Gil v. JP Morgan Chase Bank, N.A.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

PATRICK NILO GIL,

MEMORANDUM & ORDER

Plaintiff, 23-CV-02268 (HG) (JAM)

v.

JP MORGAN CHASE BANK, N.A.,

Defendant.

HECTOR GONZALEZ, United States District Judge:

Plaintiff is representing himself pro se and has asserted a negligence claim against

Defendant, his bank, related to an allegedly unauthorized withdrawal from his account. ECF No.

1. Plaintiff has also applied for permission to file his complaint in forma pauperis without

paying the District’s filing fee. ECF Nos. 2, 7. As further set forth below, the Court denies

Plaintiff’s in forma pauperis application because he does not satisfy the indigence requirement

for in forma pauperis status, and the Court further dismisses Plaintiff’s complaint because the

facts alleged clearly demonstrate that Plaintiff’s claim does not satisfy the amount in controversy

necessary to invoke diversity jurisdiction. Since the Court is dismissing Plaintiff’s complaint for

lack of subject matter jurisdiction, the dismissal is without prejudice to Plaintiff asserting his

claim in another court that can exercise jurisdiction over it, such as a state court that may

exercise personal jurisdiction over Defendant.

BACKGROUND

Plaintiff is currently incarcerated but alleges that prior to his incarceration he had opened

a bank account at one of Defendant’s branches in Queens County. ECF No. 1 at 1. He alleges

that while he was detained in jail on the charges that resulted in his current incarceration,

Defendant permitted an unauthorized transaction in his account that led to the withdrawal of

approximately $2,500. Id. at 1, 8, 18. Plaintiff has attached to his complaint documents from

Defendant and the facility where he is incarcerated showing that the money was eventually

refunded to Plaintiff several years later after Defendant investigated and corroborated Plaintiff’s

assertion that he did not authorize the withdrawal. Id. at 8, 18, 21. However, Plaintiff alleges

that he was temporarily deprived of that money at a crucial point in time—when he needed to

hire a lawyer to defend him against the charges for which he was detained. Id. at 3–4.

Plaintiff argues that, since he was not able to hire a lawyer, he received multiple court-

appointed attorneys who were constitutionally ineffective, which caused him to incur multiple

“filing fees” to assert claims of ineffective assistance while defending himself in his criminal

case. ECF No. 1 at 3–4. Plaintiff also argues that his inability to retain an adequate lawyer led

to: (i) his incarceration; (ii) the corresponding “los[s] of [his] time, wages, [and] apartment”; and

(iii) significant pain, emotional distress, and medical bills that resulted from an assault against

him in prison. Id. at 5. Plaintiff demands as damages $5,000, plus an unspecified amount to

compensate him for these other “costs.” Id.

As mentioned above, Plaintiff has applied for in forma pauperis status. ECF No. 8. A

copy of his prison trust account, which was included as part of the application, shows that

Plaintiff had approximately $4,200 in his account as of the end of April 2023. Id. at 4. But

Plaintiff says that he has not earned monthly income since losing his prison job in November

2022. ECF No. 2 at 1. Since losing that job, Plaintiff says that he received $150 in December

2022 and $50 in January 2023 from unspecified sources, which the Court infers are gifts or loans

from family or friends. ECF No. 8 at 1.

LEGAL STANDARD

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).1 “A claim is plausible ‘when the

plaintiff pleads factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.’” Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d

Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Although all allegations

contained in a complaint are assumed to be true, this tenet is “inapplicable to legal conclusions.”

Iqbal, 556 U.S. at 678.

“In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6),

a district court may consider the facts alleged in the complaint, documents attached to the

complaint as exhibits, and documents incorporated by reference in the complaint,” along with

any document for which “the complaint relies heavily upon its terms and effect, thereby

rendering the document integral to the complaint.” United States ex rel. Foreman v. AECOM, 19

F.4th 85, 106 (2d Cir. 2021). Courts are also “permitted to consider matters of which judicial

notice may be taken.” Simmons v. Trans Express Inc., 16 F.4th 357, 360 (2d Cir. 2021).

A pro se complaint “must be held to less stringent standards than formal pleadings

drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007). The Court’s obligation “to

construe a pro se complaint liberally” continues to apply “[e]ven after Twombly” established the

plausibility standard for assessing pleadings. Newsome v. Bogan, 795 F. App’x 72, 72 (2d Cir.

2020). Typically, “a pro se complaint should not be dismissed without granting leave to amend

at least once” whenever the Court “cannot rule out any possibility, however unlikely it might be,

1 Unless noted, case law quotations in this order accept all alterations and omit internal

quotation marks, citations, and footnotes.

that an amended complaint would succeed in stating a claim.” Elder v. McCarthy, 967 F.3d 113,

132 (2d Cir. 2020).

