RUALES v. SPENCER SAVINGS BANK

Filing 115

OPINION & ORDER. Signed by Judge Kevin McNulty on 6/1/2022. (sm)

Case 2:18-cv-09192-KM-MAH Document 115 Filed 06/01/22 Page 1 of 13 PageID: 1138

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
MIGUEL RUALES,
Plaintiff,

Civ. No. 18-9192 (KM) (MAH)

v.

OPINION & ORDER

SPENCER SAVINGS BANK,
Defendant.

KEVIN MCNULTY, U.S.D.J.:
Miguel Ruales maintained a checking account with Spencer Savings Bank
(“Spencer”) for approximately six years. In August 2017 Ruales’s account was
closed by Spencer. Ruales claims that the account closure was motivated by
national origin discrimination. Spencer now moves for summary judgment
arguing that there are no disputed material facts, and it is entitled to judgment
as a matter of law. For the reasons set forth below, Spencer’s motion is
GRANTED.
I.

Background 1

For ease of reference, certain key items from the record will be abbreviated as
follows:
1

“DE_”

=

Docket Entry in this Case

“SAC”

=

Second Amended Complaint (DE 37)

“Def. Brf.”

=

Memorandum of Law in Support of Spencer
Saving Bank’s renewed Motion for Summary
Judgment (DE 112-2)

“Opp.”

=

Memorandum of Law in Opposition to
Spencer’s Cross Motion for Summary
Judgment (DE 113)

=

Defendant Spencer Saving Bank’s statement
of material facts (DE 112-1)

“DSOMF”

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Miguel Ruales opened a checking account with Spencer in August 2011.
(DSOMF ¶ 1; SAC ¶ 1.) On August 8 or 9, 2017, Spencer notified Ruales that it
would be closing his account effective September 9, 2017. (DSOMF ¶ 6; SAC ¶
13.) Ruales asserts that Spencer refused to provide him with a reason for the
account closure. (Opp. at 2.) 2 Ruales closed his account and withdrew his
remaining balance on September 8, 2017, the day before the account closure
was to have taken place. (DSOMF ¶ 7.)
For its part, Spencer states that it maintains software which monitors all
accounts and transactions using an algorithm that brings irregular activity to
Spencer’s attention. (DSOMF ¶ 4.) Spencer states that “excessive use of bank
checks” caused Ruales’s account to be flagged and referred for review multiple
times. (DSOMF ¶ 5.) Ruales has attached to his brief in opposition the
deposition answers of Jane Rey (Spencer’s President and Chief Operating
Officer), Jose Guerrero (Spencer’s Chairman of the Board and Chief Executive
Officer), John C. Duncan (Spencer’s Executive Vice President and Chief
Lending Officer), as well as those of Spencer Employees, Vincent Spada, Allison
Danchak and Elizabeth Perez-Serrano. (Opp., Exs. C–H.) In response to a
question about why Ruales’s account was closed, Rey, Guerrero and Duncan
responded:
Spencer was alerted to the activity with respect to plaintiff’s account
by a software program which monitors Spencer accounts for
irregular activity. The decision to close Plaintiff’s account was based
on Spencer’s determination that Plaintiff was using the account for
purposes incompatible with a consumer checking account.
Specifically, Spencer determined that Plaintiff appeared to be using
the account to complete irregular business transactions. When
questioned by Spencer branch personnel on various occasions,
plaintiff gave inconsistent answers as to the nature of his business
activities. Plaintiff had also purchased a significant number of bank

