Rojas v. Capital One

Filing 67

District Judge Julia E. Kobick: MEMORANDUM AND ORDER entered. For the foregoing reasons, the defendants' motion for judgment on the pleadings is GRANTED with respect to Counts II, III, IV, V, and VIII, and DENIED with respect to Counts I, VI, and VII. Counts II, III, IV, V, and VIII are hereby dismissed.SO ORDERED. (Kelly, Danielle)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
)
ELBA ROJAS and
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BOSTON MORTGAGE SERVICES, LLC, )
)
Plaintiffs,
)
)
v.
)
)
CAPITAL ONE FINANCIAL
)
CORPORATION and CAPITAL ONE
)
BANK, N.A.,
)
)
Defendants.
)
)

No. 1:23-cv-10844-JEK

MEMORANDUM AND ORDER ON
DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS
KOBICK, J.
Plaintiffs Elba Rojas and Boston Mortgage Services, LLC (“BMS”) bring this action
alleging that defendants Capital One Financial Corporation and Capital One Bank, N.A. withdrew
funds without authorization from a bank account that BMS held at Eastern Bank. Pending before
the Court is defendants’ motion for judgment on the pleadings with respect to all claims asserted
against them. For the reasons explained below, that motion will be granted in part and denied in
part. Rojas and BMS fail to allege facts sufficient to sustain their claims for negligence, breach of
fiduciary duty, breach of the implied covenant of good faith and fair dealing, breach of contract,
and a violation of the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq. Those claims will
therefore be dismissed. Rojas and BMS do, however, allege facts sufficient to state claims for
conversion, declaratory judgment, and a violation of M.G.L. c. 93A, § 11, and the defendants’
motion will be denied as to those claims.

BACKGROUND
The pertinent facts, as alleged in the amended complaint, are as follows. Boston Mortgage
Services, LLC is a mortgage broker and processor for residential mortgages. ECF 24, ¶ 5. Rojas is
the sole member and manager of BMS. Id. ¶ 6. At all relevant times, BMS held an account at
Eastern Bank that it used for payroll and operations. See id. ¶¶ 7, 9, 10. Rojas occasionally used
that account to pay her own personal expenses, including her Capital One credit card payment,
which was routinely taken directly from the account. Id. ¶ 7. Rojas considered such payments to
be draws on her profits of the LLC that she believed she was entitled to as BMS’s sole member.
Id.
Between October 2021 and July 3, 2022, several unauthorized transactions were completed
involving BMS’s account at Eastern Bank. Id. ¶ 10. Specifically, Capital One allegedly made
$256,246.30 in “withdrawals” from the account. Id. ¶¶ 11, 18, 22. Such withdrawals were not
authorized by BMS or Rojas, but because Rojas routinely paid her Capital One credit card bill
from the account, she did not notice the unauthorized transactions for several months. Id. ¶¶ 10,
14, 22. Upon discovering the unauthorized transactions, Rojas contacted Capital One to inquire
about the transactions, but Capital One was “cagey” in its responses. Id. ¶ 20. At one point, Capital
One threatened to initiate fraud charges against Rojas. Id. ¶ 23. At another point, Capital One told
Rojas that it would reimburse the plaintiffs for the withdrawn funds. Id. Ultimately, the plaintiffs
concluded that the withdrawn funds were used to pay unknown Capital One customer accounts—
accounts that did not belong to BMS, Rojas, or any third party authorized to receive payments. Id.
¶¶ 11-12, 17-18, 20. Capital One never explained to BMS or Rojas why the funds were withdrawn
or identified the Capital One customer accounts that it credited. Id. ¶ 20.

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BMS and Rojas disputed the unauthorized transactions with Eastern Bank, but were able
to recover from Eastern Bank only $125,000, the maximum fraud protection available. Id. ¶ 21.
Accordingly, BMS and Rojas have lost approximately $131,246.30 as a result of the unauthorized
transactions. Id. ¶ 22.
Rojas, appearing pro se, initiated this action in Suffolk County Superior Court in March
2023. ECF 1, ¶ 1. Defendant Capital One, N.A. then removed the action to this Court. Id. Rojas
thereafter filed, with the assistance of counsel, an amended complaint in July 2023, which added
BMS as a plaintiff and named Capital One Financial Corporation and Capital One Bank, N.A.
(collectively “Capital One”) as defendants. ECF 24, at 1. In the amended complaint, Rojas and
BMS assert claims for declaratory judgment (Count I); negligence (Count II); breach of fiduciary
duty (Count III); breach of the covenant of good faith and fair dealing (Count IV); breach of
contract (Count V); conversion (Count VI); a violation of M.G.L. c. 93A, § 11 (Count VII); and a
violation of the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq. (Count VIII). Id. ¶¶ 27-77.
Capital One filed a motion for judgment on the pleadings, seeking judgment in its favor as to all
of the claims and dismissal of the amended complaint in its entirety.
STANDARD OF REVIEW
“After the pleadings are closed—but early enough not to delay trial—a party may move
for judgment on the pleadings.” Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings
under Rule 12(c) “is treated much like a Rule 12(b)(6) motion to dismiss.” Pérez-Acevedo v.
Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (citing Curran v. Cousins, 509 F.3d 36, 43-44 (1st
Cir. 2007)). Accordingly, “‘the court must view the facts contained in the pleadings in the light
most favorable to the nonmovant and draw all reasonable inferences therefrom.’” Id. (quoting R.G.
Fin. Corp. v. Vergara-Nuñez, 446 F.3d 178, 182 (1st Cir. 2006)). Precisely because a Rule 12(c)

