Case Activity (2)

1. Order | Filed: September 06, 2023 | Entered: September 06, 2023 Princeton Court Apartments, LLC v. J.P. Morgan Chase Bank, National Association

   Other Fraud | Massachusetts

   Order Dismissing Case

   Judge Richard G. Stearns: ORDER entered. Order of Dismissal. (Pacho, Arnold)

2. Order | Filed: September 06, 2023 | Entered: September 06, 2023 Princeton Court Apartments, LLC v. J.P. Morgan Chase Bank, National Association

   Other Fraud | Massachusetts

   Order on Motion to Dismiss for Failure to State a Claim

   Judge Richard G. Stearns: ELECTRONIC ORDER entered granting 6 Motion to Dismiss for Failure to State a Claim.
   
   Plaintiff Princeton Court Apartments, LLC, brings this negligence action against defendant JP Morgan Chase Bank, National Association, based on the alleged fraudulent activities of one of its account holders. JP Morgan Chase moves to dismiss the case pursuant to Fed. R. Civ. P. 12(b)(6). For the following reasons, the court will allow the unopposed motion.
   
   "To state a negligence claim under Massachusetts law, a plaintiff must allege that (1) the defendant owed the plaintiff a duty of reasonable care; (2) the defendant breached that duty; (3) damage resulted; and (4) the defendant's breach caused that damage." Saldivar v. Racine, 818 F.3d 14, 20-21 (1st Cir. 2016). The court's analysis begins and ends with the first element.
   
   First, as to the fraud itself, Princeton Court has not shown that JP Morgan Chase owed it (a non-customer) any duty of care. Under Massachusetts law, a bank only owes a duty of care to a non-customer where it has "actual knowledge" that an account holder intends to engage in fraud. Go-Best Assets Ltd. v. Citizens Bank of Massachusetts, 463 Mass. 50, 54 (2012); see also Ferrante v. Santander Bank, N.A., 2023 WL 4373898, at *2 (D. Mass. July 6, 2023). Nothing in the Complaint suggests that JP Morgan Chase had any actual knowledge that its account holder was engaging in fraud at the time of the transfer -- to the contrary, Princeton Court admits that it only informed JP Morgan Chase of the fraud two weeks after the transfer had been made, see Compl. paras. 7, 19.
   
   Second, as to JP Morgan Chase's conduct in the wake of the fraud, Princeton Court has not shown that JP Morgan Chase had any duty to help investigate and remedy the situation. A bank's duty is to its customer, not to third parties "with whom the customer has dealings." McCallum v. Rizzo, 1995 WL 1146812, at *2 (Mass. Super. Oct. 13, 1995)). Princeton Court offers no explanation for why, contrary to this rule, the court should find a duty owed to the third party rather than the customer (for example, Princeton Court does not suggest that it obtained a court order in a John Doe suit requiring JP Morgan Chase to disclose account holder information). (RGS, law3)

3. 0 additional result(s)