Preview
10/21/2020
1 AUSTIN B. KENNEY (State Bar No. 242277)
abk@severson.com
2 SEVERSON & WERSON
A Professional Corporation
3 The Atrium
19100 Von Karman Avenue, Suite 700
4 Irvine, California 92612
Telephone: (949) 442-7110
5 Facsimile: (949) 442-7118
6 TARA MOHSENI (State Bar No. 313080)
tm@severson.com
7 SEVERSON & WERSON
A Professional Corporation
8 One Embarcadero Center, Suite 2600
San Francisco, California 94111
9 Telephone: (415) 398-3344
Facsimile: (415) 956-0439
10
11 Attorneys for Defendant
BANK OF AMERICA, N.A.
12
13 SUPERIOR COURT OF CALIFORNIA
14 COUNTY OF PLACER
15
16 MEHRDAD D. MOINVASIRI, Case No. SCV0043641
17 Plaintiff, MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
18 vs. MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY
19 BANK OF AMERICA, NATIONAL ADJUDICATION
ASSOCIATION, and DOES 1 Through 10, ,
20 Filed concurrently with Notice of Motion;
Defendants. Declaration of Tara Mohseni in Support of
21 Motion; Declaration of Shane Hannah in
Support of Motion; Declaration of Rachelle
22 Bill in Support of Motion; Separate Statement
of Undisputed Material Facts in Support of
23 Motion; Index of Exhibits; and Declaration of
Compliance with Local Rule 20.2.1
24
Date: January 8, 2021
25 Time: 8:30 a.m.
Dept.: 31
26
27
28
70001.0573/15510914.1 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 TABLE OF CONTENTS
Page
2
I. INTRODUCTION ................................................................................................................. 5
3
II. UNDISPUTED MATERIAL FACTS ................................................................................... 5
4
5 III. LEGAL STANDARD ........................................................................................................... 8
6 IV. ARGUMENT ........................................................................................................................ 8
7 A. BANA Is Entitled to Summary Adjudication on Plaintiff’s Causes of Action for
Breach of Contract and Breach of Implied Covenant of Good Faith and Fair
8 Dealing Because the Operative Contract Allows BANA To Close An Account for
Any Reason Without Notice, and Plaintiff Waived Recovery of the Damages He
9 Now Seeks. (Issue Nos. 1 and 2) ..............................................................................8
10 B. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Negligent Interference with Prospective Economic Relations Because BANA Was
11
Not Aware of Plaintiff’s Alleged Relationship with Client. (Issue No. 3) ............. 10
12
C. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
13 Wrongful Dishonor of Checks (California Commercial Code Section 4-402)
Because BANA Did Not Act Wrongfully, According to the Operative Contract
14 Between the Parties. (Issue No. 4) .......................................................................... 11
15 D. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Breach of Fiduciary Duty Because California States That Banks Owe No Such
16 Duty to Their Depositors. (Issue No. 5) .................................................................. 11
17 E. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
18 Violation of the Unruh Civil Rights Act Because the Evidence Shows that BANA
Closed Plaintiff’s Account for Justifiable Business Reasons, Not Due to His
19 Nationality. (Issue No. 6) ........................................................................................ 12
20 F. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Violation of Business and Professions Code Section 17200 Because BANA Did
21 Not Violate the Law and Treated Plaintiff in Accordance with the Terms of the
Operative Contract. (Issue No. 7)............................................................................ 13
22
1. There Is No Predicate Violation Of Law .................................................... 13
23
2. BANA Has Not Acted Unfairly or Fraudulently. ....................................... 13
24
25 3. Plaintiff Is Not Entitled To Any Relief Under The UCL ............................ 14
26 G. BANA Is Entitled to Summary Adjudication on All Claims Because He Has No
Recoverable Damages ............................................................................................. 15
27
V. CONCLUSION ................................................................................................................... 15
28
70001.0573/15510914.1 2 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 TABLE OF AUTHORITIES
Cases Page
2
Aguilar v. Atlantic Richfield Co.
3
(2001) 25 Cal.4th 826................................................................................................................ 8
4
Carma Developers, Inc. v. Marathon Dev. Cal., Inc.
5 (1992) 2 Cal.4th 342.................................................................................................................. 9
6 Chabner v. United of Omaha Life Ins. Co.
(9th Cir. 2000) 225 F.3d 1042 ................................................................................................. 13
7
Chazen v. Centennial Bank
8 (1998) 61 Cal.App.4th 532 ..................................................................................................... 11
9
County of Santa Clara v. Atlantic Richfield Co.
10 (2006) 137 Cal.App.4th 292 ...................................................................................................... 8
11 Feitelberg v. Credit Suisse First Boston, LLC
(2005) 134 Cal.App.4th 997 .................................................................................................... 14
12
Glenn K. Jackson Inc. v. Roe
13 (9th Cir. 2001) 273 F.3d 1192 ................................................................................................. 13
14
Gregory v. Albertson’s, Inc.
15 (2002) 104 Cal.App.4th 845 .................................................................................................... 13
16 Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga
(2009) 175 Cal.App.4th 1306 .................................................................................................... 9
17
Hamilton v. Greenwich Investors XXVI, LLC
18 (2011) 195 Cal.App.4th 1602 .................................................................................................... 9
19 Howe v. Bank of America, N.A.
20 (2009) 179 Cal.App.4th 1443 .................................................................................................. 12
21 Korea Supply Co. v. Lockheed Martin Corp.
(2003) 29 Cal.4th 1134............................................................................................................ 14
22
Krantz v. BT Visual Images, L.L.C.
23 (2001) 89 Cal.App.4th 164 ...................................................................................................... 13
24 Kurtz-Ahlers, LLC v. Bank of America, N.A.
(2020) 48 Cal.App.5th 952 ...................................................................................................... 11
25
26 Lazar v. Hertz Corp.
(1999) 69 Cal.App.4th 1494 .................................................................................................... 12
27
Madrid v. Perot Sys. Corp.
28 (2005) 130 Cal.App.4th 440 .................................................................................................... 14
70001.0573/15510914.1 3 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 Mass. Mut. Life Ins. Co. v. Super. Ct.
(2002) 97 Cal.App.4th 1282 .................................................................................................... 14
2
McClain v. Octagon Plaza, LLC
3 (2008) 159 Cal.App.4th 784 ...................................................................................................... 9
4
O'M & Assocs., LLC v. Ozanne
5 (S.D.Cal. Sep. 21, 2011, No. 10cv2130 AJB (RBB)) 2011 U.S.Dist.LEXIS
107677 ..................................................................................................................................... 10
6
People v. Vasa Blanca Convalescent Homes, Inc.