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motion seeks “an extremely early assessment of the merits of the case, the trial court must accept
all of the nonmovant’s well-pleaded factual averments as true.” Rivera-Gomez v. de Castro, 843
F.2d 631, 631 (1st Cir. 1988). “[T]o survive a 12(b)(6) motion (and, by extension, a Rule 12(c)
motion) a complaint must contain factual allegations that ‘raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are true.’” PérezAcevedo, 520 F.3d at 29 (quoting Bell Atl. v. Twombly, 550 U.S. 544, 555-56 (2007)).
DISCUSSION
I.

Rojas’s Standing.
Capital One first challenges Rojas’s standing to assert her claims. In Capital One’s view,

because the Eastern Bank account from which the defendants allegedly withdrew the relevant
funds belongs to BMS, not to Rojas, Rojas has not alleged that she suffered any personal injury in
fact to sustain her claims.
“‘Article III of the Constitution confines the federal courts to deciding actual cases and
controversies.’” Diva’s Inc. v. City of Bangor, 411 F.3d 30, 42 (1st Cir. 2005) (quoting Cotter v.
City of Boston, 323 F.3d 160, 166 (1st Cir. 2003)). “An actual case or controversy exists when the
party seeking to invoke the court’s jurisdiction . . . has a ‘personal stake in the outcome’ of the
claim asserted.” Pagán v. Calderón, 448 F.3d 16, 27 (1st Cir. 2006) (quoting Baker v. Carr, 369
U.S. 186, 204 (1962)). “To satisfy the personal stake requirement, the plaintiff must . . . adequately
allege that [she] ‘suffered or is threatened by [an] injury in fact to a cognizable interest.’” Id.
(quoting Save our Heritage, Inc. v. FAA, 269 F.3d 49, 55 (1st Cir. 2001)). An injury in fact “‘must
be both ‘concrete and particularized and actual or imminent, not conjectural or hypothetical.’”
Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016) (quoting Van Wagner Bos.,
LLC v. Davey, 770 F.3d 33, 37 (1st Cir. 2014)). The plaintiff must also adequately allege

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traceability—i.e., that “the asserted injury is causally connected to the challenged conduct”—and
that a favorable outcome of the litigation is likely to redress the injury. Pagán, 448 F.3d at 27.
Shareholders of a corporation do not have Article III standing to enforce the rights of the
corporation or redress the corporation’s injuries in their individual capacities, even when the
corporation has only one shareholder. Diva’s Inc., 411 F.3d at 42. Likewise, “a member of an LLC
cannot bring an action in his own name to enforce the rights or redress the injuries of the LLC.”
Laverty v. Massad, 661 F. Supp. 2d 55, 62 (D. Mass. 2009) (citing First Taunton Fin. Corp. v.
Arlington Land Acquisition-99, LLC, 20 Mass. L. Rep. 556 (Feb. 27, 2006)); see also Dickey v.
Inspectional Servs. Dept. of Boston, 482 Mass. 1003, 1004 (2019) (adopting this principle from
Laverty). “Massachusetts limited liability companies, like Massachusetts business corporations,
are legal entities with the rights to sue and be sued separate and apart from their shareholders and
members.” Dickey, 482 Mass. at 1004. Accordingly, the ownership interest of a member of an
LLC “does not give [the member] standing to raise the claims of the [LLC] . . . in his individual
capacity,” because “[t]o hold otherwise would be to vitiate the principl[e] that corporations and
limited liability companies are entities that exist separate and distinct from the individuals who
own them.” Id.
Thus, where a member of an LLC alleges that she “has suffered an injury in a personal
capacity,” she “has standing to sue.” Laverty, 661 F. Supp. 2d at 61 (emphasis added). But where
the member is “seeking to assert claims on behalf of [the LLC], or otherwise for injuries to others
. . . [she] does not have standing to assert those claims.” Id. at 62 (offering, as an example, that a
member would not have standing to assert claims for breach of contract where the member was
not a party to the agreement). Where it is “not clear whether [the plaintiff] asserts claims on behalf
of [her] corporate entities, or by [herself] individually,” and where “these allegations may

