Investors who were customers of a bank alleged negligence after advancing funds to entities engaged in a cheque‑kiting scheme whose accounts had been frozen by the bank.
They claimed the bank knew of the fraudulent activity and failed to disclose material information during communications with them, while applying the advanced funds to reduce the fraudster’s indebtedness to the bank.
The bank moved under Rule 21.01(1)(b) of the Rules of Civil Procedure to strike the negligence claim for disclosing no reasonable cause of action.
Applying the Anns/Cooper framework and the test on motions to strike, the court held it was not plain and obvious that the claims had no reasonable prospect of success.
Given the pleaded bank‑customer relationship and alleged communications between the bank and its customers, the negligence claim was at least analogous to recognized categories of proximity.