When a pro se litigant requests in forma pauperis status pursuant to 28 U.S.C. § 1915, the

Court is required to “screen for and dismiss legally insufficient claims,” see Abbas v. Dixon, 480

F.3d 636, 639 (2d Cir. 2007), because that statute requires the Court to dismiss a complaint that

“fails to state a claim on which relief may be granted,” see 28 U.S.C. § 1915(e)(2)(B)(ii); see

also Alvarez v. Garland, 33 F.4th 626, 637 (2d Cir. 2022) (reiterating that such dismissal is

mandatory). But even if a pro se plaintiff has not received in forma pauperis status, “district

courts may dismiss a frivolous complaint sua sponte.” Fitzgerald v. First E. Seventh St. Tenants

Corp., 221 F.3d 362, 364 (2d Cir. 2000); see also Jean-Baptiste v. Westside Donut Huntington

Ventures LLC, No. 23-826-cv, 2023 WL 8015698, at *1 (2d Cir. Nov. 20, 2023) (affirming sua

sponte dismissal of pro se complaint without prior notice to plaintiff and reiterating that “[a]

district court has the inherent authority to dismiss a complaint sua sponte, even when the plaintiff

has paid the filing fee, when it is clear that the claims are frivolous”). Although the Second

Circuit disfavors dismissing a complaint sua sponte without giving advance notice to the

plaintiff, such dismissals are appropriate if “it is unmistakably clear that the court lacks

jurisdiction.” Catzin v. Thank You & Good Luck Corp., 899 F.3d 77, 82–83 (2d Cir. 2018).

DISCUSSION

“A litigant need not be ‘absolutely destitute’ to qualify for in forma pauperis status but

need demonstrate only that they ‘cannot because of their poverty pay or give security for the

costs and still be able to provide themselves and dependents with the necessities of life.’” Rosa

v. Doe, ___ F.4th ___, 2023 WL 8009400, at *3 (2d Cir. Nov. 20, 2023) (quoting Adkins v. E.I.

DuPont de Nemours & Co., 335 U.S. 331, 339 (1948)). When assessing an in forma pauperis

application filed by an incarcerated litigant, courts “may not simply presume that, because

incarceration provides food and lodging, the movant does not need any financial resources to

secure necessities.” Id. at *7. Instead, “prisoners may well have financial obligations that

warrant consideration in a Section 1915(a) evaluation: medical debts, court fines, student loans,

support orders, among other examples.” Id. at *6 (reversing denial of in forma pauperis status to

incarcerated litigant who had approximately $600 in his prison account—i.e., more than the

filing fee—but periodically sent money to support family members and had significant debts).

However, the Court still has an obligation to review in forma pauperis applications and

must dismiss a case if it determines that a plaintiff’s “allegation of poverty is untrue.” 28 U.S.C.

§ 1915(e)(2)(A). “The question of whether a plaintiff qualifies for [in forma pauperis] status is

within the discretion of the district court.” Chowdhury v. Sadovnik, No. 17-cv-2613, 2017 WL

4083157, at *1 (E.D.N.Y. Sept. 14, 2017); see also Rosa, 2023 WL 8009400, at *4 (reiterating

that the Second Circuit “review[s] the denial of a motion to proceed in forma pauperis for abuse

of discretion”).

Plaintiff does not qualify for in forma pauperis status. His inmate trust account records

show that he has had more than $4,200 available in his prison trust account for several

consecutive months—more than ten times the District’s filing fee—and significantly more than

the $600 that the incarcerated plaintiff had in Rosa. ECF No. 8 at 4–7; see Rosa, 2023 WL

8009400, at *3. Plaintiff is also differently situated from the prisoner in Rosa because his in

forma pauperis application identifies no debts and no financial support obligations to family and

friends. ECF No. 8 at 2. Plaintiff can, therefore, pay the District’s filing fee “and still be able to

provide himself and [his] dependents with the necessities of life.” Adkins, 335 U.S. at 339.

Having concluded that Plaintiff is ineligible for in forma pauperis status, the Court also

dismisses Plaintiff’s complaint sua sponte for lack of subject matter jurisdiction. Plaintiff’s

complaint asserts only a state law negligence claim; he does not assert any claims under federal

law. ECF No. 1. Since Plaintiff does not allege that any party is a citizen or subject of a foreign

country, he must show that: (i) the parties are “citizens of different States,” and (ii) “the matter

in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” 28 U.S.C.

§ 1332(a)(1). “[A] plaintiff invoking federal jurisdiction must demonstrate a reasonable

probability that the amount-in-controversy requirement is satisfied.” Pyskaty v. Wide World of

Cars, LLC, 856 F.3d 216, 223 (2d Cir. 2017). Even though the plaintiff bears this burden, courts

may not dismiss a complaint for failure to satisfy the amount-in-controversy requirement unless

they conclude with “a legal certainty that the plaintiff could not recover the amount alleged or

that the damages alleged were feigned to satisfy jurisdictional minimums.” Id.