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overlap,” the Court may “consider the claims only to the extent that the injuries affected [the
plaintiff] individually.” Quaglieri v. Steeves, No. 11-cv-10377-DJC, 2013 WL 1222220, at *3 (D.
Mass. Mar. 26, 2023) (citing Laverty, 661 F. Supp. 2d at 61).
Applying these principles here, Rojas lacks standing to assert claims on behalf of BMS in
her individual capacity. But because Rojas alleges that she routinely treated the BMS account as
her personal bank account and was entitled to draw on that account for her own distributions, it is
unclear from the face of the amended complaint whether Rojas’s alleged losses are personal losses
or strictly losses of BMS. Accordingly, Rojas’s has standing to pursue her claims only insofar as
she alleges that she has been injured individually. See id.
II.

Negligence.
The Court turns next to the plaintiffs’ negligence claim. Capital One 1 contends that the

claim is barred as a matter of law by the economic loss doctrine. Under Massachusetts law,
“‘purely economic losses are unrecoverable in tort and strict liability actions in the absence of
personal injury or property damage.’” In re TJX Cos. Retail Sec. Breach Litigation, 564 F.3d 489,
498 (1st Cir. 2009) (quoting Aldrich v. ADD Inc., 437 Mass. 213, 222 (2002)). This “doctrine
cabins what could otherwise be open-ended negligence liability to anyone affected by a negligent
act.” Id. Capital One contends that Rojas and BMS’s sole alleged losses—namely, the funds

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The amended complaint attributes all factual allegations contained therein to “Capital One”
but does not specify which allegations should be attributed to Capital One Bank, N.A. versus
Capital One Financial Corporation. The defendants argue that Capital One Financial Corporation
is an improper party as to all claims, because Rojas and BMS fail to identify any relationship with
that entity or tie any of its actions to the wrongdoing in the amended complaint. Rojas and BMS
respond that although the amended complaint refers to “Capital One” in general terms, such
allegations are collectively set forth against both Capital One Financial Corporation and Capital
One Bank, N.A. In light of the Court’s obligation to draw all inferences in favor of Rojas and
BMS, the Court construes the allegations against “Capital One” as allegations against both
defendants, and will consider whether the amended complaint alleges facts sufficient to state
claims against both entities on a claim-by-claim basis. See Pérez-Acevedo, 520 F.3d at 29.
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withdrawn from BMS’s bank account—are purely economic, such that Rojas and BMS cannot
recover on a negligence theory.
Rojas and BMS do not dispute that their damages are purely economic but, relying on
Portier v. NEO Technology Solutions, argue that their claim nonetheless survives. See No. 17-cv30111-TSH, 2019 WL 7946103, at *1 (D. Mass. Dec. 31, 2019), report and recommendation
adopted, 2020 WL 877035 (D. Mass. Jan. 30, 2020). Portier involved a negligence claim arising
out of an employer data breach that resulted in the disclosure of employees’ sensitive personal
information, including Social Security numbers, names, addresses, and compensation. Id. In
assessing whether the economic loss doctrine barred the plaintiffs’ claim, the Court determined
that, under Massachusetts law, 2 employers likely have an independent common law duty to their
employees to safeguard sensitive personal and financial information—a breach of which could
support a negligence claim, even where the plaintiff suffers purely pecuniary damages. Id. at *2021. The employer’s independent common law duty, Portier reasoned, derives from a “special
relationship” between the employer and the employee with respect to the protection of sensitive
personal information. Id. at *21-22.
Rojas and BMS argue that this case is similar to Portier because, in their view, Capital One
had a duty to safeguard their financial information and breached that duty through the alleged
unauthorized withdrawals. The plaintiffs’ reliance on Portier is misplaced. Although the amended
complaint asserts that Capital One breached a duty to “safeguar[d] personal and private
information . . . by accepting withdrawals from Plaintiffs’ accounts seemingly for other

