Judge Rules Jeweler’s Lawsuit Against PNC Bank Can Move Forward

TechnologyApr 15, 2024

Judge Rules Jeweler’s Lawsuit Against PNC Bank Can Move Forward

Joyce’s Jewelry sued the bank after cybercriminals drained its accounts of nearly $1.6 million through a series of wire transfers.

Joyce’s Jewelry
A judge ruled that Joyce’s Jewelry in Uniontown, Pennsylvania, can move forward with its lawsuit against PNC Bank. The Pittsburgh-area independent sued the bank in 2022 after cybercriminals stole more than $1.6 million from its accounts via unauthorized wire transfers. (Image courtesy of Joyce’s Jewelry Facebook page)
Uniontown, Pa.—A preliminary ruling by a Pennsylvania judge will allow a jeweler who lost more than $1 million in a cyberattack to move forward with its lawsuit against PNC Bank and some of its employees.

The owners of Joyce’s Jewelry in the Pittsburgh-area city of Uniontown sued PNC in September 2022 after cybercriminals stole nearly $1.6 million from the retailer’s bank accounts through a series of wire transfers. 

The theft took place on the afternoon of May 12, 2022, when one of the jewelry store’s employees accidentally logged into a phony website made to look like PNC Bank’s website.

Using the employee’s login credentials obtained from the phishing website, cybercriminals emptied all four of the store’s bank accounts through 11 wire transfers sent over a period of 20 hours.

In the lawsuit, the store’s owners alleged that PNC Bank failed to keep its money safe, while PNC claimed it took the proper steps in regard to the transactions and the fault lies with Joyce’s Jewelry and its employee.

The jeweler claimed these transfers should have raised a red flag for PNC because the money was moved to accounts and businesses it had never sent money to before. 

The wire amounts also were far above the usual transaction amounts, by tens of thousands of dollars per wire. Joyce’s had never wired close to $1 million in a single day.

The wires also exceeded the funds available, leading to an overdraft charge of nearly $200,000, another abnormality that should have caught the bank’s attention. Joyce’s, to its knowledge, had never overdrawn on its accounts before, the lawsuit states. 

PNC did recover some of the stolen funds, and charged the jeweler for its recovery efforts, bringing the loss total down to $1.1 million.

The case brought by Joyce’s Jewelry initially went to the Court of Common Pleas of Fayette County, Pennsylvania, which is a state court.

PNC Bank asked that a federal court, the U.S. District Court for the Western District of Pennsylvania, take up the matter.

On Jan. 12, 2023, the federal court denied that request, ruling the state court should continue to handle the case.

Two weeks later, PNC filed a motion to dismiss, arguing against Joyce’s claims of negligence and breach of fiduciary duty, as well as the jeweler’s request for attorneys’ fees and punitive damages.

The bank also argued it could only be sued only under the state’s Uniform Commercial Code, which guides commercial business transactions, including wire transfers.

 Related stories will be right here … 

Earlier this year, the state court’s decision came back in favor of Joyce’s Jewelry.   

In a March 11 ruling, Judge Nancy D. Vernon said the court could not dismiss claims that PNC and individual bank employees acted negligently.

She also said the jeweler can continue to seek attorneys’ fees and punitive damages in the case.

In her ruling, the judge also noted that PNC’s duty to the jeweler goes beyond its contractual obligations and said the bank may still be liable for a tort, meaning an injury or wrong independent of an implied contract.

A spokesperson from PNC said, “PNC regrets that Joyce’s Jewelry was the victim of a crime and suffered financial losses. However, Joyce’s Jewelry could have avoided being defrauded had they taken the reasonable precautions recommended by PNC at any stage of this process.

“Although the court denied PNC’s requested relief at this stage, PNC expects the facts and law will ultimately establish that PNC is not liable for Joyce’s Jewelry’s losses.”

Howard Kaplan, partner at the law firm Kaplan & Grady and Joyce’s Jewelry’s counsel, shared some insight into the case and what it could mean for other small businesses in this situation.

The recent ruling is significant, he said, because that’s not usually how these cases play out.

“Usually, [these cases] are under a very narrow legal theory and individual bank employees are not put in the mixer. And punitive damages aren’t a question, nor is tort liability for negligence,” he said.

