## Facts

- Hospicomm, Inc., a Pennsylvania company, provided management and financial services to Hamilton Continuing Care Center under a management agreement beginning in November 2002.
- Acting for Hamilton, Hospicomm opened and managed multiple bank accounts at Fleet Bank, N.A., in Hamilton’s name; account access was limited to authorized signatories and account managers.
- Fleet issued transfer cards to authorized persons to move funds among the accounts.
- Hospicomm employed Guillermo A. Martinez as a financial analyst with bookkeeping responsibilities; he was terminated around April 15, 2003.
- After his termination, Hospicomm discovered ATM withdrawals from one account and alleged Martinez obtained a VISA ATM card from Fleet despite lacking authorization and account access.
- Hospicomm alleged Martinez made 400+ ATM transactions over roughly eight months totaling more than $148,000.
- Martinez was indicted federally for access device fraud under 18 U.S.C. § 1029(a)(2).
- Hospicomm reimbursed Hamilton for the loss and sought recovery from Fleet.

## Issues

1. Whether Fleet owed a common-law duty of care to Hospicomm, which managed the accounts but was not the bank’s customer or account holder.
2. Whether Pennsylvania UCC Article 4 (deposits and collections), including its good-faith obligation, applies to ATM/electronic fund transfer transactions.
3. Whether Pennsylvania’s economic loss doctrine and gist-of-the-action doctrine barred Hospicomm’s negligence and gross-negligence claims seeking purely economic damages.

## Decision

- The court granted Fleet’s Rule 12(b)(6) motion and dismissed Hospicomm’s negligence, gross-negligence, and UCC Article 4 claims.
- The court held Fleet owed no negligence duty to Hospicomm because Hamilton, not Hospicomm, was the bank’s customer, and Hospicomm functioned as an agent/manager.
- The court held UCC Article 4 did not cover the unauthorized VISA ATM withdrawals because Article 4 addresses traditional deposit and collection activities rather than electronic fund transfers.
- The court concluded the dispute over unauthorized ATM withdrawals fits within specialized statutory treatment, identifying the Electronic Fund Transfer Act as the relevant framework rather than Article 4.
- The court dismissed the tort claims as barred where the alleged obligations arose from banking/account relationships and the damages were purely economic.
- Dismissal was without prejudice, and Hospicomm was granted leave to amend to attempt to plead a viable contract-based or statutorily grounded claim.

## Legal Principles

- Under Pennsylvania law, a bank’s common-law duty of care generally runs to its customer (the account holder), not to a noncustomer third party affected by the customer’s banking relationship.
- UCC Article 4 governs deposits and collections involving traditional “items” (such as checks) and does not govern ATM card or electronic fund transfer transactions.
- Unauthorized ATM withdrawal disputes are addressed through specialized statutory schemes; the Electronic Fund Transfer Act provides the primary framework rather than UCC Article 4.
- Pennsylvania’s economic loss doctrine and gist-of-the-action doctrine bar tort recovery for purely economic loss when the alleged duties arise from contractual or quasi-contractual relationships rather than an independent duty imposed by law.
- When pleading selects an inapplicable statutory theory or re-labels contract-type obligations as negligence, dismissal is appropriate, though amendment may be permitted if a viable legal theory can be pleaded.

## Conclusion

The court dismissed Hospicomm’s tort and UCC Article 4 claims arising from unauthorized ATM withdrawals because Hospicomm was not the bank’s customer, Article 4 did not apply to electronic ATM transactions, and Pennsylvania law bars tort recovery for purely economic loss rooted in contractual-type duties; the court permitted amendment to pursue an appropriate contract or statutory claim.


Hospicomm, Inc. v. Fleet Bank, N.A., 338 F. Supp. 2d 578 (E.D. Pa. 2004)