Bathe v. Keybank N.A.

STATE OF MAINE BUSINESS & CONSUMER COURT
CUMBERLAND, ss. DOCKET NO. BCD-CIV-2021-00043

FRANK BATHE and )
BARBARA BATHE, )
)
Plaintiffs, )
v. ) ORDER GRANTING KEYBANK’S
) MOTION TO DISMISS
KEYBANK N.A., )
)
Defendant. )

On June 11, 2021, Plaintiffs Frank and Barbara Bathe (“Plaintiffs”) filed a five­

count 1 complaint against Defendant KeyBank, N.A (“KeyBank”) alleging an

unknown third party opened an account with KeyBank in September 2020 under

Frank Bathe’s name using a fake address. In the Complaint, Plaintiffs further allege

KeyBank sent documents containing their personal information to the fake address

and put them at risk for their information being used by the unknown third party.

KeyBank filed a Motion to Dismiss for failure to state a claim under M.R. Civ.

P. 12(b)(6) on July 9, 2021. On August 9, 2021, Plaintiffs filed an Opposition to the

Motion to Dismiss and a Motion to Amend the Complaint. The Court denied the

Motion to Amend on September 29, 2021. The Court now addresses KeyBank’s

Motion to Dismiss (the “Motion”).

For the following reasons, the Motion is GRANTED.

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The Complaint alleges the following counts: Negligence (for allowing the Ocean Avenue account to be opened)
(Count I), Negligence (for mailing personal information to the wrong address) (Count II); Breach of Fiduciary Duty
(Count III); Negligent Infliction of Emotional Distress (Count IV); and Punitive Damages (Count V).

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STANDARD OF REVIEW

In reviewing a motion to dismiss under Rule 12(b)(6), courts “consider the facts

in the complaint as if they were admitted.” Bonney v. Stephens Mem. Hosp., 2011 ME

46, ¶ 16, 17 A.3d 123. The complaint is viewed “in the light most favorable to the

plaintiff to determine whether it sets forth elements of a cause of action or alleges

facts that would entitle the plaintiff to relief pursuant to some legal theory.” Id.

(quoting Saunders v. Tisher, 2006 ME 94, ¶ 8, 902 A.2d 830). “Dismissal is warranted

when it appears beyond a doubt that the plaintiff is not entitled to relief under any

set of facts that he might prove in support of his claim.” Id. Although Maine’s notice

pleading requirements are forgiving, Desjardins v. Reynolds, 2017 Me 99, ¶ 17, 162

A.3d 228, conclusory statements, even if factually true, are legally deficient to ward

off dismissal if a plaintiff fails to allege sufficient facts. Carey v. Bd. of Overseers of

Bar, 2018 ME 119, ¶ 23, 192 A.3d 589, as corrected (October 11, 2018). Further, a

court is not bound to accept legal conclusions. Id. A complaint must allege facts

sufficient to demonstrate that a plaintiff has been injured in a legally cognizable way.

America v. Sunspray Condo. Ass’n, 2013 ME 19, ¶ 20, 61 A.3d 1249 (quoting Burns v.

Architectural Doors & Windows, 2011 ME 61, ¶ 17, 19 A.3d 823).

FACTS

Plaintiffs are individuals residing in the Town of Scarborough, Maine. (Pl.’s

Compl. ¶ 1.) KeyBank is a FDIC insured financial institution licensed in the State of

Maine with its principal place of business in Portland, Maine. (Pl.’s Compl. ¶ 2.)

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Plaintiffs have been customers of KeyBank and have had the same account for over

30 years. (Pl.’s Compl. ¶3.)

On or about September 22, 2020, a fraudulent Key Smart Checking account,

ending in 3267, was created and set up online under the name of Plaintiff Frank

Bathe at the address of 26 Ocean Avenue, Scarborough, Maine using a sewer bill (the

“Ocean Avenue Account”). (Pl.’s Compl. ¶¶ 4, 6, 20.) No money was deposited in the

account when it was set up. (Pl.’s Compl. ¶ 6.) Plaintiffs have never lived at and have

no knowledge of 26 Ocean Avenue. (Pl.’s Compl. ¶5.)