“Usually, disputes with bank customers are a creature of contract, as opposed to tort or negligence. So, the liability on a negligence theory is broader. The potential damages and liability are broader than on a contract theory,” said Kaplan.

If the bank was able to confine the lawsuit to the Uniform Commercial Code claim, it likely would have limited the damages it may have to pay. 

The judge’s March 11 ruling is “a really bad development for [PNC] because they don’t want their employees getting sued, and they don’t want to be exposed to open-ended damages,” he said.

The damages are, in part, for “gaslighting” the jeweler into believing the fault was solely theirs, and for sending the business into collections and risking its livelihood, Kaplan said.

As for how much, that’s a question for the judge and jury.

“What is it going to take to send a message to PNC that the way that they’ve treated their customer in this instance was unacceptable? And I would think that it would take a large number to send a message to them, likely a multiple of Joyce’s loss,” he said.

“The bank here is spending more on their defense than it would cost to pay Joyce’s back. They will spend more than a million dollars through trial to avoid doing right by their customer.”

Beyond the legal implications of the case, Kaplan said he wants people to understand the reality and relatability of the situation.

“They’re going to blame a 70-year-old woman for making a mistake on her computer and say what resulted—collection of all of Joyce’s cash into one account and then shipping that money out in 11 highly suspect wires over the course of 20 hours—is all fair and OK,” he said. “It’s really offensive from a common-sense perspective.”

“We didn’t say that Joyce’s did everything right. But PNC is required to have reasonable security and is required to follow those reasonable security measures in a reasonable way,” Kaplan said.

“And the facts of the case seem to show that one or the other isn’t true. Either you didn’t have the proper security in place, or you all were asleep at the switch, but it has to be one or the other because of what happened,” he said.

The case is in the preliminary stages, but Kaplan’s hope is that others in this situation can take the same approach.

“If we actually win the case, and I am confident that we will, then that roadmap will just be that much more useful and hopefully it will lead more broadly to better recoveries for defrauded customers, and there are many more out there,” said Kaplan.

The Latest

De Beers CEO Al Cook and Signet Jewelers CEO Gina Drosos
SourcingMay 24, 2024
Signet, De Beers Have a Plan to Promote Natural Diamonds

The two industry giants are working together on a new marketing campaign.

Stock image of a diamond engagement ring
SourcingMay 24, 2024
De Beers’ Sales Slide in Fourth Round of Sales This Year

The company sold $380 million in rough diamonds, compared with $479 million in the same period last year.

Tiffany Venetian glass bead ear clips
TrendsMay 23, 2024
State of Jewelry Design: 3 Themes That Will Shape the Next 5 Years

Color, storytelling, and the use of nonconventional materials are the signatures of today’s most innovative and influential designers.

1872 x 1052 Gemolite.jpg
Brought to you by
Meet Gemology’s Next Generation Microscope: GIA® Gemolite® NXT Professional Edition

GIA®’s most advanced microscope has new features to optimize greater precision and comfort.

Van Cleef & Arpels tie necklace
AuctionsMay 23, 2024
Sotheby’s to Offer Rare VCA Necklace, ‘Lavender Dream’ Diamond

A tie necklace from Van Cleef & Arpels and a pinkish purple diamond are highlights of the upcoming New York jewelry auction.

Weekly QuizMay 23, 2024
This Week’s Quiz
Test your jewelry news knowledge by answering these seven questions.
Take the Quiz
Inoveo Platinum
MajorsMay 23, 2024
PGI to Debut New Platinum Alloy in Las Vegas

Inoveo Platinum will be distributed exclusively by Stuller in the U.S.

Alan Hart Headshot
MajorsMay 23, 2024
Gem-A CEO Alan Hart Resigns

He is stepping down in August after eight years as CEO.

Royal Chain gold chains
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.

Despite the rising prices, consumers continue to seek out the precious metal.

Rose cut arch cabochons Columbia Gem House
SourcingMay 22, 2024
State of Colored Stones: Why the Market Is More Colorful Than Ever

As prices of “The Big Three” skyrocket, supply dwindles, and focus on sustainability grows, an age of open-mindedness is dawning.