7 (1984) 159 Cal.App.3d 509 ..................................................................................................... 13
8 Racine & Laramie, Ltd. v. Dep’t of Parks & Rec.
(1992) 11 Cal.App.4th 1026 ...................................................................................................... 9
9
10 Rosales v. Battle
(2003) 113 Cal. App.4th 1178 ................................................................................................... 8
11
Venhaus v. Shultz
12 (2007) 155 Cal.App.4th 1072 [66 Cal.Rptr.3d 432] ............................................................... 10
13 Vikco Insurance Services, Inc. v. Ohio Indemnity Co.
(1999) 70 Cal.App.4th 55 ........................................................................................................ 14
14
15 Waller v. Truck Ins. Exchange, Inc.
(1995) 11 Cal.4th 1.................................................................................................................... 9
16
Statutes
17
Business & Professions Code § 17200. ................................................................................... 13, 14
18
California Commercial Code § 4-402 ........................................................................................... 11
19
20
21
22
23
24
25
26
27
28
70001.0573/15510914.1 4 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 I. INTRODUCTION
2 Plaintiff David M. Moinvasiri, Esq. (“Plaintiff”) opened an account at Bank of America
3 (“BANA”). BANA did its due diligence, reviewing the account for possible risk of fraud, as it
4 does with all new accounts based on the credentials the customer provides. BANA determined that
5 Plaintiff’s credentials were linked to another, possibly fraudulent account and closed Plaintiff’s
6 account accordingly. These actions were entirely consistent with the operative contract between
7 the parties. Nationality had nothing to do with it. Plaintiff nevertheless manufactured a civil rights
8 claim against the BANA on the false pretense that the Bank profiled and discriminated against
9 him. He has no evidence to support this; he admitted as much in discovery. He also has not alleged
10 any recoverable damages against BANA. Facts and law are both against Plaintiff, and with
11 BANA. BANA is entitled to summary adjudication on all claims accordingly.
12 II. UNDISPUTED MATERIAL FACTS
13 On August 1, 2019, Plaintiff opened at Bank of America the California IOLTA Trust
14 Account ending in -0101 (the “Account”) and deposited two checks totaling $51,000. (SSUF 1-2.)
15 As part of opening the Account, Plaintiff executed a “Business Signature Card.” (SSUF 3.) By
16 signing the Business Signature Card Plaintiff expressly acknowledged that he would be bound by
17 the terms of a contract called the “Deposit Agreement and Disclosures,” (“Deposit Agreement”)
18 which is a standard deposit agreement applicable to all similarly-situated customers and is subject
19 to change from time to time. (SSUF 4.) The Deposit Agreement and Disclosures include the
20 following key terms and conditions:
21 • Account Closures and Conversions/Changes to Account
Settings: You or we may close your checking or savings
22 account at any time without advance notice…. (SSUF 5.)
23
• Account Closures and Conversions/Changes to Account
24 Settings: Sometimes after an account is closed, and while
we are still holding the funds from the account, we receive a
25 withdrawal request, check or other item for payment from
26 the account. We may refuse the withdrawal request and
return the check or other item. We are not liable for any
27 losses or damage that may result from refusing the
withdrawal or dishonoring the check or other item, even if
28
70001.0573/15510914.1 5 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 we are still holding funds that would cover the withdrawal,
check or other item. (Ibid.)
2
3 • Impact of Holds: Sometimes funds in your account are not
available to cover your checks and other items. When we
4 determine that funds in your account are subject to a hold,
dispute, or legal process, then these funds are not available to
5 cover your checks and other items. … (SSUF 6.)
6
• Freezing Your Account: If we decide to close your account,
7 we may freeze it. If we do this, we may in our discretion
either accept or return deposits, checks and other items that
8 we receive after we freeze your account without being liable
to you. (SSUF 7.)
9
10 • Indemnification and Limitation of Liability: Except as
limited by applicable law, we are not liable for special,
11 incidental, exemplary, punitive or consequential losses or
damages of any kind. Our liability for a claim will be
12 limited to the face value of an item or transaction improperly
13 dishonored or paid or the actual value of any deposits not
properly credited or withdrawals not properly debited. You
14 agree that the amount of any claim you have against us in
connection with any account or transaction with us, whether
15 brought as a warranty, negligence, wrongful dishonor or
other action, is subject to reduction to the extent that: 1)
16 negligence or failure to use reasonable care on your part, or
17 on the part of any of your agents or employees, contributed
to the loss which is the basis of your claim; and 2) damages
18 could not be avoided by our use of ordinary care. (SSUF 8.)
19 Plaintiff admits he understood when he opened the Account that he agreed to be bound by
20 the terms of the Deposit Agreement. (SSUF 9.) However, he also admits that he did not read the
21 Deposit Agreement or any of its applicable provisions despite having opportunity to do so. (SSUF
22 10.)
23 Contrary to the Complaint, Plaintiff now admits that was never asked about his nationality
24 as part of opening the Account. (SSUF 11.) However, he did provide a driver’s license number
25 and social security number. (SSUF 12.) The driver’s license number and social security Plaintiff
26 used to open the Account matched with one used to open a different account that had been closed
27 years prior due to suspected fraud on that account. (Ibid.) This triggered further review of the
28
70001.0573/15510914.1 6 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 Account by a Senior Fraud Analyst (the “Analyst”) in BANA’s New Accounts Risk Review
2 (“NARR”) Department. (Ibid.)
3 The NARR Analyst contacted the Bank’s Corporate Security Department on August 2,
4 2019 to obtain additional information regarding Plaintiff’s eligibility to open an account at BANA.
5 (SSUF 13.) She was advised that Plaintiff did not qualify for a new account at BANA according to
6 the Bank’s internal fraud prevention policies, which prevent opening of an account by a person
7 linked to a previous account closure resulting from suspected fraud. (Ibid.) After being advised by
8 Corporate Security that Plaintiff did not qualify for a new account, the Analyst contacted NARR
9 management to inquire about available options, if any, to retain the account, or else to obtain the
10 approval she would need to close the account due to the large amount that was initially deposited.
11 NARR management approved the account for closure. (SSUF 14.)
12 Based on the foregoing, the Analyst initiated the closure of the Account, in accordance
13 with the applicable Deposit Agreement and Disclosures. On August 9, 2019, she obtained final
14 authorization from NARR management to close the account and issue the funds in the Account
15 back to Plaintiff. (SSUF 15.) A hold was placed on the Account on August 12, 2019 under
16 authority of NARR management in accordance with the foregoing process before the Account was
17 finally closed on August 14. (SSUF 16.)
18 In the interim, payee Ali Sepehrband attempted to draw check #102 issued by Plaintiff on
19 the Account in the amount of $19,000 on August 12, 2019. (SSUF 17.) Due to the Account hold,
20 BANA rejected payment of check #102. (SSUF 18.) On August 12, 2019, BANA sent Plaintiff a
21 letter advising him that the Account would be closed. (SSUF 19.) On August 13, 2019, BANA
22 sent Plaintiff a letter advising him of a hold on deposits made to his account on August 5, 2019.
23 (SSUF 20.) The only funds left in the Account were returned to Plaintiff on or about August 13,
24 2019 in the form of a cashier’s check for $46,248.49. (SSUF 21.) On or around August 14, 2019
25 Plaintiff received the letter from BANA dated August 12, 2019 advising him of the closure of the
26 Account. (SSUF 22.) BANA never advised Plaintiff of its reasoning for closing the account prior
27 to this suit, nor was it required to do so. (SSUF 5, 23.) In any event, BANA’s decision to the close
28 the Account was not based in any way upon Plaintiff’s national origin, nationality, race, or country
70001.0573/15510914.1 7 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 of origin. (SSUF 27.)
