“[A] simple breach of contract is not . . . considered a tort.”
How later courts described this case
- “[A] simple breach of contract is not . . . considered a tort.”
- holding that Chase is not a citizen of New York for diversity-jurisdiction purposes
- explaining that New York courts are reluctant to disturb this rule
- no fiduciary relationship where a bank did not “exercise[] powers beyond those of a typical lender-creditor”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------x
LEE BLACKMAN,
Plaintiff,
-against-
JPMORGAN CHASE, N.A., JAMIE
DIMON, GORDON SMITH, MEMORANDUM AND ORDER
MCGLINCHEY STAFFORD, PLLC, 20-CV-5539 (RPK) (LB)
DANA M. CARRERA, DENNIS A.
AMORE, and JOHN DOE,
Defendants.
----------------------------------------------------x
RACHEL P. KOVNER, United States District Judge:
Alleging various claims arising from one or several Chase credit card accounts, pro se
plaintiff Lee Blackman sues JPMorgan Chase Bank, N.A. (“Chase”), its law firm, and several
individuals. All appearing defendants have filed a motion to dismiss. For the reasons that follow,
the motion is granted in full.
BACKGROUND
The following facts come from the amended complaint, incorporated documents,
documents integral to the complaint, and documents amenable to judicial notice. Because plaintiff
proceeds pro se, the Court considers not only the facts in his amended complaint but also “the facts
and allegations contained in [his] additional submissions.” Manley v. N.Y.C. Police Dep’t, No.
05-CV-679 (FB) (LB), 2005 WL 2664220, at *1 (E.D.N.Y. Oct. 19, 2005). The allegations are
“accept[ed] as true” on a motion to dismiss. Hamilton v. Westchester Cnty., 3 F.4th 86, 90 (2d
Cir. 2021) (quoting Dane v. UnitedHealthcare Ins. Co., 974 F.3d 183, 188 (2d Cir. 2020)).
I. Factual Background
Plaintiff alleges that he opened a Chase credit card account in 1997. Am. Compl. ¶ 31
(Dkt. #33). At that time, Chase offered cardholders optional insurance, LifePlus Credit Insurance
(“LifePlus”). Ibid. Plaintiff completed an application for the insurance and submitted it to Chase.
Id. ¶ 33.
While paying his credit card bill in the mid-2000s, plaintiff attempted to apply his payments
to specific charges. Id. ¶¶ 35-37. Chase refused, sending plaintiff a notice explaining its billing
hierarchy. Id. ¶ 37; id. Ex. B. This hierarchy listed the order in which Chase applied payments to
different categories of charges, including insurance products. Id. ¶ 37; id. Ex. B. Based on this
generic hierarchy, plaintiff concluded that Chase had secretly changed the name of its LifePlus
insurance to Credit Life Insurance (“Credit Life”) and added it to plaintiff’s account. Id. ¶¶ 39-
40. Plaintiff again attempted to apply his payments to specific charges, telling Chase to refund the
payments if it could not do so. Id. ¶¶ 42-43. Citing the Cardholder Agreement, Chase again
refused, explaining that it could not apply the payments to specific charges as plaintiff had
requested. Id. ¶ 43.
Later, plaintiff alleged that Chase added a different insurance line, PRIVGRD, to his card
without his authorization. Id. ¶ 47. To the amended complaint, plaintiff appended a card statement
from 2006 that includes a charge from “TLG*PRIVGRD.” Id. Ex. E. Plaintiff alleges that
LifePlus, Credit Life, and PRIVGRD were all supposed to make the minimum payments on his
credit card account for him if he defaulted. Id. ¶¶ 37, 47, 52.
Finally, plaintiff alleges that Chase added his name to an account, id. ¶ 50, and that Chase’s
officers represented that he owed approximately $12,585 in 2011, id. ¶ 49. According to the
amended complaint, either computer glitches or hackers resulted in Chase being unable to match
its customers with their accounts, and so Chase randomly assigned this new account to plaintiff.
Id. ¶¶ 52-53. Apparently, Chase represented that he owed different amounts in 2011, 2013, and
2016. Id. ¶¶ 79-81, 90. Plaintiff also attaches a 2015 letter from Chase that appears to state that
Chase had forgiven $9,779.28 of plaintiff’s debt. Id. Ex. A.
II. Procedural Background
In 2019, plaintiff decided to sue Chase after seeing an article about how Wells Fargo had
charged fees to credit card customers for an insurance product they had not purchased. Id. ¶ 15.
Chase removed. See Notice of Removal (Dkt. #1). After removal, plaintiff filed the operative
amended complaint. See Am. Compl. The amended complaint added six new defendants: Chase’s
CEO, Jamie Dimon; Chase’s COO, Gordon Smith; Chase’s law firm, McGlinchey Stafford PLLC
(“McGlinchey”); two of Chase’s attorneys, Dana M. Carrera and Dennis A. Amore; and John Doe.
Id. ¶¶ 4-12. Plaintiff explains that defendant “John Doe” is a placeholder for yet-to-be-
“designate[d]” members “of the conspiracy.” Id. ¶ 14. All identified defendants (“defendants”)
have moved to dismiss.
A. Jurisdictional Allegations
In the amended complaint, plaintiff states he is a citizen of New York. Id. ¶ 1. Alleging
Ohio as its state of citizenship, Chase removed this case under 28 U.S.C. § 1332 and 28 U.S.C.
§ 1441. See Notice of Removal ¶ 7, 9. Plaintiff disputes Chase’s citizenship. See Pl.’s Mem. in
Opp’n 5-12 (Dkt. #52). In his amended complaint, plaintiff alleges that Mr. Dimon is a resident
of New York, Am. Compl. ¶ 4, that Mr. Smith’s, Ms. Carrera’s, and Mr. Amore’s residences are
“unknown,” id. ¶¶ 6, 9, 11, and that McGlinchey as a “resident of Louisiana” with a New York
office, id. ¶ 8. Even though McGlinchey is a professional limited liability company, the amended
complaint does not identify its members or their citizenship. Ibid. Plaintiff makes no jurisdictional
allegations regarding John Doe. Id. ¶¶ 13-14.
B. The Claims
Against these defendants, the amended complaint alleges twenty-eight claims. Id. ¶¶ 74-
246. The first seven claims and nineteenth claim are for breach of contract against Chase. Claim
One alleges breach of contract because Chase did not provide plaintiff with statements explaining
why it rounded his default balance to $12,585 in some documents while listing it as $12,585.83 in
others. Id. ¶¶ 81-82. Claim Two alleges breach of contract because Chase did not apply LifePlus
insurance toward plaintiff’s default balance. Id. ¶ 87. Claim Three alleges breach of contract
because Chase informed plaintiff in September 2015 that he owed $9,779.28 without providing a
monthly statement for an unspecified account. Id. ¶¶ 91-92. Like Claim Two, Claim Four alleges
breach of contract because Chase did not use LifePlus insurance to pay plaintiff’s minimum
payments. Id. ¶¶ 96-98. Claim Five alleges breach of contract because Chase did not use Credit
Life insurance to pay plaintiff’s monthly minimums. Id. ¶¶ 102-03. Claim Six alleges breach of
contract because Chase did not use Credit Life or LifePlus to pay a $9,779.28 debt. Id. ¶ 109.
Claim Seven alleges breach of contract because Chase did not respond to plaintiff when he
demanded monthly statements showing the insurance payments. Id. ¶ 115. Finally, Claim
Nineteen alleges breach of contract because Chase allegedly converted one of plaintiff’s credit
card accounts to a “BluePrint” account without notice. Id. ¶¶ 188, 191. Plaintiff infers that Chase
altered the account type from the fact that Chase represented his balances differently in 2011, 2013,
and 2016, and a BluePrint account allows “a user [to] create multiple different balances in a single
account in any monthly billing cycle.” Id. ¶ 190; see id. ¶¶ 82-83, 188-90.
The eighth and ninth claims are for unjust enrichment and aiding and abetting unjust
enrichment. Id. ¶¶ 117-127. Claim Eight alleges unjust enrichment because Chase followed its
contractual payment hierarchy rather than applying plaintiff’s payments to specified charges or
returning his payments as he requested. Id. ¶¶ 35-37, 42-42, 117-20. Claim Nine alleges that
Chase’s “[l]ower-[l]evel employees” aided and abetted the conduct identified in Claim Eight. Id.
¶ 127.
Claims Ten, Fourteen to Eighteen, Twenty-One, and Twenty-Four allege fraud, fraudulent
concealment, conspiracy to commit fraud and fraudulent concealment, and aiding and abetting
fraud. Id. ¶¶ 132-33, 154-86, 202, 203. Claim Ten alleges fraud by Chase for informing plaintiff
that he owed $12,585.83 on an account that plaintiff denies was his. Id. ¶¶ 132-33. Claim
Fourteen alleges that Chase and unspecified lower-level employees engaged in a conspiracy to
commit fraud by lowering plaintiff’s debt to induce him to pay the remainder. Id. ¶¶ 155-56.