2
The pages in Ruales’s opposition brief are not numbered, so all page numbers
refer to the PDF page of DE 113.

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checks which is indicative of use for purposes inconsistent with a
consumer checking account . . .
(E.g., Opp. Ex. E, ¶ 20.) In past filings in this case, Ruales himself stated that
he “was depositing large sums of money as his construction business was
taking off.” (DE 95 at 7.)
In response to a question asking who directed the closure of plaintiff’s
account, Rey, Guerrero, and Duncan responded consistently: A bank
committee composed of Jane Rey, Allison Danchak, John Fitzpatrick, and John
Duncan, (Opp., Ex. E, ¶ 18.) Ruales also attached to his motion the written
deposition answers of Vincent Spada, Allison Danchak, and Elizabeth PerezSerrano. Spada, whose role is not clear from the deposition, was asked only
one question: who instructed him to close Plaintiff’s account? Spada responded
that “[t]o the best of my recollection, it was Michael Islinger, in the retail
banking department.” (Id., Ex. F.) Allison Danchak, in contrast, stated that she
remembered it was Spada, as Cranston branch manager, who would have
investigated Ruales’s use of bank checks. (Id., Ex. G ¶ 3.) Danchak also stated
that it was Elizabeth Perez-Serrano who provided the information on the
account to the bank committee. (Id. ¶ 8.) Perez-Serrano, however, denied
referring Ruales’s account to the committee, but does state that she informed
the committee that Ruales’s account used bank checks with an unusual
frequency, and that it was the bank committee that made the decision to close
the account. (Id., Ex. H ¶ 3, 9.)
Ruales asserts that the account closure caused him reputational and
financial harm, and asserts claims against Spencer for negligence, violation of
42 U.S.C. § 1981, breach of fiduciary duty, and breach of the covenant of good
faith and fair dealing. In June and July of 2021 the parties cross-moved for
summary judgment. (DE 95, 99.) In his initial motion for summary judgment,
Ruales requested that the affidavits of Rey and Danchak be struck. I denied the
request as to Rey (DE 101 at 2–3) and referred the request to strike Danchak’s
affidavit to Magistrate Judge Hammer (id. at 3–4). Judge Hammer denied the
request to strike Danchak’s affidavit but allowed Ruales to propound written
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discovery on Danchak. (DE 102; Opp., Ex. G.) Because of the additional time
required to propound the written discovery, I administratively terminated the
cross-motions for summary judgment and allowed the parties to renew the
motions, if they wished, after discovery was completed. (DE 104.) On January
21, 2022, Judge Hammer allowed Ruales to propound interrogatories on
Elizabeth Perez-Serrano. (DE 109.) On March 1, 2022, Judge Hammer
determined that the additional discovery had been completed and that the
parties could file new motions for summary judgment. (DE 111.) Thereafter,
Spencer filed for summary judgment on April 1, and Ruales decided not to file
a new motion for summary judgment but instead filed a brief in opposition to
Spencer’s motion. (DE 112; Opp. at 2.) 3
In his opposition to Spencer’s motion, Ruales argues that summary
judgment should be denied because there are disputed issues of material fact
and that the affidavits of Danchak and Rey should be struck. (Opp. at 6–11.) I
find that Ruales’s motions to strike the affidavits have already been denied,
and that because Ruales has failed to identify a disputed issue of material fact,
summary judgment must be granted in favor of Spencer
II.

Standard of Review
Summary judgment is appropriate where “the movant shows that there is

no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is material if it “might
affect the outcome of the suit under the governing law” and a dispute about a
material fact is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). Disputes over irrelevant or unnecessary facts will not
preclude the Court from granting a motion for summary judgment. See id.

In addition, a document labeled “Reply Brief” was filed by Spencer. (DE 114.)
The document, however, appears to be a copy of Ruales’s Reply Brief in Support of his
Motion for Leave to file a Second Amended Complaint, DE 30, dated May 6, 2019. I
assume this document was filed in error and therefore disregard it.
3