2

The Supreme Judicial Court has not applied the economic loss doctrine to a negligence claim
arising out of an employer data breach. Portier predicted how that Court would rule, based on a
Pennsylvania Supreme Court decision applying Pennsylvania’s economic loss doctrine, which,
Portier determined, was analogous to that of Massachusetts. 2019 WL 7946103, at *18-19.
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customers,” ECF 24, ¶¶ 36-38, they do not allege, as in Portier, that their personal and private
information was disclosed to unauthorized third parties through a data breach. See 2019 WL
7946103, at *18-20; see also Dittman v. UPMC, 649 Pa. 496, 499-501 (2018). Rojas and BMS
have not identified—and the Court is not aware of—any Massachusetts authority indicating that a
credit card provider has a “special relationship” with its customers that would support an
independent common law duty to safeguard data. See Eggiman v. Bank of Am., N.A., No. 22-cv10298-ADB, 2023 WL 2647071, at *4 (D. Mass. March 27, 2023) (declining to apply the Portier
exception to the economic loss doctrine where no case law supported the notion that a special
relationship exists between a bank and its customers); Zoll Med. Corp. v. Barracuda Networks,
Inc., 565 F. Supp. 3d 101, 106-07 (D. Mass. 2021) (same as to the relationship between two
businesses). Accordingly, the Court declines to apply the potential exception to the economic loss
doctrine articulated in Portier and concludes that Rojas and BMS’s negligence claim is, as a matter
of law, foreclosed by the doctrine.
III.

Breach of Fiduciary Duty.
Capital One argues that Rojas and BMS’s breach of fiduciary duty claim must fail because

it did not owe them a fiduciary duty. “To establish a claim of fiduciary duty under Massachusetts
law, ‘there must be a [fiduciary] duty owed to the plaintiff by the defendant and the injury to the
plaintiff caused by the [defendant’s] breach thereof.” UBS Fin. Servs. Inc. v. Aliberti, 483 Mass.
396, 405-06 (2019) (quoting Est. of Moulton v. Puopolo, 467 Mass. 478, 492 (2014)). “Fiduciary
duties may arise in two ways: (a) as a matter of law, where parties to the subject relationship are
cast in archetypal roles, such as trustee and beneficiary, guardian and ward, attorney and client; or
(b) as determined by the facts established upon evidence indicating that one person is in fact
dependent on another’s judgment in business affairs or property matters.” Id. (citations and

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quotation marks omitted). “The relationship of debtor and creditor, without more, does not
establish a fiduciary relationship.” Blais v. Warren Five Cents Sav. Bank, No. 9128, 1993 WL
488429, at *2 (Mass. App. Div. Nov. 22, 1993). For a fiduciary duty to arise by the facts alleged
(and not as a matter of law), “‘faith, confidence, and trust’ [must be] reposed by one party ‘in
another’s judgment and advice.’” UBS Fin. Servs. Inc., 483 Mass. at 408 (quoting Doe v. Harbor
Sch., Inc., 446 Mass. 245, 252 (2006)).
The relationship between Capital One and Rojas and BMS, as alleged, was that of banking
institution or a credit card company and its customer. ECF 24, ¶¶ 42-43, 45. Rojas and BMS do
not argue, and the Court is not aware of authority indicating, that a fiduciary duty exists a matter
of law in such a relationship. See UBS Fin. Servs. Inc., 483 Mass. at 405-06. The Court therefore
considers whether the particular facts alleged in this case suggest that Capital One owed the
plaintiffs a fiduciary duty that required Capital One to exercise reasonable care when withdrawing
funds from BMS’s account at Eastern Bank and to inform Rojas and BMS of questionable activity.
Citing no authority in support, Rojas and BMS argue that the credit card agreement between the
parties, pursuant to which Rojas and BMS entrusted Capital One with their financial data, created
a fiduciary duty on the part of Capital One to safeguard that data. The Court disagrees. As an initial
matter, the amended complaint does not attach a copy of the agreement or identify the provision
of the agreement that, in the plaintiffs’ view, gives rise to a fiduciary duty. And although Rojas
and BMS may have trusted Capital One with their financial data, the amended complaint contains
no facts to suggest that Rojas or BMS was “dependent on [Capital One’s] judgment in business
affairs or property matters,” or that “faith, confidence and trust” were reposed in Capital One’s
“judgment and advice.” Id. at 405-06, 408. Thus, the allegations do not plausibly establish that

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Capital One owed the plaintiffs a fiduciary duty, and Capital One is entitled to judgment on the
pleadings on the breach of fiduciary duty claim.
IV.

Breach of Contract and Breach of the Covenant of Good Faith and Fair Dealing.
Capital One next argues that the plaintiffs’ breach of contract claim fails because the

