Submitted: December 19, 2017
L. Edmonson, Esq., Jessie F. Beeber, Esq., Patrick J. Boyle,
Esq. (Argued), Adam G. Possidente, Esq., Venable LLP
Attorneys for Plaintiff Continental Finance Company, LLC
Alexander D. Bono, Esq. (Argued), Ryan E. Borneman, Esq.,
Lynne E. Evans, Esq., Oderah C. Nwaeze, Esq., Mackenzie M.
Wrobel, Esq., Duane Morris LLP, Attorneys for Defendant TD
AND PROCEDURAL CONTEXT
a negligence case arising out of an embezzlement scheme
perpetrated by a non-party to this suit. Plaintiff
Continental Finance Company, LLC ("Continental")
opened a business account and subscribed to electronic
banking services with Defendant TD Bank. In order to do so,
Continental entered into a Business Deposit Account Agreement
and a number of master agreements with TD Bank. In a series
of fraudulent transfers from Continental's TD Bank
account, Continental's Vice President of Accounting
embezzled more than $6 million from Continental, a crime to
which she pleaded guilty. Continental then brought this
action against TD Bank, alleging that TD Bank negligently
failed to detect the embezzlement scheme.
now brings this motion to dismiss Continental's
complaint. TD Bank argues that the negligence claim is barred
by the parties' contractual obligations, by the economic
loss doctrine, and because the UCC displaces a common law
negligence action under these facts.
TO DISMISS STANDARD
Rule 12(b)(6) motion to dismiss, the Court must determine
whether the claimant "may recover under any reasonably
conceivable set of circumstances susceptible of
proof." The Court must accept as true all
well-pleaded allegations.Every reasonable factual inference will
be drawn in the non-moving party's favor.If the claimant
may recover under that standard of review, the Court must
deny the motion to dismiss.
argues that the Court cannot consider documents extraneous to
the complaint when considering this motion. It is indeed a
"general rule that matters outside of the pleadings
should not be considered in ruling on a Rule 12(b)(6) motion
to dismiss." That general rule does not apply, however,
when "the document is integral to a plaintiffs claim and
incorporated into the complaint" or "when the
document is not being relied upon to prove the truth of its
contents." Plaintiffs may not avoid this exception
simply by declining to attach an otherwise fatal, integral
document. "[W]hen plaintiff fails to introduce a
pertinent document as part of his pleading, defendant may
introduce the exhibit as part of his motion attacking the
pleading . . ., "
Continental asserts a simple negligence claim against TD
Bank. Though Continental declined to attach the relevant
documents to its complaint, the parties' relationship is
governed by contracts, which define the extent of TD
9.2 of the parties' 2006 Master Agreement states that TD
Bank may be liable for acts of negligence. A later agreement
narrows TD Bank's liability. Section 15.1 of the
parties' 2011 Cash Management Master Agreement limits TD
Bank's liability only to "gross negligence, willful
misconduct, or bad faith."
the motion to dismiss stage, artful pleading cannot alter the
undisputed fact that clear, unambiguous, plain contract
language defines the extent of TD Bank's liability.
Continental cannot simply ignore the parties' contracts
and assert tort claims to prevent the Court from considering
agreements that are central to the legal relationship of the
parties. Where a contract specifically ...