Stanback v. JPMorgan Chase Bank, N.A.

Filing 17

ORDER granting in part and denying in part 10 Motion to Dismiss: For the reasons stated in the attached Memorandum and Order, Defendant's motion to dismiss ( 13 is DENIED as to plaintiffs claims of negligence, promissory estoppel, and quan tum meruit. It is GRANTED as to any intended wrongful termination claim. This matter is recommitted to the assigned magistrate judge for supervision of all pre-trial matters, including settlement discussions. Ordered by Judge Roslynn R. Mauskopf on 3/13/2012. (Mauskopf, Roslynn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------------------------------X
GEORGIA M. STANBACK,
Plaintiff,
MEMORANDUM & ORDER
10-CV-04155 (RRM)(RLM)

- against JPMORGAN CHASE BANK, N.A.,
Defendant.
----------------------------------------------------------X
MAUSKOPF, United States District Judge.

Plaintiff Georgia Stanback (“plaintiff” or “Stanback”) brings this action against defendant
JPMorgan Chase Bank, N.A. (“defendant” or “CHASE”). She alleges common law claims of
promissory estoppel, negligence, and quantum meruit. Currently before this Court is defendant’s
motion to dismiss for failure to state a claim upon which relief may be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, the motion is DENIED.
BACKGROUND
On a motion to dismiss, the Court must “take[] factual allegations [in the complaint] to be
true and draw[] all reasonable inferences in the plaintiff’s favor.” Harris v. Mills, 572 F.3d 66,
71 (2d Cir. 2009) (citation omitted). The following facts are either undisputed or described in
the light most favorable to the plaintiff. See Capobianco v. City of N.Y., 422 F.3d 47, 50 n.1 (2d
Cir. 2001).
Plaintiff was employed by defendant from 1981 until June 2009, her most recent position
being Assistant Vice President of Operations in the Broker-Dealer Department. (Compl. (Doc.
No. 1) ¶¶ 3-4.) Since defendant offered employees the option of obtaining group life insurance
for themselves, their spouses, and other dependents, plaintiff obtained group life insurance
covering herself and her husband, Gentry Stanback (“Gentry”), in the amount of $50,000 each.

(Id. ¶¶ 5-6.) Defendant deducted premiums for this insurance coverage from plaintiff’s salary
from 1981 through April 2009. (Id.)
In October 2006, plaintiff informed the CHASE Human Resources department that she
and her husband had divorced. (Id. ¶ 7.) At that time, she asked that Gentry be removed as the
beneficiary of her employee benefit plan, and defendant complied. (Id. ¶¶ 7-8.) The CHASE
Human Resources representative advised plaintiff that she “was entitled to maintain the
insurance coverage on Gentry, of which plaintiff was the beneficiary, by simply continuing to
pay the premiums for it.” (Id. ¶ 8.) Relying on this advice, plaintiff continued to pay the
premiums for the group life insurance covering her ex-husband through April 2009. (Id. ¶ 9.)
Gentry passed away on March 18, 2009. (Id. ¶ 11.) Plaintiff submitted a claim to
defendant and to Prudential Insurance Company of America (“Prudential”), the administrator of
the insurance plan, in anticipation of collecting $50,000 from the life insurance she maintained.
(Id.) In May 2009, defendant and Prudential denied the claim because, under the group life
insurance plan, an ex-spouse is not eligible for coverage. (Id. ¶ 12.)
In June 2009, defendant terminated plaintiff’s employment “because she made a claim
for the death benefit from the group life insurance coverage on Gentry.” (Id. ¶ 13.) In
September 2009, plaintiff administratively appealed the claim denial. (Id. ¶ 14.) Prudential
denied the appeal in December 2009. (Id. ¶ 15.)
Plaintiff commenced the instant action on August 11, 2010, in the Supreme Court of the
State of New York, County of Queens. (Notice of Removal (Doc. No. 1) ¶ 1.) Defendant
removed the action to this Court on September 13, 2010 pursuant to 28 U.S.C. § 1332(a)(1). (Id.
¶¶ 3-7.) On March 18, 2011, defendant filed this motion to dismiss for failure to state a claim

