Lanfranco v. Chase Bank

Filing 13

ORDER granting 12 Motion to Dismiss for Failure to State a Claim: For the reasons discussed in the attached M & O, Defendant's motion to dismiss is granted. Because even a liberal reading of the complaint gives no indication that Plaintiff might state a valid claim for relief, the complaint is dismissed with prejudice, and the Clerk of Court is instructed to close the case. Hill v. Curcione, 657 F.3d 116, 123 (2d Cir. 2011); Lucente v. IBM Corp., 310 F.3d 243, 258 (2d Ci r. 2002). The Court certifies, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal would not be taken in good faith and, therefore, denies in forma pauperis status for purpose of an appeal. See Coppedge v. United States , 369 U.S. 438, 444-45 (1962). Ordered by Judge Pamela K. Chen on 5/21/2015. (Driscoll, Katherine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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RAFAEL A. LANFRANCO,

NOT FOR PUBLICATION
MEMORANDUM AND ORDER
14-CV-6778 (PKC)

Plaintiff,
-againstChase Bank,
Defendant.
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PAMELA K. CHEN, United States District Judge:

Pro se Plaintiff, Rafael A. Lanfranco, commenced this action in State court, asserting 20
causes of actions relating to a checking account that a corporation in which Plaintiff owns shares
maintains with Defendant JPMorgan Chase Bank, N.A.1 Following removal to this Court,
Defendant moved to dismiss for failure to state a claim. For the reasons set forth below, the
motion is granted.
BACKGROUND
The facts alleged in this case are simple, though unilluminating. According to the
complaint, Plaintiff is a partner in, and possesses power of attorney for, 90-13 Jamaica Deli
Grocery, Inc. (“Jamaica Deli”). (Compl., at 2.)2 The corporation maintains a checking account
with the Defendant bank (“Jamaica Deli account”). (Id.) Approximately 20 months before
initiating the present action, Plaintiff discovered that $300 had been withdrawn, without
authorization, from the Jamaica Deli account by a person named Rafael Tavernas. (Id. at 4.)
Tavernas made the withdrawal using a debit card that had been issued in his name. (Id. at 5.)
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Plaintiff incorrectly refers to Defendant as Chase Bank.

Because the complaint fails to include properly numbered paragraphs, citations refer to page
numbers in the complaint.

Plaintiff states that he later canceled the card, although he does not reveal why Tavernas
possessed the card in the first place. (Id.)
Sometime later, Plaintiff went to a local Chase Bank branch and requested information
regarding the Jamaica Deli account, including a statement of account activity. (Id.) A bank
employee, in consultation with the “Chase bank legal department,” told Plaintiff that she could
not provide him with the information absent a subpoena, (Id. at 6), apparently because Plaintiff’s
name was no longer listed in conjunction with the Jamaica Deli account. (Id. at 8-9.) Plaintiff
sets forth no facts that explain his current relationship with Jamaica Deli or with his partner in
the business, Romeo Guzman. (Id. at 7.)
On the basis of these events, Plaintiff sued the Defendant bank, advancing 20 separate
causes of action. Defendant has moved to dismiss the complaint for failure to state a claim
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. To date, Plaintiff has failed to
respond to Defendant’s motion.
DISCUSSION
I.

Standard of Review
To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead “enough

facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). A court must accept all factual allegations in the complaint as true, and draw
all reasonable inferences in favor of the plaintiff. Id. at 555-56. A court is “not bound to accept
as true a legal conclusion couched as a factual allegation,” and “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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Pro se complaints are held to “less stringent standards than formal pleadings drafted by
lawyers.” Haines v. Kerner, 404 U.S. 519, 520 (1972). “When considering motions to dismiss a
pro se complaint such as this, ‘courts must construe [the complaint] broadly, and interpret [it] to
raise the strongest arguments that [it] suggest[s].’” Weixel v. N.Y.C. Bd. of Educ., 287 F.3d 138,
145-46 (2d Cir. 2002) (quoting Cruz v. Gomez, 202 F.3d 593, 597 (2d Cir. 2000)); see Harris v.
Mills, 572 F.3d 66, 72 (2d Cir. 2009) (“Even after Twombly, [courts] remain obligated to
construe a pro se complaint liberally.”). Nevertheless, “pro se status does not exempt a party
from compliance with relevant rules of procedural and substantive law.” Iwachiw v. N.Y.C. Bd.
of Educ., 194 F. Supp. 2d 194, 202 (E.D.N.Y. Mar. 29, 2002) (citing Traguth v. Zuck, 710 F.2d
90, 95 (2d Cir. 1983)).
II.