Plaintiffs met with KeyBank on November 17, 2020 to discuss an investment

opportunity and refinancing their home, which has always been their mailing

address. (Pl.’s Compl. ¶ 8.) KeyBank did not notify Plaintiffs of the Ocean Avenue

Account at the November 17 meeting. Id.

Plaintiffs met with KeyBank again in late November 2020 to discuss

refinancing their home, at which time the Plaintiffs provided social security numbers,

tax information, credit card information, and other personal and protected

information for review at KeyBank’s request. (Pl.’s Compl. ¶ 9.) Shortly thereafter,

KeyBank prepared a refinancing package for Plaintiffs that included all of Plaintiffs’

personal financial documents, birth dates, social security numbers, and tax

information. (Pl.’s Compl. ¶ 10.) On December 3, 2020, KeyBank mailed the

refinancing package to the Ocean Avenue Account address as opposed to Plaintiffs’

home address. (Pl.’s Compl. ¶ 13.) KeyBank notified Plaintiff on or about December

3, 2020 via voicemail of the error after a failed attempt to locate and recover the

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package at the Ocean Avenue address. (Pl.’s Compl. ¶¶ 5, 7, 13-14.) KeyBank made

direct contact with Plaintiffs on December 5, 2020. (Pl.’s Compl. ¶ 14.) KeyBank

provided Plaintiffs with identity theft information and advised them to go to the

police, which they did. (Pl.’s Compl. ¶ 15.) In March of 2021, KeyBank sent a letter

to Plaintiffs that erroneously stated that Plaintiffs reported the “fraudulent account.”

(Pl.’s Compl. ¶ 16.)

Plaintiffs live in constant fear of the loss of their creditworthiness, loss of their

lifelong investments and earnings, loss of their financial security, loss of their

reputations, and suffer daily from emotional and psychological distress. Id. Plaintiffs

awake everyday wondering which of their accounts will be accessed by a criminal who

could bankrupt them, which is extremely traumatizing to them as they are both in

their retirement years. (Pl.’s Compl. ¶ 32.) Due to the emotional distress of wondering

about their financial future, Plaintiffs have sought professional help. (Pl.’s Compl. ¶

33.) Plaintiffs however do not allege that anyone has used, or has attempted to use,

their personal information in any unauthorized way since KeyBank mailed their

information to the Ocean Avenue address. Plaintiffs have also not alleged any

financial harm, other than medical bills for the emotional distress help.

DISCUSSION

KeyBank moves to dismiss the action on the following grounds: Plaintiffs’

negligence and fiduciary duty claims fail because the alleged injuries are premised

exclusively on the potential for future damages or injury, which is not an actual,

cognizable harm under Maine law; Plaintiffs’ breach of fiduciary duty and NEID

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claims fails as a matter of law because they have not alleged a “confidential” or

“special” relationship with KeyBank; and finally, Plaintiffs’ punitive damages claim

fails because none of Plaintiffs’ tort claims survive. The Court addresses these

arguments in turn.

I. Counts I, II, and III Must be Dismissed for Failure to Allege Legally

Cognizable Injury Under Maine Law

Legally cognizable, actual injury is a necessary element of negligence (Counts

I and II), breach of fiduciary duty (Count II), and negligent infliction of emotional

distress (Count III). See Bell ex rel. Bell v. Dawson, 2013 ME 108, ¶ 17, 82 A.3d 827

(negligence); Gonzales v. Sweetser, BCD-CV-2020-21, 2020 WL 6596389, at *7 n.8

(Me. B.C.D. Oct. 13, 2020, Duddy, J.) (citing In re Hannaford Bros. Co. Customer

Data Sec. Breach Litig., 2010 ME 93, ¶ 16, 4 A.3d 492) (breach of fiduciary duty);

Desjardins v. Reynolds, 2017 ME 99, ¶ 20, 162 A.3d 228 (citing Schelling v. Lindell,

2008 ME 59, 942 A.2d 1226 and Curtis v. Porter, 2001 ME 158, 784 A.2d 18) (negligent

infliction of emotional distress).

