Gilbert & Caddy, P.A. v. JP Morgan Chase Bank, N.A.

• Citation: 193 F.Supp.3d 1294
• Decision Date: 15 June 2016
• Docket Number: Case No. 15-cv-60653-BLOOM/Valle
• Parties: GILBERT & CADDY, P.A., Plaintiff, v. JP MORGAN CHASE BANK, N.A., and John Does, Defendants.
• Court: U.S. District Court — Southern District of Florida

193 F.Supp.3d 1294

GILBERT & CADDY, P.A., Plaintiff,

v.JP MORGAN CHASE BANK, N.A., and John Does, Defendants.

Case No. 15-cv-60653-BLOOM/Valle

United States District Court, S.D. Florida.

Signed June 15, 2016

Alan Keith Marcus, Alan K. Marcus PA, Coral Gables, FL, for Plaintiff.

Daniel Matthias Coyle, Gregory Stewart Grossman, Astigarraga Davis Mullins & Grossman, PA, Miami, FL, for Defendants.

ORDER ON MOTION FOR SUMMARY JUDGMENT

BETH BLOOM, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant JP Morgan Chase Bank, N.A.'s ("Chase") Motion for Summary Judgment, ECF No. [115] (the "Motion"), requesting that the Court grant summary judgment in favor of Chase on all claims. The Court has carefully reviewed the Motion, the record, all supporting and opposing filings, the exhibits attached thereto, and is otherwise fully advised. For the reasons that follow, the Court grants in part and denies in part the Motion for Summary Judgment.

I. BACKGROUND

On or about January 24, 2009, Randall Gilbert, Esquire, and his brother, Bryce Gilbert, Esquire (collectively, the "Gilberts"), opened an IOTA trust account (the "IOTA Trust Account") and operating account (collectively, the "Accounts") for their law firm, Gilbert & Caddy, P.A. ("Plaintiff") with Washington Mutual. See ECF No. [49] ¶ 6 (Amended Complaint). The Gilberts were the only authorized signatories to the Accounts. See ECF No. [126-8] ¶ (4)(k) (Affidavit of Randall Gilbert). In July 2009, after Washington Mutual had merged with Chase, Chase and Plaintiff executed a Deposit Account Agreement (the "2009 Agreement"). See ECF Nos. [116] ¶ 10 (Chase's Statement of Undisputed Facts); [126] ¶ 10 (Plaintiff's Statement of Controverted Facts). Plaintiff claims it "refused repeated overtures" from Chase to open an online wire service, and never acquiesced or authorized online access to its bank accounts. ECF No. [126-8] ¶ (4)(e), (o); see also id. ¶ (4)(r)-(s), (x). The parties executed an updated Deposit Account Agreement on February 1, 2012 (the "2012 Agreement"). See ECF Nos. [116] ¶ 10; [126] ¶ 10.

Meanwhile, sometime between early January 2010 and early 2011, Plaintiff's employee Steven Sacks ("Sacks") began transferring funds via wire and/or electronic transfers to accounts unaffiliated with Plaintiff (the "Sacks Transfers" or "Transfers").See ECF Nos. [116] ¶ 4; [126] ¶ 4. Many of the transfers went to a Chase bank account for a Nevada limited liability company called "S Qwerty." See id. Chase sent bank statements (collectively, the "Account Statements" or "Statements") to Plaintiff by mail on a monthly basis "which showed all of the transfers to S Qwerty and/or Steven Sacks," up to and including an Account Statement for December 2013, mailed by Chase to Plaintiff on or before January 9, 2014. See ECF Nos. [116] ¶¶ 22, 24, 26; [126] ¶¶ 22, 24, 26. Plaintiff received the Statements but did not notify Chase of any errors until 61 days later on March 11, 2014. See ECF Nos. [116] ¶¶ 22, 27; [126] ¶¶ 22, 27. By then, Sacks had transferred between $3,846,800 and $4,586,390 to accounts inside and outside Chase. See ECF Nos. [116] ¶ 4; [126] ¶ 4. Sacks was arrested on December 3, 2014, and charged with four counts of wire fraud in the case United States v. Sacks , No. 14–60290–CR–COHN. See ECF No. [49] ¶ 32-33. Sacks pled guilty to one count, and on February 27, 2015, a federal court sentenced Sacks to serve a term of seven years and three months in federal prison. See id. at ¶ 33.

Plaintiff initially filed the instant action in the Seventeenth Judicial Circuit in and for Broward County, Florida, asserting claims against Chase for negligence, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, aiding and abetting conversion, and civil conspiracy to commit fraud. See ECF No. [1] ¶¶ 44-94. On March 30, 2015, Chase removed the matter to this Court pursuant to 28 U.S.C. §§ 1441(a) and 1332(a). See id. ¶ 8. Chase filed a Motion to Dismiss, ECF No. [19], on May 22, 2015, which the Court granted in part and denied in part on August 19, 2015. See ECF No. [45]. Plaintiff thereafter filed an Amended Complaint, ECF No. [49], asserting claims for negligence (Count I) and breach of contract (Count II) related to Sacks' theft of funds from the Accounts. Following discovery by the parties, Chase filed the instant Motion for Summary Judgment contending that Plaintiff's claims are barred on three separate grounds: Plaintiff's lack of timely notice pursuant to the deposit account agreements, a lack of standing to recover funds from the IOTA account and a damage waiver contained in the account agreements.