Claim Fifteen alleges conspiracy to commit fraudulent concealment by Chase and unspecified
lower-level employees for neglecting to pay insurance benefits toward plaintiff’s defaulted
account. Id. ¶¶ 162-63. Claim Sixteen alleges fraudulent concealment by Chase for informing
plaintiff in 2020 that his accounts did not carry insurance. Id. ¶ 169. Claim Seventeen alleges
conspiracy to commit fraudulent concealment by Chase and its employees for telling plaintiff that
he owned an account ending in the digits 0028. Id. ¶ 176. Like Claim Sixteen, Claim Eighteen
alleges conspiracy to commit fraud by Chase for denying that any of plaintiff’s accounts bore
insurance. Id. ¶ 185. Claim Twenty-One alleges Chase’s lower-level employees aided and
abetted fraud by changing account balances to “give aid to Chase [in] mak[ing] lower or zero
monthly minimum payments” on defaulted accounts. Id. ¶ 202. Styled a claim for “fraudulent
intent,” Claim Twenty-Four alleges that Chase committed fraud by faking debts in its customers’
accounts so it could charge them off, write down its accounts, and thus evade taxes. Id. ¶ 223.
Claims Eleven, Twelve, Thirteen, and Twenty allege breach of fiduciary duty. Id. ¶¶ 138-
39, 145, 149, 195-96. Claim Eleven alleges a breach of fiduciary duty by Chase, Mr. Dimon, and
Mr. Smith because they did not prevent “software corruption/glitches” that resulted in Chase’s
accounts being mixed up. Id. ¶¶ 138-39. Claim Twelve alleges a breach of fiduciary duty by the
same three defendants because they “randomly pick[ed] out an account and add[ed] plaintiff’s
name to it” after someone hacked Chase’s computer files. Id. ¶¶ 142, 145. Claim Thirteen alleges
that Chase breached a fiduciary duty by putting unspecified incorrect balances on an unspecified
credit card account. Id. ¶¶ 149-51. Claim Twenty alleges a breach of fiduciary duty by Chase,
Mr. Dimon, and Mr. Smith because, as “a result of bad record keeping,” they incorrectly
determined that plaintiff lacked account insurance. Id. ¶¶ 195-96.
Claims Twenty-Two, Twenty-Three, and Twenty-Five, all against Chase, allege
embezzlement, conversion, and identity theft. Claim Twenty-Two alleges that Chase embezzled
insurance benefits. Id. ¶ 212. Though styled a claim for “[m]ismanagement and
[m]isappropriation of funds,” Claim Twenty-Three is best read as a claim for conversion. Id.
¶¶ 215, 217-18. This claim alleges that Chase “used all of plaintiff’s credit card insurance benefits
to inflate its [own] balance sheet,” id. ¶ 215, therefore was “unable to make payments” on
plaintiff’s defaulted accounts, id. ¶ 217, and thus “convert[ed] [plaintiff’s] property,” id. ¶ 218.
Claim Twenty-Five1 alleges that Chase committed identity theft by opening an account in
plaintiff’s name without his authorization. Id. ¶ 226.
The final three claims involve Chase and its lawyers. Id. ¶¶ 230-46. Claim Twenty-Six
alleges that Chase, McGlinchey, Ms. Carerra, and Mr. Amore conspired to commit fraudulent
misrepresentation by removing this case to federal court. Id. ¶ 233. Claim Twenty-Seven alleges
that Chase, McGlinchey, and the lawyers conspired to defraud plaintiff because they served him
by mail. Id. ¶¶ 236-40. Claim Twenty-Eight alleges breach of contract against Chase,
McGlinchey, and the individual lawyers because they allegedly violated the Cardholder
1 Although the twenty-fifth claim listed, this claim is erroneously styled as the “thirty[-]fifth” claim in the amended
complaint..
Agreement’s choice-of-law provision by removing this case to federal court. Id. ¶¶ 243-46.
C. The Pending Motions
Defendants now move to dismiss. See Defs.’ Mem. in Supp. (Dkt. #45-4). In his response
papers, plaintiff moves for remand. See Pl.’s Mem. in Opp’n 2.2 He also moves the Court to
reconsider the earlier denial of a motion for jurisdictional discovery. See Ltr. Mot. for
Reconsideration (Dkt. #60).3 In the motion, plaintiff now argues that Chase is a “business trust”
and therefore a citizen of New York. See ibid. Finally, he moves to strike the copy of Chase’s
certified articles of incorporation that Chase has filed on the docket and again requests discovery.
See Mot. to Strike (Dkt. #68); Letter Mot. to Compel (Dkt. #69);4 Letter Mot. for Clarification
(Dkt. #73).5
STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a
complaint based on “failure to state a claim upon which relief can be granted.” To avoid dismissal
on that basis, a complaint must plead “enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(discussing Federal Rule of Civil Procedure 8). The facial “plausibility standard is not akin to a
‘probability requirement.’” Ibid. (quoting Twombly, 550 U.S. at 556). But it requires a plaintiff
2 Plaintiff also initially moved to dismiss unidentified “third party defendants.” Notice (Dkt. #62). However, when
asked to specify the defendants to which the motion referred, he withdrew it. Mar. 3, 2022 Minute Entry & Order.
3 Plaintiff also filed a prior motion for reconsideration. See Mot. for Reconsideration (Dkt. #59). Though this motion,
which forwards a new theory of Chase’s citizenship, superseded the previous one, the arguments in the prior motion
for reconsideration were substantially the same as those in plaintiff’s opposition papers.
4 Though the motion is styled as a “motion to compel,” the Court construes this as a renewed motion for discovery,
since discovery has not yet commenced.
5 Though the motion is styled as a “motion for clarification,” the letter expands and clarifies plaintiff’s discovery
requests. Accordingly, the Court construes it as a further discovery motion.
to allege sufficient facts to enable the court to “draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ibid. In evaluating a motion to dismiss under Rule 12(b)(6),
the court must accept all facts alleged in the complaint as true. Ibid. But it need not adopt
“[t]hreadbare recitals of the elements of a cause of action” that are “supported by mere conclusory
statements.” Ibid.
Where, as here, a plaintiff alleges fraud or fraudulent concealment, those claims must also
satisfy the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). See Aetna
Cas. & Sur. Co. v. Aniero Concrete Co., 404 F.3d 566, 578-79, 582 (2d Cir. 2005). Rule 9(b)
requires a plaintiff to “state with particularity the circumstances constituting fraud.” Fed. R. Civ.
P. 9(b). To do so, the complaint must “(1) detail the statements (or omissions) that the plaintiff
contends are fraudulent, (2) identify the speaker, (3) state where and when the statements (or
omissions) were made, and (4) explain why the statements (or omissions) are fraudulent.” Harsco
Corp. v. Segui, 91 F.3d 337, 347 (2d Cir. 1996) (citations omitted); see Nakahata v. N.Y.-
Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 197 (2d Cir. 2013). While scienter “may be
alleged generally,” Fed. R. Civ. P. 9(b), the plaintiff must “allege facts that give rise to a strong
inference of fraudulent intent,” Lerner, v. Fleet Bank, N.A., 459 F.3d 273, 292 (2d Cir. 2006)
(citation omitted). Additionally, a plaintiff must allege “the time, place, speaker and sometimes
even the content of the alleged misrepresentation.” Aetna Cas. & Sur. Co., 404 F.3d at 579.
Finally, when a plaintiff is proceeding pro se, the complaint must be “liberally construed,
and . . . however inartfully pleaded, must be held to less stringent standards than formal pleadings
drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (quotations and
citations omitted).
DISCUSSION
Plaintiff’s motion to remand is denied, as are his motions for reconsideration, discovery,
and to strike. The motion to dismiss is granted in full.
I. The Exercise of Diversity Jurisdiction is Appropriate
Since the case is completely diverse, diversity jurisdiction exists. As a national bank,
Chase is a citizen of Ohio. And under the doctrine of fraudulent joinder, the named defendants do
not destroy diversity.6
A. Since Chase is a citizen of Ohio, remand, discovery, and the motion to strike
are denied.
Plaintiff argues that the case should be remanded because Chase is, like him, a citizen of
New York. Pl.’s Mem. in Opp’n 7-8.7 As the party that removed the action, Chase bears the
burden of establishing diversity. See Montefiore Med. Ctr. v. Teamsters Loc. 272, 642 F.3d 321,
327 (2d Cir. 2011). It has met this burden.
