Avarden Investments, LLC v. JPMorgan Chase Bank, N.A.

Filing 15

///ORDER granting 4 Motion to Dismiss. So Ordered by Judge Paul J. Barbadoro.(jna)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Avarden Investments,LLC
Case No. 15-cv-79-PB
Opinion No. 2015 DNH 173

v.
JPMorgan Chase Bank, N.A.

O R D E R

The defendant, JPMorgan Chase Bank, N.A. (“Chase”), has
filed a motion to dismiss for failure to state a claim.

For the

reasons set forth in this Order, I grant the defendant’s motion.
The complaint alleges that the plaintiff, Avarden
Investments, LLC, entered into a contract with Deutsche Bank to
sell a property that Deutsche Bank acquired in foreclosure.
Chase signed the contract for Deutsche Bank as its attorney in
fact.

Plaintiff’s manager, Gabriel Bilc, is the former owner of

the property, which he lost after Deutsche Bank foreclosed.
Chase, acting on behalf of Deutsche Bank, cancelled the contract
after it learned that Bilc was the former owner of the property.
In doing so, it relied on a clause in the contract that provides
that it may terminate the agreement “in its sole discretion” if
“. . . [b]uyer is the former mortgagor of the Property whose

interest was foreclosed . . . or is related to or affiliated in
any way with the former mortgagor, and Buyer has not disclosed
this fact to Seller in writing prior to Seller’s acceptance of
the Agreement and this Addendum.”

Doc. No. 4-4, Ex. C at 8-9.

Avarden asserts claims for breach of contract (Count I), a
violation of the New Hampshire Consumer Protection Act (Count
II), breach of the implied covenant of good faith and fair
dealing (Count III), and Fraud (Count IV).
This is not a close case.

Avarden has sued the wrong party

on its breach of contract and good faith and fair dealing claims
because it is undisputed that Chase was acting as an agent for a
disclosed principal when it executed the contract.

Except in

unusual circumstances not present here, an agent cannot be held
liable for a subsequent breach of the contract by the principal.
See, e.g., Universal Truck & Equip. Co. v. Southworth-Milton,
Inc., 765 F.3d 103, 108 (1st Cir. 2014)(applying Rhode Island
law); see also Restatement (Third) of Agency § 6.01 cmt. b
(2006)(explaining that an agent for a disclosed principal
generally “is not subject to liability if the principal fails to
perform”).

Any remedy Avarden has for breach of contract or

breach of the duty of good faith and fair dealing thus should be
directed to Deutsch Bank rather than Chase.

The complaint also

fails to allege that Chase committed fraud with specificity.
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Nor does it allege facts which would support an actionable
Consumer Protection Act violation.

Accordingly, these claims

must be dismissed as well.
The motion to dismiss (doc. no. 4) is granted.

The clerk

is instructed to close the case.
SO ORDERED.

/s/Paul Barbadoro
Paul Barbadoro
United States District Judge
September 9, 2015
cc:

Kenneth R. Bernard, Esq.
Nathan Reed Fennessy, Esq.

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