# Kazak and Kazak Real Estate v. Truist

> District Court, M.D. Florida · September 11, 2023

URL: https://www.frixlaw.com/law-library/cases/10113919

## Case

- **Court:** District Court, M.D. Florida
- **Decided:** September 11, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10113919

## How later opinions describe it (automated extraction)

- finding Plaintiffs' negligence theory consistent with the rights, duties, and obligations under the U.C.C. when Defendant’s lack of care exceeded simple objections to unauthorized funds
- noting factual issues at a motion to dismiss stage may obviate the court’s ability to assess preemption

## Opinion text

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION

LINDA KAZAK and KAZAK REAL
ESTATE, LLC,

Plaintiffs,

v. Case No.: 2:23-cv-40-SPC-KCD

TRUIST BANK,

Defendant.
/
OPINION AND ORDER
Before the Court is Defendant Truist Bank’s Amended Motion to Dismiss
Plaintiffs’ Amended Complaint. (Doc. 37). Plaintiffs Linda Kazak and Kazak
Real Estate, LLC oppose. (Doc. 40). For the following reasons, the Court
denies Truist’s motion.
BACKGROUND1
This case centers around a fraudulent wire transfer. Plaintiffs had bank
accounts at Branch Banking and Trust Company (“BB&T”), which merged
with SunTrust and created Defendant Truist. As banking customers,
Plaintiffs had written contracts, which they call Agreements, with Truist.
(Doc. 34 at 61-63).

1 These are the relevant facts as alleged by the Plaintiffs in their amended complaint. (Doc.
34).
On January 18, 2022, Kazak received a call from what she thought was
the Truist fraud department—a valid Truist number. Kazak says she did not

give any identification information but the representative she spoke with sent
several one-time passcodes to her phone. After the call, Kazak received an
email from Truist saying Plaintiffs’ accounts were enrolled in wire transfer
services. Kazak never initiated any wire transfers.

Kazak then took several immediate steps to alert Truist that her account
may have been compromised—and indeed third parties gained control of
Plaintiffs’ accounts and took over $112,000. She called the Truist number in
the email. While on hold, she called Ashley DiMirco, the relationship manager

at the local branch, and instructed her to lock Plaintiffs’ accounts and
terminate all wire transfers. DiMirco said she did and would contact the fraud
department. Kazak asked about notifying the fraud department herself and
DiMirco directed Kazak to the number on the back of her debit card. That

number turned out to be the Zelle fraud department, which instructed Kazak
to go to her local branch and open new accounts.
The following day, Kazak opened new accounts at her local branch.
Multiple times Truist told Kazak it would refund the money taken by the

fraudulent wire transfers. This did not happen. And the Truist fraud
department told Kazak they didn’t get her case until three days after she first
alerted Truist to the issue.
Plaintiffs sue, each alleging (1) breach of contract, (2) breach of
contractual obligation of good faith and fair dealing, (3) breach of fiduciary

duty, and (4) noncompliance with security procedures in violation of Fla. Stat.
§§ 670.202(2) and (3). Kazak Real Estate alleges a further count of negligence.
Truist moves to dismiss.
LEGAL STANDARD

A complaint must recite “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A
complaint must “give the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007).
To survive a Rule 12(b)(6) motion, a complaint must allege “sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on
its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Bare “labels and

conclusions, and a formulaic recitation of the elements of a cause of action,” do
not suffice. Twombly, 550 U.S. at 555. A district court should dismiss a claim
when a party does not plead facts that make the claim facially plausible. See
Twombly, 550 U.S. at 570. A claim is facially plausible when a court can draw

a reasonable inference, based on the facts pled, that the opposing party is liable
for the alleged misconduct. See Iqbal, 556 U.S. at 678. This plausibility
standard requires “more than a sheer possibility that a defendant has acted
unlawfully.” Id. (citing Twombly, 550 U.S. at 557 (internal quotation marks
omitted)).

When considering dismissal, courts must accept all factual allegations in
the complaint as true and draw all reasonable inferences in the light most
favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir.
2008).

DISCUSSION
Truist raises a myriad of arguments in its motion to dismiss. It argues:
(1) Plaintiffs’ breach of contract and implied covenant of good faith and fair
dealing claims fail because Plaintiffs do not identify the agreements with

enough specificity and the agreements themselves foreclose these claims; (2)
Article 4A of the Uniform Commercial Code (“UCC”) preempts Plaintiffs’
common law claims; and (3) Plaintiffs do not plausibly state claims for
negligence, breach of fiduciary duty, and UCC claims. Finally, Truist argues

Plaintiffs’ demand for a jury trial is contrary to the parties’ agreement, so it
must be stricken. Plaintiffs oppose.2 The Court takes each in turn.