amended complaint does not identify a single provision in the credit card agreement, or any other
agreement between the parties, that Capital One allegedly violated. And, Capital One contends,
without a viable breach of contract claim, the plaintiffs’ claim for breach of the covenant of good
faith and fair dealing must also fail because the covenant is a creature of the rights and obligations
provided by contract.
Under Massachusetts law, “[t]he elements of a breach of contract claim are ‘that there was
an agreement between the parties; the agreement was supported by consideration; the plaintiff was
ready, willing and able to perform his or her part of the contract; and the defendant committed a
breach of the contract; and the plaintiff suffered harm as a result.’” Huang v. RE/MAX Leading
Edge, 101 Mass. App. Ct. 150, 153-54 (2022) (quoting Bulwer v. Mount Auburn Hosp., 473 Mass.
672, 690 (2016)). “The covenant of good faith and fair dealing is implied in every contract, . . .
including contracts between sophisticated business people.” Robert & Ardis James Found. v.
Meyers, 474 Mass. 181, 189 (2016) (citations and quotation marks omitted). The covenant
“provides ‘that neither party shall do anything that will have the effect of destroying or injuring
the right of the other party to receive the fruits of the contract.’” Id. (quoting Anthony’s Pier Four,
Inc. v. HBC Assocs., 411 Mass. 451, 471-72 (1991)). “‘[T]he scope of the covenant is only as
broad as the contract that governs the particular relationship.’” Id. (quoting Ayash v. Dana-Farber
Cancer Inst., 443 Mass. 367, 385 (2005)). The covenant “may not be ‘invoked to create rights and

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duties not otherwise provided for in the existing contractual relationship.’” Ayash, 443 Mass. at
385 (quoting Uno Rests., Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004)).
Rojas and BMS allege that their credit card agreement with Capital One was a binding and
valid contract that Capital One breached by withdrawing funds from BMS’s account at Eastern
Bank without their authorization. ECF 24, ¶¶ 56-57. They further allege that these withdrawals,
and Capital One’s bad faith refusal to return the funds, violated the covenant of good faith and fair
dealing. Id. ¶¶ 49-54. Yet the amended complaint does not identify the terms of the credit card
agreement that Capital One purportedly violated by withdrawing the funds, nor, as discussed, does
it attach the parties’ contract as an exhibit. Without concrete allegations regarding the substance
of the parties’ agreement or what terms of the agreement Capital One breached, the plaintiffs’
breach of contract claim cannot survive. See Britton v. AthenaHealth, Inc., No. 13-P-1544, 2015
WL 4726872, at *2 (Mass. App. Ct. Aug. 11, 2015) (Rule 1:28) (concluding that plaintiffs failed
to state claim for breach of contract, in part, because they did not allege facts demonstrating “any
contract right was breached”). And since a claim for breach of the implied covenant of good faith
and fair dealing is limited to the rights set forth in a contract, the breach of the implied covenant
of good faith and fair dealing claim fails too. See Mass. Eye & Ear Infirmary v. QLT
Phototherapeutics, Inc., 412 F.3d 215, 230 (1st Cir. 2005).
V.

Conversion.
Capital One contends that Rojas and BMS’s conversion claim fails because the amended

complaint does not allege facts to plausibly establish that it exercised unauthorized dominion over
the withdrawn funds. Emphasizing the allegation that “all of the unauthorized transactions went to
pay accounts of customers of Capital One,” ECF 24, ¶ 12, Capital One maintains that while the

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amended complaint alleges that the recipient customers exercised dominion and control over the
funds, it does not allege that Capital One exercised dominion and control.
Under Massachusetts law, “[t]he tort of conversion requires an intentional or wrongful
exercise of dominion or control over personal property of another by one with no right to
immediate possession.” Kelley v. LaForce, 288 F.3d 1, 11-12 (1st Cir. 2002) (citing Third Nat’l
Bank v. Cont’l Ins. Co., 388 Mass. 380, 383 (Mass. 1983); Restatement (Second) of Torts § 222A
(1965)); see In re Hilson, 448 Mass. 603, 611 (2007) (“The elements of conversion may be
established by a showing that one person exercised dominion over the personal property of another,
without right, and thereby deprived the rightful owner of its use and enjoyment.”). A claim of
“[c]onversion may lie if an individual wrongly exercises dominion or control over the money of
another.” Weiler v. PortfolioScope, Inc., 469 Mass. 75, 87 (2014). And those authorized to access
another’s money for a limited and defined purpose may exercise wrongful dominion or control
over that money if they exceed the scope of their limited authorization. See Cahaly v. Benistar
Prop. Exch. Tr. Co., 68 Mass. App. Ct. 668, 679-80 (2007) (a defendant bank that was authorized
to keep plaintiffs’ funds in an escrow account exercised wrongful dominion or control over the
funds when it exceeded its limited authority by using the funds for other unauthorized purposes).
The allegations in the amended complaint, construed in the light most favorable to Rojas
and BMS, plausibly establish that Capital One exercised wrongful dominion or control over their
funds. The amended complaint alleges that Capital One was authorized to access the BMS account
at Eastern Bank to withdraw payments for Rojas’s and BMS’s Capital One credit card accounts.
ECF 24, ¶ 61. But, as alleged, Capital One exceeded the scope of its authority when it withdrew
funds from BMS’s account to credit the accounts of unidentified third party customers of Capital
One. See id. ¶¶ 15, 17-20, 61. In one paragraph, the amended complaint alleges that the funds