Plaintiff cannot possibly show that the amount in controversy requirement is satisfied.

His claim is based on Defendant’s allegedly negligent act of permitting approximately $2,500 to

be withdrawn from his bank account—an amount that the materials attached to Plaintiff’s

complaint show that Defendant eventually refunded him. ECF No. 1. Plaintiff’s assertion that

he is entitled to damages beyond the amount of the withdrawal is based on his attempt to argue

that his temporary deprivation of these funds prevented him from hiring a competent lawyer to

defend against criminal charges filed against him, which triggered a series of events that caused

him other financial and physical harms. See id. at 3–4.

Although Plaintiff labels his claim as a negligence claim, the Court instead interprets it as

a breach of contract claim because if a plaintiff customer has an account agreement with a

defendant bank, any claim related to the bank’s handling of funds must be brought as a breach of

contract claim. See Serengeti Express, LLC v. JP Morgan Chase Bank, N.A., No. 19-cv-5487,

2020 WL 2216661, at *4–5 (S.D.N.Y. May 7, 2020) (dismissing negligence claim based on

unauthorized withdrawal because “[plaintiff] entered into a contract, the Deposit Account

Agreement, with [defendant]” and, “under New York law, such a relationship between a bank

and its depositor is deemed contractual”). The correspondence between Defendant and Plaintiff

that Plaintiff attached as exhibits to his complaint shows that his account with Defendant was

governed by both a Deposit Account Agreement and a Wire Transfer Agreement. ECF No. 1 at

8, 12. Plaintiff cannot recover the damages he seeks through a breach of contract claim because

“such indirect or consequential damages were not foreseeable” to Defendant as the ordinary

consequence of an unauthorized withdrawal, and those damages, therefore, do not count towards

the amount in controversy requirement. See Kruglov v. Copart of Conn., Inc., 771 F. App’x 117,

119 (2d Cir. 2019) (affirming sua sponte dismissal of pro se complaint and holding that breach

of contract claim based on defendant selling plaintiff an inoperable car could not include as

damages “a salary of $129,000 from a job interview opportunity that [plaintiff] lost because he

had no car to drive to the interview”).

The Court would reach the same conclusion even if Plaintiff’s claim were properly

brought as a negligence claim. Damages are the proximate cause of a defendant’s allegedly

negligent act only if they are “a normal or foreseeable consequence of the situation created by

the defendant’s negligence.” Hain v. Jamison, 68 N.E.3d 1233, 1237 (N.Y. 2016) (emphasis in

original). A plaintiff cannot prove proximate cause if his alleged damages occurred because of

intervening actions that were “extraordinary under the circumstances, not foreseeable in the

normal course of events, or independent of or far removed from the defendant’s conduct.” Id.

Although issues related to proximate cause and foreseeability “are generally questions for the

factfinder,” Plaintiff’s complaint presents an “instance[] in which proximate cause can be

determined as a matter of law.” Id. at 1238. Being arrested, convicted, and assaulted in prison

are simply not the foreseeable consequences of an unauthorized withdrawal from a person’s bank

account; they are extraordinary circumstances that occur because of actions committed by parties

other than the bank. Since Plaintiff cannot recover these damages, “it is unmistakably clear that

the court lacks jurisdiction” over his state law claim, regardless of whether it is characterized as a

breach of contract or negligence claim. Catzin, 899 F.3d at 82–83.

CONCLUSION

For the reasons set forth above, the Court DENIES Plaintiff’s motion seeking permission

to file his case in forma pauperis without prepaying the District’s filing fee. See ECF Nos. 2, 8.

The Court also dismisses Plaintiff’s complaint for lack of subject matter jurisdiction. Although

the Court is not permitting Plaintiff to file an amended complaint, this dismissal is without

prejudice because Plaintiff may attempt to assert his claim in another court that can exercise

jurisdiction over it, such as a state court that may exercise personal jurisdiction over Defendant.

The Clerk of Court is respectfully directed to enter judgment, to close this case, and to

mail Plaintiff a copy of the forthcoming judgment. The Court certifies pursuant to 28 U.S.C. §

1915(a)(3) that any appeal from this order would not be taken in good faith and, therefore, denies

Plaintiff in forma pauperis status for the purpose of an appeal. See Coppedge v. United States,

369 U.S. 438, 444–45 (1962). The Court’s staff is mailing Plaintiff a copy of this order, along

with copies of the unpublished decisions referenced in this order, in accordance with the Second

Circuit’s decision in Lebron v. Sanders, 557 F.3d 76 (2d Cir. 2009).

SO ORDERED.

/s/ Hector Gonzalez

HECTOR GONZALEZ

United States District Judge

Dated: Brooklyn, New York

December 11, 2023