2 III. LEGAL STANDARD
3 Summary judgment requires a three-step analysis. (Rosales v. Battle (2003) 113 Cal. App.4th
4 1178, 1182 (“Rosales”).)
5 “First, [the Court] identif[ies] the issues framed by the pleadings.” (Id., at p. 1182.) A review
6 of those issues is crucial because in moving for summary judgment a defendant need only “negate
7 plaintiff’s theories of liability as alleged in the complaint. A moving party need not … refute liability
8 on some theoretical possibility not included in the pleadings.” (County of Santa Clara v. Atlantic
9 Richfield Co. (2006) 137 Cal.App.4th 292, 332.)
10 “Secondly, [the Court] determine[s] whether the moving party’s showing has established
11 facts which negate the opponent’s claim and justify a judgment in movant’s favor ….” (Rosales,
12 supra, 113 Cal.App.4th at p. 1182.) The moving party “bears an initial burden of production to make
13 a prima facie showing of the nonexistence of any triable issue of fact ….” (Aguilar v. Atlantic
14 Richfield Co. (2001) 25 Cal.4th 826, 850 (“Aguilar”).) “A prima facie showing is one that is
15 sufficient to support the position of the party in question.” (Id., at p. 851.)
16 “[T]he third and final step is to determine whether the opposition demonstrates the
17 existence of a triable, material factual issue.” (Rosales, supra, 113 Cal.App.4th at p. 1182.) If the
18 moving defendant meets its initial burden of production, “the burden shifts back to the plaintiff to
19 show that a triable issue of one or more material facts exists as to that cause of action …. In doing
20 so, the plaintiff cannot rely on the mere allegations or denial of his pleadings, ‘but, instead, shall
21 set forth the specific facts showing that a triable issue of material fact exists....’”
22 IV. ARGUMENT
23 A. BANA Is Entitled to Summary Adjudication on Plaintiff’s Causes of Action for
Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing
24 Because the Operative Contract Allows BANA To Close An Account for Any Reason
Without Notice, and Plaintiff Waived Recovery of the Damages He Now Seeks. (Issue
25 Nos. 1 and 2)
26 Plaintiff claims BANA breached the Deposit Agreement by closing the Account and
27 returning three unspecified check drafts unpaid. However, the undisputed material facts confirm
28 that BANA acted in accordance with the Deposit Agreement at all relevant times.
70001.0573/15510914.1 8 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 The elements of a cause of action for breach of contract are “(1) the contract, (2) plaintiff's
2 performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages
3 to plaintiff.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.)
4 Furthermore, in every contract there is an implied covenant of good faith and fair dealing that no
5 party will do anything that will have the effect of impairing or injuring the rights of the other party
6 under the contract. (See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36.) The implied
7 covenant is “a supplement to an existing contract” (McClain v. Octagon Plaza, LLC (2008) 159
8 Cal.App.4th 784, 799; Racine & Laramie, Ltd. v. Dep’t of Parks & Rec. (1992) 11 Cal.App.4th
9 1026, 1031-35) and, as such, “it is universally recognized [that] the scope of conduct prohibited by
10 the covenant of good faith is circumscribed by the purposes and express terms of the contract.”
11 (Carma Developers, Inc. v. Marathon Dev. Cal., Inc. (1992) 2 Cal.4th 342, 373.) It does not create
12 rights or remedies beyond the four corners of the written contract. For this reason, the implied
13 covenant only requires that each party not do anything which will deprive the other parties thereto
14 of the benefits of the existing contract. (Waller v. Truck Ins. Exch., Inc. (1995) 11 Cal.4th 1, 36.)
15 Accordingly, “[b]reach of the covenant of good faith and fair dealing is nothing more than a cause
16 of action for breach of contract.” (Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga
17 (2009) 175 Cal.App.4th 1306, 1344.)
18 The express terms of the Deposit Agreement, to which Plaintiff admits he agreed and by
19 which he admits he was bound, provide that BANA “may close [Plaintiff’s] checking or savings
20 account at any time without advance notice.” (SSUF 5.) In deciding to closing an account, BANA
21 may freeze the account, place a hold on the account, and refuse to honor withdrawal requests or
22 return checks. (Ibid.; SSUF 7.) Per the contract, this may mean that funds are unavailable to cover
23 checks the customer has written. Checks may also be returned. (SSUF 6-7.) BANA acted in
24 accordance with these provisions.
25 Additionally, the Deposit Agreement specifically exempts BANA from liability for
26 special, incidental, exemplary, punitive or consequential losses or damages of any kind. (SSUF 8.)
27 Such would include the damages Plaintiff now seeks related to alleged losses from his business
28 relationship with his client, Mr. Sepehrband.
70001.0573/15510914.1 9 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 Thus, the undisputed material facts confirm that Plaintiff will be unable to show that
2 BANA breached the terms of the Deposit Agreement such that Plaintiff was ever deprived of the
3 benefit of the same. For this reason alone this court should grant BANA’s motion for summary
4 adjudication of the first and second causes of action.
5 B. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Negligent Interference with Prospective Economic Relations Because BANA Was Not
6 Aware of Plaintiff’s Alleged Relationship with Client. (Issue No. 3)
7 In support of his third cause of action, Plaintiff claims BANA negligently interfered with
8 his prospective business relationships by refusing to pay the checks Plaintiff had written to his
9 client, Ali Sepehrband. (Complaint, ¶¶ 26-33.) The tort of negligent interference with prospective
10 economic advantage is established where a plaintiff demonstrates that: (1) an economic
11 relationship existed between the plaintiff and a third party which contained a reasonably probable
12 future economic benefit or advantage to the plaintiff; (2) the defendant knew of the existence of
13 the relationship and was aware or should have been aware that if it did not act with due care its
14 actions would interfere with this relationship and cause the plaintiff to lose in whole or in part the
15 probable future economic benefit or advantage of the relationship; (3) the defendant was
16 negligent; and (4) such negligence caused damage to the plaintiff in that the relationship was
17 actually interfered with or disrupted and the plaintiff lost in whole or in part the economic benefits
18 or advantage reasonably expected from the relationship. (Venhaus v. Shultz (2007) 155
19 Cal.App.4th 1072, 1073 [66 Cal.Rptr.3d 432].)
20 As an initial matter, “a party to a contract cannot recover from the other party to the
21 contract for interference with prospective economic advantage for what is essentially a breach of
22 contract. Neither a party to a contract, nor its agent, may be liable for interference with their own
23 contract or related subcontracts that would require the performance of the party to the primary
24 contract.” (O'M & Assocs., LLC v. Ozanne (S.D.Cal. Sep. 21, 2011, No. 10cv2130 AJB (RBB))
25 2011 U.S.Dist.LEXIS 107677, at *14.) As discussed, Plaintiff and BANA’s relationship is
26 governed by the terms of the Deposit Agreement and Plaintiff cannot seek further tort recovery for
27 conduct otherwise governed by the applicable contract.
