Mackey v. JPMorgan Chase Bank, N.A. et al

Filing 36

ORDER - The Court ADOPTS Judge Acosta's Findings and Recommendation, Dkt. 32 , as supplemented herein. Plaintiff's motion for partial summary judgment (Dkt. 5 ) is DENIED. Chase's motion for summary judgment is GRANTED IN PAR T AND DENIED IN PART. Plaintiff's Fourth Claim for Relief for Negligence is dismissed with prejudice, Plaintiff's Seventh and Eighth Claims for Relief under the FCRA are dismissed without prejudice. Chase's motion for leave to supplement the summary judgment record (Dkt. 19 ) is DENIED as moot. Signed on 8/1/2014 by Judge Michael H. Simon. (mja)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

GARY MACKEY,
Plaintiff,

Case No. 3:13-cv-0065-AC
OPINION AND ORDER

v.
ISHWAR UTTAMCHANDANI, et al.,
Defendants.
Michael H. Simon, District Judge.
United States Magistrate Judge John V. Acosta issued Findings and Recommendation
(“F&R”) in this case on June 30, 2014. Dkt. 32. Judge Acosta recommended that Plaintiff’s
motion for partial summary judgment be denied, Defendant JP Morgan Chase Bank N.A.’s
(“Chase”) motion for summary judgment be granted in part and denied in part, and Chase’s
motion for leave to supplement the record be denied as moot. With respect to Chase’s motion for
summary judgment, Judge Acosta recommended that Chase’s motion be granted against
Plaintiff’s claim for negligence and two claims under the Fair Credit Reporting Act (“FCRA”)

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and denied with respect to Plaintiff’s claim for declaratory relief based on the underlying
cognizable theories of relief of money had and received and conversion.1
The facts of this case were set out in Judge Acosta’s F&R and shall not be repeated here.
In sum, this case involves fraudulent conduct by Ishwar Uttamcdhandani (“Ishwar”), who
managed real property owned by Plaintiff as Plaintiff’s Trustee, sold that real property in 2005,
paid the proceeds of the sale of the real property to Washington Mutual Bank (“WaMu”),
Chase’s predecessor-in-interest, and instructed WaMu to apply the proceeds to Ishwar’s personal
debt with WaMu and not to Plaintiff’s debt with WaMu secured by the real property. Ishwar’s
fraudulent conduct was not discovered until 2009, when Chase began foreclosure proceedings on
Plaintiff’s real property and discovered that the real property had been sold in 2005 and that the
proceeds had not been applied to the mortgage on the property, but instead to Ishwar’s personal
loans.
A. Portions of the F&R to Which Chase Objected
Under the Federal Magistrates Act (“Act”), the Court may “accept, reject, or modify, in
whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C.
§ 636(b)(1)(C). If a party files objections to a magistrate’s findings and recommendations, “the
court shall make a de novo determination of those portions of the report or specified proposed
findings or recommendations to which objection is made.” Id.; Fed. R. Civ. P. 72(b)(3).
Chase timely filed objections. Dkt. 34. Chase argues that Judge Acosta erred in finding a
cognizable theory of either money had and received or conversion. Chase argues that money had
and received requires that Chase have been “unjustly enriched” and Chase was not unjustly