2 The Court notes that Plaintiffs also say Truist’s motion to dismiss should be denied because
it fails to comply with Local Rule 3.01(a): (1) it exceeded the page limit, and (2) it consisted
of two documents rather than a single document. Truist’s motion to dismiss is two pages too
long. M.D. Fla. R. 3.01(a). Moving forward, Truist must ensure it stays within the page limit
or seeks leave of the Court to exceed it. But a clear review of the docket shows the motion to
dismiss unintentionally consisted of two documents—Truist attempted to file Doc. 38-1 as an
Exhibit D to Doc. 37 (Doc. 37-4), but an error occurred rendering Doc. 37-4 blank. The Court
finds it inappropriate to penalize Truist for correcting the error by filing that attachment as
Doc. 38-1.
A. The Agreements
Truist argues Plaintiffs’ breach of contract and implied covenant of good

faith and fair dealing claims fail because Plaintiffs do not identify the
agreements with enough specificity. The Court disagrees. Plaintiffs had bank
accounts at Truist. They claim the parties had a written contract—the
agreements—that govern all matters between the parties. (Doc. 34 at 61-63,

75-77). Plaintiffs allege the agreements contain obligations to honor cancel
pay request, and refund money fraudulently transferred out of accounts. (Doc.
34 at 64-65, 78-79). The Court finds this gives Truist fair notice of the breach
of contract and implied covenant of good faith and fair dealing claims and the

grounds upon which they rest and creates plausible breach of contract and
implied covenant of good faith and fair dealing claims. See Twombly, 550 U.S.
at 555.
Next Truist argues the agreements foreclose the breach of contract and

implied covenant of good faith and fair dealing claims. While the agreements
are not attached to Plaintiffs’ complaint, Truist attaches to its motion to
dismiss an Online and Mobile Banking for Business Service Agreement
(“OBBA”) (Doc. 37-1) and Commercial Bank Services Agreement (“CBSA”),

which it says governs Kazak Real Estate’s business account, and an Online
Banking Agreement (“OBA”) and Bank Services Agreement (“BSA”), which it
says governs Kazak’s personal account (collectively “the agreements.”).
Truist’s argument is misplaced at this motion to dismiss stage. When
faced with such a motion, courts limit their review to the allegations in the

complaint. See Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005). To
consider materials beyond the pleading, courts must convert a motion to
dismiss into a motion for summary judgment. Id. at 175-76. But there is an
exception. No conversion is needed if a document is “referred to in the

complaint, central to the plaintiff’s claim, and of undisputed authenticity.” Hi-
Tech Pharm., Inc. v. HBS Int’l Corp., 910 F.3d 1186, 1189 (11th Cir. 2018).
Truist claims the Court can consider the agreements because they are
central to Plaintiffs’ claims and “their authenticity is undisputed.” (Doc. 37 at

n.2). Not so. Plaintiffs do dispute the agreements’ authenticity. According to
Plaintiffs, the attachments are “not the operative agreements.” (Doc. 40 at Pg.
5). Further, none are signed by Plaintiffs, and it is unclear the dates Plaintiffs
may have agreed to them. (Doc. 37-2; Doc. 37-3; Doc. 38-1). So the Court will

not consider the agreements at this stage. See, e.g., Thompson v. City of St.
Cloud, No. 6:23-cv-283-WWB-LHP, 2023 WL 3931952, at *2 (M.D. Fla. June 9,
2023) (finding defendants did not satisfy the incorporation-by-reference
doctrine because, in part, the plaintiff did not concede the authenticity to

extrinsic videos); Palm Devs., Inc. v. Ridgdill & Sons, Inc., No. 2:08-cv-322-
FTM-DNF, 2009 WL 513027, at *3 (M.D. Fla. Feb. 27, 2009) (declining to
convert a motion to dismiss to one for summary judgment when the plaintiff
claimed some dispute over the documents attached to the motion).

One further point: without considering the agreements, Truist’s
arguments that the agreements bar Plaintiffs’ negligence, breach of fiduciary
duty, and UCC claims must also fail.
B. UCC Preemption

Truist argues all of Plaintiffs’ common law claims are preempted by
Article 4A of the Uniform Commercial Code. Article 4A, codified in Florida
Statutes § 670.102, et seq., “controls how electronic funds transfers are
conducted and specifies certain rights and duties related to the execution of

such transactions.” Valdes v. Customers Bank, Inc., No. 8:19-CV-2603-T-
33AEP, 2020 WL 13357817, at *2 (M.D. Fla. Feb. 10, 2020) (cleaned up).
“Parties whose conflict arises out of a funds transfer should look first and
foremost to Article 4A for guidance in bringing and resolving their claims.”