28 Furthermore, Plaintiff will be unable to create a triable issue of material fact as to whether
70001.0573/15510914.1 10 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 BANA was aware of Plaintiff’s relationship Mr. Sepehrband or their potential dealings; it was not.
2 (SSUF 26.) To the contrary, BANA conducted a diligent internal investigation before concluding
3 that it had a legitimate business reason to close the Account, and was entitled to do so per the
4 Deposit Agreement. (SSUF 12-16.)
5 C. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Wrongful Dishonor of Checks (California Commercial Code Section 4-402) Because
6 BANA Did Not Act Wrongfully, According to the Operative Contract Between the
Parties. (Issue No. 4)
7
8 Section 4-402 concerns instances where a customer issues a check and which the payor
9 bank refuses to honor, resulting in a rejection of payment or other lack of payment due to
10 insufficient funds. Specifically, a payor bank is held liable to its customer for damages
11 proximately caused by the refusal, should it constitute a wrongful dishonor of an item. (Cal.
12 Comm. Code, § 4-402 .) “Wrongful dishonor” excludes any permitted or justified dishonor. (See
13 Official Comments on Cal. Comm. Code § 4-402.)
14 BANA did not wrongfully dishonor the checks Plaintiff intended to pay to his client, Mr.
15 Sepehrband. (Compl. ¶¶ 36-43.) Again, BANA was within its contractual rights to refuse to pay
16 any check drawn on the Account on or after August 12, 2019, which is when the hold was placed
17 on the Account. (SSUF 16.) This cause of action therefore fails as a matter of law.
18 D. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Breach of Fiduciary Duty Because California States That Banks Owe No Such Duty
19 to Their Depositors. (Issue No. 5)
20 Plaintiff wrongly claims BANA breached a fiduciary duty by closing the Plaintiff’s
21 Account without any explanation. (Complaint, ¶¶ 45-46.) It is settled law in California and around
22 the country that “banks ‘are not fiduciaries for their depositors.’” (Kurtz-Ahlers, LLC v. Bank of
23 America, N.A. (2020) 48 Cal.App.5th 952, 9561; Chazen v. Centennial Bank (1998) 61
24 Cal.App.4th 532, 537 (Chazen) [“The relationship between a bank and its depositor is not
25 fiduciary in character but, rather, “‘founded on contract,’ [citation] which is ordinarily
26
1
27 Severson & Werson successfully handled the Kurtz-Ahlers matter through a two-week jury trial,
whereby the trial court granted the BANA’s motion for nonsuit before the Court of Appeal later
28 affirmed the ruling.
70001.0573/15510914.1 11 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 memorialized by a signature card that the depositor signs upon opening the account. [Citation.]”)
2 (Ibid.)
3 Here, the Deposit Agreement explicitly provided BANA with authority to close the
4 Account at any time without advanced notice. (SSUF 5.) Plaintiff’s claim must fail for this simple
5 reason.2
6 E. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Violation of the Unruh Civil Rights Act Because the Evidence Shows that BANA
7 Closed Plaintiff’s Account for Justifiable Business Reasons, Not Due to His
Nationality. (Issue No. 6)
8
9 Plaintiff’s cause of action for violation of the Unruh Civil Acts right fails because
10 Plaintiff’s nationality had nothing to do with BANA’s decision to close the Account. There are
11 simply no facts indicating any discriminatory action by BANA.
12 “[T]he objective of the [Unruh] Act is to prohibit businesses from engaging in
13 unreasonable, arbitrary or invidious discrimination.’ [Citations omitted.]” (Howe v. Bank of
14 America, N.A. (2009) 179 Cal.App.4th 1443, 1450, (emphasis in original).) A claim under the
15 Unruh Act cannot survive “when the business practice appears to be valid on its face as bearing a
16 reasonable relation to appropriate commercial objectives for a public enterprise.” (Lazar v. Hertz
17 Corp. (1999) 69 Cal.App.4th 1494, 1509.)
18 Indeed, the undisputed material facts establish that BANA closed the Account for
19 legitimate business reasons. (SSUF 12-16.) BANA confirms the decision to the close the Account
20 was not based in any way upon Plaintiff’s national origin, nationality, race, or country of origin.
21 (SSUF 27.) Plaintiff himself even admits his nationality was never asked about his nationality as
22 part of the account opening process. (SSUF 11.) Nor did BANA provide him with any reason as to
23 the close of the account, let alone a discriminatory one.3 (SSUF 23.)
24
25 2
Nor does the Bank owe a fiduciary duty because the account was specifically an IOLTA
26 Account. There is simply no authority for this proposition. As an attorney, Plaintiff is a fiduciary
of his client. But the same does not apply to Plaintiff’s bank.
27
3
Again, it was not required to give a reason, per the Deposit Agreement. (SSUF 5.)
28
70001.0573/15510914.1 12 Case No. SCV0043641
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT,
OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1 BANA is entitled to summary adjudication accordingly.
2 F. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for
Violation of Business and Professions Code Section 17200 Because BANA Did Not
3 Violate the Law and Treated Plaintiff in Accordance with the Terms of the Operative
Contract. (Issue No. 7)
4
5 Plaintiff’s sixth cause of action is for violation of California’s Unfair Competition Law
6 under Business & Professions Code § 17200, et seq. (“UCL”). The UCL claim is not based on any
7 specific allegations, other than those already set forth. It is entirely derivative of Plaintiff’s other
8 claims. (Compl. ¶¶ 60, 64.)
9 1. There Is No Predicate Violation Of Law
10 Courts have made clear that UCL cannot be used as an end-run around the requirements of
11 other statutes. (See Glenn K. Jackson Inc. v. Roe (9th Cir. 2001) 273 F.3d 1192, 1203; see also
12 Krantz v. BT Visual Images, L.L.C. (2001) 89 Cal.App.4th 164, 178 (the viability of a UCL claim
13 stands or falls with the antecedent substantive causes of action).) “A court may not allow plaintiff
14 to plead around an absolute bar to relief simply by recasting the cause of action as one for unfair
15 competition.” (Chabner v. United of Omaha Life Ins. Co. (9th Cir. 2000) 225 F.3d 1042, 1048.)
16 Likewise, as § 17200 requires an underlying violation of law, a defense to the predicate claim is a
17 defense to the alleged violation of the UCL. (Krantz, 89 Cal.App.4th at 178.)
18 As explained above, Plaintiff cannot prevail on any of his aforementioned claims because
19 the undisputed facts establish that BANA was within its rights to close the Account and reject
20 payment of the settlement check, and did not do so discriminatorily. (Supra, sections IV.A-IV.E.)
21 Accordingly, there is no unlawful conduct to support a UCL claim.
22 2. BANA Has Not Acted Unfairly or Fraudulently.
23 To state a claim under the “unfair” prong of the UCL, a plaintiff must allege the supposed
24 conduct “offends an established public policy or…is immoral, unethical, oppressive, unscrupulous
25 or substantially injurious to consumers.” (People v. Vasa Blanca Convalescent Homes, Inc.
