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Fu v. Wells Fargo Home Mortgage

United States District Court, N.D. Alabama, Southern Division

September 12, 2014



ABDUL K. KALLON, District Judge.

Hongwei Qin and Jianjun Fu pursue this case against Wells Fargo, N.A., alleging that Wells Fargo is vicariously liable for the negligence of one of its employees who sent Qin and Fu an unsecure email containing their confidential information. Qin and Fu contend the employee's actions led to the theft of Qin's identity and subjected them to an increased risk of identity theft. Doc. 16 at 5, 7. Qin and Fu also claim that sending the unsecured email breached a contract between Qin and Fu and Wells Fargo. Id. at 19-21. The parties have filed cross motions for summary judgment on the negligence claims, and Wells Fargo moves for summary judgment on the breach of contract claim as well. Docs. 25, 30. The motions are fully briefed and ripe for review. See docs. 26, 27, 30, 32, 37, 38, 39, 40. Based on a review of the evidence and the law, the court finds that Qin and Fu present insufficient evidence of causation and lack standing to pursue their negligence claims, fail to establish the existence of a contract, and fail to prove actual damages. Therefore, Qin and Fu's motion for summary judgment is due to be denied and Wells Fargo's motion is due to be granted.


Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." "Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear a burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (alteration in original). The moving party bears the initial burden of proving the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to "go beyond the pleadings" to establish that there is a "genuine issue for trial." Id. at 324 (citation and internal quotation marks omitted). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The court must construe the evidence and all reasonable inferences arising from it in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all justifiable inferences must be drawn in the non-moving party's favor). Any factual disputes will be resolved in the non-moving party's favor when sufficient competent evidence supports the non-moving party's version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir. 2002) (a court is not required to resolve disputes in the non-moving party's favor when that party's version of events is supported by insufficient evidence). However, "mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion." Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, "[a] mere scintilla' of evidence supporting the opposing party's position will not suffice; there must be a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252)).


In August 2010, Qin submitted an online inquiry to Wells Fargo regarding the refinance of a loan on one of Qin and Fu's rental properties. Doc. 27-1 at 5. After exchanging several phone calls with Ken Jacobson, a mortgage loan originator for Wells Fargo, Qin and Fu decided to use Wells Fargo for the refinancing. Id. Jacobson then sent an unsecured, unencrypted email to Qin's work email account with the loan application attached. Doc. 32-1 at 2-7. Qin forwarded the email to Fu, who, after reviewing it, realized the attached application included both his and Qin's social security numbers, birth dates, and employment information. Doc. 27-1 at 6. The email also contained the following disclaimer: "This is an unsecured email service which is not intended for sending confidential or sensitive information. Please do not include your social security number, account number, or any other personal or financial information in the content of the email." Doc. 27-7 at 42. Fu subsequently sent an email, which Qin edited, to Jacobson complaining that Jacobson included their confidential information in an unencrypted, unsecured email. Doc. 27-1 at 6. Jacobson responded with an email that mainly discussed the progress of Qin and Fu's loan, and only acknowledged the unsecured email by stating: "I also appreciate your comments with regard to emailing the loan documents." Doc. 27-7 at 40. Jacobson copied his manager, Steve Gatermann, who never contacted Qin and Fu. Doc. 32-1 at 9.

Beginning in December 2012, Qin realized that an unknown person or persons had used her identity to conduct a series of fraudulent financial transactions. Doc. 27-1 at 7. Qin and Fu first learned about these transactions when Discover Card contacted Qin about a fraudulently opened account and BBVA Compass Bank denied her application for a credit card. Id. Then, after Qin received a copy of her credit report, Qin and Fu found that someone had opened several fraudulent accounts in Qin's name. Id. at 8. Eventually, Qin and Fu learned that someone had used Qin's identity to 1) open a credit card with Discover; 2) establish telephone service with AT&T and incur a balance of $1, 539; 3) open a credit card with Bank of America and incur a balance of $36, 539; 4) open a credit card with Nordstrom FSB and use it to make a $269 purchase; 5) open a PayPal MasterCard and incur a balance of $471; and 6) open a MBNA credit card with the clothing store Cache and incur a balance of $10, 994. Doc. 32-3 at 1-21. To remove these accounts from Qin's credit reports, Qin and Fu spent many hours on the phone with creditors and collections agencies and subscribed Qin to Life Lock credit monitoring service. Doc. 31 at 6. Ultimately, Qin was not held liable for any of the charges. Id. at 7.


Qin and Fu allege claims for (1) negligence and wantonness (that Wells Fargo negligently or wantonly increased the risk of identity theft, doc. 16 at 7-15, and caused the theft and misuse of Qin's identity, id. at 15-19) and (2) breach of contract (that Wells Fargo breached express and implied contracts dictating that it not expose Qin and Fu's confidential information to theft, id. at 19-22). The court will consider each claim in turn.

A. Negligence and Wantonness

Qin and Fu allege that Wells Fargo wantonly or negligently caused an increased risk of identity theft (Count I), and the theft and misuse of Qin's identity (Count II). Doc. 16 at 7-15. To recover on a negligence claim, Qin and Fu need to show 1) duty, 2) breach, 3) causation, and 4) damages. Albert v. Hsu, 602 So.2d 895, 897 (Ala. 1992). For wantonness, "the plaintiff must prove that the defendant, with reckless indifference to the consequences, consciously and intentionally did some act or omitted some known duty." Martin v. Arnold, 643 So.2d 564, 567 (Ala. 1994). "Proximate cause is an essential element of both negligence claims and wantonness claims." Id. (citations omitted). "Proximate cause is an act or omission that in a natural and continuous sequence, unbroken by any new independent causes, produces the injury and without which the injury would not have occurred." Id. Proximate cause is established when an ordinary prudent person would have reasonably foreseen the negligent or wanton act or omission causing the injury. Peevy v. Ala. Power Co., 393 So.2d 971, 973 (Ala. 1981). For the reasons stated below, Qin and Fu cannot establish their negligence or wantonness claims.

1. Qin and Fu's Increased Risk of Identity Theft Claim

In a nutshell, Qin and Fu contend that the mere sending of an unencrypted email has exposed them to an increased risk of identity theft. Unfortunately for Qin and Fu, "without more than allegations of increased risk of future identity theft, they have not suffered harm that the law is prepared to remedy." Pisciotta v. Old Nat'l Bancorp., 499 F.3d ...

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