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upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Mot. to
Dismiss (Doc. No. 10).)
STANDARD OF REVIEW
A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6) requires the court to examine the legal, rather than factual, sufficiency of a
complaint. As required by Rule 8(a)(2), a pleading must contain a “short and plain statement of
the claim showing that the pleader is entitled to relief.” To withstand a motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).
A court considering a 12(b)(6) motion must “take[] factual allegations [in the complaint]
to be true and draw[] all reasonable inferences in the plaintiff’s favor.” Harris, 572 F.3d at 71
(citation omitted). A complaint need not contain “‘detailed factual allegations,’” but it must
contain “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 129
S. Ct. at 1949 (quoting Twombly, 550 U.S. at 555). In other words, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
(citing Twombly, 550 U.S. at 555). Rather, the plaintiff’s complaint must include “enough facts
to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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.” Iqbal, 129 S. Ct. at
1949 (citing Twombly, 550 U.S. at 570). The determination of whether “a complaint states a
plausible claim for relief will . . . be a context-specific task that requires the reviewing court to

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draw on its judicial experience and common sense.” Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d
143, 157–58 (2d Cir. 2007)).
In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a
district court must limit itself to the facts stated in the complaint, documents attached to the
complaint as exhibits, and documents incorporated by reference in the complaint. Hayden v.
Cnty. of Nassau, 180 F.3d 42, 54 (2d Cir. 1999). The Court must accept the factual allegations
contained in the complaint as true, and view the pleadings in the light most favorable to the
nonmoving party, drawing all reasonable inferences in that party’s favor. Sheppard v. Beerman,
18 F.3d 147, 150 (2d Cir. 1994).
DISCUSSION
I.

PLAINTIFF’S CLAIMS ARE NOT BARRED BY THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT
Defendant asserts that plaintiff’s promissory estoppel, negligence, and quantum meruit

claims are preempted by ERISA. (Def.’s Mem. in Supp. of Mot. to Dismiss (Doc. No. 13) at 7.)
However, ERISA merely allows for a participant in an employee benefit plan to sue “to recover
benefits due him under the terms of his plan, to enforce his rights under the terms of the plan, or
to clarify his rights to future benefits under the terms of the plan,” none of which plaintiff
attempts here. 29 U.S.C. § 1132(a)(1)(B). Though ERISA “completely preempts any state cause
of action seeking the same relief,” it nonetheless allows for state-law claims that only
incidentally relate to a benefits plan, but that do not seek to recover benefits. Aetna U.S.
Healthcare, Inc. v. Maltz, No. 98 Civ. 8829 (WHP), 1999 WL 285545, at *3 (E.D.N.Y. May 4,
1999); compare Moscovitch v. Danbury Hosp., 25 F. Supp. 2d 74, 81 (D. Conn. 1998) (holding
that a negligence claim for medical malpractice that is not a claim “to recover benefits due under
the terms of a plan” is not preempted by ERISA) with Aetna Health, Inc. v. Davila, 542 U.S.
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200, 208-09 (2004) (holding that a claim under the Texas Health Care Liability Act alleging
injuries suffered because plan administrator decided not to cover certain treatment is preempted
by ERISA).
Plaintiff does not seek enforcement of the terms of the plan. She asserts a negligence
claim based on incorrect information offered by defendant’s Human Resources representative, a
promissory estoppel claim because her justifiable reliance on the information given to her
resulted in financial harm, and a quantum meruit claim because defendant was allegedly unjustly
enriched by the premiums that she paid. (Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss (Doc.
No. 14) at 2.) Thus, the preemption provision does not apply to the present claims, and her
claims are not preempted by ERISA. Cicio v. Vytra Healthcare, 208 F. Supp. 2d 288, 296
(E.D.N.Y. 2001).
Defendant also claims that the “[c]omplaint . . . should be dismissed because ERISA only
authorizes suits for benefits against a benefits plan itself or the plan administrator, but not against
Plaintiff’s employer or former employer.” (Def.’s Mem. in Supp. of Mot. to Dismiss at 10.)
Again, plaintiff’s suit is only tangentially related to the benefits plan and does not fall under
ERISA – thus, Prudential, the plan administrator, is not a named party to the action. (Pl.’s Mem.
in Opp’n to Def.’s Mot. to Dismiss at 1.) Her suit is against CHASE because it was her reliance
on the misinformation supplied CHASE that form the basis of her claims. As such, the Court
DENIES defendant’s motion to dismiss plaintiff’s claims as preempted by ERISA. (Id. at 2.)
II.