26 (1984) 159 Cal.App.3d 509, 530.) California authority, however, has “require[d] that the public
27 policy which is a predicate to the action…be ‘tethered’ to specific constitutional, statutory, or
Preview
10/21/2020 1 AUSTIN B. KENNEY (State Bar No. 242277) abk@severson.com 2 SEVERSON & WERSON A Professional Corporation 3 The Atrium 19100 Von Karman Avenue, Suite 700 4 Irvine, California 92612 Telephone: (949) 442-7110 5 Facsimile: (949) 442-7118 6 TARA MOHSENI (State Bar No. 313080) tm@severson.com 7 SEVERSON & WERSON A Professional Corporation 8 One Embarcadero Center, Suite 2600 San Francisco, California 94111 9 Telephone: (415) 398-3344 Facsimile: (415) 956-0439 10 11 Attorneys for Defendant BANK OF AMERICA, N.A. 12 13 SUPERIOR COURT OF CALIFORNIA 14 COUNTY OF PLACER 15 16 MEHRDAD D. MOINVASIRI, Case No. SCV0043641 17 Plaintiff, MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF 18 vs. MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY 19 BANK OF AMERICA, NATIONAL ADJUDICATION ASSOCIATION, and DOES 1 Through 10, , 20 Filed concurrently with Notice of Motion; Defendants. Declaration of Tara Mohseni in Support of 21 Motion; Declaration of Shane Hannah in Support of Motion; Declaration of Rachelle 22 Bill in Support of Motion; Separate Statement of Undisputed Material Facts in Support of 23 Motion; Index of Exhibits; and Declaration of Compliance with Local Rule 20.2.1 24 Date: January 8, 2021 25 Time: 8:30 a.m. Dept.: 31 26 27 28 70001.0573/15510914.1 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 TABLE OF CONTENTS Page 2 I. INTRODUCTION ................................................................................................................. 5 3 II. UNDISPUTED MATERIAL FACTS ................................................................................... 5 4 5 III. LEGAL STANDARD ........................................................................................................... 8 6 IV. ARGUMENT ........................................................................................................................ 8 7 A. BANA Is Entitled to Summary Adjudication on Plaintiff’s Causes of Action for Breach of Contract and Breach of Implied Covenant of Good Faith and Fair 8 Dealing Because the Operative Contract Allows BANA To Close An Account for Any Reason Without Notice, and Plaintiff Waived Recovery of the Damages He 9 Now Seeks. (Issue Nos. 1 and 2) ..............................................................................8 10 B. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Negligent Interference with Prospective Economic Relations Because BANA Was 11 Not Aware of Plaintiff’s Alleged Relationship with Client. (Issue No. 3) ............. 10 12 C. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for 13 Wrongful Dishonor of Checks (California Commercial Code Section 4-402) Because BANA Did Not Act Wrongfully, According to the Operative Contract 14 Between the Parties. (Issue No. 4) .......................................................................... 11 15 D. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Breach of Fiduciary Duty Because California States That Banks Owe No Such 16 Duty to Their Depositors. (Issue No. 5) .................................................................. 11 17 E. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for 18 Violation of the Unruh Civil Rights Act Because the Evidence Shows that BANA Closed Plaintiff’s Account for Justifiable Business Reasons, Not Due to His 19 Nationality. (Issue No. 6) ........................................................................................ 12 20 F. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Violation of Business and Professions Code Section 17200 Because BANA Did 21 Not Violate the Law and Treated Plaintiff in Accordance with the Terms of the Operative Contract. (Issue No. 7)............................................................................ 13 22 1. There Is No Predicate Violation Of Law .................................................... 13 23 2. BANA Has Not Acted Unfairly or Fraudulently. ....................................... 13 24 25 3. Plaintiff Is Not Entitled To Any Relief Under The UCL ............................ 14 26 G. BANA Is Entitled to Summary Adjudication on All Claims Because He Has No Recoverable Damages ............................................................................................. 15 27 V. CONCLUSION ................................................................................................................... 15 28 70001.0573/15510914.1 2 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 TABLE OF AUTHORITIES Cases Page 2 Aguilar v. Atlantic Richfield Co. 3 (2001) 25 Cal.4th 826................................................................................................................ 8 4 Carma Developers, Inc. v. Marathon Dev. Cal., Inc. 5 (1992) 2 Cal.4th 342.................................................................................................................. 9 6 Chabner v. United of Omaha Life Ins. Co. (9th Cir. 2000) 225 F.3d 1042 ................................................................................................. 13 7 Chazen v. Centennial Bank 8 (1998) 61 Cal.App.4th 532 ..................................................................................................... 11 9 County of Santa Clara v. Atlantic Richfield Co. 10 (2006) 137 Cal.App.4th 292 ...................................................................................................... 8 11 Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997 .................................................................................................... 14 12 Glenn K. Jackson Inc. v. Roe 13 (9th Cir. 2001) 273 F.3d 1192 ................................................................................................. 13 14 Gregory v. Albertson’s, Inc. 15 (2002) 104 Cal.App.4th 845 .................................................................................................... 13 16 Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306 .................................................................................................... 9 17 Hamilton v. Greenwich Investors XXVI, LLC 18 (2011) 195 Cal.App.4th 1602 .................................................................................................... 9 19 Howe v. Bank of America, N.A. 20 (2009) 179 Cal.App.4th 1443 .................................................................................................. 12 21 Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134............................................................................................................ 14 22 Krantz v. BT Visual Images, L.L.C. 23 (2001) 89 Cal.App.4th 164 ...................................................................................................... 13 24 Kurtz-Ahlers, LLC v. Bank of America, N.A. (2020) 48 Cal.App.5th 952 ...................................................................................................... 11 25 26 Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494 .................................................................................................... 12 27 Madrid v. Perot Sys. Corp. 28 (2005) 130 Cal.App.4th 440 .................................................................................................... 14 70001.0573/15510914.1 3 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 Mass. Mut. Life Ins. Co. v. Super. Ct. (2002) 97 Cal.App.4th 1282 .................................................................................................... 14 2 McClain v. Octagon Plaza, LLC 3 (2008) 159 Cal.App.4th 784 ...................................................................................................... 9 4 O'M & Assocs., LLC v. Ozanne 5 (S.D.Cal. Sep. 21, 2011, No. 10cv2130 AJB (RBB)) 2011 U.S.Dist.LEXIS 107677 ..................................................................................................................................... 