1

All defendants but Chase have been dismissed from this case. Plaintiff’s claims for
relief other than his negligence, FCRA, and Declaratory Judgment Act claims are asserted
against defendants who have been dismissed and are not at issue in this motion.
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enriched, and that conversion requires that Chase intentionally exercise dominion over Plaintiff’s
money and Chase is not doing so because that money was applied to Ishwar’s personal loans
years ago. The Court has reviewed de novo those portions of Judge Acosta’s F&R, as well as
Chase’s objections and Plaintiff’s response. The Court agrees with Judge Acosta’s reasoning that
there is a material issue of fact as to whether Chase’s refusal to reapply the proceeds of the sale
of Plaintiff’s real property to Plaintiff’s loan after Chase discovered that the proceeds had
fraudulently been applied to Ishwar’s personal loan is reasonable or just. Thus, the Court
ADOPTS those portions of the F&R finding a cognizable theory of money had and received and
conversion.
Chase also objects that a claim of money had and received is barred by the statute of
limitations. Chase argues that the six-year statute of limitations begins to run on a claim for
money had and received the date that payment is made, which in this case was 2005, more than
six years before the complaint in this case was filed. This issue was not addressed in the F&R.
A claim for “[m]oney had and received ‘is an action at law but is governed by equitable
principles.’” Angelini v. Delaney, 156 Or. App. 293, 303 (1998) (quoting Belmon Int’l, Inc. v.
Am. Int’l Shoe Co., 313 Or. 112, 123 (1992)). The six-year statute of limitations for implied
contract actions applies to a claim for money had and received. Id. When this type of claim
accrues and the statute begins to run has only been analyzed in one Oregon case, Angelini. In that
case, the court noted that “it is generally accepted that a claim for money had and received
accrues, and the statute of limitations begins to run, when the party against whom the claim is
asserted receives payment.” Id. The court quoted 54 C.J.S. Limitations of Actions § 158 for this
proposition (“Generally, where a person is obliged to pay money for which another is liable, or

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pays it at the other’s request, his right of action to recover it from the latter accrues, and the
statute of limitations runs, from the time of payment.”).
Both the Oregon Court of Appeals and the treatise on which it relied note that “generally”
a cause of action for money had and received accrues at the time of payment. Further, both
involve situations where the plaintiff seeking to recover the money is the one who made the
actual payment. Thus, that plaintiff knows that the payment was made and it is equitable for the
statute of limitations to begin to accrue at the time of payment. Here, Plaintiff did not know that
a payment was made to WaMu in 2005. Plaintiff did not discover that a payment had been made
until 2009.
A claim for money had and received is governed by equitable principles and the accrual
for such a claim has not been definitively held by Oregon courts to be at the time the payment
was made, regardless of circumstances. Because of this, and in light of the unique circumstances
of this case in which Plaintiff did not make the payment or know about the payment when it was
made, the Court finds that Plaintiff’s claim for money had and received did not accrue
until 2009, when Plaintiff (and Chase) discovered the fact of the fraudulent payment. Thus, a
claim for money had and received is not time-barred and Plaintiff’s declaratory judgment claim
can proceed with money had and received as an underlying theory of recovery.
B. Portions of the F&R to Which No Party Objected
For those portions of a magistrate’s findings and recommendations to which neither party
has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S.
140, 152 (1985) (“There is no indication that Congress, in enacting [the Act], intended to require
a district judge to review a magistrate’s report[.]”); United States. v. Reyna-Tapia, 328 F.3d
1114, 1121 (9th Cir. 2003) (en banc) (the court must review de novo magistrate’s findings and
recommendations if objection is made, “but not otherwise”). Although in the absence of
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objections no review is required, the Magistrates Act “does not preclude further review by the
district judge[] sua sponte . . . under a de novo or any other standard.” Thomas, 474 U.S. at 154.
Indeed, the Advisory Committee Notes to Fed. R. Civ. P. 72(b) recommend that “[w]hen no
timely objection is filed,” the Court review the magistrate’s recommendations for “clear error on
the face of the record.”
For those portions of Judge Acosta’s F&R to which neither party has objected, this Court
follows the recommendation of the Advisory Committee and reviews those matters for clear
error on the face of the record. No such error is apparent.
CONCLUSION
The Court ADOPTS Judge Acosta’s Findings and Recommendation, Dkt. 32, as
supplemented herein. Plaintiff’s motion for partial summary judgment (Dkt. 5) is DENIED.
Chase’s motion for summary judgment is GRANTED IN PART AND DENIED IN PART.
Plaintiff’s Fourth Claim for Relief for Negligence is dismissed with prejudice, Plaintiff’s
Seventh and Eighth Claims for Relief under the FCRA are dismissed without prejudice. Chase’s
motion for leave to supplement the summary judgment record (Dkt. 19) is DENIED as moot.
IT IS SO ORDERED.
DATED this 1st day of August, 2014.

/s/ Michael H. Simon
Michael H. Simon
United States District Judge

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