Wells Fargo granted dismissal of most claims in lawsuit blaming it for $400K in forged checks

By Nicholas Malfitano | Apr 14, 2015

PHILADELPHIA – The estate of a woman who blamed Wells Fargo for nearly $400,000 in forged checks that were drawn through an account in her name in the four years preceding her death has had those claims partially dismissed in federal court.

Elaine Faber, acting as Trustee of the Irrevocable Trust of Raymond A. and Victoria A. Fahrner of Havertown, sued Wells Fargo Bank on Dec. 9, alleging violations of Pennsylvania’s Uniform Commercial Code (UCC) and Unfair Trade Practices and Consumer Protection Law (UTPCPL).

Wells Fargo moved to dismiss the alleged violation of UCC in part and the violation of UTPCPL in full, a motion which Judge Gerald J. Pappert of the Eastern District Court of Pennsylvania granted in an 11-page opinion issued April 13.

Victoria A. Fahrner had been a customer of Wells Fargo, where she operated a checking account. According to the lawsuit, sometime after Jan. 1, 2008, Fahrner became “mentally incapacitated” and unable to maintain the duties of her personal finances. On Feb. 25, 2012, Fahrner died of Alzheimer’s at the age of 92.

After her death, Faber was named trustee of Fahrner’s estate and began the posthumous preparation of Fahrner’s financial affairs.

It was during this process that Faber discovered the alleged forged checks in the total amount of $388,313.43 that were drawn on Fahrner’s account from May 3, 2008, to Fahrner’s death. According to the suit, Faber immediately contacted Wells Fargo, seeking further information on these financial transactions.

Faber brought action against Wells Fargo in the Delaware County Court of Common Pleas in May, followed by a complaint in state court the following December, alleging the honoring of those forged checks against Fahrner’s account were tantamount to violations of the UCC and UTPCPL.

As Wells Fargo is headquartered in San Francisco, the corporation cited a diversity of citizenship and removed the complaint to the U.S. District Court for the Eastern District Court of Pennsylvania.

It was the contention of Wells Fargo that Pennsylvania’s UCC is bound by a statute of limitations dating back three years from Faber’s initial court action, or to May 2011.

Thus, Wells Fargo believed that any financial transactions occurring prior to that date would not be applicable in this litigation, but Faber countered that Wells Fargo’s alleged “fraudulent concealment” and Fahrner’s mental incapacity stopped the running of the statute of limitations period.

However, Pappert decided Faber “has not alleged any affirmative acts by Wells Fargo that amount to fraudulent concealment."

Faber claimed Wells Fargo honored checks that it knew were forgeries or should have recognized as forgeries, but the court maintained Faber did not allege the corporation committed any act of deliberate concealment regarding the honoring of the checks.

Thus, the three-year statute of limitations period raised by Wells Fargo was found to apply in this case and any alleged forged checks dated prior to May 12, 2011 were found not to be actionable, according to the court.

In reference to the alleged second violation of Pennsylvania’s UTPCPL, Faber cited the law’s “catchall provision," which makes it “unlawful to engage in any other fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding.”

Further, Faber needed to prove said deceptive conduct was “justifiably relied on” by Fahrner to her own detriment, under the law.

Faber’s contention was that Wells Fargo’s alleged actions in approving the check signatures as those of Fahrner, when in fact they were not, satisfied this criteria.

However, the court found Faber’s complaint lacked any facts to suggest Fahrner had relied on the alleged actions of Wells Fargo to her own detriment.

“The amended complaint is equally devoid of facts to show that Fahrner justifiably relied on any statement Wells Fargo made to her about the authenticity of her own signature,” Pappert wrote.

However, Pappert added that since the court is assessing Faber’s claims for the first time, Faber has another opportunity to factually prove Fahrner relied on alleged fraudulent concealment on the part of Wells Fargo.

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