Because Chase is a national banking association, it is a citizen of Ohio and thus diverse.
While a corporation is typically considered a citizen of both its state of incorporation and the
6 Since plaintiff alleges only that the “John Doe” defendant is placeholder, Am. Compl. ¶¶ 13-14, the Court disregards
it for the purposes of evaluating jurisdiction at this phase in the proceedings. While it is possible that a John Doe
defendant could eventually be identified as a citizen of New York, “the mere inclusion of John Doe defendants does
not destroy complete diversity until it is later found that one or more of the unknown defendants is domiciled such
that there is not complete diversity.” Zaccaro v. Shah, 746 F. Supp. 2d 508, 516 (S.D.N.Y. 2010) (quoting Doe v.
Ciolli, 611 F. Supp. 2d 216, 220 (D. Conn. 2009)); see, e.g., Grice v. McMurdy, No. 18-CV-6414 (MAT), 2020 WL
90770, at *1 n.1 (W.D.N.Y. Jan. 8, 2020); Wells Fargo Bank, N.A. v. Ullah, No. 13-CV-485 (JPO), 2014 WL 470883,
at *6 n.3 (S.D.N.Y. Feb. 6, 2014); Marcelo v. EMC Mortg. Corp., No. 10-CV-5964 (JS) (ETB), 2011 WL 1792671,
at *2 n.3 (E.D.N.Y. May 6, 2011).
7 Plaintiff also accuses Chase of “waiting until the last minute to remove the complaint.” Pl.’s Mem. in Opp’n 5.
Typically, service must occur within thirty days, see 28 U.S.C. § 1446(b), and Chase removed thirty-three days after
plaintiff mailed the copy of the summons and complaint, see Notice of Removal, Ex. A (Dkt. #1). However, Chase
contends that service was not proper, so the thirty-day clock never began to run and removal was timely. See Notice
of Removal ¶ 2 (Dkt. #1). Plaintiff does not challenge Chase’s allegations concerning service. Moreover, plaintiff
did not claim that Chase’s removal was untimely for this reason within 30 days of the filing of the notice of removal.
As a result, plaintiff’s challenge to removal on this ground is time-barred. See Agyin v. Razmzan, 986 F.3d 168, 181
n.15 (2d Cir. 2021) (“[R]emand based on a defect in removal procedure—such as the untimeliness of removal—must
be effected within 30 days after the filing of the notice of removal.” (quotations omitted)).
location of its principal place of business, see Hertz Corp. v. Friend, 559 U.S. 77, 88 (2010); 28
U.S.C. § 1332, a more specific statute governs national banking associations, see Excelsior Funds,
Inc. v. JP Morgan Chase Bank, N.A., 470 F. Supp. 2d 312, 314 (S.D.N.Y. 2006); 28 U.S.C. § 1348.
Under this statute, a national bank is a citizen only of the state listed in its articles of association.
OneWest Bank, N.A. v. Melina, 827 F.3d 214, 219 (2d Cir. 2016). To establish its citizenship,
Chase has filed a certified copy of its revised articles of association, sworn by the acting
Comptroller of the Currency. See Defs.’ Letter Resp. to Mot. for Reconsideration (“Defs.’ Letter
Resp.”) Ex. A (Dkt. #66-1). Chase’s articles identify Ohio as the location of its main office and
therefore as its state of citizenship. See OneWest Bank, N.A., 827 F.3d at 218 (“[A] national bank
is ‘located,’ for diversity jurisdiction purposes, in the state designated in its articles of association
as the locus of its main office.” (citing Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006)).
Other courts in this circuit have considered Chase’s citizenship and reached the same conclusion.
Excelsior Funds, Inc., 470 F. Supp. 2d at 313 (holding that Chase is not a citizen of New York for
diversity-jurisdiction purposes); Pipala v. JP Morgan Chase Bank NA, No. 16-CV-3723 (VB),
2016 WL 7378979, at *1 n.1 (S.D.N.Y. Dec. 20, 2016) (same); Scully v. Chase Bank USA, NA,
No. 16-CV-325 (NGG) (RML), 2016 WL 2977270, at *3-4 (E.D.N.Y. May 20, 2016) (same).
Plaintiff’s submissions are not to the contrary. First, plaintiff argues that Chase is a New
York citizen because its principal place of business is in New York. Pl.’s Mem. in Opp’n 5-8.
However, since Chase shows that it is a national bank, its principal place of business is immaterial
to its citizenship. See OneWest Bank, N.A., 827 F.3d at 218. To bolster his argument, plaintiff has
filed multiple screen captures from the website of the Secretary of State of Ohio. See Pl.’s Mem.
in Opp’n 20; Mot. for Reconsideration Ex. B. None contradict Chase’s filings. The first image
identifies Chase as a “foreign corporation” because its “[l]ocation” is the “United States of
America,” not Ohio. Pl.’s Mem. in Opp’n 20. This appears to signify only that Chase is
incorporated under the laws of the United States rather than the laws of Ohio, which is consistent
with Chase’s status as a national bank. See OneWest Bank, N.A., 827 F.3d at 219 (national banks
are associated “under the laws of the United States” (quotations omitted)). Another shows
information about a Chase affiliate, not Chase itself. Pl.’s Mem. in Opp’n 21-22 (concerning
“JPMorgan Chase & Co,” not “JPMorgan Chase Bank, N.A.”). Finally, the third screen capture
show a business trust with no apparent affiliation to Chase. See Mot. for Reconsideration Ex. B
(describing “JP Morgan Chase Bank, National Association (2118141),” affiliated with “The
Federal Reserve Bank of Fite & Co., Holdings”); Defs.’ Letter Resp. 2 n.2 (supplying information
about Fite and explaining that unlike this business, Chase’s name does not contain “(2118141)”).
Because Chase has filed its certified articles of incorporation and plaintiff offers neither
evidence nor specific factual allegations contradicting them, removal remains valid. Therefore,
plaintiff’s motion for remand is denied.
Moreover, since the Federal Rules of Civil Procedure “do[] not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions,” Iqbal, 556 U.S. at 678-79,
plaintiff’s motion for reconsideration as to jurisdictional discovery and renewed motions for
discovery are also denied, see Northfield Ins. Co. v. GM Star Constr., Inc., 532 F. Supp. 3d 73, 74
(E.D.N.Y. 2021). Since plaintiff supplies neither specific factual allegations nor evidence
contradicting Chase’s submissions, plaintiff has not demonstrated an entitlement to discovery.
Finally, plaintiff has moved to strike Chase’s articles of incorporation from the docket
because he argues they contradict his filing showing that Chase is a “business trust.” See Mot. to
Strike (relying on the “business trust” theory). As explained, this filing appears to refer to an
entirely different business and does not contradict Chase’s articles of incorporation. See Mot. for
Reconsideration Ex. B; Defs.’ Letter Resp. 2 n.2. Since plaintiff has offered no other reason to
strike, the motion is denied.
B. The doctrine of fraudulent joinder permits the Court to discount the
citizenship of the other defendants.
The citizenship of the five named defendants does not trigger remand either. Under the
doctrine of fraudulent joinder, the court may retain jurisdiction when a plaintiff adds a nondiverse
defendant if the defendants show the nondiverse defendant has “no real connection with the
controversy.” DNJ Logistic Grp., Inc. v. DHL Exp. (USA), Inc., 727 F. Supp. 2d 160, 164
(E.D.N.Y. 2010) (quoting Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998)).
This may be accomplished by demonstrating “that there is no possibility, based on the pleadings,
that a plaintiff can state a cause of action against the non-diverse defendant in state court.” Ibid.
(quoting Pampillonia, 138 F.3d at 461). In making this determination, “all uncertainties in
applicable state law are resolved in favor of the plaintiff, and the complaint is subjected to less
searching scrutiny than on a motion to dismiss for failure to state a claim.” Ibid. (quoting Campisi
v. Swissport Cargo Servs., LP, 09-CV-1507 (FB) (JMA), 2010 WL 375878, at *2 (E.D.N.Y. Jan.
26, 2010)) (brackets omitted).
Since “state case law . . . removes all reasonable possibility that the plaintiff would be
permitted to litigate [his] claim[s]” against these five defendants, Lopez v. Bell Sports, Inc., No.
14-CV-2530 (SJF) (SIL), 2015 WL 1396466, at *2 (E.D.N.Y. Mar. 25, 2015) (quotations omitted),
their citizenship is not cause for remand.
1. Based on the pleadings, there is no possibility plaintiff can state a claim
against Mr. Dimon or Mr. Smith.
Three claims, Claims Eleven, Twelve, and Twenty involve Mr. Dimon and Mr. Smith.