Nearly two months after the filing of Defendant's Motion, Plaintiff now seeks leave to File Second Amended Complaint, ECF No. [124]. The Court addresses each Motion in turn.

II. LEGAL STANDARD

A court may grant a motion for summary judgment "if 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). The parties may support their positions by citation to the record, including, inter alia , depositions, documents, affidavits, or declarations. See Fed. R. Civ. P. 56(c). An issue is genuine if "a reasonable trier of fact could return judgment for the non-moving party." Miccosukee Tribe of Indians of Fla. v. United States , 516 F.3d 1235, 1243 (11th Cir.2008) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A fact is material if it "might affect the outcome of the suit under the governing law." Id. (quoting Anderson , 477 U.S. at 247–48, 106 S.Ct. 2505 ). The Court views the facts in the light most favorable to the non-moving party and draws all reasonable inferences in the party's favor. See Davis v. Williams , 451 F.3d 759, 763 (11th Cir.2006). "The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which a jury could reasonably find for the [non-moving party]." Anderson , 477 U.S. at 252, 106 S.Ct. 2505. The Court does not weigh conflicting evidence. See Skop v. City of Atlanta, Ga. , 485 F.3d 1130, 1140 (11th Cir.2007) (quoting Carlin Comm'n, Inc. v. S. Bell Tel. & Tel. Co. , 802 F.2d 1352, 1356 (11th Cir.1986) ).

The moving party shoulders the initial burden to demonstrate the absence of a genuine issue of material fact. See Shiver v. Chertoff , 549 F.3d 1342, 1343 (11th Cir.2008). If a movant satisfies this burden, "the nonmoving party ‘must do more than simply show that there is some metaphysical doubt as to the material facts.’ " Ray v. Equifax Info. Servs., L.L.C. , 327 Fed.Appx. 819, 825 (11th Cir.2009) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). Instead, "the non-moving party ‘must make a sufficient showing on each essential element of the case for which he has the burden of proof.’ " Id. (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). The non-moving party must produce evidence, going beyond the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and admissions on file, designating specific facts to suggest that a reasonable jury could find in the non-moving party's favor. Shiver , 549 F.3d at 1343. But even where an opposing party neglects to submit any alleged material facts in controversy, the court cannot grant summary judgment unless it is satisfied that all of the evidence on the record supports the uncontroverted material facts that the movant has proposed. See Reese v. Herbert , 527 F.3d 1253, 1268–69, 1272 (11th Cir.2008) ; United States v. One Piece of Real Prop. Located at 5800 S.W. 74th Ave., Miami, Fla. , 363 F.3d 1099, 1103 n. 6 (11th Cir.2004).

III. DISCUSSION

Chase moves for summary judgment in its favor pursuant to Fed. R. Civ. P. 56, and makes three primary arguments. First, Chase argues that Plaintiff cannot recover the amounts transferred from the Accounts prior to January 1, 2014 because Plaintiff did not comply with the 30-day notification provision contained in the Agreements. See ECF No. [115] at 2. According to Chase, the Agreements require Plaintiff to notify Chase of any unauthorized transfers within 30 days of Chase mailing the account statements on which the unauthorized transactions appeared. See id. Because Plaintiff did not notify Chase of the transfers until March 11, 2014, Chase argues that the majority of Plaintiff's claims are barred. See id. Next, Chase contends that Plaintiff lacks standing to recover any of the transfers made from Plaintiff's IOTA Trust Account, encompassing all but $30,000 in dispute. See id. Finally, Chase contends that the damages waiver provisions of the Agreements bar Plaintiff's claims for incidental damages, consequential damages, loss of goodwill, and loss of reputation. See id. at 3.

Plaintiff retorts that material facts remain in dispute. See ECF No. [125] at 16. Specifically, Plaintiff argues that the Gilberts never agreed to any online services, and thus, the 2009 and 2012 Agreements do not cover the Sacks Transfers. See id. at 4. Plaintiff further argues that even if the Agreements govern, the 30-day notification condition precedent to filing suit does not apply to the transfers at issue. See id. at 6. In the alternative, Plaintiff argues that the 30-day notification provision constitutes an impermissible modification and expansion of section 674.406 of the Florida Statutes ("§ 674.406"), and that regardless, Chase's material breach of the Agreements excused Plaintiff from complying with the provision. See id. at 6, 11. Plaintiff contends that it has standing to bring claims based on transfers from the IOTA Trust Account as the owner of that account and trustee of the monies contained therein, and because it has reimbursed clients and it has also been sued for reimbursement by its...