10 6 People v. Vasa Blanca Convalescent Homes, Inc. 7 (1984) 159 Cal.App.3d 509 ..................................................................................................... 13 8 Racine & Laramie, Ltd. v. Dep’t of Parks & Rec. (1992) 11 Cal.App.4th 1026 ...................................................................................................... 9 9 10 Rosales v. Battle (2003) 113 Cal. App.4th 1178 ................................................................................................... 8 11 Venhaus v. Shultz 12 (2007) 155 Cal.App.4th 1072 [66 Cal.Rptr.3d 432] ............................................................... 10 13 Vikco Insurance Services, Inc. v. Ohio Indemnity Co. (1999) 70 Cal.App.4th 55 ........................................................................................................ 14 14 15 Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1.................................................................................................................... 9 16 Statutes 17 Business & Professions Code § 17200. ................................................................................... 13, 14 18 California Commercial Code § 4-402 ........................................................................................... 11 19 20 21 22 23 24 25 26 27 28 70001.0573/15510914.1 4 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 I. INTRODUCTION 2 Plaintiff David M. Moinvasiri, Esq. (“Plaintiff”) opened an account at Bank of America 3 (“BANA”). BANA did its due diligence, reviewing the account for possible risk of fraud, as it 4 does with all new accounts based on the credentials the customer provides. BANA determined that 5 Plaintiff’s credentials were linked to another, possibly fraudulent account and closed Plaintiff’s 6 account accordingly. These actions were entirely consistent with the operative contract between 7 the parties. Nationality had nothing to do with it. Plaintiff nevertheless manufactured a civil rights 8 claim against the BANA on the false pretense that the Bank profiled and discriminated against 9 him. He has no evidence to support this; he admitted as much in discovery. He also has not alleged 10 any recoverable damages against BANA. Facts and law are both against Plaintiff, and with 11 BANA. BANA is entitled to summary adjudication on all claims accordingly. 12 II. UNDISPUTED MATERIAL FACTS 13 On August 1, 2019, Plaintiff opened at Bank of America the California IOLTA Trust 14 Account ending in -0101 (the “Account”) and deposited two checks totaling $51,000. (SSUF 1-2.) 15 As part of opening the Account, Plaintiff executed a “Business Signature Card.” (SSUF 3.) By 16 signing the Business Signature Card Plaintiff expressly acknowledged that he would be bound by 17 the terms of a contract called the “Deposit Agreement and Disclosures,” (“Deposit Agreement”) 18 which is a standard deposit agreement applicable to all similarly-situated customers and is subject 19 to change from time to time. (SSUF 4.) The Deposit Agreement and Disclosures include the 20 following key terms and conditions: 21 • Account Closures and Conversions/Changes to Account Settings: You or we may close your checking or savings 22 account at any time without advance notice…. (SSUF 5.) 23 • Account Closures and Conversions/Changes to Account 24 Settings: Sometimes after an account is closed, and while we are still holding the funds from the account, we receive a 25 withdrawal request, check or other item for payment from 26 the account. We may refuse the withdrawal request and return the check or other item. We are not liable for any 27 losses or damage that may result from refusing the withdrawal or dishonoring the check or other item, even if 28 70001.0573/15510914.1 5 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 we are still holding funds that would cover the withdrawal, check or other item. (Ibid.) 2 3 • Impact of Holds: Sometimes funds in your account are not available to cover your checks and other items. When we 4 determine that funds in your account are subject to a hold, dispute, or legal process, then these funds are not available to 5 cover your checks and other items. … (SSUF 6.) 6 • Freezing Your Account: If we decide to close your account, 7 we may freeze it. If we do this, we may in our discretion either accept or return deposits, checks and other items that 8 we receive after we freeze your account without being liable to you. (SSUF 7.) 9 10 • Indemnification and Limitation of Liability: Except as limited by applicable law, we are not liable for special, 11 incidental, exemplary, punitive or consequential losses or damages of any kind. Our liability for a claim will be 12 limited to the face value of an item or transaction improperly 13 dishonored or paid or the actual value of any deposits not properly credited or withdrawals not properly debited. You 14 agree that the amount of any claim you have against us in connection with any account or transaction with us, whether 15 brought as a warranty, negligence, wrongful dishonor or other action, is subject to reduction to the extent that: 1) 16 negligence or failure to use reasonable care on your part, or 17 on the part of any of your agents or employees, contributed to the loss which is the basis of your claim; and 2) damages 18 could not be avoided by our use of ordinary care. (SSUF 8.) 19 Plaintiff admits he understood when he opened the Account that he agreed to be bound by 20 the terms of the Deposit Agreement. (SSUF 9.) However, he also admits that he did not read the 21 Deposit Agreement or any of its applicable provisions despite having opportunity to do so. (SSUF 22 10.) 23 Contrary to the Complaint, Plaintiff now admits that was never asked about his nationality 24 as part of opening the Account. (SSUF 11.) However, he did provide a driver’s license number 25 and social security number. (SSUF 12.) The driver’s license number and social security Plaintiff 26 used to open the Account matched with one used to open a different account that had been closed 27 years prior due to suspected fraud on that account. (Ibid.) This triggered further review of the 28 70001.0573/15510914.1 6 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 Account by a Senior Fraud Analyst (the “Analyst”) in BANA’s New Accounts Risk Review 2 (“NARR”) Department. (Ibid.) 3 The NARR Analyst contacted the Bank’s Corporate Security Department on August 2, 4 2019 to obtain additional information regarding Plaintiff’s eligibility to open an account at BANA. 5 (SSUF 13.) She was advised that Plaintiff did not qualify for a new account at BANA according to 6 the Bank’s internal fraud prevention policies, which prevent opening of an account by a person 7 linked to a previous account closure resulting from suspected fraud. (Ibid.) After being advised by 8 Corporate Security that Plaintiff did not qualify for a new account, the Analyst contacted NARR 9 management to inquire about available options, if any, to retain the account, or else to obtain the 10 approval she would need to close the account due to the large amount that was initially deposited. 11 NARR management approved the account for closure. (SSUF 14.) 12 Based on the foregoing, the Analyst initiated the closure of the Account, in accordance 13 with the applicable Deposit Agreement and Disclosures. On August 9, 2019, she obtained final 14 authorization from NARR management to close the account and issue the funds in the Account 15 back to Plaintiff. (SSUF 15.) A hold was placed on the Account on August 12, 2019 under 16 authority of NARR management in accordance with the foregoing process before the Account was 17 finally closed on August 14. (SSUF 16.) 