These are breach-of-fiduciary-duty claims brought against Mr. Dimon, Mr. Smith, and Chase for
failing to prevent “software/corruption glitches” in Chase’s accounts, Am. Compl. ¶ 137 (Claim
Eleven), for “randomly picking out an account and add[ing] plaintiff’s name to it,” id. ¶ 145 (Claim
Twelve), and for “bad record keeping” resulting in Chase’s determination that plaintiff had no
insurance on his account, id. ¶ 195. Defendants contend that Mr. Dimon and Mr. Smith were
fraudulently joined because plaintiff cannot state a claim for breach of fiduciary duty against them.
See Defs.’ Mem. in Supp. 14-15 (Dkt. #45-4); Defs.’ Reply 5-9 (Dkt. #55).
To bring a claim for breach of fiduciary duty, a fiduciary relationship must first exist. See
Yukos Cap. S.A.R.L. v. Feldman, 977 F.3d 216, 241 (2d Cir. 2020) (“To state a cause of action to
recover damages for breach of fiduciary duty, a plaintiff must allege: (1) the existence of a
fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the
defendant’s misconduct.” (quotations omitted)). The general rule under New York law is that “the
relationship between a borrower and a bank is contractual in nature and does not create a fiduciary
relationship.” Baumann v. Hanover Cmty. Bank, 100 A.D.3d 814, 817 (N.Y. App. Div. 2012);
JPMorgan Chase Bank, N.A. v. Freyberg, 171 F. Supp. 3d 178, 191 (S.D.N.Y. 2016) (explaining
that New York courts are reluctant to disturb this rule)). The essence of a fiduciary relationship is
“de facto control and dominance,” Doe v. Roman Cath. Diocese of Rochester, 12 N.Y.3d 764, 765
(N.Y. 2009) (quotations omitted), and courts only set aside the general rule when the relationship
between the borrower and bank bears these characteristics, see, e.g., Mfts. Hanover Tr. Co. v.
Yanakas, 7 F.3d 310, 318 (2d Cir. 1993) (no fiduciary relationship where a bank did not “exercise[]
powers beyond those of a typical lender-creditor”).
The amended complaint contains no indication that Chase or its executives “exercise[]
powers beyond those of a typical lender-creditor.” Ibid. Plaintiff alleges that he held a Chase
credit card and purchased account insurance from Chase. Am. Compl. ¶¶ 31-33. This describes a
straightforward “contractual” relationship “between a borrower and a bank” and nothing more.
Baumann, 100 A.D.3d at 816. Since such dealings do “not create a fiduciary relationship,” id. at
817, “there is no possibility, based on the pleadings, that . . . plaintiff can state a cause of action
[for breach of fiduciary duty] against [Mr. Dimon and Mr. Smith] in state court.” DNJ Logistic
Grp., Inc., 727 F. Supp. 2d at 164 (quoting Pampillonia, 138 F.3d at 461). Thus, Mr. Dimon and
Mr. Smith have “no real connection with the controversy,” ibid., and do not count for purposes of
diversity jurisdiction.
2. Defendants also demonstrate that, based on the pleadings, there is no
possibility plaintiff can state a claim against Chase’s law firm or its
lawyers.
The same is true for McGlinchey, Ms. Carrera, and Mr. Amore. Claims Twenty-Six and
Twenty-Seven allege that Chase, McGlinchey, and its lawyers committed fraud and conspired to
commit fraud in removing this case to federal court. Am. Compl. ¶¶ 233, 236-40. Claim Twenty-
Eight asserts that these defendants breached the Cardholder Agreement’s choice-of-law provision
by litigating in federal court. Id. ¶¶ 243-46. Defendants contest the legal sufficiency of these
claims. Defs.’ Mem. in Supp. 18-19; Defs.’ Reply 5-10; Defs.’ Letter Resp. 3-4.
None of these claims have merit. To state a claim for fraud under New York law, a plaintiff
must allege: “(1) the defendant made a material misrepresentation; (2) with intent to defraud the
plaintiff; (3) the plaintiff reasonably relied upon the representation; and (4) suffered damage as a
result.” Eternity Global Master Fund, Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 186-
87 (2d Cir. 2004) (quotations omitted). To plead conspiracy to commit fraud, a plaintiff must
plead the elements of fraud, as well as “an agreement between conspirators” regarding the fraud
and “an overt action in furtherance of the agreement.” Fairstein v. Netflix, Inc., No. 20-CV-8042
(PKC), 2021 WL 3501527, at *23 (S.D.N.Y. Aug. 9, 2021) (quoting Perez v. Lopez, 97 A.D.3d
558, 560 (N.Y. App. Div. 2012)). To substantiate his fraud claims, plaintiff alleges that Chase is
not diverse, that defendants served him by mail, and that Ms. Carrera’s and Mr. Amore’s notices
of appearance contained typographical errors.8
None of these allegations identify material misrepresentations. As described previously,
aside from conclusory assertions, plaintiff offers nothing to indicate that Chase has misrepresented
its citizenship. See pages 9-11, supra. Nor does plaintiff allege any misrepresentations regarding
service. Service is effective upon mailing. Fed. R. Civ. P. 5(b)(2)(C). Plaintiff alleges that Ms.
Carrera certified service of the notice of removal on November 13, 2020, but that shipping the
notice took three days. Am. Compl. ¶ 239.9 Since service is effective upon mailing, see Fed. R.
Civ. P. 5(b)(2)(C), the allegation that shipping took three days does not contradict Ms. Carrera’s
representations as to service. Nor are the alleged errors in Ms. Carrera’s and Mr. Amore’s notices
of appearance material. See Pl.’s Mem. in Opp’n 6. Ms. Carrera’s notice of appearance described
her client as “Chase Bank, N.A., as successor by merger to Chase Bank USA, N.A.,” while Mr.
Amore’s notice described Chase as “Chase Bank, N.A., as successor by merger to JPMorgan Chase
Bank USA, N.A.” Compare Notice of Appearance (Dkt. #4) with Notice of Appearance (Dkt. #6).
8 In his response, plaintiff also argues that defendants’ motion to dismiss should be denied because of a defect in
service. He alleges that service was defective because the individual who served him, presumably a McGlinchey
affiliate, mailed plaintiff the motion to dismiss on July 19, 2021, from Texas and then filed a certificate of service in
New York on the next day. See Pl.’s Mem. in Opp’n 6. The Court construes this argument as a motion to strike.
This motion is denied. As discussed, see pages 14-15, infra, service may be performed by mail, Fed. R. Civ. P.
5(b)(2)(C), and proof of service need only be filed “within a reasonable time after service,” Fed. R. Civ. P.
5(d)(1)(B)(i). Filing a certificate of service the day after performing service does not violate the Rule. Nor does the
Rule require that the certificate of service must be sworn in the same state where service was performed.
Moreover, even if the certificate of service contained technical errors, such errors would not justify striking the motion.
“The principal importance” of a certificate of service “is to provide the Court with clear proof that service has been
accomplished.” Ezeh v. VA Med. Ctr., No. 13-CV-6563 (EAW), 2014 WL 4897905, at *9 (W.D.N.Y. Sept. 29, 2014)
(quoting Ives v. Guilford Mills, Inc., 3 F. Supp. 2d 191, 195 (N.D.N.Y. 1998)). Therefore, courts do not strike motions
so long as service is effected, even when a certificate of service is entirely absent. See, e.g., Russell v. City of
Milwaukee, 338 F.3d 662, 666 (7th Cir. 2003) (“[T]he absence of a certificate does not require the invalidation of the
paper where service is not contested or where the court finds that service was accomplished.” (quoting 1 James Wm.
Moore et al., Moore’s Federal Practice § 5.20[1] at 5-34 (3d ed.)). Since “service [itself] is not contested,” Russell,
338 F.3d at 666, there is no reason to strike defendants’ filings.
9 The amended complaint contains two paragraphs numbered “239.” This is the second of the two.
Since both notices clearly identify the defendant as Chase, they contain no material
misrepresentations.
Furthermore, to the extent that either the certificates of service or the notices of appearance
contain any inaccuracies, plaintiff has not pleaded that he relied upon them in any way. “[T]he
failure to plead reliance renders” a claim for fraud “patently without merit.” Tag Mech. Sys., Inc.
v. V.I.P. Structures, Inc., 63 A.D.3d 1504, 1505 (N.Y. App. Div. 2009) (quotations omitted).
Indeed, plaintiff has contested Chase and its lawyers at every turn. See Reply to Notice of Removal
(Dkt. #9) (objecting to removal). Since plaintiff fails to allege basic elements of fraud, these two
fraud and conspiracy-to-commit-fraud claims are without merit.
