Nguyen vs. TD Bank

First Amended Complaint (FAC)

Plaintiff filed her FAC on 5/7/26 on Judicial Council form PLD-C- 001. However, under Paragraph 8 of the FAC, Plaintiff does not

check the box for breach of contract but rather checks the box for “other” causes of action and alleges the following: “Only authorized registered accounts/customers, banks are agents for receiving money on behalf of these customers CA Fin Code § 105.2.” She also alleges the following under Paragraph 9: “Banks violated CA Com § 11105 rule for fund transfer to authorized accounts, customers regulating how banks process payment orders on behalf of their clients, due to no authorized account/customer on bank system, banks are not authorized ... .”

Plaintiff attaches a declaration in support of the FAC wherein she declares the following: “I called these banks for the information of the accounts that money wired to. They all said those accounts did not exist in their systems. So the banks created the accounts and deleted without the trace. But the money I sent to these banks were kept by them without return. By USA business law, the record of all customers must be kept for 7 years. My case in court reported last year Feb 01 2024 as scam happened to me and I reported in end of Feb 2024. Now I got the final judgement to follow the debtor. I called the bank where the debtor registered the account to get my money. The agent/bank agents said there is no such account numbers that I had on my records of bank transactions of Well [sic] fargo to their banks.”

Defendant contends that Plaintiff’s cause of action for breach of contract fails because Plaintiff failed to state any contract between Defendant and Plaintiff. (See Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 [elements of breach of contract are: (1) the existence of the contract, (2) plaintiffs’ performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.]).

Defendant also contends that Plaintiff’s claims are preempted by Division 11 of the California Uniform Commercial Code, which governs wire transfers, and that Plaintiff’s entire FAC is uncertain.

While Plaintiff used Judicial Council form PLD-C-001 for her FAC, it appears that Plaintiff does not actually allege a cause of action for breach of contract. Instead, Plaintiff alleges that Defendants violated Fin. Code § 105.2 and Comm. Code § 11105 because they failed to return the money that Plaintiff sent via wire transfer.

Defendant contends that Comm. Code § 11202(a) provides that the customer is exclusively liable for the loss of an authorized payment order. Comm. Code § 11202, subd. (a), provides: “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 bound by it under the law of agency.” Defendant also cites to Zengen v. Comerica Bank (2007) 41 Cal.4th 239, in support of its argument that the analysis of funds transfer under these sections results in a determination of whether or not the funds transfer was “authorized,” and “provides a very specific scheme for allocation of loss.” (Id. at 252).

However, the Supreme Court in Zengen also held:

This is not to say that the Uniform Commercial Code necessarily displaces all common law actions based on all activities surrounding funds transfers. One court has explained that “[t]he exclusivity of Article 4–A is deliberately restricted to ‘any situation covered by particular provisions of the Article.’ Conversely, situations not covered are not the exclusive province of the Article.” (Sheerbonnet, Ltd. v. American Exp. Bank, Ltd. (S.D.N.Y.1995) 951 F.Supp. 403, 407–408.) The Sheerbonnet court held that the Uniform Commercial Code did not displace causes of action based on a bank's crediting funds from a payment order to the account of an insolvent company even though the bank knew the account had been frozen, and then asserting its own rights to the funds as an off-set against debts owed to it by the insolvent account holder. (Id. at pp. 405.)

It concluded that no portion of the Uniform Commercial Code “directly addresses the allegations” of the case.

Accordingly, the first step is to determine whether Plaintiff is asserting a cause of action that is preempted by statute, or a common law cause of action that is not addressed by the Uniform Commercial Code.

Here, Plaintiff alleges that TD Bank, NA created a bank account, Plaintiff transferred money to that account, and then TD Bank contended that those accounts did not exist, violating Fin. Code § 105.2 and Comm. Code § 11105.

It appears that Financial Code § 105.2 has been repealed; however Financial Code § 105 provides the following: “Banks are divided into the following classes: (a) Commercial banks. (b) Industrial banks. (c) Trust companies.”

Fin. Code § 109 provides: “‘Commercial banking business’ includes, but is not limited to, the business of soliciting, receiving, or accepting of money or its equivalent on deposit as a regular business whether

the deposit is made subject to check or is evidenced by a certificate of deposit ... .”

In either event, neither statute provides a basis for liability.

Next, Comm. Code § 11105 provides:

(a) In this division: (1) “Authorized account” means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account. (2) “Bank” means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company.

A branch or separate office of a bank is a separate bank for purposes of this division. (3) “Customer” means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders. (4) “Funds-transfer business day” of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders. (5) “Funds-transfer system” means a wire transfer network, automated clearinghouse, or other communication system of a clearinghouse or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed. ...

As with Fin. Code § 109, this section provides definitions and does not provide any basis for liability. It is unclear how T.D. Bank violated either of these statutes.

With regards to Plaintiff’s allegations in her attached declaration, Plaintiff alleges/declares that “the banks created the accounts and deleted without the trace. But the money I sent to these banks were kept by them without return.” However, Plaintiff also declares that she received a judgment against the “debtor”, and called the bank where the debtor registered the account to get her money. Therefore, on the one hand, Plaintiff is alleging that TD Bank kept her money and that the bank accounts do not exist, but on the other hand,

Plaintiff is alleging that she obtained a judgment against a separate debtor for these wire transfers, and is attempting to collect this judgment against the debtor by going through the debtor’s banks. The court finds that Plaintiff’s claim “is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Fin. Indus. Regul. Auth. (2012) 208 Cal.App.4th 1125, 1135).

As explained above, Plaintiff’s FAC is uncertain because the statutes that Defendant allegedly violated do not provide a basis for liability, and the allegations against Defendants as stated in Plaintiff’s declaration are unclear as to Defendant’s liability, whether the Defendant-or the judgment debtor- kept her money, and whether the basis for liability is preempted by the Uniform Commercial Code. Accordingly, the demurrer is sustained.

Should Plaintiff desire to file an amended complaint that addresses the issues in this ruling, Plaintiff shall file and serve the amended complaint within 30 days of service of the notice of ruling.

Defendant TD Bank shall give notice.

4 Nguyen vs. TENTATIVE RULING: Uriarte Demurrer to Complaint

For the reasons set forth below, the Demurrer to the Complaint brought by Defendant the Santa Ana Police Department is OVERRULED; however, the Demurrer to the Complaint brought on behalf of Defendant the City of Santa Ana is SUSTAINED, with 30 days leave to amend.

Demurrer brought by the Santa Ana Police Department

Defendant the City of Santa Ana asserts that “it is the only proper party defendant in this lawsuit besides Officer Uriarte because the Santa Ana Police Department is not a separate legal entity....” (Demurrer: 5:8- 10.)

In making this argument, Defendant relies in part on Darby v. Pasadena Police Dept. (5th Cir. 1991) 939 F.2d 311 (Darby), wherein the 5th Circuit Court of Appeals, explained that “[t]he capacity of an entity to sue or be sued ‘shall be determined by the law of the state in which the district court is held.’” (Id. at 313.)