McNeil v. Wells Fargo Bank, N.A.

TRACY MCNEIL v. WELLS FARGO BANK, N.A.

CIVIL ACTION NO. 20-6319

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

February 18, 2021

MEMORANDUM

KEARNEY, J.

Wells Fargo Bank admits it wrongly identified its depositor Tracy McNeil as deceased for a couple days in March 2020 in an internal bank alert. Wells Fargo internally removed the alert within a couple days of learning of the error but did not tell Ms. McNeil of its internal correction and instead described ongoing investigations to assist her. A federal agency then told her the Social Security Administration identified her as passing away in November 2019 on the same day her mom (with a different name) passed. Ms. McNeil persuaded United States Congressperson Dwight Evans to contact the Social Security Administration and it corrected its mistaken records of her death on April 30, 2020. Wells Fargo admitted its early March 2020 error and prompt corrective action in a May 11, 2020 letter.

Ms. McNeil alleges Wells Fargo's error led to her losing CARES Act benefits, unemployment benefits, and possibly health coverage in the early days of COVID-19 mitigation. But she does not plead a fact allowing us to plausibly infer Wells Fargo's internal alert caused third parties to deny anticipated benefits. We cannot plausibly infer a nexus between federal and state government records and Wells Fargo's error. Ms. McNeil does not plead claims against Wells Fargo under a variety of state law theories and we dismiss her amended complaint.

I. Alleged Facts

Wells Fargo depositor Tracy McNeil owned a small business.¹ Ms. McNeil's mother, Valerie Conaughty, passed away unexpectedly on November 11, 2019.² A week later, on November 18, Ms. McNeil gave the Social Security Administration office in New Port Richey, Florida - where her mother resided - her mother's death certificate as part of her duties as Executor of her mother's estate.³ The next month, Ms. McNeil provided her mother's death certificate to Wells Fargo where her mother also had accounts.⁴

Ms. McNeil "shopped, banked, traveled and generally engaged in daily life" without issue for the next few months.⁵ For example, Ms. McNeil flew from Florida to Pennsylvania without problems on November 21, 2019.⁶ She communicated with the United States Department of Health and Human Services' Office of Medicare and Medicaid "[o]n various occasions" from December 2019 through February 2020 regarding her private healthcare plan and prospective Medicaid policy.⁷ The Office of Medicare and Medicaid never indicated the Federal Government classified Ms. McNeil as being deceased.⁸ Ms. McNeil also interacted with Wells Fargo without issue during this time; she opened a new savings account on January 23, 2020 and used her accounts for day-to-day purposes between November 18, 2019 and March 2, 2020.⁹

On March 4, 2020, Ms. McNeil went to her local Wells Fargo branch seeking to deposit money into her account.¹⁰ The bank teller assisting Ms. McNeil could not complete the deposit and directed Ms. McNeil to another employee, Yanice Williams.¹¹ Ms. Williams worked to resolve Ms. McNeil's deposit issue for approximately ninety minutes.¹² Ms. Williams then disclosed Wells Fargo updated its computers on March 2, 2020 "and as an apparent result of a Wells Fargo computer error during the system update," Wells Fargo wrongfully designated Ms. McNeil as "deceased" and froze her accounts as a result.¹³ Ms. Williams showed Ms. McNeil the computerscreen reflecting the "deceased" notation.¹⁴ After speaking to a branch manager and a co-worker, Ms. Williams informed Ms. McNeil she could not access her accounts until she signed a "Certificate Declaration of Life."¹⁵ Ms. McNeil signed the Declaration the same day.¹⁶

Three weeks later, an employee of the Office of Medicare and Medicaid told Ms. McNeil of a document from the Social Security Administration classifying Ms. McNeil as "deceased" as of November 11, 2019.¹⁷ The employee told Ms. McNeil it listed her date of death as November 11, 2019.¹⁸ The employee said "you've got a problem on your hands" and "this is a big deal," and instructed Ms. McNeil to resolve the issue with the Social Security Administration immediately.¹⁹ "In a state of shock, [Ms.] McNeil realized this [the Social Security reporting] was likely related to the aforementioned misclassification of her vital status by Wells Fargo, which she now saw was not confined to the bank."²⁰ She assumed Wells Fargo caused the Social Security Administration to misrepresent her as deceased. She apparently did not assume the converse: the Social Security Administration's misreporting caused Wells Fargo to issue its internal alert.