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ultimately were under the dominion or control of the recipient customers, see id. ¶ 12, but in other
paragraphs, it alleges that the funds were under Capital One’s control, not the control of Capital
One’s customers, see id. ¶¶ 11, 19, 62. In addition, the amended complaint alleges that Capital
One was the principal actor that withdrew the funds without authorization and did not return the
funds to Rojas or BMS. See id. ¶¶ 62-64. At this stage in the proceedings, these allegations are
sufficient to plead wrongful dominion or control, and the conversion claim therefore survives. See
Cahaly, 68 Mass. App. Ct at 679-80.
VI.

Chapter 93A.
Capital One seeks judgment on the pleadings on the plaintiffs’ claim under M.G.L. c. 93A,

§ 11 on several bases. First, Capital One argues that Chapter 93A requires plaintiffs to send a
demand letter to defendants thirty days prior to filing an action, and Rojas and BMS failed to take
that necessary step before bringing this lawsuit. This argument misstates the plaintiffs’ obligation
under M.G.L. c. 93A, § 11. Chapter 93A creates two mutually exclusive private rights of action:
section 9 authorizes consumers to bring an action for unfair or deceptive acts or practices, and
section 11 creates the same right for “[a]ny person who engages in the conduct of any trade or
commerce.” M.G.L. c. 93A, §§ 9, 11; see Cont’l Ins. Co. v. Bahnan, 216 F.3d 150, 156 (1st Cir.
2000) (“[S]ection 11 affords no relief to consumers and, conversely, section 9 affords no relief to
persons engaged in trade or commerce.”). Although section 9 requires consumer plaintiffs to issue
written demands to defendants at least thirty days before filing a claim, see M.G.L. c. 93A, § 9(3),
section 11 has no written demand requirement, id. § 11; see Damon v. Sun Co., Inc., 87 F.3d 1467,
1486 (1st Cir. 1996). Since Rojas and BMS brought their Chapter 93A claim under section 11—
and Capital One does not dispute that they properly rely on section 11—the plaintiffs were not
required to send Capital One a demand letter before filing this case.

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In the alternative, Capital One argues, Rojas and BMS fail to allege sufficient facts to state
a plausible claim under Chapter 93A. Chapter 93A prohibits “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade or commerce.” M.G.L. c. 93A,
§ 2(a). To state a claim under section 11, a plaintiff must allege facts sufficient to establish “(1) that
the defendant engaged in an unfair method of competition or committed an unfair or deceptive act
or practice, as defined by M.G.L. c. 93A, § 2, or the regulations promulgated thereunder; (2) a loss
of money or property suffered as a result; and (3) a causal connection between the loss suffered
and the defendant’s unfair or deceptive method, act, or practice.” Auto Flat Car Crushers, Inc. v.
Hanover Ins. Co., 469 Mass. 813, 820 (2014).
Focusing on only the first element, Capital One contends the amended complaint does not
allege facts showing that its conduct was unfair or deceptive. Although Chapter 93A does not
define what constitutes an unfair or deceptive act or practice, Massachusetts courts have held that
“an act or practice is unfair if it falls ‘within at least the penumbra of some common-law, statutory,
or other established concept of unfairness’; ‘is immoral, unethical, oppressive, or unscrupulous’;
and ‘causes substantial injury to consumers.’” Walsh v. TelTech Sys., Inc., 821 F.3d 155, 160 (1st
Cir. 2016) (quoting PMP Assocs. v. Globe Newspaper Co., 366 Mass. 593, 596 (1975)); see Exxon
Mobil Corp. v. Att’y Gen., 479 Mass. 312, 316 (2018). An act or practice is deceptive “‘if it
possesses a tendency to deceive’ and ‘if it could reasonably be found to have caused a person to
act differently from the way he [or she] otherwise would have acted.’” Walsh, 821 F.3d at 160
(quoting Aspinall v. Philip Morris Cos., Inc., 442 Mass. 381, 394 (2004)). “To be held unfair or
deceptive under [Chapter] 93A, practices involving even worldly-wise business people do not have
to attain the antiheroic proportions of immoral, unethical, oppressive, or unscrupulous conduct,

