Estate of Bass v. Regions Bank, Inc., Nos. 17-13048

Decision Date21 January 2020
Docket Number18-12917,Nos. 17-13048
Citation947 F.3d 1352
Parties ESTATE OF David BASS, Plaintiff – Appellant, v. REGIONS BANK, INC., Fidelity Investments Institutional Services Company, Inc., Defendants – Appellees.
CourtU.S. Court of Appeals — Eleventh Circuit

Jason H. Coffman, Law Office of Jason H. Coffman, ATLANTA, GA, for Plaintiff - Appellant.

William James Holley, II, Erik J. Badia, Parker Hudson Rainer & Dobbs, LLP, ATLANTA, GA, for Defendant - Appellee REGIONS BANK, INC.

John Norman Bolus, Christopher Charles Frost, Jennifer A. Stanley, Maynard Cooper & Gale, PC, BIRMINGHAM, AL, for Defendant - Appellee FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC.

Before JORDAN and TJOFLAT, Circuit Judges, and SCHLESINGER,* District Judge.

TJOFLAT, Circuit Judge:

I.

A.

David Bass instructed Fidelity Investments ("Fidelity") to write a check to his sister-in-law, Ruth Barr, consisting of his entire retirement savings from his Fidelity 401k account. The purpose of the check was to set up an IRA account for Bass that would be administered by Ruth.

Pursuant to Bass’s instructions, Fidelity sent a check to Bass made out to "Ruth A. Barr Plan Admin TR IRA FBO: David Bass." Bass reviewed the check and gave it to Ruth, who deposited the check into her general business account, entitled "B&B Accounting and Tax Services," at Regions Bank ("Regions"). She proceeded to spend all of Bass’s money for personal purposes. Bass died shortly thereafter, and the administrator of his estate brought separate actions against Regions and Fidelity.1

B.

Bass2 filed multicount complaints against both Regions and Fidelity. Counts I and II in both complaints were essentially identical.

Count I in both complaints alleges common law conversion claims against Regions and Fidelity, stating that "Defendant converted to its own use the money it removed improperly from Plaintiff’s accounts."

Count II in each complaint explicitly purports to contain two theories of recovery: (1) the common law, and (2) the Georgia Uniform Commercial Code (the "Georgia UCC"). First, Count II against both Fidelity and Regions alleges common law claims for "Negligence, Lack of Good Faith, [and] Failure to Exercise Ordinary Care." Count II states that Regions and Fidelity acted negligently, with a lack of good faith, and failed to exercise reasonable care in handling Bass’s funds/account—presumably because Regions allowed Ruth to place the proceeds of the check in her general business account without inquiring whether the deposit was authorized or proper—and Fidelity disbursed the funds in the same manner.

Second, Count II alleges that, by engaging in such conduct, Regions "violat[ed] the banking laws and [Georgia] Uniform Commercial Code, including, but not limited to, Article 3 and Article 4," and Fidelity "violated the banking laws, including, but not limited to, [Georgia UCC] section 11-4-103."

Additionally, Count II in both complaints "incorporates by reference each and every allegation contained" in the preceding paragraphs of the complaints—as did all of the counts in both complaints.3 And because Count II incorporates Count I, Bass also arguably alleges a conversion claim against both defendants under the Georgia UCC and "the banking laws."4

Count III, brought against only Fidelity, alleges a breach of contract. The complaint states that the parties had a contract that "controlled, among other things, the manner in which [Fidelity] would safeguard [Bass’s] funds, negotiate instruments presented to his account, and handle his funds with the necessary and proper safeguards." Bass alleges that "[b]y, among other things, negotiating and paying an instrument with a forged, improper, and suspicious endorsement, [Fidelity] breached the parties’ contract."

Count IV, also brought against only Fidelity, alleges a breach of fiduciary duty. The general factual predicates that precede the specific counts in the complaint state that "[d]ue to among other things, the contract and [Bass’s] depositing funds with [Fidelity] for retirement, [Fidelity] owed [Bass] a fiduciary duty." Count IV asserts that Fidelity had a duty, among other things, to "conduct itself in the manner appropriate in the industry and for professionals of this type, safeguard [Bass’s] funds, negotiate instruments presented to his account, and handle his funds with the necessary and proper safeguards," and that Fidelity violated this duty "[b]y, among other things, negotiating and paying an instrument with a forged, improper, and suspicious endorsement."5

C.

Both Regions and Fidelity moved to dismiss Bass’s complaints pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6).