WRONGFUL TERMINATION CLAIM
Defendant contends that plaintiff’s wrongful termination claim should be dismissed

because “employment for an indefinite or unspecified term is at will and may be freely
terminated by either party at any time without cause or notice” (Def.’s Mem. in Supp. of Mot. to

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Dismiss at 13-14) (quoting Horn v. New York Times, 100 N.Y.2d 85, 90-91 (2003)). If plaintiff
had pursued a wrongful termination claim, defendant would likely be correct. See Smalls v.
PetSmart, Inc., No. 09 Civ. 5347 (SJF), 2010 WL 5572073, at *4 (E.D.N.Y. Nov. 1, 2010)
(noting that “[a]bsent an agreement establishing a fixed duration, an employment relationship is
presumed to be a hiring at will, terminable at any time by either party”) (quoting DePetris v.
Union Settlement Ass’n, Inc., 86 N.Y.2d 406, 410 (1995)). However, though plaintiff’s
complaint does mention that “CHASE terminated Plaintiff’s employment after 28 years of
service, because she made a claim for the death benefit from the group life insurance coverage
on Gentry,” she does not appear to pursue a wrongful termination claim based on that fact.
(Compl. ¶ 13.)
While plaintiff does not allege facts to support a wrongful termination claim, she requests
punitive damages based on wrongful termination. Plaintiff requests that no less than $250,000
be appended to her negligence claim for being terminated “because she made a claim for the
death benefit from the group life insurance coverage on Gentry,” “an egregious retaliatory
action.” (Id. ¶ 22.) To the extent that plaintiff, by way of this peremptory statement, did intend
to assert a wrongful termination claim, this claim is not pleaded with particularity. See Ashcroft
v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (To withstand a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’”) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, insofar as plaintiff
meant to assert a claim based on wrongful termination, defendant’s motion to dismiss such claim
is GRANTED.

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III.

NEGLIGENCE CLAIM
A. Preemption
The threshold issue to plaintiff’s negligence claim is whether the claim is barred by the

New York Workers’ Compensation Law (“NYWCL”), as defendant argues. (Def.’s Mem. in
Supp. of Mot. to Dismiss at 11.) A negligence claim against a plaintiff’s employer alleging that
a mistake caused the plaintiff pure economic harm is not barred by the NYWCL. The NYWCL
provides “compensation for . . . disability or death from injury arising out of and in the course of
employment.” N.Y. Workers’ Comp. Law § 10 (McKinney 2009). To suffer a “disability”
means to be “disabled from earning full wages at the work at which the employee was last
employed;” pure economic loss does not impact a worker’s ability to earn full wages, so it is not
compensated by the NYWCL. Id. § 37. The NYWCL only preempts those actions described in
§ 10 of the statute, which does not include accidents that result in pure economic loss. Id. § 11.
The history and purpose of the NYWCL also favors excluding claims based on pure
economic harm from its auspices. The “intent of the law was to provide payments to injured
employees during periods of disability, causally connected with an industrial accident.” Roberts
v. Gen. Elec. Co., 174 N.Y.S.2d 533, 535 (App. Div. 1958). This intent is further manifested in
the way that compensation is calculated: “the average weekly wages of the injured employee at
the time of the injury shall be taken as the basis upon which to compute compensation or death
benefits.” N.Y. Workers’ Comp. Law § 14. For example, the loss of an arm entitles a worker to
312 weeks of his salary. Id. § 15. The entire compensation system is premised on a diminished
capacity to work subsequent to an accident, indicating that the drafters never anticipated that the
NYWCL would address claims for pure economic loss, whose capacity to labor is unaltered.