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A party moving for summary judgment has the initial burden of showing
the basis for its motion and must demonstrate that there is an absence of a
genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). “A party asserting that a fact [is not] genuinely disputed must support
the assertion by . . . citing to particular parts of materials in the record,
including depositions, documents . . ., affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A). After the
moving party adequately supports its motion, the burden shifts to the
nonmoving party to “go beyond the pleadings and by her own affidavits, or by
the depositions, answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S.
at 324 (internal quotation marks omitted). To withstand a properly supported
motion for summary judgment, the nonmoving party must identify specific
facts and affirmative evidence that contradict the moving party. Anderson, 477
U.S. at 250. “[I]f the non-movant's evidence is merely ‘colorable’ or is ‘not
significantly probative,’ the court may grant summary judgment.” Messa v.
Omaha Prop. & Cas. Ins. Co., 122 F. Supp. 2d 523, 528 (D.N.J. 2000) (quoting
Anderson, 477 U.S. at 249-50)). “If reasonable minds could differ as to the
import of the evidence,” however, summary judgment is not appropriate.
Anderson, 477 U.S. at 250-51.
“In considering a motion for summary judgment, a district court may not
make credibility determinations or engage in any weighing of the evidence;
instead, the nonmoving party's evidence ‘is to be believed and all justifiable
inferences are to be drawn in his favor.’” Marino v. Indus. Crating Co., 358 F. 3d
241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255)). In that respect,
the Court's role in deciding a motion for summary judgment is simply “to
determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at
249. Ultimately, there is “no genuine issue as to any material fact” if a party

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“fails to make a showing sufficient to establish the existence of an element
essential to that party's case.” Celotex, 477 U.S. at 322.
Ruales is proceeding pro se. A pro se litigant is ordinarily entitled to
considerable leeway. See Niblack v. Murray, No. CV126910MASTJB, 2016 WL
4086775, at *1 n. 1 (D.N.J. July 29, 2016) (citing Pratt v. Port Auth. of N. Y. &
N.J., 563 Fed.Appx. 132, 134 (3d Cir. 2014) (“[B]ecause [the plaintiff] is
proceeding pro se, we will construe his brief liberally.”); Marcinek v. Comm'r,
467 F. App’x 153, 154 (3d Cir. 2012) (holding that courts are “under an
obligation to liberally construe the submissions of a pro se litigant”)). See
generally Haines v. Kerner, 404 U.S. 519 (1972).
III.

Discussion

Spencer moves for summary judgment on Ruales’s claims of negligence,
42 U.S.C. § 1981, breach of fiduciary duty, and breach of the covenant of good
faith and fair dealing. Its motion is GRANTED.
a.

Section 1983 Claim
Ruales’s brief addresses a Section 1983 claim. (Opp. at 3.) However, this

claim was previously dismissed because Spencer is not a state actor. (DE 20,
21.) Ruales did not assert a Section 1983 claim in his second amended
complaint, which is the operative pleading. (DE 37.) Insofar as Ruales wishes to
maintain his Section 1983 claim, I grant summary judgment in favor of
Spencer on this claim.
b.

Negligence
The second amended complaint includes a claim for negligence asserting

that Spencer should have contacted Ruales and investigated the matter before
closing the account. To prevail on a negligence claim, Ruales must prove: (1)
the defendant owed plaintiff a duty; (2) there was a breach of that duty; and (3)
the breach proximately caused the injury. V.C. by Costello v. Target Corp., 454

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F. Supp. 3d 415, 423 (D.N.J. 2020) (citing Keith v. Truck Stops Corp. of Am.,
909 F.2d 743, 745 (3d Cir. 1990)). 4
In a prior opinion, I dismissed the negligence claim contained in Ruales’s
first amended complaint for failure to allege a duty. (DE 29.) I held that Ruales
had not pointed to any law or industry standard requiring the bank to provide
reasons for the closure of an account. Ruales’s second amended complaint still
does not point to such a duty but invokes the general common law duty of
care.
Spencer responds that it violated no general duty of care. It points to
deposition testimony stating that the decision to close the account was made
after deliberation by Spencer’s senior management, because the account was
flagged by its monitoring software multiple times. (Def. Brf. at 13-14.) Ruales
has not offered any evidence which refutes this. Further, the agreement
entered into when Ruales signed the account card provides that Spencer “may
also close this account upon reasonable notice to you and tender of the
account balance personally or by mail.” (DSOMF ¶ 3.) It is not “negligent” for a
party to an agreement to act in a manner provided for in that agreement. It is
undisputed that Spencer provided Ruales with 30-days’ notice before the
scheduled account closure. Ruales presents no argument in his brief in
opposition in support of his negligence claim, other than claiming that the
decision to close his account was baseless because the bank checks were used
at Sears. (Opp. at 10.)
Ruales has provided no evidence from which a reasonable juror could
conclude that Spencer behaved negligently and therefore could not meet his
burden at trial. Celotex, 477 U.S. at 322. I therefore grant Spencer’s motion for
summary judgment on this claim. See Doe v. Bank of Am. Corp., 273 F. Supp.