Plaintiff’s Claims
Plaintiff’s causes of action can be divided into four groups: (1) those that seek to impose

liability for actions that Defendant allegedly took with respect to the funds held in the Jamaica
Deli account; (2) those that seek to impose liability for Defendant’s refusal to provide Plaintiff
information that he requested about the account; (3) those that seek to impose liability for
Defendant’s failure to notify Plaintiff that his name had been removed from the account; and (4)
those that advance claims without specifying the particular conduct that allegedly gives rise to
liability. Each set of claims will be considered in turn.
First, Plaintiff’s causes of action concerning Defendant’s actions with respect to the funds
held in the Jamaica Deli account must be dismissed because Plaintiff does not have standing to
assert individual claims for injuries sustained by Jamaica Deli. Plaintiff’s specific claims are that
Defendant aided and abetted the fraudulent conveyance of the account funds (Eighth Cause of
Action), that Defendant colluded in the conversion of the corporation’s assets (Ninth and

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Nineteenth Causes of Action), and that Defendant violated its fiduciary responsibilities relating
to the corporate checking account (Fifteenth Cause of Action). These causes of actions concern
funds owned by the corporation and turn on duties that run, at most, from Defendant to the
corporation itself. “It is a well-settled principle of corporate law that an action to redress injuries
to a corporation cannot be maintained by a shareholder in his or her own name but must be
brought in the name of the corporation through a derivative action.” Dueren v. Credit Suisse
First Boston Corp., No. 02 Civ. 3921, 2003 WL 21767509, at *1 (S.D.N.Y. July 31, 2003)
(internal quotation marks and alterations omitted). The injury that Plaintiff appears to allege is
the unauthorized withdrawal of $300 by Rafael Tavernas. This harm is not borne by Plaintiff
alone, but rather affects all shareholders in Jamaica Deli in proportion to their ownership in the
corporation. “It is well settled that diminution in value of corporate assets is insufficient direct
harm to give the shareholder standing to sue in his own right.” Nordberg v. Lord, Day & Lord,
107 F.R.D. 692, 698 (S.D.N.Y. Sept. 30, 1985) (internal quotation marks and ellipses omitted);
see also Dueren, 2003 WL 21767509, at *3 (“Loss of investment value resulting from breach of
a duty owed to a corporation does not give rise to a direct cause of action by the corporation’s
shareholders.”). See generally 12B William M. Fletcher, Fletcher Cyclopedia of the Law of
Corporations § 5911. Because Plaintiff does not having standing to bring this first set of claims,
they must be dismissed. See Norberg, 107 F.R.D. at 703 (granting 12(b)(6) motion on ground
that plaintiff lacked standing to individually assert claims for harms suffered by corporation).
Second, Plaintiff’s causes of action concerning Defendant’s refusal to provide
information to Plaintiff (First, Second, Fourth, Seventh, Tenth, Eleventh, Twelfth, and
Fourteenth Causes of Action) must also be dismissed for failure to state a claim. Dismissal of
the First, Second, Seventh, Tenth, and Eleventh Causes of Action is warranted because they do