The same is true of plaintiff’s breach-of-contract claim. To state a claim for breach of
contract in either New York or in Delaware, a plaintiff must allege “1) a contractual obligation; 2)
a breach of that obligation by the defendant; and 3) a resulting damage to the plaintiff.” Connelly
v. State Farm Mut. Auto. Ins. Co., 135 A.3d 1271, 1279 n.28 (Del. 2016) (Delaware law); Moreno-
Godoy v. Kartagener, 7 F.4th 78, 85 (2d Cir. 2021) (“To prevail on a breach-of-contract claim in
New York, a plaintiff must prove: “(1) the existence of a contract, (2) performance by the party
seeking recovery, (3) nonperformance by the other party, and (4) damages attributable to the
breach.”). Plaintiff alleges that defendants breached the Cardholder Agreement’s choice-of-law
provision by litigating in New York instead of Delaware, and he attaches a copy of the provision
to the amended complaint to prove it. Am. Compl. ¶¶ 242-46; id. Ex. J.
Plaintiff appears to have misunderstood this provision. Titled “Governing Law,” this
clause states that “the terms and enforcement of this agreement and your account shall be governed
and interpreted in accordance with federal law, and to the extent state law applies, the law of
Delaware.” Id. Ex. J. It requires the application of Delaware law, but it contains no restriction as
to the geographic location where either party may sue. Ibid. (explaining that the “law of Delaware”
applies, not that litigation shall take place in Delaware). Since plaintiff identifies no contractual
obligation that defendants breached, his breach-of-contract claim is without substance.
As with Mr. Dimon and Mr. Smith, the Court likewise finds that “there is no possibility,
based on the pleadings, that . . . plaintiff can state a cause of action” “in state court” for fraud,
conspiracy to commit fraud, or breach of contract against McGlinchey, Ms. Carrera, or Mr. Amore.
DNJ Logistic Grp., Inc., 727 F. Supp. 2d at 164 (quoting Pampillonia, 138 F.3d at 461). Their
presence does not destroy diversity, and the Court may retain jurisdiction.
II. The Amended Complaint Is Dismissed as Insufficiently Pleaded
Having resolved the jurisdictional disputes, the Court turns to defendants’ motion to
dismiss. This motion is granted in full. Claims Eleven, Twelve, Twenty, Twenty-Six, Twenty-
Seven, and Twenty-Eight, see pages 11-17, supra, are deficient for the reasons stated above and
are dismissed. So too are remaining claims brought against Chase.
A. Plaintiff does not successfully state a claim for breach of contract.
Since the Cardholder Agreement provides for the application of Delaware law, the Court
uses Delaware law in resolving plaintiff’s remaining breach-of contract claims. See Am. Compl.
Ex. J. However, the result is the same under either Delaware or New York law, as a claim for
breach of contract in either state requires the existence of a contractual obligation that the
defendant failed to perform, and these basic elements, coupled with Federal Rule of Civil
Procedure 8(a)’s pleading standards, resolve these claims. Compare Connelly, 135 A.3d at 1280
n.28 (Under Delaware law, the elements of a breach-of-contract claim are (1) “the existence of the
contract, whether express or implied,” (2) “the breach of an obligation imposed by that contract,”
and (3) “the resultant damage to the plaintiff.”) with Moreno-Godoy, 7 F.4th at 85 (2d Cir. 2021)
(“To prevail on a breach-of-contract claim in New York, a plaintiff must prove: “(1) the existence
of a contract, (2) performance by the party seeking recovery, (3) nonperformance by the other
party, and (4) damages attributable to the breach.”).
Eight breach-of-contract claims remain. Claims One, Three, and Seven allege, in
substance, that Chase did not provide various forms of documentation. See Am. Compl. ¶¶ 78-83
(Claim One: Chase represented that plaintiff owed either $12,585.83 or $12,585 in 2011, $12,585
in 2013, and $12,585.83 in 2016 but did not explain why it rounded the sum in some instances and
not others); id. ¶¶ 90-93 (Claim Three: Chase sent plaintiff a notice in 2015 indicating that he owed
$9,779.28 without including in that mailing copies of monthly statements explaining the sum); id.
¶¶ 112-16 (Claim Seven: plaintiff, at some unspecified time, demanded monthly statements
pertaining to the insurance lines he believed were on his account, and Chase failed to comply).
Claims Two, Four, Five, and Six allege that Chase failed to make insurance payments toward his
account. Id. ¶ 86 (Claim Two: Chase “fail[ed] to apply the LifePlus insurance benefits towards
the account”); id. ¶ 98 (Claim Four: Chase “h[eld] back payment of the LifePlus credit insurance
benefit funds” on the debt stated as $12,585.83); id. ¶ 103 (Claim Five: Chase “fail[ed] to apply
the Credit Life insurance benefit funds toward the monthly minimum payments” on the debt stated
as $12,585.83); id. ¶ 108 (Claim Six: Chase “fail[ed] to apply the Credit Life or LifePlus insurance
benefit funds” toward the stated debt of $9,779.28). Claim Nineteen alleges that Chase converted
plaintiff’s account to a BluePrint account without his permission, a fact that plaintiff appears to
have inferred because his debt was stated variously as $12,585.83, $12,585, and $9,779.28 at
different times. Id. ¶¶ 188-89, 191.
Claims One, Three, and Seven fail because plaintiff does not allege specific details showing
that Chase had a contractual obligation to produce these documents. In federal court, Rule 8 of
the Federal Rules of Civil Procedure governs the standards for pleading. See Fed. R. Civ. P. 8;
Iqbal, 556 U.S. at 677. Under this standard, to survive a motion to dismiss a breach-of-contract
claim, a plaintiff must “identify [the] provision of the agreement that Chase’s conduct allegedly
violated.” Weinstock v. Chase Card Servs., No. 07-CV-3087 (ENV), 2009 WL 10706507, at *6
(E.D.N.Y. Oct. 5, 2009) (applying Delaware law); accord Aleph Towers, LLC v. Ambit Tex., LLC,
No. 12-CV-3488, 2013 WL 4517278, at *6 (E.D.N.Y. Aug. 23, 2013) (A breach of contract claim
will be dismissed where a plaintiff fails to allege “the essential terms of the parties’ purported
contract, including the specific provisions of the contract upon which liability is predicated.”
(internal quotations omitted) (applying New York law)).
Plaintiff does not do so. While he apparently possessed a Chase credit card, he alleges no
facts about the Cardholder Agreement that indicate what documentation Chase was obligated to
provide, or when. See Am. Compl. ¶¶ 78-83 (Claim One); id. ¶¶ 90-93 (Claim Three); id. ¶¶ 112-
16 (Claim Seven). Moreover, the amended complaint does not identify what types of notices
Chase sent to plaintiff in 2011, 2013, or 2016, see id. ¶¶ 78-83 (Claim One), or whether he still
had a contract with Chase when he demanded the notices, id. ¶¶ 112-16 (Claim Seven). Since
plaintiff does not “even summarize[] the essential terms” relevant to Chase’s alleged failure to
provide documents “with [any] specificity,” Cellucci v. O’Leary, No. 19-CV-2752 (VEC), 2020
WL 977986, at *9 (S.D.N.Y. Feb. 28, 2020) (applying both New York and Delaware law), plaintiff
fails to state a claim on his first, third, and seventh causes of action.
The same shortcomings bedevil plaintiff’s second, fourth, fifth, and sixth claims, all of
which allege in some fashion that Chase never made LifePlus or Credit Life payments on plaintiff’s
account. Id. ¶ 86 (Claim Two); id. ¶ 98 (Claim Four); id. ¶¶ 101-03 (Claim Five); id. ¶ 108 (Claim
Six). The basic issue is that the amended complaint contains no specific allegations indicating that
Chase contracted to give plaintiff LifePlus or Credit Life insurance at all. Under either Delaware
or New York law, a plaintiff must allege “first, the existence of [a] contract.” VLIW Tech., LLC v.
Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003) (Delaware law); see Moreno-Godoy, 7 F.4th
at 85 (2d Cir. 2021) (under New York law, a plaintiff must allege “the existence of a contract”).
When a complaint “fail[s] to allege facts sufficient to show that an enforceable contract exist[s],”
the claim will be dismissed. Banco Espirito Santo de Investimento, S.A. v. Citibank, N.A., No. 03-
CV-1537 (MBM), 2003 WL 23018888, at *4 (S.D.N.Y. Dec. 22, 2003), aff’d, 110 F. App'x 191
(2d Cir. 2004); accord Cellucci, 2020 WL 977986, at *9 (applying New York and Delaware law).
