Lourenco Garcia v. Santander Bank, N.A.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

24-P-144

LOURENCO GARCIA

vs.

SANTANDER BANK, N.A.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The plaintiff, Lourenco Garcia, appeals from a judgment of

the Superior Court dismissing his amended complaint against the

defendant, Santander Bank, N.A. (Santander), pursuant to

Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974). We affirm.

Background. We summarize the facts from Garcia's amended

complaint, accepting as true the facts alleged therein as well

as any reasonable inferences drawn therefrom. See Lopez v.

Commonwealth, 463 Mass. 696, 700 (2012). Garcia maintained a

checking account at Santander since 2013 and a savings account

at Santander since 2019. Over time, Garcia's accounts

"accumulated significant funds." Prior to December of 2021,

Garcia "made no large withdrawals, card purchases or wire

transfers."
Between December 13, 2021, and January 4, 2022, Garcia used

funds from his Santander accounts to make two "online card

purchases," and seven wire transfers in an amount totaling

$751,500. Specifically, Garcia made two online card purchases

at "Crypto.com," a "popular cryptocurrency platform," and

initiated seven wire transfers in person at Santander bank

branches. The wire transfers were made to an account at the

Metropolitan Commercial Bank of New York, and "the funds were

immediately used to purchase cryptocurrency from Crypto.com, and

thereafter from a purported cryptocurrency platform CoinEgg."

Garcia later discovered that "the CoinEgg platform is a scam,

and he has therefore lost all of the funds ultimately

transferred there."

On October 25, 2022, Garcia filed a complaint in the

Superior Court against Santander. On January 6, 2023, Garcia

filed an amended complaint alleging breach of contract, breach

of the covenant of good faith and fair dealing, negligent

misrepresentation, and violation of G. L. c. 93A. In the

amended complaint, Garcia averred, inter alia, that Santander's

"Personal Deposit Account Agreement" (Agreement) with him states

that Santander "may decline or prevent any or all transactions

to or from your Account," in certain circumstances, including if

Santander "suspect[s] that you may be the victim of a fraud,

scam, or financial exploitation, even though you have authorized

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the transaction(s)," or if Santander "suspect[s] that any

transaction may involve illegal activity or may be fraudulent."1

He also averred that Santander's website contained

representations as to steps Santander would take to protect

customers from fraud, including a statement that "if we see any

transactions that follow patterns fraudsters typically use, we

will text you or email you to ask whether or not you authorized

the transactions."2

On March 1, 2023, Santander moved to dismiss the amended

complaint for failure to state a claim under rule 12 (b) (6).

On November 16, 2023, a Superior Court judge issued a written

decision allowing Santander's motion to dismiss. A "judgment on

motion to dismiss" entered on November 17, 2023, and this appeal

ensued.

Discussion. "We review the allowance of a motion to

dismiss de novo." Galiastro v. Mortgage Elec. Registration

Sys., Inc., 467 Mass. 160, 164 (2014). "We accept as true the

facts alleged in the plaintiff['s] complaint as well as any

favorable inferences that reasonably can be drawn from them."

Id. "Factual allegations are sufficient to survive a motion to

1A copy of the Agreement was attached to the amended
complaint as an exhibit.

2A copy of a printout from Santander's website was attached
to the amended complaint as an exhibit.

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dismiss if they plausibly suggest that the plaintiff is entitled

to relief." A.L. Prime Energy Consultant, Inc. v. Massachusetts

Bay Transp. Auth., 479 Mass. 419, 424 (2018). The plaintiff

must plead more than "subjective characterizations or conclusory

descriptions of a general scenario which could be dominated by

unpleaded facts" (quotations and citation omitted). Schaer v.

Brandeis Univ., 432 Mass. 474, 478 (2000).