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not advance any legal claims, but rather reiterate and expand upon Plaintiff’s factual allegations
relating to his requests for account information. Dismissal of the Fourth and Twentieth Causes
of Action, alleging identity theft, is warranted because the complaint does not allege that
Plaintiff’s identity was stolen, and, even if it were, the Court cannot identify a plausible legal
theory under which Defendant might be held liable. Dismissal of Plaintiff’s Fourteenth Cause of
Action, alleging “gross” laches, is warranted because “laches is a defense and not a cognizable
cause of action.” Gerlach v. Russo Realty Corp., 695 N.Y.S.2d 128, 130 (App. Div. 1999).
Finally, dismissal of Plaintiff’s Sixteenth Cause of Action, alleging violations of unidentified
banking laws is warranted because Plaintiff does not identify any particular statute that he claims
was violated, let alone one that creates a private right of action. Even looking beyond the
particular legal theories contained in the complaint, the Court is unable to hypothesize any legal
basis for holding Defendant liable for refusing to provide Plaintiff information regarding a
corporate checking account from which his name had been removed.
Third, Plaintiff’s causes of action concerning Defendant’s failure to notify him that his
name was no longer listed in conjunction with the corporate checking account must be dismissed
as well. According to Plaintiff, by failing to provide such notification, Defendant breached a
fiduciary duty it owed to Plaintiff (Third Cause of Action), and aided and abetted corporate and
bank fraud (Fifth and Sixth Causes of Action). Under New York law, “[t]he elements of a claim
for breach of a fiduciary obligation are: (i) the existence of a fiduciary duty; (ii) a knowing
breach of that duty; and (iii) damages resulting therefrom.” Johnson v. Nextel Commc’ns, Inc.,
660 F.3d 131, 138 (2d Cir. 2011). “[A] fiduciary relationship exists between two persons when
one of them is under a duty to act for or to give advice for the benefit of another upon matters
within the scope of the relation.” N. Shipping Funds I, LLC v. Icon Capital Corp., 921 F. Supp.

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2d 94, 101 (S.D.N.Y. Jan 24, 2013) (internal quotation marks and citation omitted).

The

complaint sets forth no facts from which a fiduciary relationship between Plaintiff and Defendant
might be inferred and, therefore, Plaintiff fails to state a claim for breach of a fiduciary duty.
Plaintiff also fails to state a claim for bank or corporate fraud. Bank fraud is a federal
crime, codified at 18 U.S.C. § 1344, and does not create a private right of action. Wright v.
Waterside Plaza LLC, No. 07 Civ. 9303, 2008 WL 872281, at *2 (S.D.N.Y. Apr. 2, 2008), aff’d
sub nom. Wright v. Waterside Plaza, L.L.C., 354 F. App’x 594 (2d Cir. 2009) (dismissing civil
claim for bank fraud). Plaintiff’s corporate fraud claim, which the Court interprets to be a
common law fraud claim, is no more viable. A claim for aiding and abetting fraud requires that a
plaintiff plead: “(1) the existence of a fraud; (2) [the] defendant’s knowledge of the fraud; and
(3) that the defendant provided substantial assistance to advance the fraud’s commission.”
Lerner v. Fleet Bank, N.A., 459 F.3d 273, 292 (2d Cir. 2006) (internal quotation marks and
citation omitted) (alterations in original). Plaintiff’s complaint is devoid of any allegations that
might allow an inference in Plaintiff’s favor on any of these elements.
Finally, each of Plaintiff’s remaining causes of action—for negligence (Twelfth Cause of
Action), fraud (Thirteenth Cause of Action), gross torts (Seventeenth Cause of Action), and
violation of plaintiff’s unalienable property rights (Eighteenth Cause of Action)—warrant
dismissal. Even when liberally construed, the complaint sets forth no facts that would permit the
Court to find that Plaintiff states a claim with respect to any of these causes of action. The Court
cannot discern any duty to Plaintiff that the Defendant violated, such that it is liable in tort, nor
can it identify any inalienable property rights of Plaintiff with which Defendant unlawfully
interfered.

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CONCLUSION
For the foregoing reasons, Defendant’s motion to dismiss is granted. Because even a
liberal reading of the complaint gives no indication that Plaintiff might state a valid claim for
relief, the complaint is dismissed with prejudice, and the Clerk of Court is instructed to close the
case. Hill v. Curcione, 657 F.3d 116, 123 (2d Cir. 2011); Lucente v. IBM Corp., 310 F.3d 243,
258 (2d Cir. 2002). The Court certifies, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal
would not be taken in good faith and, therefore, denies in forma pauperis status for purpose of an
appeal. See Coppedge v. United States, 369 U.S. 438, 444-45 (1962).
SO ORDERED:

/s/ Pamela K. Chen
PAMELA K. CHEN
United States District Judge
Dated: May 21, 2015
Brooklyn, New York

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