So it is here. While plaintiff alleges that he applied for LifePlus insurance, he does not
allege whether he met the criteria for the program. See Am. Compl. ¶¶ 32-33 (alleging only that
he completed an application by submitted his birth date and a request to transfer $200 to a new
card). These criteria are listed in the LifePlus advertisement plaintiff attached to his amended
complaint. See id. Ex. A (criteria including, inter alia, fulltime employment and certain age
limits). Moreover, he does not allege that Chase ever indicated that it accepted his application.
See Am. Compl. And the only specific allegation he makes indicating that he held Credit Life
insurance was that Chase lists Credit Life insurance in the generic payment hierarchy that appears
to apply to all customers. See id. ¶ 37; id. Ex. B. Tellingly, plaintiff does not allege that he ever
received any documentation from Chase indicating that he had been enrolled in either program,
that he ever paid any premiums toward LifePlus insurance, id. ¶ 38 (alleging plaintiff believed
Chase was paying his insurance policy), or that any charges for Credit Life ever appeared on his
bill, id. ¶ 39 (alleging that Chase charged customers for Credit Life using a “hidden built-in
payment premium”).
Furthermore, even if plaintiff were enrolled in the program, the amended complaint does
not identify the circumstances obligating Chase to pay benefits or whether plaintiff qualified to
receive benefits. The advertisement concerning LifePlus indicates that the insurance pays only
under certain circumstances, such as disability. Id. Ex. A. Plaintiff does not allege what those
circumstances are, or whether he qualified for them. And the amended complaint lacks any
allegations whatsoever indicating when a beneficiary is entitled to Credit Life payments.
Finally, Claim Nineteen fails because, assuming that Chase did convert an account held by
plaintiff into a BluePrint account, see id. ¶¶ 188-89, 191, plaintiff does not identify any contractual
provision that this action breached. See Weinstock, 2009 WL 10706507, at *6 (dismissing claim
where plaintiff failed to “identify [the] provision of the agreement that Chase’s conduct allegedly
violated” because plaintiff “is not immune from basic pleading rules”) (applying Delaware law);
accord Harbor Distrib. Corp. v. GTE Operations Support Inc., 176 F. Supp. 3d 204, 215 (E.D.N.Y.
2016) (“The [plaintiff] must allege the specific provisions of the contract upon which the breach
of contract is based.”) (applying New York law). It is not clear what account Chase converted,
and if it was plaintiff’s credit card account, plaintiff provides no details about the Cardholder
Agreement showing that it prohibited such a conversion.
Since “[c]onclusory allegations that a defendant breached an agreement are insufficient to
support a breach of contract claim,” Harbor Distrib. Corp. v. GTE Operations Support Inc., 176
F. Supp. 3d 204, 215 (E.D.N.Y. 2016) (quoting Frontline Processing Corp. v. Merrick Bank Corp.,
No. 13-CV-3956 (RPP), 2014 WL 837050, at *2 (S.D.N.Y. Mar. 3, 2014)) (collecting cases),
plaintiff’s first, second, third, fourth, fifth, sixth, seventh, and nineteenth claims are dismissed.
B. Plaintiff does not state claims for unjust enrichment.
Claims Eight and Nine, for unjust enrichment and aiding and abetting unjust enrichment,
also fail. These claims allege that Chase and its lower-level employees failed to apply plaintiff’s
payments to specific card charges as he requested. Am. Compl. ¶¶ 35, 117-28.
To state a claim for unjust enrichment under New York law, a plaintiff must show “that (1)
the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good
conscience to permit [the defendant] to retain what is sought to be recovered.” Mandarin Trading
Ltd. v. Wildenstein, 16 N.Y.3d 173, 182 (N.Y. 2011) (quotations omitted). Stating a claim for
aiding and abetting unjust enrichment—or for aiding and abetting any tort in New York—requires
allegations of “(1) the existence of an underlying tort; (2) the defendant’s knowledge of the
underlying tort; and (3) that the defendant provided substantial assistance to advance the
underlying tort’s commission.” Bigio v. Coca-Cola Co., 675 F.3d 163, 172 (2d Cir. 2012)
(brackets and quotations omitted).
Plaintiff may not recover on these claims because he admits that he owed Chase the
payments, and the Cardholder Agreement governed how his payments were applied. “New York
law does not permit recovery in quantum meruit . . . if the parties have a valid, enforceable contract
that governs the same subject matter as the quantum meruit claim.” Mid-Hudson Catskill Rural
Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168, 175 (2d Cir. 2005); see Stanley v. Direct
Energy Servs., LLC, 466 F. Supp. 3d 415, 431 (S.D.N.Y. 2020) (a party may plead unjust
enrichment in the face of a binding contract only when attacking the validity of the contract itself)
(collecting cases). Plaintiff admits that he owed money on his credit card and made payments to
Chase. Am. Compl. ¶ 35. Contrary to his request to apply the money to charges with higher APRs,
ibid., Chase applied plaintiff’s voluntary payments per the contractual payment hierarchy, see id.
Ex. B (including Chase’s payment hierarchy and a letter from Chase explaining that the Cardholder
Agreement advises of the payment hierarchy and that use of the card constituted acceptance of its
terms); id. ¶¶ 243-46 (Claim Twenty-Eight: insisting on the applicability of the Cardholder
Agreement to this action). Since the facts alleged in the amended complaint and attached
documents indicate that the Cardholder Agreement governed the order in which payments were to
be applied, plaintiff’s unjust enrichment claims are precluded.
Moreover, plaintiff could not unilaterally alter the terms of the Cardholder Agreement by
adding conditions to his payments without Chase’s consent. See Am. Compl. ¶ 35, 42 (sending
Chase payments but directing Chase to return them if it did not consent to applying them to the
specific charges he indicated). Whether under Delaware or New York law, “[a]ny amendment to
a contract, whether written or oral, relies on the presence of mutual assent and consideration.”
Cont’l Ins. Co. v. Rutledge & Co., 750 A.2d 1219, 1232 (Del. Ch. 2000); accord Lawrence M.
Kamhi, M.D., P.C. v. E. Coast Pain Mgmt., P.C., 177 A.D.3d 726, 726 (N.Y. App. Div. 2019)
(describing as “[f]undamental” the principle that one party cannot alter the terms of contract
without “mutual assent”). Since the amended complaint does not allege that Chase consented to
plaintiff’s conditions, Chase was not bound to follow them.
No matter how these claims are construed, they too must be dismissed.
C. Nor does plaintiff successfully allege fraud.
Five claims allege fraud, conspiracy to commit fraud, and aiding and abetting of fraud.
Am. Compl. ¶¶ 132-33 (Claim Ten: alleging fraud because Chase told plaintiff he owed
$12,585.83 on an account that plaintiff denies was his); id. ¶¶ 155-57 (Claim Fourteen: alleging
conspiracy to commit fraud by Chase and unspecified lower-level employees because they
allegedly lowered plaintiff’s debt to induce him to pay the remainder); id. ¶ 185 (Claim Eighteen:
alleging conspiracy to commit fraud by Chase for denying that any of plaintiff’s accounts bore
insurance); id. ¶ 202 (Claim Twenty-One: alleging aiding and abetting fraud by Chase’s lower-
level employees for changing account balances to “give aid to Chase [in] mak[ing] lower or zero
monthly minimum payments” on defaulted accounts); id. ¶ 223 (Claim Twenty-Four: alleging
fraud by Chase for faking debts in its customers’ accounts so it could charge them off, write down
its accounts, and thus evade taxes).
To state a claim for fraud in New York, a plaintiff must allege “(1) the defendant made a
material misrepresentation; (2) with intent to defraud the plaintiff; (3) the plaintiff reasonably
relied upon the representation; and (4) suffered damage as a result.” Eternity Global Master Fund,
Ltd., 375 F.3d at 186-87 (quotations omitted). To plead conspiracy to commit fraud, a plaintiff
must plead the elements of fraud, as well as “an agreement between conspirators” regarding the
fraud and “an overt action in furtherance of the agreement.” Fairstein v. Netflix, Inc., No. 20-CV-
8042 (PKC), 2021 WL 3501527, at *23 (S.D.N.Y. Aug. 9, 2021) (quoting Perez v. Lopez, 97
A.D.3d 558, 560 (N.Y. App. Div. 2012)). Aiding and abetting fraud requires alleging the existence
of fraud, “the defendant’s knowledge of the” fraud, and that “the defendant provided substantial
assistance to advance the [fraud’s] commission.” Bigio, 675 F.3d at 172 (brackets and quotations
omitted).
Claims Ten, Fourteen, and Eighteen fail because plaintiff does not adequately plead
reliance. To state a claim for fraud in New York, a plaintiff must allege that he “relied upon a
misrepresentation by a defendant to his . . . detriment.” Pasternack v. Lab’y Corp. of Am.
