COTAPAXI CUSTOM DESIGN AND MANUFACTURING, LLC v. CHASE BANK USA, N.A.
OPINION. Signed by Judge William J. Martini on 11/21/17. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
COTAPAXI CUSTOM DESIGN AND
Civ. No. 2:17-04292
CHASE BANK USA, N.A.,
and JOHN DOES 1–100,
WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff Cotapaxi Custom Design and Manufacturing, LLC (“Plaintiff”) brings this
action against Chase Bank USA, N.A. (“Defendant”), alleging violations of the Truth in
Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., and various state law claims. This matter
comes before the Court on Defendant’s motion to dismiss Counts 2–6 under Federal Rule
of Civil Procedure 12(b)(6). There was no oral argument. Fed. R. Civ. P. 78(b). For the
reasons set forth below, Defendant’s motion to dismiss is GRANTED.
Plaintiff is a Delaware corporation with its principal place of business in Carlstadt,
New Jersey. Decl. of C. Turcotte, Ex. A, Compl. ¶ 1, ECF No. 10-2 [hereinafter “Compl.”].
Defendant is a Delaware corporation with its principal place of business in Wilmington
Delaware. Id. at ¶ 2. Plaintiff engaged Defendant’s credit card services in the form of a
Chase United Mileage Plus business credit card account (the “Account”) from at least early
2013 through May 2016. See id. at ¶¶ 4, 6, 12. Plaintiff alleges damages of $643,998.99
arising out of purported fraudulent charges made to the Account by a third-party entity, BP
Promos, beginning on May 6, 2013, and ending in May 2016. See id. at ¶¶ 8–12. Plaintiff’s
Complaint alleges six causes of action against Defendant:
(1) Count 1: violation of TILA, see id. at ¶¶ 28–37;
(2) Count 2: breach of contract, see id. at ¶¶ 38–43;
(3) Count 3: violation of the covenant of good faith and fair dealing, see id. at ¶¶
(4) Count 4: violation of the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A.
56:8-1, see id. at ¶¶ 50–64;
(5) Count 5: unjust enrichment, see id. at ¶¶ 65–70; and
(6) Count 6: fraud in the inducement, see id. at ¶¶ 71–79.
Defendant moves to dismiss Counts 2–6, but does not contest the validity of Count
1 at this time. See Def.’s Mem. of Law in Supp. of Mot. (“Def.’s Mem.”) 1, ECF No. 101. Defendant argues that Counts 2 and 3 (the “contract claims”) should be dismissed
because the Complaint fails to identify the contract and the specific provisions therein that
were breached. See id. at 4–6. Defendant argues that Counts 4 and 6 (the “fraud claims”)
should be dismissed because the Complaint fails to meet the heightened pleading standards
of Federal Rule of Civil Procedure 9(b). See id. at 6–8. Finally, Defendant argues that
Count 5 should be dismissed because Plaintiff’s claim amounts to nothing more than a
formulaic recitation of the elements for unjust enrichment. See id. at 8–9.
Plaintiff responds by first suggesting that Defendant’s 12(b)(6) motion is
inappropriate because material questions of fact exist as to Defendant’s conduct, which
requires discovery by the parties. As part of this need for discovery, Plaintiff notes that it
is not currently in possession of the contract which it claims Defendant breached. See Pl.’s
Mem. of Law in Opp’n to Pl.’s Mot. (“Pl.’s Opp’n”) 3–4, ECF No. 12. Plaintiff next claims
that it satisfied Rule 9(b)’s heightened pleading standard by alleging that Defendant’s
employee conveyed false information to Plaintiff during a phone call on June 30, 2016.
See id. at 4–6. Finally, Plaintiff submits that Defendant’s conduct violates the covenant of
good faith and fair dealing because it failed to investigate in good faith the fraudulent
charges made to Plaintiff’s Account. See id. at 6–9.
In its reply, Defendant reiterates its argument regarding the contract claims and
asserts that Plaintiff does not need discovery to access the contract in question because it
is publicly available. See Def.’s Reply Mem. of Law in Supp. of Mot. (“Def.’s Reply”) 2–
3, ECF No. 14. Defendant further argues that the June 30 conversation between its
employee and Plaintiff cannot form the basis for a cause of action under the NJCFA. See
id. at 4–6. Defendant maintains that Plaintiff fails to meet Rule 9(b)’s heightened pleading
standard concerning its fraudulent inducement claim. See id. at 6–7. Finally, Defendant
contends that Plaintiff did not respond to its argument for dismissal of the unjust
enrichment claim, which the Court should consider unopposed and dismiss with prejudice.
See id. at 7.
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,
in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.
The moving party bears the burden of showing that no claim has been stated. Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under
Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in
the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975);
Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir.
Although a complaint need not contain detailed factual allegations, “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegations
must be sufficient to raise a plaintiff’s right to relief above a speculative level, such that it
is “plausible on its face.” See id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542
F.3d 59, 64 (3d Cir. 2008). 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) (citing Twombly,
550 U.S. at 556). While “[t]he plausibility standard is not akin to a ‘probability
requirement’ . . . it asks for more than a sheer possibility.” Id.