Neither party explicitly address which state’s law should apply. Ruales resides
in New Jersey and Spencer is a New Jersey corporation with its principal place of
business in New Jersey. (SAC ¶ 9, 10.) Both parties appear to apply New Jersey law. I
do the same.
4

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3d 203, 210 (D.D.C. 2017) (dismissing negligence claim based on materially
similar facts).
c.

Section 1981 Claim
Ruales’s second amended complaint asserts that Spencer discriminated

against him on the basis of his national origin in violation of 42 U.S.C. § 1981.
(SAC ¶ 64.) To state a claim under § 1981, a plaintiff must allege: (1) that he
was a member of a racial minority; (2) that the defendant intentionally
discriminated against the plaintiff on the basis of race; and (3) “discrimination
concerning one or more of the activities enumerated in the statute[,] which
includes the right to make and enforce contracts.” Varughese v. Robert Wood
Johnson Med. Sch., No. CV 16-02828, 2017 WL 4270523, at *6 (D.N.J. Sept.
26, 2017) (quoting Brown v. Philip Morris Inc., 250 F.3d 789, 797 (3d Cir.
2001)). A § 1981 plaintiff “bears the burden of showing that race was a but-for
cause of its injury.” Comcast Corp. v. Nat'l Ass'n of African-Am.-Owned Media,
140 S. Ct. 1009, 1014 (2020). Ruales has not provided any evidence of national
origin-based discrimination. In contrast, Spencer has provided positive
evidence that the decision to close Ruales’s account was not based on national
origin.
In his second amended complaint, Ruales alleges that an employee,
Barbara Bornstein, told him his account was closed because he was Hispanic.
(SAC ¶ 66.) Bornstein, however, is not referred to in Ruales’s brief in
opposition. 5
Spencer attached Bornstein’s deposition to its motion for summary judgment.
(Def. Brf., Appx. 2 (“Bornstein Dep.”)) Bornstein testified that she spoke with Ruales
once when he approached her with questions about Spencer. (Bornstein Dep.at 14:615:12.) She stated that her supervisor, Katie Jordan, was a “prejudiced manager,” but
clarified that she treated people differently based on the amount of money in their
account. (Bornstein Dep. at 18:13–20.) Bornstein was asked if it mattered to Jordan
“whether you were white, black or Hispanic?” and Bornstein responded “no.”
(Bornstein Dep. at 19:17–19.) She then testified that the differential treatment was
limited to Jordan. (Bornstein Dep. at 20:5–7.) Jordan was fired from Spencer in
September 2007. (DSOMF ¶ 15.) Spencer did not send Ruales the letter informing him
his account would be closed until August 2017. (SAC ¶ 13.) Even had Jordan been
employed at the time the decision to close Ruales’s account was made, Ruales has not

5

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In his brief in opposition, Ruales claims that this case “presents a classic
factual dispute” in which Spencer claims Ruales’s account was closed because
of his use of bank checks, while Ruales claims his account was closed because
of his national origin. The facts in the record relating to the account closure,
however, are all on Spencer’s side. The allegedly disputed facts that Ruales
points to involve what he claims are inconsistencies in the testimony about
who was responsible for closing the account. (Opp. at 5.) It is clear from the
testimony that it was a bank committee composed of Rey, Danchak,
Fitzpatrick, and Duncan that made the decision to close the account. It is true
that Spada, on the other hand, stated that he believed the decision was made
by an employee named Michael Islinger. (Opp. at 7.) It is not clear what basis
Spada had for the statement. 6 Regardless, Ruales has not provided any
evidence which suggests that that dispute is material. The material issue is not
who made the decision to close Ruales’s account but whether any of the
decisionmakers discriminated against Ruales on the basis of his national
origin. Ruales has not presented a single fact to show that any of the