18 In the interim, payee Ali Sepehrband attempted to draw check #102 issued by Plaintiff on 19 the Account in the amount of $19,000 on August 12, 2019. (SSUF 17.) Due to the Account hold, 20 BANA rejected payment of check #102. (SSUF 18.) On August 12, 2019, BANA sent Plaintiff a 21 letter advising him that the Account would be closed. (SSUF 19.) On August 13, 2019, BANA 22 sent Plaintiff a letter advising him of a hold on deposits made to his account on August 5, 2019. 23 (SSUF 20.) The only funds left in the Account were returned to Plaintiff on or about August 13, 24 2019 in the form of a cashier’s check for $46,248.49. (SSUF 21.) On or around August 14, 2019 25 Plaintiff received the letter from BANA dated August 12, 2019 advising him of the closure of the 26 Account. (SSUF 22.) BANA never advised Plaintiff of its reasoning for closing the account prior 27 to this suit, nor was it required to do so. (SSUF 5, 23.) In any event, BANA’s decision to the close 28 the Account was not based in any way upon Plaintiff’s national origin, nationality, race, or country 70001.0573/15510914.1 7 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 of origin. (SSUF 27.) 2 III. LEGAL STANDARD 3 Summary judgment requires a three-step analysis. (Rosales v. Battle (2003) 113 Cal. App.4th 4 1178, 1182 (“Rosales”).) 5 “First, [the Court] identif[ies] the issues framed by the pleadings.” (Id., at p. 1182.) A review 6 of those issues is crucial because in moving for summary judgment a defendant need only “negate 7 plaintiff’s theories of liability as alleged in the complaint. A moving party need not … refute liability 8 on some theoretical possibility not included in the pleadings.” (County of Santa Clara v. Atlantic 9 Richfield Co. (2006) 137 Cal.App.4th 292, 332.) 10 “Secondly, [the Court] determine[s] whether the moving party’s showing has established 11 facts which negate the opponent’s claim and justify a judgment in movant’s favor ….” (Rosales, 12 supra, 113 Cal.App.4th at p. 1182.) The moving party “bears an initial burden of production to make 13 a prima facie showing of the nonexistence of any triable issue of fact ….” (Aguilar v. Atlantic 14 Richfield Co. (2001) 25 Cal.4th 826, 850 (“Aguilar”).) “A prima facie showing is one that is 15 sufficient to support the position of the party in question.” (Id., at p. 851.) 16 “[T]he third and final step is to determine whether the opposition demonstrates the 17 existence of a triable, material factual issue.” (Rosales, supra, 113 Cal.App.4th at p. 1182.) If the 18 moving defendant meets its initial burden of production, “the burden shifts back to the plaintiff to 19 show that a triable issue of one or more material facts exists as to that cause of action …. In doing 20 so, the plaintiff cannot rely on the mere allegations or denial of his pleadings, ‘but, instead, shall 21 set forth the specific facts showing that a triable issue of material fact exists....’” 22 IV. ARGUMENT 23 A. BANA Is Entitled to Summary Adjudication on Plaintiff’s Causes of Action for Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing 24 Because the Operative Contract Allows BANA To Close An Account for Any Reason Without Notice, and Plaintiff Waived Recovery of the Damages He Now Seeks. (Issue 25 Nos. 1 and 2) 26 Plaintiff claims BANA breached the Deposit Agreement by closing the Account and 27 returning three unspecified check drafts unpaid. However, the undisputed material facts confirm 28 that BANA acted in accordance with the Deposit Agreement at all relevant times. 70001.0573/15510914.1 8 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 The elements of a cause of action for breach of contract are “(1) the contract, (2) plaintiff's 2 performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages 3 to plaintiff.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) 4 Furthermore, in every contract there is an implied covenant of good faith and fair dealing that no 5 party will do anything that will have the effect of impairing or injuring the rights of the other party 6 under the contract. (See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36.) The implied 7 covenant is “a supplement to an existing contract” (McClain v. Octagon Plaza, LLC (2008) 159 8 Cal.App.4th 784, 799; Racine & Laramie, Ltd. v. Dep’t of Parks & Rec. (1992) 11 Cal.App.4th 9 1026, 1031-35) and, as such, “it is universally recognized [that] the scope of conduct prohibited by 10 the covenant of good faith is circumscribed by the purposes and express terms of the contract.” 11 (Carma Developers, Inc. v. Marathon Dev. Cal., Inc. (1992) 2 Cal.4th 342, 373.) It does not create 12 rights or remedies beyond the four corners of the written contract. For this reason, the implied 13 covenant only requires that each party not do anything which will deprive the other parties thereto 14 of the benefits of the existing contract. (Waller v. Truck Ins. Exch., Inc. (1995) 11 Cal.4th 1, 36.) 15 Accordingly, “[b]reach of the covenant of good faith and fair dealing is nothing more than a cause 16 of action for breach of contract.” (Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga 17 (2009) 175 Cal.App.4th 1306, 1344.) 18 The express terms of the Deposit Agreement, to which Plaintiff admits he agreed and by 19 which he admits he was bound, provide that BANA “may close [Plaintiff’s] checking or savings 20 account at any time without advance notice.” (SSUF 5.) In deciding to closing an account, BANA 21 may freeze the account, place a hold on the account, and refuse to honor withdrawal requests or 22 return checks. (Ibid.; SSUF 7.) Per the contract, this may mean that funds are unavailable to cover 23 checks the customer has written. Checks may also be returned. (SSUF 6-7.) BANA acted in 24 accordance with these provisions. 25 Additionally, the Deposit Agreement specifically exempts BANA from liability for 26 special, incidental, exemplary, punitive or consequential losses or damages of any kind. (SSUF 8.) 27 Such would include the damages Plaintiff now seeks related to alleged losses from his business 28 relationship with his client, Mr. Sepehrband. 70001.0573/15510914.1 9 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 Thus, the undisputed material facts confirm that Plaintiff will be unable to show that 2 BANA breached the terms of the Deposit Agreement such that Plaintiff was ever deprived of the 3 benefit of the same. For this reason alone this court should grant BANA’s motion for summary 4 adjudication of the first and second causes of action. 5 B. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Negligent Interference with Prospective Economic Relations Because BANA Was Not 6 Aware of Plaintiff’s Alleged Relationship with Client. (Issue No. 3) 7 In support of his third cause of action, Plaintiff claims BANA negligently interfered with 8 his prospective business relationships by refusing to pay the checks Plaintiff had written to his 9 client, Ali Sepehrband. (Complaint, ¶¶ 26-33.) The tort of negligent interference with prospective 10 economic advantage is established where a plaintiff demonstrates that: (1) an economic 11 relationship existed between the plaintiff and a third party which contained a reasonably probable 12 future economic benefit or advantage to the plaintiff; (2) the defendant knew of the existence of 13 the relationship and was aware or should have been aware that if it did not act with due care its 14 actions would interfere with this relationship and cause the plaintiff to lose in whole or in part the 15 probable future economic benefit or advantage of the relationship; (3) the defendant was 16 negligent; and (4) such negligence caused damage to the plaintiff in that the relationship was 17 actually interfered with or disrupted and the plaintiff lost in whole or in part the economic benefits 18 or advantage reasonably expected from the relationship. (Venhaus v. Shultz (2007) 155 19 Cal.App.4th 1072, 1073 [66 Cal.Rptr.3d 432].) 