“Damages must be grounded on established positive facts or on evidence from

which their existence and amount may be determined to a probability.” Michaud v.

Steckino, 390 A.2d 524, 530 (Me. 1978). In Maine, damages are not recoverable when

uncertain, contingent, or speculative. Id.; Wood v. Bell, 2006 ME 98, ¶ 21, 902 A.2d

843; Snow v. Villacci, 2000 ME 127, ¶ 13, 754 A.2d 360; Gottesman & Co. v. Portland

Terminal Co., 27 A.2d 394, 395 (Me. 1942). Exposure of sensitive personal

information on its own is not a legally cognizable harm without a manifestation of a

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concrete, present or past, non-speculative injury stemming from the exposure. See In

re Hannaford Bros. Co. Customer Data Sec. Breach Litig., 2010 ME 93 (the exposure

of financial and personal information during a data hack did not constitute a legally

cognizable harm); Gonzales v. Sweetser, BCD-CV-2020-21, 2020 WL 6596389, (Me.

B.C.D. Oct. 13, 2020, Duddy, J.) (the exposure of sensitive data after phishing attack

that may have put the plaintiffs at an increased risk of future harm did not constitute

a legally cognizable harm); Chabot v. Spectrum Healthcare Partners, P.A., No. BCD­

CV-2020-18, 2021 WL 659565, (Me. B.C.D. Jan. 14, 2021, Duddy, J.); see also Bernier

v. Raymark Industries, Inc., 516 A.2d 534, 543 (Me. 1986) (exposure to asbestos is not

itself actual injury; a judicially cognizable injury does not occur until there has been

a manifestation of physical injury to a person resulting from the exposure); Michaud,

390 at 530 (“a mere possibility” of future pain or suffering or some later injury not

sufficient to warrant damages).

“Purely emotional injuries” only constitute “actual injury” to the extent that

those emotional damages are compensable pursuant to existing statutory or common

law. Desjardins, 2017 ME 99, ¶ 20, 162 A.3d 228. Emotional distress alone, absent

some financial, physical or property damage, is insufficient to sustain claims for

negligence or breach of fiduciary duty. Curtis, 2001 ME 158, ¶ 19, 784 A.2d 18; Bryan

R. v. Watchtower Bible & Tract Soc. Of N.Y. Inc., 1999 ME 144, ¶ 12, 738 A.2d 839;

Gonzales, 2020 WL 6596389, at *4. The fact that Plaintiffs have incurred medical

bills to treat their emotional distress does not otherwise save their claims of

negligence and breach of fiduciary duty, since the underlying emotional distress does

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not constitute the actual injury necessary to support those claims. Accordingly,

Counts I, II, and III must be dismissed.

II. Count IV Must be Dismissed Because There is no Special Relationship.

In some circumstances, emotional distress alone can provide the basis for a

negligent infliction of emotional distress claim, if the emotional distress is so severe

that no reasonable person could be expected to endure it. Desjardins, 2017 ME 99, ¶

20, 162 A.3d 228 (citing Schelling, 2008 ME 59, ¶ 20, 942 A.2d 1226 and Curtis, 2001

ME 158, ¶ 10, 784 A.2d 18, 23.) However, a negligent infliction claim is generally

limited to two scenarios: (1) bystander liability and (2) circumstances where a “special

relationship” is present between the parties. Curtis, 2001 ME 158, ¶ 19, 784 A.2d 18;

Oceanic Inn, 2016 ME 34, ¶ 23, 133 A.3d 1021. On the facts of this case the bystander

prong does not apply. The question is whether the “special relationship” prong

applies. For the reasons discussed below, it does not.