On appeal Garcia argues, in essence, that the combination

of the following factual allegations in the amended complaint

plausibly suggest an entitlement to relief: (1) the

"unprecedented nature of . . . Garcia's banking activity";

(2) the "[r]ampant fraud in the cryptocurrency space" which

Santander knew or should have known of; and (3) Santander's

representations in the Agreement and on its website. Stated

otherwise, Garcia contends that Santander promised to protect

him from fraud and failed to do so. The claim fails for several

reasons.

First, it is undisputed that Garcia was the account holder

and authorized all the transactions at issue. There is no claim

that Santander allowed an unauthorized or fraudulent transfer

from Garcia's account to occur. Rather, Garcia claims that

Santander failed to prevent him from entering into transactions

with another bank and with an entity that was involved in the

cryptocurrency space. Garcia does not identify any provision of

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the contract that obligated Santander to take such action. See

generally I & R Mechanical, Inc. v. Hazelton Mfg. Co., 62 Mass.

App. Ct. 452, 454 (2004); Restatement (Second) of Contracts § 1

(1981).

Furthermore, Garcia's claim in the amended complaint that

"[t]he Agreement obligates Santander to stop any transaction

that it suspects is fraudulent and otherwise protect . . .

Garcia from fraud" is inaccurate. The Agreement states that

Santander "may decline or prevent any or all transactions to or

from [an] Account," but does not obligate Santander to do so.

Also, the amended complaint does not allege that the information

on Santander's website was part of or incorporated into the

Agreement, or otherwise constituted an independent contractual

agreement.

In addition, the amended complaint fails to identify any

legal duty violated by Santander in the instant case.

"Massachusetts law is clear . . . that banks do not have a duty

to depositors to make inquiry as to withdrawals by an authorized

person that do not contravene an express limitation on his

authority to draw on the account." Schlichte v. Granite Sav.

Bank, 40 Mass. App. Ct. 179, 181 (1996). "Rather, a bank's

liability turns on its actual knowledge of a misappropriation of

the depositor's funds." Id. For these reasons, the breach of

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contract and breach of the covenant of good faith and fair

dealing claims fail as a matter of law.3

Finally, the amended complaint fails to identify any false

information that Santander provided to Garcia. See Cumis Ins.

Soc'y, Inc. v. BJ's Wholesale Club, Inc., 455 Mass. 458, 471-472

(2009) (negligent misrepresentation claim requires proof that

party supplied false information for guidance of others in their

business transactions and that others justifiably relied on

information and suffered pecuniary loss caused by such

justifiable reliance). The amended complaint also does not

allege any undue or deceptive act or practice within the meaning

of G. L. c. 93A. For these reasons, as well as those discussed

3 Garcia also argues that Santander failed to respond to his
demand for arbitration and thus waived arbitration. Santander
does not dispute this contention. To the extent that Garcia
claimed in the amended complaint that Santander breached the
Agreement by failing to comply with the arbitration provision
therein, we note that Garcia neither articulates a legal basis
for this claim nor cites to any authority for it in his
appellate brief. The claim is thus waived. See Mass. R. A. P.
16 (a) (9) (A), as appearing in 481 Mass. 1628 (2019). See also
Tobin v. Commissioner of Banks, 377 Mass. 909, 909 (1979). We
further note that Garcia did not file a motion to compel
arbitration. See Hanslin Bldrs., Inc. v. Britt Dev. Corp., 15
Mass. App. Ct. 319, 321-322 (1983) (noting defendants' failure
to seek an order to compel arbitration). See also G. L. c. 251,
§ 2 (a) ("A party aggrieved by the failure or refusal of another
to proceed to arbitration under an agreement described in
section one may apply to the superior court for an order
directing the parties to proceed to arbitration").

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supra, the chapter 93A and negligent misrepresentation claims

likewise fail as a matter of law.

Judgment affirmed.

By the Court (Neyman, Shin &
Wood, JJ.4),

Clerk

Entered: April 18, 2025.

4 The panelists are listed in order of seniority.

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