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Originally, the NYWCL required a physical injury for activation. Chernin v. Progress
Serv. Co., 192 N.Y.S.2d 758, 760 (App. Div. 1959). Courts later expanded the concept of
“injury” to encompass emotional harms as well as physical harms. Wolfe v. Sibley, Lindsay &
Curr Co., 330 N.E.2d 603, 606 (N.Y. 1975) (“[P]sychological or nervous injury precipitated by
psychic trauma is compensable to the same extent as physical injury.”); Gerson v. Giorgio
Sant’Angelo Collectibles, Inc., 671 N.Y.S.2d 958, 961 (Sup. Ct. 1998) (holding that actions
against employers for negligent infliction of emotional distress must be brought under the
NYWCL). Current courts consistently hold that the NYWCL preempts negligence actions
against employers for physical injury or emotional distress, but it appears that no court has
extended that preemption to negligence actions for pure economic loss. See Duran v. Jamaica
Hosp., 216 F. Supp. 2d 63, 66 (E.D.N.Y. 2002) (holding a negligent hiring claim barred by the
NYWCL, where the negligently hired co-worker harassed plaintiff); Rivera v. Baccarat, Inc., 95
Civ. 9478 (MBM), 1996 WL 251850, at *2 (S.D.N.Y. May 10, 1996) (The NYWCL’s
preemption “applies to negligent infliction of emotional distress as well as to torts causing
physical injury.”); Lawson v. Elec. Data Sys., Inc., 584 N.Y.S.2d 359, 359 (App. Div. 1992).
This lack of precedent for barring pure economic loss claims, combined with the wording and
purpose of the statute, leads this Court to hold that plaintiff’s negligence action is not barred by
the NYWCL.
B. Negligence Claim
The elements of a negligence claim are “(1) that the defendant owed [plaintiff] a duty of
care; (2) that the defendant breached that duty; and (3) that the defendant’s breach was the
proximate cause of the plaintiff’s injuries.” Fagan v. AmerisourceBergen Corp., 356 F. Supp. 2d
198, 205 (E.D.N.Y. 2004).

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It is well established that an employer owes a duty of care to his employees. Georgas v.
Kreindler & Kreindler, 41 F. Supp. 2d 470, 474 (S.D.N.Y. 1999). Courts have additionally
found that “there is a duty, in view of the bank’s relations to the public, to speak carefully when
[the bank’s] employee undertook to speak at all.” Anchor Lumber Corp. v. Mfrs. Trust Co., 272
N.Y.S. 610, 610 (App. Div. 1934); see ADL, LLC v. Tirakian, No. CV 2006-5076 (SJF) (MDG),
2010 WL 3925131, at *10 (E.D.N.Y. Aug. 26, 2010). Indeed, one court has noted that liability
may attach
for negligent misrepresentation where there is a relationship
between the parties such that there is an awareness that the
information provided is to be relied upon for a particular purpose
by a known party in furtherance of that purpose, and some conduct
by the declarant linking it to the relying party and evincing the
defendant’s understanding of [the] reliance.
Osuchowski v. Gallinger Real Estate, 711 N.Y.S.2d 369, 369 (App. Div. 2000) (quoting
Houlihan/Lawrence, Inc. v. Duval, 644 N.Y.S.2d 553, 553 (App. Div. 1996)).
The defendant’s duty to plaintiff thus may have been breached when “[t]he representative
in defendant’s employee benefits section negligently informed plaintiff that she could maintain
the group life insurance coverage on Gentry by simply continuing to pay the premiums for it,
even though under the terms of the plan, after plaintiff and Gentry were divorced, Gentry was no
longer eligible for such coverage.” (Compl. ¶ 19); see Osuchowski, 711 N.Y.S.2d at 369. That
breach caused plaintiff’s injury; “[b]ecause the employee benefits section at CHASE was
responsible for administering its employee benefit plans, plaintiff justifiably relied on the
information and advice that was given to her by its representative, and did not obtain life
insurance coverage on Gentry elsewhere.” (Compl. ¶ 20.) Plaintiff claims that she sustained
financial damage due to this alleged negligence. (Id. ¶ 21.) She has thus plausibly alleged all of

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the elements of a negligence action; accordingly, defendant’s motion to dismiss the negligence
claim is DENIED.
IV.

