Case Background
Marsha J. Martin filed an amended complaint[1] alleging that she received an e-mail that appeared to be from Coastal Customs Builders requesting payment for construction services provided to her. Martin further alleged that, unbeknownst to her at the time, Coastal Customs’ e-mail had been hacked. Martin ultimately wire transferred funds to the hacker’s account at Fifth Third Bank. The hacker then withdrew the funds and transferred them elsewhere. According to Martin, Fifth Third Bank was unable to recover the funds that were wired.
Under a theory of negligence, Martin alleged that Fifth Third Bank knew the hacker used his Fifth Third Bank account to defraud others and that it was foreseeable that the hacker would continue to use his accounts to perpetrate wire fraud. Martin further alleged that despite this knowledge, Fifth Third Bank failed to close the hacker’s accounts, prevent or verify large wire transfers to or from his accounts, freeze his accounts, prevent withdrawals from his accounts, or implement standards and procedures to prevent his fraudulent activity. Martin claimed that as a result, she suffered financial losses as well as additional expenses and hardships.
Fifth Third Bank moved to dismiss the claim against it under a Section 2-615 motion to dismiss, arguing in part that under Illinois law, a bank does not owe a duty of care to a non-customer.[2] The circuit court agreed and dismissed the claim with prejudice, holding that under Illinois law, a bank does not owe a common-law duty of care to a non-customer. Martin appealed.
Appellate Court’s Rationale
The appellate court reversed and remanded the case, examining whether Illinois law permits banks to owe a duty of care to non-customers. Although the analysis focused on banks, the law applies more generally.
When the circuit court dismissed Martin’s claim, it relied on the premise that under Illinois law, a bank does not owe a duty of care to a non-customer. The appellate court noted that while this conclusion aligns with federal caselaw, Illinois law requires a separate duty analysis guided from Illinois Supreme Court precedent.
The appellate court noted that in Illinois, “the relationship between the plaintiff and defendant need not be a direct relationship” for it to give rise to a duty of care. In other words, the court rationalized the general duty of care in Illinois does not depend on contractual or privity of interest, nor even the proximity of the relationship. Instead, the court stated that duty depends on the:
- reasonable foreseeability of the injury
- likelihood of the injury
- magnitude of the burden of guarding against the injury
- consequences of placing that burden on the defendant
When evaluating whether Martin adequately pleaded a duty of care, the court noted that “every person or business ‘owes a duty of ordinary care to all others to guard against injuries which naturally flow as a reasonably probable and foreseeable consequence of an act.’” In other words, the court continued, “where an individual’s course of action creates a foreseeable risk of injury, the individual has a duty to protect others from such injury.”
Although the court did not decide whether Fifth Third Bank owed Martin a duty, it did conclude that she could possibly plead the existence of such a duty. Therefore, the court remanded the case to allow Martin to amend her complaint to allege facts necessary to support the four-factor duty analysis.
Words to the Wise
While Illinois courts have long applied the four-factor duty analysis, this case serves as a reminder of how broad that duty can become. If a business or an individual takes an action that leads to a reasonably foreseeable injury and the burden of preventing that injury is minimal, there’s a good chance a court may find that a duty of care is owed to the injured party. Individuals and businesses should consider whether their actions may create probable and foreseeable injuries. This is especially true when preventing the injury would require little effort or cost.
Martin also provides helpful guidance on when a plaintiff’s complaint may be inadequately pleaded and when a 2-615 motion should be considered. While this motion may not end the case, it may force greater specificity in the pleading.
For example, a complaint should allege specific, nonconclusory facts demonstrating the reasonable probability and foreseeability of the injury. These allegations may include prior incidents, established patterns, or other facts showing that a defendant was on notice of the risk. Similarly, a complaint should allege specific nonconclusory facts addressing the burden of guarding against the injury and the consequences of imposing that burden on the defendant. The Martin court noted that pleading such facts assists trial courts in conducting a duty analysis and aids any subsequent courts on appeal.
Importantly, the Martin court also cautioned that plaintiffs who plead allegations on information and belief must explain how they obtained that information or what steps they took to investigate it. Finally, for banks subject to Illinois jurisdiction, this case reinforces that banks remain subject to the same four-factor duty analysis as other defendants, regardless of whether the party is a customer. This holding may lead to an increase in negligence claims, especially those involving wire fraud. As a preemptive measure, it may be worth assessing whether specific safeguards and procedures for detecting fraudulent activity are necessary. This may include tracking fraudulent concerns and taking actions to prevent fraudulent wire transfers.
[1] Marsha J. Martin v. Fifth Third Bank, et al., 2026 IL App (1st) 250705
[2] Fifth Third Bank also argued that dismissal was appropriate because article 4A of the Uniform Commercial Code preempted plaintiff’s negligence claim and because under Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69 (1982), a plaintiff cannot recover for purely economic losses under a theory of negligence. Neither of these arguments were discussed in the trial court’s dismissal order and therefore weren’t addressed by the appellate court on appeal.