The Court will first address the contract claims, followed by the fraud claims and
the unjust enrichment claim. Ultimately, the Court finds that Plaintiff failed to plead
properly all of the contested counts and Defendant’s motion, therefore, is GRANTED.
The Contract Claims (Counts 2 & 3)
“A party alleging a breach of contract satisfies its pleading requirement if it alleges
(1) a contract; (2) a breach of that contract; (3) damages flowing therefrom; and (4) that
the party performed its own contractual duties.” Video Pipeline, Inc. v. Buena Vista Home
Entm’t, Inc., 210 F. Supp. 2d 552, 561 (D.N.J. 2002). Failure to identify breach of specific
provisions of a contract constitutes grounds for dismissal. See Skypala v. Mortg. Elec.
Registration Sys., Inc., 655 F. Supp. 2d 451, 459–60 (D.N.J. 2009). Likewise, there can be
no breach of the covenant of good faith and fair dealing without the presence of a contract.
See Wade v. Kessler Inst., 778 A.2d 580, 584 (N.J. Super. Ct. App. Div. 2001).
Plaintiff fails to identify a contract and breach of specific provisions therein. As a
matter of common sense, Plaintiff does not require discovery to obtain its credit card
contract, which it claims Defendant breached. In all likelihood, Plaintiff could download
the contract from Defendant’s website or, at the very least, request a copy of the contract
from Defendant as a longstanding customer. Regardless, Plaintiff’s argument that it
requires discovery to obtain the contract is meritless and cannot forgive the deficiencies in
Plaintiff’s pleadings. Accordingly, Counts 2 and 3 are DISMISSED WITHOUT
The Fraud Claims (Counts 4 & 6)
Rule 9(b) provides, “In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.” This heightened pleading
standard applies to NJCFA and fraud-in-the-inducement claims. See Fed. Deposit Ins.
Corp. v. Bathgate, 27 F.3d 850, 876 (3d Cir. 1994) (applying Rule 9(b) to NJCFA claim);
Ceruzzi Holdings, LLC v. Inland Real Estate Acquisitions, Inc., No. 09-cv-5440, 2010 WL
1752184, at *4 (D.N.J. Apr. 29, 2010) (applying Rule 9(b) to fraud-in-the-inducement
claim). “To satisfy this standard, the plaintiff must plead or allege the date, time and place
of the alleged fraud or otherwise inject precision or some measure of substantiation into a
fraud allegation.” Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007). “To state
a claim for fraud under New Jersey law, a plaintiff must allege (1) a material
misrepresentation of fact; (2) knowledge or belief by the defendant of its falsity; (3)
intention that the other person rely on it; (4) reasonable reliance thereon by the other
person; and (5) resulting damage.” Id. (citing Gennari v. Weichert Co. Realtors, 691 A.2d
350, 367–368 (N.J. 1997)).
The only misrepresentations Plaintiff alleges purportedly occurred during a phone
call between Plaintiff and Defendant’s employee, Ryan Isler, which took place on June 30,
2016. See Compl. at ¶¶ 18–23, 50–64, 71–79; Pl.’s Opp’n at 5–6. Notably, this
conversation occurred several years after Plaintiff decided to enter into a contract with
Defendant for credit card services. Furthermore, Plaintiff claims that it corrected Mr.
Isler’s misrepresentations during that same phone call. Pl.’s Opp’n at 6. Plaintiff clearly
cannot claim that Mr. Isler’s purported misrepresentations induced it to enter into the
contract or make a payment in connection therewith. At a minimum, Plaintiff fails to allege
reasonable reliance. Accordingly, Counts 4 and 6 are DISMISSED WITHOUT
Unjust Enrichment (Count 5)
Plaintiff did not oppose Defendant’s argument for dismissal of the unjust
enrichment claim. Defendant argues that Plaintiff’s claim is conclusory and amounts to a
formulaic recitation of the elements. Def.’s Mem. at 8–9. The Court agrees with Defendant
and, in the absence of any response by Plaintiff, considers the claim abandoned. See
Yocham v. Novartis Pharms. Corp., 736 F. Supp. 2d 875, 890 (D.N.J. 2010) (granting
summary judgment in favor of defendant where plaintiff did not address defendant’s
argument in its opposition); Ultraflex Sys., Inc. v. Verseidag-Indutex GmbH, No. 01-cv129, 2006WL 1098181, at *8 (D.N.J. Mar. 30, 2006) (“[C]ourts both within and beyond
the Third Circuit routinely have held the claim at issue to have been abandoned when it is
not defended in its opposition to defendant’s motion.” (internal quotations and citations
omitted)). Accordingly, Count 5 is DISMISSED WITH PREJUDICE.
For the reasons stated above, Defendants’ motion to dismiss is GRANTED. Counts
2–4 and 6 are DISMISSED WITHOUT PREJUDICE. Count 5 is DISMISSED WITH
PREJUDICE. An appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: November 21, 2016
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