Regions Bank v. Provident Bank, Inc., 345 F.3d 1267, 1274 (11th Cir. 2003)
(cleaned up).
But “Article 4A is not the exclusive means by which a plaintiff can seek
to redress an alleged harm arising from a funds transfer.” Regions, 345 F.3d

at 1274-75 (quotation omitted). “Claims that, for example, are not about the
mechanics of how a funds transfer was conducted may fall outside of this
regime.” Valdes v. Customers Bank, Inc., No. 8:19-cv-2603-T-33AEP, 2020 WL
13357817, at *4 (M.D. Fla. Feb. 10, 2020) (quoting Ma v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 597 F.3d 84, 89 (2d Cir. 2010)). Simply put, when an

issue does not clearly fit within the UCC. provisions, common law claims may
supplement the UCC if they would not create rights, duties, or liabilities
inconsistent with the UCC. See Regions, 345 F.3d at 1274-75.
Importantly, two related but separate allegations of Truist wrongdoing

form the basis of Plaintiffs’ complaint. First, Kazak claims Truist’s normal
security procedures failed to stop third parties from obtaining Plaintiffs’
account information and taking money. With only this, Kazak’s common law
claims would be preempted under the UCC. See Peter E. Shapiro, P.A. v. Wells

Fargo Bank N.A., 795 F. App’x 741, 750 (11th Cir. 2019) (finding no error in
decision Article 4A preempted negligence claim because complaint alleged no
negligence beyond the scope of the erroneous funds transfer); Capten Trading
Ltd. v. Banco Santander Int’l, No. 17-20264-CIV, 2018 WL 1558272, at *4 (S.D.

Fla. Mar. 29, 2018) (finding Florida's UCC precluded common law negligence
claim where Plaintiff’s claims “at bottom ... rest on [Plaintiff's] allegations that
the Bank mishandled unauthorized wire transfer requests.”).
But there is a second alleged wrongdoing. Kazak claims she immediately

told Truist about the compromised accounts “at a time when the accounts could
be frozen and the fraudulent wire transfers could be terminated/recaptured.”
(Doc. 34 at 16). The complaint details the steps Kazak took to inform Truist of
the compromised accounts, the promises Truist’s representative made to lock
the account and terminate any wire transfers, and allegations Truist did not

keep these promises. (Doc. 34 at 16-17, 27-47, 51, 54-57). This alleged
wrongdoing extends beyond the passive mechanics of how a funds transfer was
conducted and falls outside the UCC regime. See Peach State Bank & Tr. v.
Wells Fargo Bank Nat’l Ass’n (Inc.), No. 2:18-CV-00126-RWS, 2019 WL

13224780, at *3 (N.D. Ga. June 20, 2019) (finding no preemption where
Plaintiff’s claims were based on allegations that Defendant allowed
withdrawals after it knew or should have known a transaction was fraudulent).
Further, allowing these claims is consistent with the UCC. See Anderson v.

Branch Banking & Tr. Co., 119 F. Supp. 3d 1328, 1358 (S.D. Fla. 2015) (finding
Plaintiffs' negligence theory consistent with the rights, duties, and obligations
under the U.C.C. when Defendant’s lack of care exceeded simple objections to
unauthorized funds).

At a later dispositive motion stage, with the benefit of a more developed
record, the uncontested facts may support preemption. But at this motion to
dismiss stage, the Court is tied to Plaintiffs’ allegations of fact and all plausible
claims from them. See Anderson v. Branch Banking & Tr. Co., 119 F. Supp.

3d 1328, 1349 (S.D. Fla. 2015) (noting factual issues at a motion to dismiss
stage may obviate the court’s ability to assess preemption).
C. Failure to State Claims
Truist challenges Plaintiffs’ negligence, breach of fiduciary duty, and
UCC claims for failure to state a claim. For both negligence and breach of

fiduciary duty, Truist argues Plaintiffs fail to meet the essential elements of a
duty (negligence) and a fiduciary duty owed to Plaintiffs.
An essential element of Plaintiffs’ negligence and breach of fiduciary
duty claims are a duty and fiduciary duty respectively owed by Truist to

Plaintiffs. See Jenkins v. W.L. Roberts, Inc., 851 So. 2d 781, 783 (Fla. 1st DCA
2003) (“The duty element of negligence is a threshold legal question; if no legal
duty exists, then no action for negligence may lie.”); Bahmann v. N.A., No. 6:23-
CV-1303-PGB-EJK, 2023 WL 5573820, at *2 (M.D. Fla. Aug. 29, 2023).

