In a post-foreclosure lawsuit, Santos v. U.S. Bank National Association, et al., 2016 WL 3636049 (Mass.App.Ct. 2016), a borrower ("Santos") alleged inter alia that a foreclosing mortgagee ("U.S. Bank") and its loan servicer negligently handled his applications for a HAMP loan modification. Santos argued that the defendants "negligently failed to adhere to the HAMP guidelines in processing his loan modification applications."
The United States Courts of Appeals for the Sixth and Eleventh Circuits have added to the significant body of law limiting a bank's duty to non-customers harmed or defrauded by one of the bank's actual customers. The Sixth Circuit reaffirmed that, under Michigan law, a bank only owes a duty of care to its own customers. The Eleventh Circuit found that, under Florida law, a bank has no fiduciary relationship with its customers and only owes a duty of ordinary care in arms-length transactions with its customers, and that any aiding and abetting liability for acts of a bank's customers is limited to cases where a bank has actual knowledge of the customer's bad actions.
In a recent case, Bernkopf Goodman LLP v. Herbert, 2013 WL 803521 (March 21, 2013), Massachusetts Federal District Judge Zobel considered the scope of a bank's duty of care to non-customers in cases of alleged misappropriation by an account holder. The plaintiff, Bernkopf Goodman LLP (the "Firm"), alleged that its payroll company, Checkmaster Payroll Service ("Checkmaster"), had misappropriated funds that were supposed to be used to pay the Firm's taxes. In addition to naming Checkmaster as a defendant, the Firm sued the two banks that Checkmaster used to transfer the Firm's funds that were supposed to be paid to the I.R.S. The Firm claimed that the banks were negligent in failing to prevent the alleged misappropriation.