpose of (i) verifying that a payment order or communication amending or canceling a payment order is that of the customer, or (ii) detecting error in the 7 transmission or the content of the payment order or communication. 8 Cal. Com. Code § 11201 (emphasis added). 9 Defendant argues that Plaintiff fails to state a claim because he “simply declares that 10 [its] security procedures are inadequate without alleging what the security procedures entail, 11 whether Plaintiff and [it] agreed to the procedures, and why/how the procedures are not 12 commercially reasonable under section 11202(b).” (ECF No. 8-1, p. 7). 13 However, Plaintiff counters that the transfer was not justified by any security procedure, 14 and points to the allegation in the complaint that “Wells Fargo fails to maintain security 15 procedures specifically designed to protect customers such as [him].” (ECF No. 1, p. 7). 16 At the pleading stage, Plaintiff lacks knowledge of any security procedures that applied to the transaction at issue. [Complaint, ¶¶ 7, 40]. Because this 17 information is uniquely within Defendant’s possession, Plaintiff cannot allege 18 further detail at this juncture but reasonably infers that no such procedures existed for two reasons. 19 First, effective security procedures require a mutual agreement between the 20 parties. Plaintiff, however, does not recall entering into any such agreement and does not possess a copy of security procedures applicable to wire transfers. 21 Second, adequate security procedures would have required direct 22 communication between Plaintiff and Defendant to confirm and detect any potential error before the wire was initiated. No such communication occurred 23 until after the wire had already been sent. [Complaint, ¶ 18]. It was Plaintiff, not 24 Defendant, who identified the error, promptly alerted Defendant, and implored Defendant to stop the transaction while it was still pending. [Id., ¶¶ 19–23]. . . . 25 Given Plaintiff’s lack of any recollection of an agreement regarding wire 26 security procedures, the uniquely suspicious nature of the transaction, which should have alerted Defendant, and Plaintiff’s timely efforts to prevent the loss, 27 Plaintiff reasonably infers the absence of any applicable security procedures on 28 Defendant’s part. Plaintiff intends to investigate Defendant’s purported procedures in discovery. While Defendant may challenge this issue at the summary judgment stage, doing so now contradicts Plaintiff’s allegations and 1 improperly demands detail that is beyond Plaintiff’s present knowledge. 2 Accordingly, Defendant’s Motion should be denied. 3 (ECF No. 12, pp. 15-16) (emphasis added). 4 As one court has noted in analogous circumstances, where a plaintiff alleges that he did 5 not authorize a wire transfer and the defendant did not offer security procedures, the plaintiff 6 states a claim under the Commercial Code: Here, Plaintiff alleges that Defendant accepted an unauthorized wire transfer in 7 his name. (FAC ¶¶ 29, 30.) Plaintiff further avers he never agreed to any 8 security procedures for the verification of payment orders. (Id. ¶ 32.) . . . . 9 Defendant argues that Plaintiff “does not disprove the existence of security measures.” (Mot. at 17; Reply at 6.) However, that is not relevant at the motion 10 to dismiss stage; the Court reviews allegations, not proof. Nor does Defendant address Plaintiff’s first set of allegations, namely, that there were no agreed- 11 upon security procedures, and the wire transfer was unauthorized. 12 Plaintiff has successfully stated a claim under division 11 of the California Commercial Code. Accordingly, the Court DENIES Defendant’s motion to 13 dismiss Plaintiff’s claim under California Commercial Code §§ 11201 et seq. 14 Zhang v. Bank of Am., N.A., No. 2:25-CV-03999-JLS-E, 2025 WL 3049867, at *2 (C.D. Cal. 15 Sept. 15, 2025); see Cal. Com. Code § 11203, Comment 3 (“Subsection (b)(i) assures that the 16 interests of the customer will be protected by providing an incentive to a bank to make 17 available to the customer a security procedure that is commercially reasonable. If a 18 commercially reasonable security procedure is not made available to the customer, subsection 19 (b) does not apply. The result is that subsection (a) applies and the bank acts at its peril in 20 accepting a payment order that may be unauthorized. Prudent banking practice may require that 21 security procedures be utilized in virtually all cases except for those in which personal contact 22 between the customer and the bank eliminates the possibility of an unauthorized order.”). 23 Here, the Court likewise concludes that Plaintiff’s allegations are sufficient to state a 24 claim under the Commercial Code. 25 V. CONCLUSION AND ORDER 26 For the reasons explained above, IT IS ORDERED as follows: 27 1. Defendant’s motion to dismiss (ECF No. 8) is granted to the extent that Plaintiff’s Elder 28 Abuse Act claims—as alleged under Cal. Welf. & Inst. Code § 15610.30(a)(1)-(2) in een I IIE IIE IRIS IERIE IIE OID IIE

] Count 1 of the complaint—are dismissed.* 2 2. Defendant’s motion to dismiss (ECF No. 8) is denied to the extent that the case will 3 proceed on Plaintiff's Commercial Code claim—as alleged under Cal. Com. Code 4 § 11202 in Count 2 of the complaint. 5 3. Within 10 days from the date of the entry of this order, the parties shall contact 6 Courtroom Deputy Felicia Navarro (fnavarro@caed.uscourts.gov) to secure a new 7 scheduling conference date. (ECF No. 9). 8 9 IT IS SO ORDERED. 10 || Dated: _February 9, 2026 [Je hey — 11 UNITED STATES MAGISTRATE JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 %6 3 In his opposition, Plaintiff states “Should this Court grant Defendant’s Motion in whole, or in part, Plaintiff request[s] leave to amend to cure the operative pleading of any perceived deficiencies.” (ECF 27 || No. 12, p. 7). However, Plaintiff does not indicate what additional facts he could allege in an amended pleading. Thus, while the Court is not granting Plaintiff leave to amend at this time, nothing in this order 28 || precludes Plaintiff from seeking leave to amend if he believes that he can allege facts that would address the deficiencies discussed in this order. 11