Although Count II alleged only that Regions and Fidelity had violated unspecified provisions of the Georgia UCC and "the banking laws," Regions and Fidelity argued that Bass’s Georgia UCC and "banking law" claims should be dismissed under Rule 12(b)(1), in their entirety , because Bass allegedly did not have standing to bring a conversion claim under one specific section of the Georgia UCC—namely, Georgia Code § 11-3-420.6 As we discuss below in Part V, this argument is nonsensical because Count II in each complaint alleges that Regions and Fidelity violated unspecified provisions of the Georgia UCC and "the banking laws," generally. Therefore, it does not matter whether Bass lacks standing to bring a claim under one specific section of the code—namely, § 11-3-4207 —because he may have standing to bring a claim under quite literally any other provision of the Georgia UCC or "the banking laws."

Regions and Fidelity also argued that Bass’s Georgia UCC and "banking law" claims should be dismissed under Rule 12(b)(6) because (1) he could not state a prima facie case of conversion under § 11-3-420, and (2) his common law claims were preempted by § 11-3-420.

Regarding the breach of contract and breach of fiduciary duty claims brought only against Fidelity in Count III and Count IV, Fidelity moved to dismiss under Rule 12(b)(6), arguing that neither count stated a claim for relief.

The District Court granted both Regions’s and Fidelity’s Rule 12(b)(1) motions, finding that Bass lacked standing to bring the Georgia UCC claims. The Court also agreed with Regions and Fidelity that Bass’s common law claims for conversion, negligence, breach of contract, and breach of fiduciary duty were preempted by Georgia’s UCC.

Apart from preemption, the Court also dismissed Bass’s Count III and Count IV claims against Fidelity for breach of contract and breach of fiduciary duty under Rule 12(b)(6) because he "fail[ed] to state sufficient facts regarding the specific nature of the breach or the existence of the contract itself," and because he did not "plausibly ple[a]d [that] a fiduciary relationship existed between [himself] and [Fidelity]"he "merely assert[ed]" that Fidelity owed him a fiduciary duty "without any factual support." Bass appeals.

D.

We conclude that the District Court properly granted Fidelity’s Rule 12(b)(6) motion regarding Bass’s Count III breach of contract and Count IV breach of fiduciary duty claims. However, we vacate the District Court’s Rule 12(b)(1) dismissals of Bass’s Count II Georgia UCC claims in both complains because those rulings are incapable of meaningful review. Finally, we affirm the District Court’s dismissal of Bass’s Count I common law conversion and Count II common law negligence claims because they are preempted by Georgia Code § 11-3-420.

Accordingly, we affirm in part, vacate in part, and remand for further consideration.

II.

We review a district court’s dismissal pursuant to Rule 12(b)(1) or Rule 12(b)(6) of the Federal Rules of Civil Procedure de novo . Lord Abbett Mun. Income Fund, Inc. v. Tyson , 671 F.3d 1203, 1205–06 (11th Cir. 2012).

III.

A civil complaint filed in federal court must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Under well-settled Supreme Court precedent, this means that "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S. Ct. at 1949 (quoting Twombly , 550 U.S. at 570, 127 S. Ct. at 1974 ).

When a plaintiff files a shotgun pleading, he fails to satisfy these basic requirements. Such a pleading is never plain because it is impossible to comprehend which specific factual allegations the plaintiff intends to support which of his causes of action, or how they do so. It is not the proper function of courts in this Circuit to parse out such incomprehensible allegations, see Jackson v. Bank of Am., N.A. , 898 F.3d 1348, 1355 n.6 (11th Cir. 2018), which is why we have stated that a district court that receives a shotgun pleading should strike it and instruct counsel to replead the case—even if the other party does not move the court to strike the pleading, id. at 1357–58. Accordingly, here, the District Court should have struck the complaints and given Bass an opportunity to amend them in compliance with Rule 8(a)(2) and Iqbal . But the Court did not do so. Therefore, once again, we are forced to review a judgment that should never have been entered. Below, we review that judgment to the extent that it is scrutable.

IV.

We first address Bass’s Count III breach of contract claim against Fidelity. We agree with the District Court that Bass has failed to state a claim.

To prove a breach of contract claim under Georgia law, a plaintiff must show (1) breach, (2) the resultant damages that he suffered, and (3) that he "has the right to complain about the contract being broken." Kuritzky v. Emory Univ. , 294 Ga.App. 370, 669 S.E.2d 179, 181 (2008).

The District Court noted that Bass only "generally asserted" a breach of contract, without identifying "any provisions or any specific agreements that were breached, nor excerpt[ing] any relevant portions of an agreement to allege the existence of a valid contract." We agree that this...

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