The Court begins with negligence. Truist claims that the only duty
Kazak Real Estate identifies for the negligence claim is the duty to provide a
commercially reasonable method of providing security against unauthorized
payment orders. Not so. Plaintiffs explicitly state Truist, through its

representatives, had a duty “to act with due care to address Plaintiff’s requests
and concerns.” (Doc. 34 at 122-123). This goes beyond the duty to provide a
commercially reasonable method of providing security against unauthorized
payment orders and Truist fails to address this. So Truist has not shown

Plaintiffs’ negligence claim is barred by the independent tort doctrine. See
Elec. Sec. Sys. Corp. v. S. Bell Tel. & Tel. Co., 482 So.2d 518, 519 (Fla. 3d DCA
1986) (“[A] breach of contract, alone, cannot constitute a cause of action in
tort.... It is only when the breach of contract is attended by some additional
conduct which amounts to an independent tort that such breach can constitute

negligence.”) (emphasis added) (cleaned up).
Turning to fiduciary relationships, these may be expressly created, such
as through a contract, or impliedly created. Cap. Bank v. MVB, Inc., 644 So.
2d 515, 518 (Fla. Dist. Ct. App. 1994). Here, Plaintiffs allege an implied

fiduciary relationship. (Doc. 34 at 126) (“Defendant owed Plaintiffs a fiduciary
duty under these facts.”). “Fiduciary relationships implied in law are premised
upon the specific situation surrounding the transaction and the relationship of
the parties.” Cap. Bank, 644 So. 2d at 518. Courts have found a fiduciary

relation implied in law when “confidence is reposed by one party and a trust
accepted by the other.” Id.
The relationship between a bank and its borrower is generally that of
creditor to debtor, in which parties engage in arms-length transactions, and

the bank owes no fiduciary responsibilities. Cap. Bank, 644 So. 2d at 518. But
exceptions exist. Id. (collecting cases). For example, a fiduciary relationship
may be imposed where a lender takes on extra services for a customer. Id.
Here, Kazak’s attempts to notify Truist of the compromised accounts and

the promises Truist’s representative DiMirco allegedly made are detailed in
Plaintiffs’ complaint. (Doc. 34 at 16-17, 27-47, 51, 54-57). These facts plausibly
created a fiduciary relationship because DiMirco promised to take certain steps
to safeguard Plaintiffs’ accounts. Whether this claim will ultimately survive is
too close a factual question to be determined now.

The Court next addresses Truist’s arguments on Plaintiffs’ UCC claims.
Truist says they fail because the specific section Plaintiffs cite (Fla. Stat. §
670.202) does not impose liability on Truist so it cannot serve as a stand-alone
claim and Plaintiffs fail to plead certain elements of § 670.202. While

Plaintiffs’ headings on these counts exclusively say § 670.202, the language of
the counts states that Plaintiffs are entitled to recovery and refund pursuant
to § 670.204. (Doc. 34 at 170, 180). Truist makes no argument this section
does not impose liability or Plaintiffs have not pled the requirements for that

section, so the Court will allow Plaintiffs’ UCC claims to proceed.
D. Jury Demand
Truist’s final argument requesting the Court strike Plaintiffs’ jury
demand is misplaced in this motion to dismiss. Truist claims that Plaintiffs’

jury demand must be stricken under the agreements. While the Seventh
Amendment protects a fundamental right to jury trials, a party may
contractually waive its right to a jury. See Jacob v. City of New York, 315 U.S.
752, 752-53 (1942); Brookhart v. Janis, 384 U.S. 1, 4 (1966); Burns v. Lawther,

53 F.3d 1237, 1240 (11th Cir. 1995). Determining whether Plaintiffs waived
their jury trial right requires the Court to decide the waiver was made
knowingly, intentionally, and voluntary. Aponte v. Brown & Brown of Fla.,
Inc., 806 F. App’x 824, 827 (11th Cir. 2020). And, as already discussed,
Plaintiffs contest the validity of the agreements Truist attaches to its motion
to dismiss. The Court will deny Truist’s motion to strike within its motion to
dismiss without prejudice for Truist to refile the motion to strike separately.
Accordingly, it is now
ORDERED:
Defendant’s Amended Motion to Dismiss Plaintiffs’ Amended Complaint
(Doc. 37) is DENIED. To the extent Defendant incorporates a motion to strike
Plaintiffs’ jury demand into its Motion to Dismiss, the motion to strike is
denied without prejudice and may be refiled as its own motion. Defendant
must answer the Amended Complaint (Doc. 34) on or before September 25,
2023.
DONE and ORDERED in Fort Myers, Florida on September 11, 2023.

UNITED STATES DISTRICT JUDGE
Copies: All Parties of Record

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10113919. Public record. Not legal advice.