20 As an initial matter, “a party to a contract cannot recover from the other party to the 21 contract for interference with prospective economic advantage for what is essentially a breach of 22 contract. Neither a party to a contract, nor its agent, may be liable for interference with their own 23 contract or related subcontracts that would require the performance of the party to the primary 24 contract.” (O'M & Assocs., LLC v. Ozanne (S.D.Cal. Sep. 21, 2011, No. 10cv2130 AJB (RBB)) 25 2011 U.S.Dist.LEXIS 107677, at *14.) As discussed, Plaintiff and BANA’s relationship is 26 governed by the terms of the Deposit Agreement and Plaintiff cannot seek further tort recovery for 27 conduct otherwise governed by the applicable contract. 28 Furthermore, Plaintiff will be unable to create a triable issue of material fact as to whether 70001.0573/15510914.1 10 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 BANA was aware of Plaintiff’s relationship Mr. Sepehrband or their potential dealings; it was not. 2 (SSUF 26.) To the contrary, BANA conducted a diligent internal investigation before concluding 3 that it had a legitimate business reason to close the Account, and was entitled to do so per the 4 Deposit Agreement. (SSUF 12-16.) 5 C. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Wrongful Dishonor of Checks (California Commercial Code Section 4-402) Because 6 BANA Did Not Act Wrongfully, According to the Operative Contract Between the Parties. (Issue No. 4) 7 8 Section 4-402 concerns instances where a customer issues a check and which the payor 9 bank refuses to honor, resulting in a rejection of payment or other lack of payment due to 10 insufficient funds. Specifically, a payor bank is held liable to its customer for damages 11 proximately caused by the refusal, should it constitute a wrongful dishonor of an item. (Cal. 12 Comm. Code, § 4-402 .) “Wrongful dishonor” excludes any permitted or justified dishonor. (See 13 Official Comments on Cal. Comm. Code § 4-402.) 14 BANA did not wrongfully dishonor the checks Plaintiff intended to pay to his client, Mr. 15 Sepehrband. (Compl. ¶¶ 36-43.) Again, BANA was within its contractual rights to refuse to pay 16 any check drawn on the Account on or after August 12, 2019, which is when the hold was placed 17 on the Account. (SSUF 16.) This cause of action therefore fails as a matter of law. 18 D. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Breach of Fiduciary Duty Because California States That Banks Owe No Such Duty 19 to Their Depositors. (Issue No. 5) 20 Plaintiff wrongly claims BANA breached a fiduciary duty by closing the Plaintiff’s 21 Account without any explanation. (Complaint, ¶¶ 45-46.) It is settled law in California and around 22 the country that “banks ‘are not fiduciaries for their depositors.’” (Kurtz-Ahlers, LLC v. Bank of 23 America, N.A. (2020) 48 Cal.App.5th 952, 9561; Chazen v. Centennial Bank (1998) 61 24 Cal.App.4th 532, 537 (Chazen) [“The relationship between a bank and its depositor is not 25 fiduciary in character but, rather, “‘founded on contract,’ [citation] which is ordinarily 26 1 27 Severson & Werson successfully handled the Kurtz-Ahlers matter through a two-week jury trial, whereby the trial court granted the BANA’s motion for nonsuit before the Court of Appeal later 28 affirmed the ruling. 70001.0573/15510914.1 11 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 memorialized by a signature card that the depositor signs upon opening the account. [Citation.]”) 2 (Ibid.) 3 Here, the Deposit Agreement explicitly provided BANA with authority to close the 4 Account at any time without advanced notice. (SSUF 5.) Plaintiff’s claim must fail for this simple 5 reason.2 6 E. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Violation of the Unruh Civil Rights Act Because the Evidence Shows that BANA 7 Closed Plaintiff’s Account for Justifiable Business Reasons, Not Due to His Nationality. (Issue No. 6) 8 9 Plaintiff’s cause of action for violation of the Unruh Civil Acts right fails because 10 Plaintiff’s nationality had nothing to do with BANA’s decision to close the Account. There are 11 simply no facts indicating any discriminatory action by BANA. 12 “[T]he objective of the [Unruh] Act is to prohibit businesses from engaging in 13 unreasonable, arbitrary or invidious discrimination.’ [Citations omitted.]” (Howe v. Bank of 14 America, N.A. (2009) 179 Cal.App.4th 1443, 1450, (emphasis in original).) A claim under the 15 Unruh Act cannot survive “when the business practice appears to be valid on its face as bearing a 16 reasonable relation to appropriate commercial objectives for a public enterprise.” (Lazar v. Hertz 17 Corp. (1999) 69 Cal.App.4th 1494, 1509.) 18 Indeed, the undisputed material facts establish that BANA closed the Account for 19 legitimate business reasons. (SSUF 12-16.) BANA confirms the decision to the close the Account 20 was not based in any way upon Plaintiff’s national origin, nationality, race, or country of origin. 21 (SSUF 27.) Plaintiff himself even admits his nationality was never asked about his nationality as 22 part of the account opening process. (SSUF 11.) Nor did BANA provide him with any reason as to 23 the close of the account, let alone a discriminatory one.3 (SSUF 23.) 24 25 2 Nor does the Bank owe a fiduciary duty because the account was specifically an IOLTA 26 Account. There is simply no authority for this proposition. As an attorney, Plaintiff is a fiduciary of his client. But the same does not apply to Plaintiff’s bank. 27 3 Again, it was not required to give a reason, per the Deposit Agreement. (SSUF 5.) 28 70001.0573/15510914.1 12 Case No. SCV0043641 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION 1 BANA is entitled to summary adjudication accordingly. 2 F. BANA Is Entitled to Summary Adjudication on Plaintiff’s Cause of Action for Violation of Business and Professions Code Section 17200 Because BANA Did Not 3 Violate the Law and Treated Plaintiff in Accordance with the Terms of the Operative Contract. (Issue No. 7) 4 5 Plaintiff’s sixth cause of action is for violation of California’s Unfair Competition Law 6 under Business & Professions Code § 17200, et seq. (“UCL”). The UCL claim is not based on any 7 specific allegations, other than those already set forth. It is entirely derivative of Plaintiff’s other 8 claims. (Compl. ¶¶ 60, 64.) 9 1. There Is No Predicate Violation Of Law 10 Courts have made clear that UCL cannot be used as an end-run around the requirements of 11 other statutes. (See Glenn K. Jackson Inc. v. Roe (9th Cir. 2001) 273 F.3d 1192, 1203; see also 12 Krantz v. BT Visual Images, L.L.C. (2001) 89 Cal.App.4th 164, 178 (the viability of a UCL claim 13 stands or falls with the antecedent substantive causes of action).) “A court may not allow plaintiff 14 to plead around an absolute bar to relief simply by recasting the cause of action as one for unfair 15 competition.” (Chabner v. United of Omaha Life Ins. Co. (9th Cir. 2000) 225 F.3d 1042, 1048.) 16 Likewise, as § 17200 requires an underlying violation of law, a defense to the predicate claim is a 17 defense to the alleged violation of the UCL. (Krantz, 89 Cal.App.4th at 178.) 18 As explained above, Plaintiff cannot prevail on any of his aforementioned claims because 19 the undisputed facts establish that BANA was within its rights to close the Account and reject 20 payment of the settlement check, and did not do so discriminatorily. (Supra, sections IV.A-IV.E.) 21 Accordingly, there is no unlawful conduct to support a UCL claim. 22 2. BANA Has Not Acted Unfairly or Fraudulently. 23 To state a claim under the “unfair” prong of the UCL, a plaintiff must allege the supposed 24 conduct “offends an established public policy or…is immoral, unethical, oppressive, unscrupulous 25 or substantially injurious to consumers.” (People v. Vasa Blanca Convalescent Homes, Inc. 26 (1984) 159 Cal.App.3d 509, 530.) California authority, however, has “require[d] that the public 27 policy which is a predicate to the action…be ‘tethered’ to specific constitutional, statutory, or