provided any evidence that Jordan was involved with that decision or that she was
prejudiced against Hispanic customers. A reasonable juror could not find racial
discrimination based on this evidence.
In his Second Amended Complaint. Ruales also argued that there is a pattern of
discrimination at Spencer. (SAC ¶ 23–27.) Ruales cites to a suit brought by Bornstein
against Spencer alleging discrimination. That matter was dismissed by the
Administrative Law Judge, a ruling adopted by the Director of the New Jersey Division
on Civil Rights. Bornstein v. Spencer Savings Bank, DCR EB-21WB-49983,
Administrative Action Findings, Determination, and Order (Aug. 10, 2007), available at
https://www.nj.gov/oag/dcr/downloads/orders/bornstein-order-8-10-07.pdf. This
ruling is, if anything, evidence that the bank did not discriminate. Ruales has not
provided any other claims or instances of discrimination in support of his “pattern”
allegation.
It is likely that Spada’s answer reflected the unclear nature of the question.
Spada’s interrogatory asked “Do you recall the specific individual(s) or member(s) of
retail services who instructed you to close Plaintiff’s account? If so, please provide the
identity of that person or persons.” (Opp., Ex. F.) Thus, Spada was not asked who
made the decision to close the account, but merely who instructed him to close the
account. This answer is entirely consistent with Islinger passing along the committee’s
decision to Spada so that Spada could execute the account closure.
6

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decisionmakers at Spencer harbored, or acted upon, any bias toward him on
the basis of his national origin. Because Ruales has not provided any evidence
from which a reasonable juror could conclude that Spencer’s actions were
motivated by race or national origin, his § 1981 claim fails. Spencer’s motion
for summary judgment is therefore granted as to that claim.
d.

Breach of Fiduciary Duty
Ruales also asserts a claim for breach of fiduciary duty.
Whether a fiduciary duty exists is a question of law. United Jersey Bank

v. Kensey, 306 N.J. Super. 540, 704 A.2d 38, 43 (N.J. Super. Ct. App. Div.
1997). “A fiduciary relationship arises between two persons when one person is
under a duty to act for or give advice for the benefit of another on matters
within the scope of their relationship.” F.G. v. MacDonell, 150 N.J. 550, 696
A.2d 697, 704 (N.J. 1997). Traditional fiduciary relationships include those
between trustee and beneficiary, guardian and ward, agent and principal,
attorney and client, corporate director and shareholder, and the members of a
partnership. Avon Bros. v. Tom Martin Constr. Co., 2000 WL 34241102, at *4,
2000 N.J. Super. Unpub. LEXIS 1, at *11 (App. Div. Aug. 30, 2000). “[T]he
dominant theme of the case law . . . is that fiduciary relationships arise where
one party has the power and opportunity to take advantage of the other,
because of that other's susceptibility or vulnerability.” Coca-Cola Bottling Co. of
Elizabethtown v. Coca-Cola Co., 696 F. Supp. 57, 73 (D. Del. 1988).
Generally, “there is no presumed fiduciary relationship between a bank
and its customer.” Remtek Servs. v. Wells Fargo Bank, N.A., No. 19-12790
(RBK/KMW), 2020 WL 241332, at *11 (D.N.J. Jan. 16, 2020) (quoting United
Jersey Bank, 704 A.2d at 44) (discussing the duty in the context of a
creditor/lender relationship); Estate of Paley v. Bank of Am., No. A-4391-07T3,
2011 N.J. Super. Unpub. LEXIS 1055, at *33 (Super. Ct. App. Div. Apr. 29,
2011) (explaining that a bank’s relationship with a depositor is one of debtorcreditor, which is not fiduciary in character). “When a bank accepts a deposit
from a depositor for either a checking or savings account, a creditor-debtor
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relationship typically is established. The virtually unanimous rule is that
creditor-debtor relationships rarely give rise to a fiduciary duty.” Meglino v.
Wells Fargo Bank, N.A., Nos. A-0443-12T3, A-3254-12T3, 2014 N.J. Super.
Unpub. LEXIS 2163, at *24-25 (Super. Ct. App. Div. Sep. 4, 2014). In United
Jersey Bank v. Kensey, “the Appellate Division of the New Jersey Superior
Court articulated exceptions to the general rule that ‘creditor-debtor
relationships rarely give rise to a fiduciary duty.’ Relying on the Restatement
(Second) of Torts § 551, the Appellate Division explained that a duty may arise
when a lender commits gross acts of misconduct or deceit, or under the ‘special
circumstance’ where a lender ‘knows or has reason to know that the customer
is placing his trust and confidence in the bank and [is] relying on the bank . . .
to counsel and inform him.’” Bank of Am., N.A. v. Westheimer, 683 F. App'x
145, 149 (3d Cir. 2017) (citing United Jersey Bank v. Kensey, 306 N.J. Super.
540, 553, 704 A.2d 38, 44 (Super. Ct. App. Div. 1997)). There is nothing about
the relationship between Spencer and Ruales which indicates a fiduciary
relationship.
Even if Spencer did owe a general fiduciary duty, which has not been
established, Spencer asserts that it would not encompass any duty to maintain
an account for a customer. (Def. Brf. at 14-19.) In fact, Spencer points out that
such a duty would run counter to, for example, the many state and federal
banking regulations which require a bank to monitor accounts for suspicious
activity. I agree with Spencer that Spencer had no obligation to maintain an
account for Ruales. No funds were ever in jeopardy. Even if the two were in a
fiduciary relationship, closing Ruales’s account after reasonable notice would
not constitute a breach of a fiduciary duty. Spencer’s motion is therefore
granted as to the fiduciary duty claim.
e.