Holdings, 27 N.Y.3d 817, 829 (N.Y. 2016). These three claims lack such allegations. The tenth
claim alleges that Chase informed plaintiff that he owed money on an account he insists was not
his. Am. Compl. ¶¶ 132-33. The fourteenth claim alleges that Chase lowered plaintiff’s debt to
induce him to make payments. Id. ¶¶ 155-56. Nowhere, though, does plaintiff allege that he
“relied upon [these] misrepresentation[s],” either by making payments or acting or failing to act in
any way. Pasternack, 27 N.Y.3d at 829. Similarly, the eighteenth claim alleges that Chase stated
in June 2020 that plaintiff never had any insurance on his accounts. Am. Compl. ¶ 181. However,
plaintiff does not allege that he ever relied on Chase’s 2020 statement. Thus, Claims Ten,
Fourteen, and Eighteen must be dismissed.
The twenty-first and twenty-fourth claims fail because they do not allege fraud with
sufficient particularity. Claim Twenty-One alleges that Chase and its employees changed account
balances frequently in order to avoid making insurance payments. Id. ¶ 202. Claim Twenty-Four
alleges that Chase faked debts in its customers’ accounts so it could charge them off and avoid
taxes. Id. ¶ 223. Rule 9(b) requires “stat[ing] with particularity the circumstances constituting
fraud,” Fed. R. Civ. P. 9(b), including “the who, what, when, where, and how” of the alleged
misrepresentation. PetEdge, Inc. v. Garg, 234 F. Supp. 3d 477, 490 (S.D.N.Y. 2017) (quotations
omitted); see Williams v. Affinion Grp., LLC, 889 F.3d 116, 124 (2d Cir. 2018). Those details are
missing from these claims. Plaintiff does not identify which accounts these claims describe or
when Chase engaged in this alleged behavior. Am. Compl. ¶¶ 202, 223. Moreover, the allegations
that Chase engaged in a massive tax-evasion scheme contain no specific facts to make them
plausible. Id. ¶¶ 222-23. Nor do the allegations about the alleged insurance underpayment
scheme. Id. ¶¶ 200-02. Since these two claims do not “specify the statements that the plaintiff
contends were fraudulent,” “identify the speaker[s]” of these statements, “state where and when
the statements were made,” or allege specific facts substantiating the tax-evasion and insurance
underpayment schemes, they too must be dismissed along with the other fraud claims. DiMuro v.
Clinique Labs., LLC, 572 F. App’x 27, 30 (2d Cir. 2014) (quoting Mills v. Polar Molecular Corp.,
12 F.3d 1170, 1175 (2d Cir. 1993)).
D. Nor does plaintiff successfully allege fraudulent concealment.
Plaintiff’s fifteenth, sixteenth, and seventeenth claims for fraudulent concealment and
conspiracy to commit fraudulent concealment are also dismissed.
These claims allege that Chase and lower-level employees changed account balances to
avoid paying Credit Life benefits, Am. Compl. ¶ 163 (Claim Fifteen), that Chase told plaintiff in
2020 that defendant never had insurance, id. ¶ 169 (Claim Sixteen), and represented that plaintiff
owed $12,585.83, $12,585, and $9,779.28 at various times “without saying anything” about the
insurance plaintiff alleges was on his account, id. ¶ 176 (Claim Seventeen). To establish fraudulent
concealment, a plaintiff must allege “(1) a duty to disclose material facts; (2) knowledge of
material facts by a party bound to make such disclosures; (3) failure to discharge a duty to disclose;
(4) scienter; (5) reliance; and (6) damages.” Martin Hilti Fam. Tr. v. Knoedler Gallery, LLC, 386
F. Supp. 3d 319, 348-49 (S.D.N.Y. 2019) (quotations omitted) (citing Aetna Cas. & Sur. Co. v.
Aniero Concrete Co., Inc., 404 F.3d 566, 582 (2d Cir. 2005)). Pleading conspiracy to commit
fraudulent concealment requires the two additional elements of “an agreement between
conspirators” to commit fraudulent concealment and “an overt act in furtherance of the
agreement.” Fairstein, 2021 WL 3501527, at *23 (quoting Perez, 97 A.D.3d at 560).
The fraudulent-concealment claims fail for the same reasons the fraud-based claims failed.
Like fraud, fraudulent concealment must be pleaded with “particularity,” Zirvi v. Flatley, 838 F.
App’x 582, 585 (2d Cir. 2020) (citing Armstrong v. McAlpin, 699 F.2d 79, 90 (2d Cir. 1983)), and
like plaintiff’s twenty-first and twenty-fourth claims, the fifteenth claim does not “specify” which
balances Chase allegedly manipulated, “identify” who was responsible for these alleged omissions,
or “state where and when” the alleged omissions were made, DiMuro, LLC, 572 F. App’x at 30
(quoting Mills, 12 F.3d at 1175) (applying Rule 9(b)’s pleading standard). Similarly, fraudulent
concealment requires allegations that the plaintiff “actually relied” on the material omission, Bank
of Am., Nat. Ass’n v. Commack Props., LLC, No. 09-CV-5296 (DRH), 2011 WL 5401763, at *4
(E.D.N.Y. Nov. 4, 2011) (“In order to make a claim for fraudulent concealment a plaintiff must
show that he ‘actually relied on the disclosure or lack thereof.’” (quoting Banque Arabe et
Internationale D’Investissment v. Md. Nat’l Bank, 57 F.3d 146, 156 (2d Cir. 1995)), and the
sixteenth and seventeenth claims contain no allegations that plaintiff relied on Chase’s 2020
statement or any of its representations in 2011, 2013, 2015, or 2016, Am. Compl. ¶¶ 165-77.
For these reasons, Claims Fifteen, Sixteen, and Seventeen are dismissed.
E. Plaintiff’s fiduciary duty claims also fail.
Three breach-of-fiduciary-duty claims have already been dismissed. See pages 13-14,
supra (discussing Claims Eleven, Twelve, and Twenty). Claim Thirteen, the last claim for breach-
of-fiduciary duty, fails for the same reason, because plaintiff fails to allege the existence of a
fiduciary duty. See ibid. While plaintiff alleges that Chase breached a fiduciary duty by placing
incorrect balances on one of his accounts, Am. Compl. ¶ 149, plaintiff has failed to allege that a
relationship existed between him and Chase other than that of “a borrower and a bank,” Baumann,
100 A.D.3d at 817; see pages 13-14, supra. Since a borrower-banker relationship “is contractual
in nature and does not create a fiduciary relationship,” it does give rise to the fiduciary duty
required to sustain Claim Thirteen. Baumann, 100 A.D.3d at 817. Accordingly, plaintiff’s last
breach-of-fiduciary-duty claim is dismissed.
F. Plaintiff’s embezzlement, conversion, and identity theft claims fail too.
Plaintiff’s twenty-second, twenty-third, and twenty-fifth claims for embezzlement,
conversion, and identity theft are also dismissed.
1. Embezzlement
Claims Twenty-Two is dismissed for lack of a cause of action. Moreover, even if New
York still recognized a civil cause of action for embezzlement, plaintiff’s claim is still
insufficiently pleaded.
Under New York law, “criminal offenses . . . [that] are specifically defined in the Penal
Law[] may not be pleaded as separate causes of action in a civil action.” Montalvo v. J.P. Morgan
Chase & Co., 25 Misc. 3d 1244(A), 906 N.Y.S.2d 781 (N.Y. Sup. 2009) (citing Crandall v.
Bernard, Overton & Russell, 133 A.D.2d 878, 879 (N.Y. App. Div. 1987), appeal dismissed, 70
N.Y.2d 940 (N.Y. 1988)); Cohain v. Klimley, No. 08-CV-5047 PGG, 2011 WL 3896095, at *4
(S.D.N.Y. Aug. 31, 2011), aff’d sub nom. Sissel v. Rehwaldt, 519 F. App’x 13 (2d Cir. 2013).
Since New York criminalizes embezzlement, see N.Y. Penal Law § 155.05(2)(a), without
supplying a parallel civil cause of action, a plaintiff may not bring an embezzlement claim in a
civil suit. See Rachunow v. Jamieson, No. 20-CV-5627 (PKC), 2021 WL 1894206, at *2
(S.D.N.Y. May 11, 2021) (“There is no civil cause of action under New York law for
embezzlement.”) (collecting cases).
