SFS Check, LLC v. First Bank of De.

Kopko ran SFS in Michigan, providing financial transaction processing and electronic funds transfers to companies engaged in e-commerce, processing those transactions through its Fifth Third account, Fifth Third discovered that FBD was processing illegal gambling funds through that account and notified SFS that it was closing SFS’s account immediately. Losing this account crippled SFS’s ability to do business. SFS went bankrupt. Kopko telephoned FBD and spoke to Bastable, FBD’s vice-president for e-commerce. According to Kopko, Bastable said FBD did not have an account in SFS’s name. Months later SFS received a grand jury subpoena related to a federal investigation of the gambling transactions done in SFS’s name. When Kopko called Bastable again to discuss the subpoena, Bastable admitted that FBD had an account in SFS’s name and that the board of directors was aware of this account. In 2012, SFS sued FBD, Bastable, and FBD’s individual directors in federal court for negligence and fraud against. The district court dismissed. The Sixth Circuit affirmed that: answering the phone calls did not establish personal jurisdiction over individual defendants; FBD owed no duty of care to SFS because SFS was not a customer; and SFS failed to adequately plead a claim of fraud. View "SFS Check, LLC v. First Bank of De." on Justia Law