There are a very limited number of relationships that have been recognized as

special relationships under Maine law: (1) common carriers and passengers; (2)

innkeepers and guests; (3) owners of land and their invitees; (4) those who take

physical custody of another; and (5) a fiduciary relationship where there is a “great

disparity of position and influence.” Dragomir v. Spring Harbor Hosp., 2009 ME 51,

¶¶ 18-19, 970 A.2d 310. Of the relationships identified, only the fiduciary relationship

potentially applies to this case. But the Complaint does not allege any great disparity

in position and influence between Plaintiffs and KeyBank. Plaintiffs also fail to allege

any diminished emotional or physical capacity, or a letting down of their guard. See

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Stewart v. Machias Sav. Bank, 2000 ME 207, ¶ 11, 762 A.2d 44; Diversified Foods,

Inc., 605 A.2d at 615. Without these indicia, banking relationships, borrower-lender

relationships, mortgagor-mortgagee relationships, and arms-length business

relationships do not rise to the level of fiduciary relationships. See Oceanic Inn, Inc.,

2016 ME 34, ¶¶ 18-21, 133 A.3d 1021; Ramsey v. Baxter Title Co., 2012 ME 113, ¶¶

6, 10, 54 A.3d 710.

Plaintiffs nevertheless contend that they satisfy the special relationship prong

of the negligent infliction analysis, because of the operation of 9-B M.R.S. § 162

(2020). 2 According to Section 162, a financial institution is prohibited from the

unauthorized disclosure of any financial records relating to the customer of that

financial institution. Id. In its Order denying Plaintiffs Motion to Amend, the Court

has already determined that Section 162 does not create a private right of action. 3

Bathe v. KeyBank, N.A., Order Denying Motion to Amend, September 29, 2021.

Further, nothing in Section 162 creates the kind of special relationship that supports

a claim for negligent infliction of emotional distress. Accordingly, Plaintiffs negligent

infliction claim fails, and Count IV must be dismissed.

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Plaintiffs also argue that the “FINRA requirements”, create a fiduciary relationship between them and KeyBank.
FINRA, (2021). The FINRA rules apply to certain business activities such as investment banking and the securities
business. Morgan Keegan & Co. v. Silverman, 706 F.3d 562, 566 (4th Cir. 2013). Here, although Plaintiffs initially
met with KeyBank in part to discuss an investment opportunity, the package of information KeyBank sent to the
wrong address was solely related to Plaintiffs’ request to refinance their home. Plaintiffs have not demonstrated any
basis to apply the FINRA rules to the facts of this case, or how, even if the FINRA rules apply, they create a fiduciary
relationship.
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The Court also rejects Plaintiffs’ argument that the mere violation of Section 162 creates a claim akin to a HIPAA
claim.

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III. Count V Must be Dismissed Because no Tort Claims Survive.

In Count V of their Complaint, Plaintiffs seek punitive damages. Punitive

damages are only available when there is an underlying tort. See Wuestenberg v.

Rancourt, 2020 ME 25, ¶ 19 n.3, 226 A.3d 227 (citing Tuttle v. Raymond, 494 A.2d

1353, 1361 (Me. 1985)). Due to the dismissals of Counts I through IV, there is no

underlying tort to support the request for punitive damages. Accordingly, Count V

must be dismissed.

CONCLUSION

For the foregoing reasons, KeyBank’s Motion to Dismiss is GRANTED. Counts

I, II, III, IV and V are all dismissed with prejudice.

Pursuant to M.R. Civ. P. 79(a), the Clerk is instructed to incorporate this Order

by reference on the docket for this case.

So Ordered.