14

but need only be within any recognized or established common law or statutory concept of
unfairness.” VMark Software, Inc. v. EMC Corp., 37 Mass. App. Ct. 610, 620 (1994).
With all inferences drawn in favor of Rojas and BMS, the amended complaint plausibly
alleges that Capital One committed an unfair or deceptive act. See Auto Flat Car Crushers, Inc.,
469 Mass. at 820. It alleges that Capital One withdrew $256,246.30 from the BMS account at
Eastern Bank without authorization from Rojas or BMS, ECF 24, ¶ 18; that such withdrawals were
“fraudulent” and not credited toward Rojas’s or BMS’s Capital One credit card accounts, id. ¶ 17;
that Capital One did not inform the plaintiffs why the withdrawals were made or identify the
customer accounts that were credited with the withdrawn funds, id. ¶ 20; and that Capital One
“threatened [Rojas] with having fraud charges instituted against her,” and insinuated that “a former
employee or somebody close to [Rojas]” was the one “who committed the fraud,” id. ¶ 23. Capital
One makes no persuasive argument as to why such allegations, accepted as true, do not state a
claim that Capital One’s conduct fell “‘within at least the penumbra of some common-law,
statutory, or other established concept of unfairness,’” or was “‘immoral, unethical, oppressive, or
unscrupulous.’” Walsh, 821 F.3d at 160 (quoting PMP Assocs., 366 Mass. at 596).
Alternatively, Capital One contends that Rojas and BMS have alleged a mere “private
dispute” to which Chapter 93A does not apply. ECF 49, at 13. The Massachusetts Legislature
enacted Chapter 93A to “reduce the general danger to the public arising from the potential for . . .
unscrupulous behavior in the marketplace” through “the imposition of penalties for specific unfair
or deceptive acts or practices between particular individuals.” Manning v. Zuckerman, 388 Mass.
8, 14 (1983); see Allstate Ins. Co. v. Fougere, 79 F.4th 172, 186 (1st Cir. 2023). Consistent with
that intent, Chapter 93A applies to disputes that occur “in the ordinary conduct of any trade or
commerce,” but does not reach disputes that are “private in nature.” Manning, 388 Mass. at 14

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(quotation marks omitted); see M.G.L. c. 93A, § 2(a) (“[U]nfair or deceptive acts or practices in
the conduct of any trade or commerce are hereby declared unlawful.” (emphasis added)). The
dispute alleged here, however, does not arise from a “strictly private transactio[n],” such as
between business partners or between an employer and employee, that may be excluded from
Chapter 93A’s coverage. Allstate Ins. Co., 79 F.4th at 186. Rather, it arises from alleged
transactions between a credit card company and its customers in the ordinary course of trade or
commerce. Chapter 93A therefore applies to the transactions alleged in the amended complaint,
and Capital One is not entitled to judgment on the plaintiffs’ claim.
VII.

Electronic Fund Transfer Act.
Capital One next argues that the plaintiffs’ claim under the Electronic Fund Transfer Act

(“EFTA”), 15 U.S.C. § 1693 et seq., fails because the relevant account at Eastern Bank from which
the funds were allegedly withdrawn did not belong to a “consumer,” as required by the statute and
its corresponding regulations. Because BMS—the owner of the account—is an LLC and not a
natural person, Capital One contends, Rojas and BMS cannot bring a claim under the EFTA.
Congress enacted the EFTA “to provide a basic framework establishing the rights,
liabilities, and responsibilities of participants in electronic fund and remittance transfer systems,”
with the “primary objective” of protecting “individual consumer rights.” 15 U.S.C. § 1693(b). The
statute creates a private right of action against a bank that “fails to comply” with its substantive
provisions, “with respect to any consumer.” Id. § 1693m(a), (g) (emphasis added); see Widjaja v.
JPMorgan Chase Bank, N.A., 21 F.4th 579, 584 (9th Cir. 2021). 3 As defined in the statute, “the