Breach of Covenant of Good Faith and Fair Dealing
Ruales also brings a claim for breach of the covenant of good faith and

fair dealing.

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“Good faith performance or enforcement of a contract emphasizes
faithfulness to an agreed common purpose and consistency with the
justified expectations of the other party.” [Wilson v. Amerada Hess
Corp., 168 N.J. 236, 245, 773 A.2d 1121 (2001)] (quoting
Restatement (Second) of Contracts, supra, § 205 comment a). The
covenant of good faith and fair dealing calls for parties to a contract
to refrain from doing “anything which will have the effect of
destroying or injuring the right of the other party to receive” the
benefits of the contract. Palisades Props., Inc. v. Brunetti, 44 N.J.
117, 130, 207 A.2d 522 (1965) (internal quotations omitted); see
also Wade v. Kessler Institute, 172 N.J. 327, 340, 798 A.2d 1251
(2002) (same). Proof of “bad motive or intention” is vital to an action
for breach of the covenant. Wilson, supra, 168 N.J. at 251, 773 A.2d
1121. The party claiming a breach of the covenant of good faith and
fair dealing “must provide evidence sufficient to support a
conclusion that the party alleged to have acted in bad faith has
engaged in some conduct that denied the benefit of the bargain
originally intended by the parties.” Williston, supra, § 63:22, at 51314 (footnotes omitted); see also Wilson, supra, 168 N.J. at 251, 773
A.2d 1121; [Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420,
690 A.2d 575 (1997)]
Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Associates, 182
N.J. 210 (N.J. 2005).
Ruales has not presented any evidence that Spencer acted in bad faith or
denied Ruales the benefit of their contract. In fact, the agreement entered into
when Ruales signed the account card states that Spencer “may also close this
account upon reasonable notice to you and tender of the account balance
personally or by mail.” (DSOMF ¶ 3.) Spencer has presented evidence that it
acted in good faith, in response to software-flagged behavior. Ruales has not
provided facts from which a reasonable juror could conclude that Spencer
breached the covenant of good faith and fair dealing. Spencer’s motion for
summary judgment is therefore granted as to that claim.

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IV.

Conclusion
For the reasons stated above, Spencer’s motion for summary judgment is

GRANTED. A separate order will issue.
Dated: June 1, 2022
/s/ Kevin McNulty
____________________________________
Kevin McNulty
United States District Judge

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