Ms. McNeil called the Social Security Administration later the same day.²¹ A federal employee confirmed the Social Security Administration classified Ms. McNeil as having died on November 11, 2019 (the date of her mom's passing).²² The employee told her the Social Security Administration deactivated her social security number.²³

Ms. McNeil called Wells Fargo the next day "to alert [Wells Fargo] of the downstream impact of the [b]ank's misclassification" and to resolve the issue.²⁴ After waiting on hold for over two hours, she could not connect with Wells Fargo employees.²⁵ She called Wells Fargo again the next day and spent approximately four and a half hours on the phone; Wells Fargo "escalated" her issue four times and eventually assigned her matter to the "highest level" of the "Executive Officeof Consumer Lending in the Resolution and Remediation Division."²⁶ Wells Fargo told Ms. McNeil they would reach out to her "within days" to resolve the issue.²⁷

Ms. McNeil eventually contacted the United States Representative Dwight Evans of Philadelphia, who then worked with Ms. McNeil to resolve the Social Security Administration's misclassification of Ms. McNeil.²⁸ On April 30, 2020, the Social Security Administration informed Ms. McNeil it "recently discovered that [their] records wrongly showed [her] as deceased."²⁹ The Social Security Administration immediately removed Ms. McNeil's information from the Death Master File - where it compiles death information from various sources - as soon as it learned of the error.³⁰ On May 11, 2020, Wells Fargo told Ms. McNeil it "verified the death alert was inadvertently placed on [her] account on March 2, 2020" and removed the alert two days later."³¹

In mid-March 2020, Ms. McNeil closed her yoga studio temporarily due to the COVID-19 pandemic and the resulting statewide shutdown order.³² She could not receive CARES Act stimulus funds or file for unemployment until May 19, 2020 because these government agencies misclassified her as deceased.³³ She also learned her health insurer cancelled her coverage as of June 1, 2020 because of her deceased status.³⁴

II. Analysis

Ms. McNeil seeks damages for Wells Fargo's misclassification of her as "deceased." She claims Wells Fargo is liable for negligence, breach of fiduciary duty, defamation, negligent training and supervision, intentional infliction of emotional distress, and violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law.³⁵

Wells Fargo moves to dismiss arguing Ms. McNeil fails to plausibly allege a causal connection between Wells Fargo's computer error and the Social Security Administration's misclassification of her as deceased.³⁶ Even if she does, Wells Fargo argues Ms. McNeil fails tostate the required elements for each of her claims.³⁷ Ms. McNeil counters she plausibly alleges Wells Fargo's conduct led to the Social Security Administration's misclassification; she further argues she does not have to allege the precise details of the causal chain at this early stage.³⁸ We find Ms. McNeil fails to state any of her claims and dismiss the complaint without prejudice. We cannot plausibly infer Wells Fargo directly or indirectly caused the United States, the Commonwealth, or even her health insurer to deny benefits. Wells Fargo's error and extended lulling while "investigating" her claim which it immediately corrected in its internal records does not automatically impose liability without pleading some fact allowing us to plausibly infer Wells Fargo caused these independent actors to also find her deceased. We cannot assume the Social Security Administration's classification is - to use Ms. McNeil's term - "likely related" to Wells Fargo's error. Legal causation is different the Ms. McNeil's "likely related" speculation. This speculative leap is not plausible absent some fact showing Wells Fargo did notify the Social Security Administration of her passing or even of a legal obligation for it to do so. Ms. McNeil does not plead an obligation for a bank to tell the Social Security Administration if one of its depositors died. We cannot simply speculate Wells Fargo contacted Social Security of Ms. McNeil's alleged death.

A. Ms. McNeil does not plead a claim under the Consumer Protection Law.

Ms. McNeil does not plead a claim under the Consumer Protection Law because she did not plead she relied on the misclassification nor were her damages proximately caused by Wells Fargo's misrepresentations regarding the handling of her claim.

The Pennsylvania General Assembly included a catchall provision in the Consumer Protection Law prohibiting persons from "engaging in . . . deceptive conduct which creates a likelihood of confusion or misunderstanding."³⁹ To state a claim under this catchall provision, Ms.McNeil must allege: (1) a "deceptive act, that is conduct that is likely to deceive a consumer acting reasonably under similar circumstances;" (2) justifiable reliance, meaning she engaged in some detrimental activity because of the deceptive conduct; and (3) this justifiable reliance caused ascertainable loss.⁴⁰ Ms. McNeil alleges Wells Fargo violated the Consumer Protection Law by wrongfully classifying her as "deceased," failing to rectify the misclassification, failing to have proper safeguards in place, repeatedly...