Killion v. Truist Bank

CourtDistrict Court, N.D. Texas
DecidedMay 29, 2025
Docket5:24-cv-00194
StatusUnknown

This text of Killion v. Truist Bank (Killion v. Truist Bank) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Killion v. Truist Bank, (N.D. Tex. 2025).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS LUBBOCK DIVISION

SHERI KILLION, individually and as assignee of Lubbock National Bank, a branch of Amarillo National Bank, Plaintiff, v. No. 5:24-CV-194-H TRUIST BANK, et al., Defendants. MEMORANDUM OPINION AND ORDER This case arises from an incident of alleged wire fraud. The plaintiff, Sheri Killion, alleges that Truist Bank or a John Doe hacker, or both, fraudulently hacked into her wealth advisor’s email account, causing the plaintiff to wire $300,000 from her personal bank account to the hacker’s account instead of to another one of the plaintiff’s accounts. The plaintiff brings claims against Truist on her own behalf and as an assignee of Lubbock National Bank, which is also a defendant. Lubbock National Bank assigned its claims to the plaintiff, in exchange for which the plaintiff indemnified Lubbock National Bank. Truist Bank removed the case to this Court based on diversity jurisdiction, arguing that the plaintiff improperly joined Lubbock National Bank. The plaintiff moved to remand (Dkt. No. 6), asserting that joinder is not improper and that Truist Bank’s removal is untimely. The plaintiff also moved for attorney’s fees incurred as a result of the motion to remand (Dkt. No. 9), and Truist Bank moved to strike a sur-sur-reply to the motion to remand filed by the plaintiff (Dkt. No. 15). The Court denies the motion to remand and the motion for attorney’s fees and denies as moot the motion to strike. 1. Factual and Procedural Background A. Factual Background The Court takes the pertinent factual allegations from the complaint as true, as it must at this procedural stage. See Villareal v. Wells Fargo Bank, N.A., 814 F.3d 763, 766 (5th Cir. 2016). Sheri Killion emailed her personal wealth advisor asking for instructions to wire

$300,000 from her personal account to her Morgan Stanley account. Dkt. No. 1-13 at 3. But unbeknownst to the plaintiff, Truist Bank or a John Doe hacker, or both, had hacked her advisor’s email account and emailed to the plaintiff fraudulent wire-transfer instructions. Id. That email instructed the plaintiff to wire funds to her Morgan Stanley account, but the account number listed in the instructions was actually the hacker’s Truist Bank account number. Id. The plaintiff took these instructions to a branch of Lubbock National Bank, where she signed off on a $300,000 wire from her personal account to the fraudulent “Morgan Stanley” account that was, in reality, the hacker’s Truist Bank account. Id. at 3–4. The next day, the plaintiff emailed her advisor to confirm receipt of the wire, but

Truist Bank or the hacker intercepted and responded to that email as well. Id. at 4–5. Over a week later, Morgan Stanley informed Lubbock National Bank that it had detected a fraudulent wire transfer from the plaintiff’s account. Id. at 5. However, Lubbock National Bank refused to inspect or recall the wire. Id. Instead, Lubbock National Bank placed a notice on the plaintiff’s account, but did not inform the plaintiff of that notice until about two months later. Id. Truist Bank refuses to identify the person or entity that owns the hacker’s account. Id. Although Truist Bank has returned $1,093.41 to the plaintiff’s Lubbock National Bank account, it has not returned the remaining $298,906.59. Id. B. Procedural Background The plaintiff sued Truist Bank and Lubbock National Bank in February 2024, bringing claims for violation of the Texas Uniform Commercial Code and the federal Bank Secrecy Act, as well as claims for negligence, negligence per se, and gross negligence. See Dkt. No. 1-3 at 4–7. Truist Bank removed the action in April 2024, citing diversity

jurisdiction as the basis for removal. See No. 5:24-CV-091-C, Dkt. No. 1. However, after the plaintiff moved to remand, pointing out that Texas citizens—the plaintiff Sheri Killion and the defendant Lubbock National Bank—were on both sides of the dispute, Truist Bank consented to remand. See No. 5:24-CV-091-C, Dkt. No. 5. The Court remanded the case in May 2024. See No. 5:24-CV-091-C, Dkt. No. 6. The plaintiff later amended her complaint to drop the Bank Secrecy Act claim and add several common-law claims and a claim for violation of the federal Electronic Funds Transfers Act. See Dkt. No. 1-11 at 4–9. Then, in July 2024, the plaintiff settled her claims against Lubbock National Bank. The plaintiff and Lubbock National Bank entered into a “Settlement and Indemnity

Agreement” (the Agreement) in which Lubbock National Bank assigned all of its potential claims related to this transaction to the plaintiff. Dkt. No. 7 at 56. In exchange, the plaintiff agreed to pursue claims against only Truist Bank and to indemnify Lubbock National Bank. Id. The plaintiff filed a second amended petition on July 29, 2024, including allegations regarding Lubbock National Bank’s assignment of claims to the plaintiff and adding an additional state-law claim. See Dkt. No. 1-13. Truist Bank filed the instant removal on August 21, 2024. Dkt. No. 1. Truist Bank’s second removal is also based on diversity jurisdiction. Id. This time, however, Truist Bank argues that the diversity-destroying defendant, Lubbock National Bank, is improperly joined. Id. The plaintiff moved to remand, arguing that Truist Bank’s notice of removal was untimely. Dkt. No. 6. Truist Bank responded (Dkt. No. 8) and the plaintiff replied (Dkt. No. 9). The plaintiff’s reply also included a motion for attorney’s fees. Dkt. No. 9 at 8–9. Truist Bank sought leave to file a sur-reply, arguing that the plaintiff’s

reply included a new motion for attorney’s fees to which Truist Bank should be permitted to respond, as well as new arguments in favor of remand. Dkt. No. 10. The Court permitted a sur-reply (Dkt. No. 11), and Truist Bank filed a sur-reply (Dkt. No. 12). The plaintiff then filed a sur-sur-reply to Truist Bank’s sur-reply (Dkt. No. 13), which Truist Bank moved to strike (Dkt. No. 15). The motion to remand and motion to strike are both ripe for review. 2. Legal Standards A. Motion to Remand Defendants in state court may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). “A defendant may remove a state court action to federal court only if the action could have originally been filed in federal court.” Anderson v. Am. Airlines, Inc., 2 F.3d 590,

593 (5th Cir. 1993). The removing party bears the burden of establishing that federal jurisdiction exists over the controversy. Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013). The Court must remand the action if “at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). B. Improper-Joinder Doctrine Ordinarily, removal on the basis of diversity jurisdiction requires complete diversity—no plaintiffs or defendants that are citizens of the same state—but if a plaintiff has improperly joined a nondiverse defendant, a court can disregard the citizenship of that defendant. Flagg v. Stryker Corp., 819 F.3d 132, 136 (5th Cir. 2016) (en banc). Removing parties claiming improper joinder bear a heavy burden. Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003). “Fraudulent joinder can be established in two ways: (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Id.

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Killion v. Truist Bank, Counsel Stack Legal Research, https://law.counselstack.com/opinion/killion-v-truist-bank-txnd-2025.