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“Regulation E implements the [EFTA],” Bettencourt v. Jeanne D’Arc Credit Union, 370
F. Supp. 3d 258, 265 (D. Mass. 2019), and provides that the EFTA “applies to any electronic fund
transfer that authorizes a financial institution to debit or credit a consumer’s account,” 12 C.F.R.
§ 205.3(a) (emphasis added).
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term ‘consumer’ means a natural person.” 15 U.S.C. § 1693a(6). Consequently, “[c]orporations or
other business entities are not ‘consumers’ for purposes of the EFTA.” Ironforge.com v. Paychex,
Inc., 747 F. Supp. 2d 384, 402 (W.D.N.Y. 2010) (citing Kashanchi v. Texas Com. Med. Bank,
N.A., 703 F.2d 936, 939-42 (5th Cir. 1983)); see also Corposistemas, C.A. v. Regions Bank, 1:23cv-23540-KMM, 2024 WL 2783124, at *2-*3 (S.D. Fla. Feb. 5, 2024) (corporate plaintiff was not
a consumer under the EFTA and was accordingly foreclosed from bringing an EFTA claim). The
statute further defines the term “account” as “a demand deposit, savings deposit, or other asset
account . . . established primarily for personal, family, or household purposes.” 15 U.S.C.
§ 1693a(2) (emphasis added). Accordingly, “‘the EFTA does not apply to accounts that are used
primarily or solely for commercial purposes.’” Yuille v. Uphold HQ Inc., 686 F. Supp. 3d 323, 338
(S.D.N.Y. 2023) (citation omitted).
The amended complaint alleges that BMS held the account at Eastern Bank from which
Capital One withdrew the relevant funds and that BMS used the account for payroll and operations.
ECF 24, ¶¶ 7, 9-10. Because BMS is an LLC, it is not a “consumer” for purposes of the EFTA and
is therefore foreclosed from bringing a claim under the statute. See 15 U.S.C. § 1693a(6); 12 C.F.R.
§ 205.3(a); Ironforge.com, 747 F. Supp. 2d at 402. Furthermore, although Rojas—a natural person
and therefore, “consumer”—routinely used the BMS account to pay personal expenses, ECF 24,
¶ 7, the amended complaint contains no allegations indicating that Rojas herself owned the account
or that the account was “established primarily for personal, family, or household purposes,” 15
U.S.C. § 1693a(2). Thus, the EFTA and the regulations thereunder do not apply to BMS’s Eastern
Bank account, and both plaintiffs are foreclosed from bringing a claim under the EFTA. See id.;
Yuille, 686 F. Supp. 3d at 338.

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VIII. Declaratory Judgment.
Finally, the Court turns to the plaintiffs’ declaratory judgment claim. ECF 24, ¶¶ 31-32.
Capital One argues that the request for declaratory relief fails because Eastern Bank—the bank
where BMS held its relevant account—is a necessary party that is not named as a defendant. If
Eastern Bank is indeed a necessary party, however, the proper remedy would be joinder, not
dismissal, so long as joinder of Eastern Bank is feasible. See Fed. R. Civ. P. 19; Duggan v.
Martorello, 596 F. Supp. 3d 195, 203 (D. Mass. 2022). Capital One makes no argument that joinder
of Eastern Bank is not feasible, but the Court nevertheless considers whether joinder of Eastern
Bank is necessary to sustain the claim for declaratory relief.
“Generally, all interested parties should be joined in a declaratory judgment action
whenever possible in keeping with the purpose of the Declaratory Judgment Act to fully and finally
adjudicate the controversy at issue.” AIG Prop. Cas. Co. v. Green, 172 F. Supp. 3d 468, 476
(D. Mass. 2016) (citations and quotation marks omitted). Federal Rule of Civil Procedure 19,
which governs joinder of necessary parties, provides that “[a] person who is subject to service of
process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined
as a party if: (A) in that person’s absence, the court cannot afford complete relief among existing
parties; or (B) that person claims an interest relating to the subject of the action and is so situated
that disposing of the action in the person’s absence may: (i) as a practical matter impair or impede
the person’s ability to protect the interest; or (ii) leave an existing party subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent obligations because of the interest.” Fed.
R. Civ. P. 19(a)(1).
Rule 19(a)(1) does not require the joinder of Eastern Bank. The plaintiffs’ two surviving
substantive claims are for conversion and a violation of M.G.L. c. 93A, § 11. Capital One makes

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no argument as why Eastern Bank is a necessary party if, as alleged, Capital One intentionally or
wrongfully exercised dominion or control over the plaintiffs’ funds. Likewise, Capital One makes
no argument as why Eastern Bank is a necessary party if, as alleged, Capital One’s unfair or
deceptive conduct resulted in the wrongful withdrawal of funds from BMS’s account at Eastern
Bank. Thus, Capital One offers no convincing reason why the Court could not “afford complete
relief” among Rojas, BMS, and Capital One in Eastern Bank’s absence. Fed. R. Civ. P.
19(a)(1)(A). Nor does the Court discern an interest of Eastern Bank’s in these two claims that
would be “impair[ed] or imped[ed]” were the Court to “dispos[e] of the action in [its] absence,”
or that would “leave [Rojas, BMS, or Capital One] subject to substantial risk of incurring, double,
multiple, or otherwise inconsistent obligations.” Fed. R. Civ. P. 19(a)(1)(B). Thus, Capital One is
not entitled to judgment on the pleadings on the plaintiffs’ declaratory judgment claim and, at least
at this juncture, Eastern Bank is not a necessary party.
CONCLUSION
For the foregoing reasons, the defendants’ motion for judgment on the pleadings is
GRANTED with respect to Counts II, III, IV, V, and VIII, and DENIED with respect to Counts I,
VI, and VII. Counts II, III, IV, V, and VIII are hereby dismissed.
SO ORDERED.
/s/ Julia E. Kobick
JULIA E. KOBICK
UNITED STATES DISTRICT JUDGE

Dated: September 4, 2024

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