The Eden Rose, a 10.20-carat fancy intense pink diamond
AuctionsMay 22, 2024
Christie’s Website Back Online, Announces Plans to Auction 10-Carat Pink Diamond

The fancy intense pink “The Eden Rose” is estimated to sell for up to $12 million at the New York “Magnificent Jewels” sale next month.

Pandora Essence jewelry
CollectionsMay 22, 2024
Pandora’s New Jewelry Collection Reimagines the Essentials

The “Pandora Essence” collection brings a contemporary and sculptural feel to staples like gold hoops and pearl necklaces.

Instore show 2024
Events & AwardsMay 22, 2024
InStore ‘Cram Day’ To Focus on Lab-Grown Diamond Education

The limited-seating learning event precedes its second annual trade show, which starts Aug. 11.

Swarovski New York City flagship
IndependentsMay 21, 2024
State of Retail: 4 Retail Design Trends for 2024

From lighter color palettes to the integration of AR, experts offer inspiration for jewelers in need of an aesthetic refresh.

Dame Shirley Bassey’s
AuctionsMay 21, 2024
Dame Shirley Bassey’s Diamonds Are Ready for Their Encore

Sotheby’s will auction jewelry belonging to the “Diamonds Are Forever” singer in Paris this October.

National Jeweler columnist Sherry Smith
ColumnistsMay 21, 2024
Successful Vendor Relationships: A Win-Win Approach

Sherry Smith shares tips for fostering successful vendor-retailer partnerships, from marketing investment to fast-seller replenishment.

Jennifer Herold, Independent Jewelers Organization vice president
IndependentsMay 21, 2024
Jennifer Herold Promoted to VP at IJO

Herold has been with the organization for 22 years and will continue in her current role of conference director.

Studs pop-up
MajorsMay 20, 2024
Studs Opens Luxury Piercing Pop-Up in NYC

“Fancy Studs” will feature revamped branding and a new lab-grown diamond fine jewelry collection.

Nivoda executive team at table
SourcingMay 20, 2024
2 Business-to-Business Platforms Secure Millions in Funding

Nivoda and Liquid Diamonds both have big plans for the new capital.

Stuller Packaging & Displays 2024-2025 catalog
MajorsMay 20, 2024
Stuller Issues New Packaging & Display Catalog

The 2024-2025 edition features new colors and styles, as well as storytelling elements.

Elephants wading in the Okavango Delta in Botswana
SourcingMay 20, 2024
State of the Diamond Industry: Botswana Beyond Diamonds

From moringa to ecotourism in the Okavango Delta, the country and its leaders are exploring how Botswana can diversify its economy.

Rough diamonds from De Beers
SourcingMay 20, 2024
Anglo American Confirms It Is Looking to Sell De Beers

The mining giant also wants to offload its platinum business as part of an overhaul designed to “unlock significant value.”

Buccellati jewelry
FinancialsMay 17, 2024
Richemont Appoints Van Cleef & Arpels’ Nicolas Bos as New CEO

The announcement coincided with its full-year results, with growth driven by its jewelry brands.

Watches of Switzerland Mall of America store
FinancialsMay 17, 2024
Watches of Switzerland’s Fiscal-Year Sales Flat

Looking ahead, the retailer said it sees “enormous potential” in Roberto Coin’s ability to boost its branded jewelry business.

My Next Question webinar series graphic
Recorded WebinarsMay 17, 2024
Watch: Preparing for Trade Show Success

Jewelry trade show veterans share strategies for engaging buyers, managing your time effectively, and packing the right shoes.

Cartier ring-tailed lemur brooch circa 1991
AuctionsMay 17, 2024
Piece of the Week: Cartier’s Ring-Tailed Lemur

This little guy’s name is Ricky and he just sold for more than $200,000 at Sotheby’s Geneva jewelry auction.

202.18 carat fancy intense yellow diamond The Yellow Rose
AuctionsMay 16, 2024
Christie’s Holds 2 Sales Despite Cyberattack

Though its website has been down for a week, Christie’s proceeded with its jewelry and watch auctions on May 13-14, bringing in nearly $80 million.

The Allnatt yellow diamond
AuctionsMay 16, 2024
Sotheby’s Withdraws 101-Carat Yellow Diamond from Auction

Despite the absence of “The Allnatt,” Sotheby’s Geneva jewelry auction totaled $34 million, with 90 percent of lots sold.


This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy