TOLL et al v. TOLL et al

Filing 20

OPINION. Signed by Judge Noel L. Hillman on 7/2/2015. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

JAIME TOLL and RICHARD TOLL,
Plaintiffs,

CIVIL NO. 14-7032(NLH)(AMD)

v.
OPINION
STEVEN TOLL and TD BANK,
N.A.,
Defendants.

Appearances:
AMY L. SANTAMARIA
KAPLIN STEWART MELOFF RELTER & STEIN, PC
THE LIBERTYVIEW BUILDING, SUITE 310
457 HADDONFIELD ROAD
CHERRY HILL, NJ 08002
On behalf of plaintiffs
SUSAN M. LEMING
JEFFREY R. JOHNSON
CHRISTOPHER A. REESE
BROWN & CONNERY, LLP
360 HADDON AVENUE
WESTMONT, NJ 08108
On behalf of defendant TD Bank, N.A.
HILLMAN, District Judge
Presently before the Court is the motion of defendant TD
Bank, N.A. to dismiss plaintiffs’ amended complaint, or in the
alternative, for a more definite statement.

For the reasons

expressed below, TD Bank’s motion will be granted, and
plaintiffs will be afforded 14 days to file a second amended
complaint.

BACKGROUND
Plaintiff Jaime Toll is a member of, and plaintiff Richard
Toll is a manager of, Toll Finance, LLC, which does business as
Mystic River.

On June 17, 2014, Mystic River opened a business

deposit bank account at TD Bank in Mt. Laurel, New Jersey and
deposited $95,000 in the account.

When the account was created,

Mystic River appointed James J. Gallagher as the single
authorized representative and signer of the account.

Mr.

Gallaher signed a New Business Account Agreement and executed a
General Business Resolution, which provided that Mystic River’s
funds could only be withdrawn by an authorized agent on the
account with his signature on file.
On August 27, 2014, Steven Toll, a member of Toll Finance,
LLC/Mystic River, went to a TD Bank branch in Cherry Hill, New
Jersey and requested to be added to the Mystic River bank
account as an authorized representative, signer, and business
agent.

Plaintiffs claim that Steven Toll did this unilaterally

and without their knowledge.

Plaintiffs also claim that TD Bank

violated Mystic River’s direct and specific instructions by
allowing Steven Toll to be added to the account.
On September 2, 2014, Steven Toll visited three TD Bank
branches between 2:54pm and 4:00pm, and he withdrew $43,000.00
2

at a Marlton branch, $34,000.00 at a Mt. Laurel branch, and the
remaining funds, plus overdraft, at a Cherry Hill branch.
Jaime Toll claims that when she and Mr. Gallagher learned
about Steven Toll’s emptying of the Mystic River bank account,
they contacted TD Bank, but TD Bank refused to discuss the
matter.

They also attempted to contact Steven Toll, demanding

that he return the money.

Richard Toll reported Steven Toll’s

actions to the Evesham Police Department.

On October 2, 2014,

Mystic River made a formal demand upon TD Bank to return the
$95,000.00 that was improperly withdrawn from its account.
Neither TD Bank nor Steven Toll has returned Mystic River’s
money, and because of this, Mystic River has been unable to
conduct its business since September 2014.
Pursuant to N.J.S.A. 42:2C-68, Jaime Toll has brought a
derivative action on behalf of Mystic River against TD Bank for
violation of the Uniform Commercial Code, breach of contract,
breach of the implied covenant of good faith and fair dealing,
negligence, and tortious interference with prospective economic
advantage, which is also asserted against Steven Toll.

Jaime

Toll and Richard Toll have asserted claims against Steven Toll

3

for breach of fiduciary duty, conversion, and fraud. 1
Defendant TD Bank filed a motion to dismiss plaintiffs’
original complaint.

(Docket No. 8.)

Plaintiffs filed an

amended complaint pursuant to Fed. R. Civ. P. 15(a)(1)(B)
(Docket No. 13), which mooted TD Bank’s motion.

TD Bank has now

filed a motion to dismiss plaintiffs’ amended complaint.
Plaintiffs have opposed TD Bank’s motion.

Steven Toll has not

yet appeared in the action. 2

1

N.J.S.A. 42:2C-68 provides:
A member may maintain a derivative action to enforce a
right of a limited liability company if:
a. the member first makes a demand on the other members in
a member-managed limited liability company, or the managers
of a manager-managed limited liability company, requesting
that they cause the company to bring an action to enforce
the right, and the managers or other members do not bring
the action within a reasonable time; or
b. A demand under subsection a. of this section would be
futile.

Jaime Toll claims, indisputably, that a demand upon Steven
Toll to allow the company to bring an action against him for the
return of the $95,000 would be futile.
2

Plaintiffs have filed an Affidavit of Diligent Inquiry and
Alternative Service by Publication (Docket No. 19), which
details their attempts to serve Steven Toll with the original
and amended complaint. It appears that Steven Toll has evaded
service up to this point.
4

DISCUSSION
A.

Jurisdiction

This Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1332 because there is complete diversity of citizenship
between the parties and the amount in controversy exceeds
$75,000.

Plaintiff Jaime Toll is a citizen of California,

plaintiff Richard Toll is a citizen of New Jersey, defendant TD
Bank is a citizen of Delaware (state of incorporation and
principal place of business are both Delaware), and defendant
Steven Toll is a citizen of Pennsylvania.

Toll Finance LLC

d/b/a Mystic River LLC is not a party; Jaime Toll, as a member
of the entity, is maintaining a derivative action on behalf of
Mystic River. 3

3

If Toll Finance LLC d/b/a Mystic River LLC were a named
plaintiff, diversity of citizenship would be lacking because the
citizenship of an LLC is determined from the citizenship of each
of its members, Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592
F.3d 412, 418 (3d Cir. 2010), and Steven Toll’s citizenship
would be accounted for on both sides of the “v”, thus destroying
diversity. Pursuant to the principles articulated by the Third
Circuit in HB General Corp. v. Manchester Partners, L.P., 95
F.3d 1185, 1188 (3d Cir. 1996), however, it appears that because
the averments in the amended complaint show that Jaime Toll and
Steven Toll are the only two members of Toll Finance LLC d/b/a
Mystic River LLC, the presence of Toll Finance LLC d/b/a Mystic
River LLC is not necessary, and subject matter jurisdiction
under 28 U.S.C. 1332(a) is properly established. (See, e.g.,
Amend. Compl. ¶¶ 95-100, “Defendant Steven Toll, by virtue of
being a member of Mystic River, owed a fiduciary duty to Mystic
5

B.

Standard for Motion to Dismiss

When considering a motion to dismiss a complaint for
failure to state a claim upon which relief can be granted
pursuant to Federal Rule of Civil Procedure 12(b)(6), a court
must accept all well-pleaded allegations in the complaint as
true and view them in the light most favorable to the plaintiff.
Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005).

It is well

settled that a pleading is sufficient if it contains “a short
and plain statement of the claim showing that the pleader is
entitled to relief.”

Fed. R. Civ. P. 8(a)(2).

Under the

liberal federal pleading rules, it is not necessary to plead
evidence, and it is not necessary to plead all the facts that
serve as a basis for the claim.
F.2d 434, 446 (3d Cir. 1977).

Bogosian v. Gulf Oil Corp., 562
However, “[a]lthough the Federal

Rules of Civil Procedure do not require a claimant to set forth
an intricately detailed description of the asserted basis for
relief, they do require that the pleadings give defendant fair
notice of what the plaintiff’s claim is and the grounds upon

River and to the other member of Mystic River, his sister,
Plaintiff Jaime Toll”[])(emphasis added). If Toll Finance, LLC
has more members than Jaime and Steven Toll the parties shall
promptly advise the Court.
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which it rests.”

Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S.

147, 149-50 n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks
“‘not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the
claim.’”

Bell Atlantic v. Twombly, 550 U.S. 544, 563 n.8 (2007)

(quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in
Twombly expounded the pleading standard for ‘all civil actions’
. . . .”); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009) (“Iqbal . . . provides the final nail-in-the-coffin for
the ‘no set of facts’ standard that applied to federal
complaints before Twombly.”).
Following the Twombly/Iqbal standard, the Third Circuit has
instructed a two-part analysis in reviewing a complaint under
Rule 12(b)(6).

First, the factual and legal elements of a claim

should be separated; a district court must accept all of the
complaint's well-pleaded facts as true, but may disregard any
legal conclusions.
S. Ct. at 1950).

Fowler, 578 F.3d at 210 (citing Iqbal, 129
Second, a district court must then determine

whether the facts alleged in the complaint are sufficient to
show that the plaintiff has a “‘plausible claim for relief.’”

7

Id. (quoting Iqbal, 129 S. Ct. at 1950).

A complaint must do

more than allege the plaintiff's entitlement to relief.

Id.;

see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d
Cir. 2008) (stating that the “Supreme Court's Twombly
formulation of the pleading standard can be summed up thus:
‘stating . . . a claim requires a complaint with enough factual
matter (taken as true) to suggest’ the required element.

This

‘does not impose a probability requirement at the pleading
stage,’ but instead ‘simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence of’
the necessary element”).
A court need not credit either “bald assertions” or “legal
conclusions” in a complaint when deciding a motion to dismiss.
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 142930 (3d Cir. 1997).

The defendant bears the burden of showing

that no claim has been presented.

Hedges v. U.S., 404 F.3d 744,

750 (3d Cir. 2005) (citing Kehr Packages, Inc. v. Fidelcor,
Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).
Finally, a court in reviewing a Rule 12(b)(6) motion must
only consider the facts alleged in the pleadings, the documents
attached thereto as exhibits, and matters of judicial notice.
S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd.,

8

181 F.3d 410, 426 (3d Cir. 1999).

A court may consider,

however, “an undisputedly authentic document that a defendant
attaches as an exhibit to a motion to dismiss if the plaintiff’s
claims are based on the document.”

Pension Benefit Guar. Corp.

v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
1993).

If any other matters outside the pleadings are

presented to the court, and the court does not exclude those
matters, a Rule 12(b)(6) motion will be treated as a summary
judgment motion pursuant to Rule 56.
C.

Fed. R. Civ. P. 12(b).

Analysis

TD Bank has moved to dismiss plaintiffs’ claims against it,
arguing that plaintiffs’ UCC claim preempts their common law
claims against it, and that their UCC claim is insufficiently
pleaded because it does not specify any provision that TD Bank
allegedly violated.

In response, plaintiffs argue that their

UCC claim is properly pleaded, and that it does not
automatically preempt their common law claims. 4
Addressing the preemption argument first, it is clear as a
general principle that at the pleading stage, the maintenance of

4

Only Jaime Toll, as a member of Mystic River bringing claims on
Mystic River’s behalf, has asserted claims against TD Bank. The
Court will refer, however, to “plaintiffs” generally for ease of
reference.
9

a claim based on a violation of the UCC does not preclude a
plaintiff from also asserting common law claims. 5

The New Jersey

Supreme Court and the Third Circuit Court of Appeals have both
recognized that “[n]otwithstanding its expansive language, ‘the
UCC does not purport to preempt the entire body of law affecting
the rights and obligations of parties to a commercial
transaction.’”

ADS Associates Group, Inc. v. Oritani Sav. Bank,

99 A.3d 345, 357 (N.J. 2014) (quoting N.J. Bank, N.A. v.
Bradford Sec. Operations, Inc., 690 F.2d 339, 345 (3d Cir.
1982)) (citing N.J.S.A. 12A:1–103(b), “Unless displaced by the
particular provisions of the [UCC], the principles of law and
equity, including the law merchant and the law relative to
capacity to contract, principal and agent, estoppel, fraud,
misrepresentation, duress, coercion, mistake, bankruptcy, and
other validating or invalidating cause supplement its
provisions.”)).

Thus, simply because plaintiffs here have

asserted a claim against TD Bank based on the UCC, their claims
against TD Bank based on the common law are not instantly
dismissible.
That general principle does not, however, end the inquiry
into the whether all of plaintiffs’ claims may be maintained

5

The UCC is codified in New Jersey under N.J.S.A. 12A:1–103.
10

against TD Bank.

A plaintiff is not prevented from asserting a

common law cause of action in addition to a UCC violation claim
“except insofar as reliance on the common law would thwart the
purposes of the UCC.”
46).

Id. (quoting N.J. Bank, 690 F.2d at 345-

The issue concerning the pleading sufficiency of

plaintiffs’ UCC claim prevents the Court from determining which,
if any, common law claims may proceed in tandem with plaintiffs’
UCC claim so that they do not thwart the UCC’s purpose of
“simplifying and clarifying the law governing commercial
transactions, fostering the expansion of commercial practices,
and standardizing the laws of the various jurisdictions.”

See

N.J. Bank, 690 F.2d at 346.
Plaintiffs’ UCC claim against TD Bank alleges that “TD Bank
acted in violation of the Uniform Commercial Code by virtue of
its actions in allowing money to be withdrawn from the bank
account of Mystic River without the signature of an authorized
representative, singer or agent of Mystic River.”
Compl. ¶ 53.)

(Amend.

Plaintiffs’ claim does not state which provision

of the UCC, which spans twelve chapters and four book volumes,
that TD Bank allegedly violated.

This is important, because,

for example, if plaintiffs intended to allege violations of
Articles 3 and 4, courts have held that certain common law

11

claims can contravene the purpose of those provisions.

See ADS

Associates Group, 99 A.3d 345, 363 (finding that Article 4A
preempted common law negligence claim when bank permitted the
transfer of funds from one account to another because no special
relationship existed between plaintiff and the bank which would
support a common law negligence claim);

City Check Cashing Inc.

v. Mfrs. Hanover Trust Co., 764 A.2d 411, 418 (N.J. 2001) (“In
short, in the check collection arena, unless the facts establish
a special relationship between the parties created by agreement,
undertaking or contact, that gives rise to a duty, the sole
remedies available are those provided in the Code.”); cf. Girard
Bank v. Mount Holly State Bank, 474 F. Supp. 1225, 1240 (D.N.J.
1979) (allowing common law negligence claim to proceed along
with claims for violations of Articles 3 and 4 of the UCC, but
only for types of negligence not covered directly by the UCC).
Here, not only does plaintiffs’ UCC claim against TD Bank fail
to satisfy the Twombly/Iqbal pleading standard because it does
not specify their entitlement to relief under the UCC, it also
fails to permit the Court to ultimately determine whether their
common law claims against TD bank are maintainable. 6

6

It is important to point out that the determination of whether
a plaintiff’s common law claims are displaced by the remedies
provided under the UCC is often made after the discovery process
12

Even though plaintiffs’ UCC claim must be dismissed for
insufficient pleading, the Court will allow plaintiffs the
opportunity to provide TD Bank with the “more definite
statement” it requested as alternative relief to its motion to
dismiss.

Federal Civil Procedure Rule 12(e) provides, “A party

may move for a more definite statement of a pleading to which a
responsive pleading is allowed but which is so vague or
ambiguous that the party cannot reasonably prepare a response.
The motion must be made before filing a responsive pleading and
must point out the defects complained of and the details
desired.

If the court orders a more definite statement and the

order is not obeyed within 14 days after notice of the order or
within the time the court sets, the court may strike the
pleading or issue any other appropriate order.”

Accordingly,

the Court will grant TD Bank’s motion to dismiss, and provide
plaintiffs with 14 days to file a second amended complaint.

The

so that the relationship between the parties and the
circumstances of the alleged violations can be assessed in
consideration of the purpose of the UCC. Moreover, as pointed
out by several courts, common law claims are not barred for
certain conduct where the UCC does not provide a comprehensive
remedy. See Universal Premium v. York Bank & Trust Co., 69 F.3d
695, 704 (3d Cir. 1995) (holding that where section 3–405 does
not apply, a party is free to bring a negligence action); Girard
Bank v. Mount Holly State Bank, 474 F. Supp. 1225, 1240 (D.N.J.
1979).
13

amended pleading shall specify the UCC provisions that TD Bank
allegedly violated, and plaintiffs are directed to consider,
when surveying the relevant case law, whether any of their
common law claims against TD Bank are displaced by the UCC.
An appropriate Order will be entered.

Date:
July 2, 2015
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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