Moreover, as defendants argue, even if a civil cause of action for embezzlement still exists,
plaintiff has not adequately alleged it. See Defs.’ Mem. in Supp. 15-16; Pl.’s Mem. in Opp’n
(failing to respond to this point). At common law in New York, embezzlement is “a fraudulent
appropriation of another’s property by a person to whom it has been intrusted, or into whose hands
it has lawfully come.” Spiegel v. Levine, 161 A.D. 764, 768 (N.Y. App. Div. 1914) (Barrett, J.,
concurring); accord 35A N.Y. Jur. 2d Criminal Law: Principles and Offenses § 911 (the “essence”
of the crime of larceny by embezzlement, which codifies common-law embezzlement, is the
conversion of property that “has been entrusted to the embezzler to hold on behalf of the owner”).
Plaintiff does not allege that he “entrusted” Chase with money to “hold on [his] behalf.” 35A N.Y.
Jur. 2d Criminal Law: Principles and Offenses § 911. Rather, he alleges that Chase was
contractually bound to make Credit Life insurance payments to him in the event he could not pay
his monthly minimums, and that Chase failed to make those payments because of internal
embezzlement. Id. ¶ 205 (“Chase ran[ ]out of . . . funds and could not apply the benefits.”). This
claim sounds in contract, not in tort. Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d 382,
389 (N.Y. 1987) (“[A] simple breach of contract is not . . . considered a tort.”). Since plaintiff
alleges only a contractual duty, not one giving rise to embezzlement, Spiegel, 161 A.D. at 768, this
claim fails even with a cause of action.
Therefore, the embezzlement claim is dismissed.
2. Conversion
Claim Twenty-Three, for “[m]ismanagement and [m]isappropriation of funds,” is best read
as a conversion claim. See Am. Compl. ¶¶ 215, 217-18 (alleging that Chase “convert[ed]
[plaintiff’s] property,” id. ¶ 218, by “us[ing] all of plaintiff’s credit card insurance benefits to
inflate its [own] balance sheet,” id. ¶ 215, rather than “mak[ing] payments” on plaintiff’s defaulted
accounts, id. 217); Defs.’ Mem. in Supp. 16-17 (so construing); see Pl.’s Mem. in Opp’n (offering
no response to defendants’ characterization of this claim). Under New York law, “conversion is
the unauthorized assumption and exercise of the right of ownership over goods belonging to
another to the exclusion of the owner’s rights.” Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400,
403-04 (2d Cir. 2006) (quoting Vigilant Ins. Co. of Am. v. Hous. Auth., 87 N.Y.2d 36, 44 (N.Y.
1995)) (brackets omitted). To state a claim for conversion under New York law, a plaintiff must
plead (1) “a possessory right or interest in the property” and (2) “defendant’s dominion over the
property or interference with it, in derogation of plaintiff’s rights.” Frederique v. Cty. of Nassau,
168 F. Supp. 3d 455, 485 (E.D.N.Y. 2016) (quotations omitted).
“An action for conversion of money is insufficient as a matter of law unless it is alleged
that the money converted was in specific tangible funds of which claimant was the owner and
entitled to immediate possession.” GWG MCA Cap., Inc. v. Nulook Cap., LLC, No. 17-CV-1724
(SIL), 2020 WL 10508196, at *11 (E.D.N.Y. June 28, 2020) (quotations and brackets omitted).
Therefore, the money must be “specifically identifiable and segregated,” and there must exist “an
obligation to return or otherwise treat in a particular manner the specific fund in question.” In re
Columbia Tuition Refund Action, 523 F. Supp. 3d 414, 430-31 (S.D.N.Y. 2021) (quoting Mfrs.
Hanover Tr. Co. v. Chem. Bank, 160 A.D.2d 113, 117 (N.Y. App. Div. 1990)); accord Shak v.
Adelphi Univ., 549 F. Supp. 3d 267, 275 (E.D.N.Y. 2021).
Plaintiff’s conversion claim fails because the amended complaint does not allege that the
funds plaintiff claims Chase owed him as insurance benefits were “specifically identifiable and
segregated.” In re Columbia Tuition Refund Action, 523 F. Supp. 3d at 430-31. Instead, he alleges
that Chase mismanaged pooled insurance funds such that it was “unable to make [insurance]
payments” generally. Id. ¶ 217. Nor does plaintiff allege that he was “entitled to immediate
possession” of the insurance benefits, GWG MCA Cap., Inc., 2020 WL 10508196, at *11, since
the amended complaint suggests that these insurance benefits were to be paid only under certain
circumstances. Id. ¶ 47; id. Ex. A. Since plaintiff has not alleged either that he was the “owner
and entitled to immediate possession” of the allegedly converted benefits, GWG MCA Cap., Inc.,
2020 WL 10508196, at *11, or that these funds were “specifically identifiable and segregated,” In
re Columbia Tuition Refund Action, 523 F. Supp. 3d at 430-31, his conversion claim fails.
3. Identity Theft
Plaintiff’s twenty-fifth claim alleges that Chase committed identity theft by “open[ing] an
account with $9,779.28 in plaintiff’s name . . . without [his] authorization.” Id. ¶ 226. A letter
attached to the amended complaint indicates that Chase canceled $9,779.28 of plaintiff’s debt, not
that it assigned plaintiff new debt. Am. Compl. Ex. A (describing how Chase has “issued an IRS-
Form 1099-C . . . in the amount of $9,779.28 . . . . for the discharged debt”). Nevertheless, even
assuming that Chase did open an account in plaintiff’s name, he has not stated a claim under New
York’s identity-theft statute.
New York law does provide a cause of action for “theft of identity.” See N.Y. Gen. Bus.
Law § 380-s; Defs.’ Mem. in Supp. 17-18 (noting that plaintiff fails to a cause of action for his
identity-theft claim); Pl.’s Mem. in Opp’n (failing to respond to this point). However, this section,
part of New York’s Fair Credit Reporting Act, General Business Law § 380-a et seq., “authorizes
a civil action only if the identity theft ‘resulted in the transmission or provision to a consumer
reporting agency of information that would otherwise not have been transmitted or provided.’”
Galper v. JP Morgan Chase Bank, N.A., 802 F.3d 437, 441 (2d Cir. 2015) (quoting N.Y. Gen. Bus.
Law § 380-l) (emphasis added). “[T]o recover under GBL § 380-s,” a plaintiff must “allege that
[the] [d]efendants’ actions implicate credit reporting.” Ibid. (citing N.Y. Gen. Bus. Law § 380-l,
which limits Section 380-l liability to acts “result[ing] in the transmission or provision to a
consumer reporting agency of information that would otherwise not have been transmitted”); see
Prignoli v. Bruczynski, No. 20-CV-907 (MKB), 2021 WL 4443895, at *9 (E.D.N.Y. Sept. 28,
2021); Leser v. Karenkooper.com, 856 N.Y.S.2d 498, 498 (N.Y. Sup. Ct. 2008) (dismissing
Section 380-s claim lacking credit reporting where defendant allegedly used plaintiff’s name,
email address, logo, trade name, and photo); Guardsman Elevator Co. v. Apartment Inv. & Mgmt.
Co., No. 116447/06, 2010 WL 3393269 (N.Y. Sup. Ct. Aug. 20, 2010) (dismissing GBL § 380-s
claim because “[t]he basis for [the plaintiff’s] claim herein does not involve credit reporting in any
way”); Dardashtian v. Gitman, No. 17-CV-4327 (LLS), 2017 WL 6398718, at *8 (S.D.N.Y. Nov.
28, 2017) (dismissing GBL § 380-s claim because alleged conduct failed to “implicate[d] credit
reporting”). Since “[p]laintiff has failed to allege that [Chase’s] actions implicate credit reporting,
as is required to recover under GBL § 380-s,” the identity-theft claim must be dismissed. Prignoli,
2021 WL 4443895, at *9.
CONCLUSION
Remand, discovery, reconsideration as to jurisdictional discovery, and the motion to strike
are denied, and the amended complaint is dismissed in full.10 While a district court “should not
dismiss without granting leave to amend at least once when a liberal reading of the complaint gives
any indication that a valid claim might be stated,” Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir.
2000) (quotations omitted), plaintiff has already had an opportunity to amend, see Jan. 28, 2021
Order (Dkt. #23) (granting an opportunity to amend “in line with established Second Circuit
precedent”). Moreover, having considered all of plaintiff’s filings in this case, there is no
“indication that [plaintiff] could—or would—provide additional allegations that might lead to a
different result.” Gallop v. Cheney, 642 F.3d 364, 369 (2d Cir. 2011). Accordingly, the amended
complaint is dismissed with prejudice. The Clerk of Court is directed to enter judgment and close
the case.
SO ORDERED.
/s/ Rachel Kovner
RACHEL P. KOVNER
United States District Judge
Dated: March 31, 2022
Brooklyn, New York
10 Plaintiff has also filed a “motions to strike” a typographical error in his own briefing papers. See Mot. to Strike
(Dkt. #61). Since the underlying request for discovery has been denied, this motion is terminated as moot.