Dated:_______________ ______________________________
Michael A. Duddy
Judge, Business and Consumer Court

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STATE OF MAINE BUSINESS & CONSUMER COURT
CUMBERLAND, ss. DOCKET NO. BCD-CIV-2021-00043

FRANK BATHE and )
BARBARA BATHE, )
)
Plaintiffs, ) ORDER DENYING PLAINTIFFS’
v. ) MOTION TO AMEND
)
KEYBANK N.A., )
)
Defendant. )
)

On June 11, 2021, Plaintiffs Frank and Barbara Bathe (“Plaintiffs”) filed a complaint

against Defendant KeyBank, N.A (“KeyBank”) alleging an unknown third party opened an

account with KeyBank in September 2020 under Frank Bathe’s name using a fake address. In the

complaint, Plaintiffs further allege KeyBank sent documents containing their personal information

to the fake address and put them at risk for their information being used by the unknown third

party.

KeyBank filed a Motion to Dismiss the Complaint on July 9, 2021 on the grounds that

Plaintiffs have failed to state a claim. One August 9, 2021, Plaintiffs filed a Motion to Amend (the

“Motion”) the Complaint along with their Opposition to the Motion to Dismiss. In the Motion,

Plaintiffs request leave to amend the Complaint to assert a new claim under 9-B M.R.S. § 162,

Disclosure of Financial Records Prohibited. KeyBank filed an Opposition to the Motion on the

grounds that Section 162 does not provide a private right of action so the claim would be subject

to dismissal rendering the amendment futile.

For the reasons set forth below, the Court agrees the amendment would be futile and denies

Plaintiffs’ Motion.

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STANDARD OF REVIEW

Courts may deny motions to amend based on one or more of the following grounds: undue

delay, bad faith, undue prejudice, or futility of amendment. Montgomery v. Eaton Peabody, LLP,

2016 ME 44, ¶ 13, 135 A.3d 106 (citing Bangor Motor Co. v. Chapman, 452 A.2d 389, 392 (Me.

1982)). Further, “[w]hen a proposed amended complaint would be subject to a motion to dismiss,

the court is well within its discretion in denying leave to amend." Id. (quoting Glynn v. City of S.

Portland, 640 A.2d 1065, 1067 (Me. 1994)) (internal quotations omitted).

ANALYSIS

Plaintiffs seek to assert a new claim under 9-B M.R.S. § 162. Section 162 prohibits

financial institutions in Maine from “disclos[ing] to any person, except to the customer or the

customer’s duly authorized agent, any financial records relating to that customer” unless the

disclosure falls under one the exceptions enumerated in the statute. 9-B M.R.S. § 162. Section 162

however does not address penalties for violations. Instead, violations of Section 162 are addressed

in 9-B M.R.S. § 164. Section 164 provides that a financial institution that "intentionally or

knowingly furnishes financial records in violation of this chapter commits a civil violation for

which the superintendent may assess a civil penalty of not more than $5,000 per violation. 9-B

M.R.S. § 164(1).

Under Maine law, a statute may provide for a private right of action by express language

or by implication. Wawenock, LLC v. Dep’t of Transp., 2018 ME 83, ¶ 5, 187 A.3d 609. Nothing

in the plain language or legislative history of Sections 162 or 164 expressly or impliedly creates a

private right of action. Moreover, the Business and Consumer Court has already established that

under Section 164, a court even lacks the authority to impose a civil penalty for a violation of

Section 162. In Bank of Maine v Boothbay Country Club, the Court found that Section 164 “does

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not confer upon the court jurisdiction to consider the imposition of civil penalties . . .” Bank of Me.

v. Boothbay Country Club, No. BCD-CV-2013-18, 2013 Me. Bus. & Consumer LEXIS 30, at *6

(June 27, 2013). Accordingly, “the civil penalty is available in an administrative enforcement

action” only, and not in a civil action. Id. It follows that there is no private right of action under

Section 162 in civil proceedings. Without a private right of action, the proposed amendment to the

Complaint in this matter would be futile.

CONCLUSION

For all the foregoing reasons, the Court DENIES Plaintiffs’ Motion to Amend the

Complaint on the grounds that the proposed amendment would be futile.

The Clerk is instructed to enter this Order on the docket for this case by incorporating it by

reference. M.R. Civ. P. 79(a).

So Ordered.

Dated:_______________ ______________________________
Judge, Business and Consumer Court

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