PROMISSORY ESTOPPEL
Plaintiff asserts that “she is entitled to recover from CHASE under the doctrine of

promissory estoppel.” (Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss at 7.) To recover for
promissory estoppel in New York, a plaintiff “must allege (1) a clear and unambiguous promise,
(2) reasonable and foreseeable reliance by the party to whom the promise is made, and (3) an
injury sustained in reliance on that promise.” Fleet Bank v. Pine Knoll Corp., 736 N.Y.S.2d ,
742 (App. Div. 2002) (quoting Rogers v. Town of Islip, 646 N.Y.S.2d 158, 158 (App. Div.
1996)).
Plaintiff alleges that the CHASE Human Resources representative “promised Plaintiff
that if she continued to pay the premiums for Gentry’s life insurance coverage by having them
deducted from her salary, Plaintiff would be entitled to the $50,000 death benefit in the event of
Gentry’s death.” (Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss at 7.) She also asserts that she
“justifiably relied on that promise, because the employee benefits section where the individual
was employed was the source of information concerning the plan, and she had never been
provided with a Summary Plan Description of CHASE’s insurance plan that contradicted the
advice given by CHASE’s employee.” (Id.) Plaintiff sustained an economic injury by paying
the premiums for years without receiving the expected $50,000 benefit. (Id. at 8.) Plaintiff has
alleged all of the essential elements of a successful promissory estoppel claim, and, on a motion
to dismiss, those allegations are assumed to be true. Harris v. Mills, 572 F.3d 66, 71 (2d Cir.
2009). Accordingly, defendant’s motion to dismiss the promissory estoppel claim is DENIED.

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V.

QUANTUM MERUIT
For a plaintiff to state a successful quantum meruit claim “under New York law, a

claimant must establish that “(1) plaintiff conferred a benefit upon defendant; (2) defendant
accepted that benefit; and (3) plaintiff expected compensation for the reasonable value of that
benefit.” Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 948 F. Supp. 285, 312
(S.D.N.Y. 1996). Quantum meruit is an equitable doctrine, allowing recovery “when one should
be compensated . . . in order to prevent the unjust enrichment of another.” Newman & Schwartz
v. Asplundh Tree Expert Co., 917 F. Supp. 265, 270 (S.D.N.Y. 1996). If plaintiff is unable to
recover under her promissory estoppel claim, the Court may allow a quantum meruit claim if
justice so requires. See Milton Abeles, Inc. v. Farmers Pride, Inc., 603 F. Supp. 2d 500, 505
(E.D.N.Y. 2009) (“[I]f a plaintiff fails to establish an enforceable contract, the court may
nonetheless allow recovery in quantum meruit where the defendant ‘received a benefit from the
plaintiff’s circumstances which, in justice, preclude him from denying an obligation to pay for
them.’”) (quoting Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996)).
Plaintiff alleges that she conferred a benefit on defendant, and defendant accepted that
benefit, because “CHASE continued to deduct the premiums for Gentry’s life insurance coverage
from Plaintiff’s salary, even after it was advised by Plaintiff that she and Gentry were divorced,
from November 2006 through at least April 2009.” (Compl. ¶ 26.) Plaintiff alleges that she
relied on the CHASE representative’s information and advice that she could receive $50,000
upon the death of her ex-husband, “and continued to pay the premiums for the group life
insurance covering Gentry.” (Id. ¶ 9.) She contends that she has suffered financial harm as a
result of this reliance. (Id. ¶ 29.)

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Plaintiff has pleaded all of the elements of a successful quantum meruit claim. If it is the
case that defendant did not receive a benefit, then plaintiff’s quantum meruit case may fail on the
merits at a later stage. See Stephen Pevner, Inc. v. Ensler, 766 N.Y.S.2d 183, 184-85 (App. Div.
2003) (dismissing a quantum meruit action because defendant did not receive a benefit); Martin
H. Bauman Assocs., Inc. v. H & M Int. Trans., Inc., 567 N.Y.S.2d 404, 408 (App. Div. 1991)
(upholding motion for summary judgment on a quantum meruit claim because defendant did not
receive a benefit). However, taking all factual allegations in the complaint to be true and
drawing all reasonable inferences in the plaintiff’s favor, as the Court must on a motion to
dismiss, defendant’s motion to dismiss the claim is denied. Harris, 573 F.3d at 71.
CONCLUSION
Defendant’s motion to dismiss [Doc. No 13] is DENIED as to plaintiff’s claims of
negligence, promissory estoppel, and quantum meruit. It is GRANTED as to any intended
wrongful termination claim.

SO ORDERED.

Roslynn R. Mauskopf

Dated: Brooklyn, New York
March 13, 2012

______________________________
ROSLYNN R. MAUSKOPF
United States District Judge

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