Deutsche Bank Trust Co. Americas v. Doral Fin. Corp.
| Decision Date | 26 January 2012 |
| Docket Number | Civil No. 11–1344 (SEC). |
| Parties | DEUTSCHE BANK TRUST COMPANY AMERICAS, Plaintiff, v. DORAL FINANCIAL CORPORATION, et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
OPINION TEXT STARTS HERE
Lee Sepulvado–Ramos, Sepulvado & Maldonado, PSC, Albeniz Couret–Fuentes, San Juan, PR, for Plaintiff.
Jose A. Acosta–Grubb, Roberto A. Camara–Fuertes, Fiddler Gonzalez & Rodriguez, P.S.C, San Juan, PR, for Defendants.
Before the Court are defendants' motion to dismiss under Fed.R.Civ.P. 12(b)(6) (Dockets # 22 and 41), and plaintiff's opposition thereto (Dockets # 29 and 47). After reviewing the filings and the applicable law, defendants' motion is GRANTED in part and DENIED in part.
The present suit stems from the alleged mishandling of a $658,874 check (the “Check”) and is premised on 12 C.F.R. § 229.32(c) as well as under Puerto Rico' Civil Code and Law of Negotiable Instruments. Plaintiff is Deutsche Bank Trust Company Americas (“Deutsche”), a New York chartered bank headquartered in Manhattan, New York. Docket # 16, ¶ 4. Defendants, on the other hand, are Doral Financial Corporation (“DFC”) and its wholly owned subsidiary Doral Bank (“Doral”) (collectively, “Defendants”), two Puerto Rico chartered banking enterprises. The events underlying Deutsche's claims, as averred in the complaint, follow.1
In November 2007, Deutsche received the Check for collection from a non-United States customer. The Check was drawn on a Bank of America account, makers Nasser Ghazi and Erym Khan Ghazi, for payee Vista Real Estate, Ltd. Deutsche, who was the bank of first deposit, processed the Check and presented it to the Federal Reserve Bank for payment from Bank of America. The latter, however, refused payment on the Check due to insufficient funds in the Ghazi account. Things unraveled thereafter.
Upon returning the Check to the Federal Reserve, Bank of America mistakenly identified Defendants as the bank of first deposit, so the Federal Reserve sent the Check to them. Defendants then sat on the Check for several weeks. Thus, unaware of the issues with the Check, Deutsche incorrectly credited its customer's account for $658,874 on December 5, 2007.
On January 23, 2008, Defendants submitted a “Not Our Item” adjustment claim on the Check to the Federal Reserve. The claim, however, was denied because the 20–day deadline for its filing had expired. The same day, Defendants notified Deutsche about the Check and requested a reimbursement, alleging that their account had been incorrectly debited for the Check amount. Deutsche refused. Nevertheless, the Federal Reserve eventually reimbursed Defendants and, on February 21, 2008, debited Deutsche's account for $658,874.
Immediately, Deutsche began efforts with the Federal Reserve to obtain additional information regarding the Check and continued trying to resolve the dispute with Defendants. On May 5, 2008, the Federal Reserve sent a letter to Deutsche explaining the reasons behind the $658,874 debit and Defendants' actions in connection with it.2
On July 25, 2008, Deutsche sent a letter to Defendants, claiming that they had negligently mishandled the Check and requestinga reimbursement. 3 Defendants nonetheless denied any wrongdoing, and a second collection letter followed on September 25, 2008. Still unable to collect the Check, Deutsche's counsel continued pressing Defendants for payment, contacting them in February, April, June, and July of 2009.4 Defendants remained unyielding. So, on May 5, 2010, Deutsche informed them that it would file suit if payment was not forthcoming before May 20, 2010. Docket # 29–16.
On June 9, 2010, Deutsche made good on its word; it filed suit against Doral in New York's Supreme Court under the Uniform Commercial Code and New York's general tort statute. Docket # 1–9. That suit, however, ended on January 6, 2011 through a stipulation of dismissal without prejudice. Docket # 29–2. This case began three months later. Docket # 1.
As stated above, Deutsche's complaint is premised on both federal and state law. And, in pertinent part, it states that “had [Defendants] properly handled the Check as a Not Our Item when [they] received the same, the Check would have been properly researched and returned ... in a timely manner [which] would have enabled Plaintiff to charge the Check to its Customer.” Docket # 16, ¶ 21. After preliminary procedural nuances, Defendants moved to dismiss, claiming that Deutsche's complaint as drafted fails the pleading standards imposed in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Alternatively, Defendants also contend that all causes of action are time barred. Id. Deutsche timely opposed each contention. Docket # 29.
To survive a Rule 12(b)(6) motion to dismiss, Plaintiffs' “well-pleaded facts must possess enough heft to show that [they are] entitled to relief.” Clark v. Boscher, 514 F.3d 107, 112 (1st Cir.2008).5 In evaluating whether Plaintiffs are entitled to relief, the court must accept as true all “well-pleaded facts [and indulge] all reasonable inferences” in plaintiff's favor. Twombly, 550 U.S. 544, 127 S.Ct. 1955. The First Circuit has held that “dismissal for failure to state a claim is appropriate if the complaint fails to set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Gagliardi v. Sullivan, 513 F.3d 301, 305 (1st Cir.2008). Courts “may augment the facts in the complaint by reference to documents annexed to the complaint or fairly incorporated into it, and matters susceptible to judicial notice.” Id. at 305–306. Nevertheless, in judging the sufficiency of a complaint, courts must “differentiate between well-pleaded facts, on the one hand, and ‘bald assertions, unsupportable conclusions, periphrastic circumlocution, and the like,’ on the other hand; the former must be credited, but the latter can safely be ignored.” LaChapelle v. Berkshire Life Ins., 142 F.3d 507, 508 (1st Cir.1998) ( quoting Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996)); Buck v. American Airlines, Inc., 476 F.3d 29, 33 (1st Cir.2007); see also Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.1999). Thus, Plaintiffs must rely on more than unsupported conclusions or interpretations of law, as these will be rejected. Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir.1997) (citing Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988)).
Moreover, “even under the liberal pleading standards of Fed R. Civ. P. 8, the Supreme Court has recently held that to survive a motion to dismiss, a complaint must allege ‘a plausible entitlement to relief.’ ” Twombly, 550 U.S. at 559, 127 S.Ct. 1955,cited in Rodríguez–Ortiz v. Margo Caribe, Inc., 490 F.3d 92 (1st Cir.2007). Although complaints do not need detailed factual allegations, the plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Twombly, 550 U.S. at 556, 127 S.Ct. 1955.
In Iqbal, 556 U.S. 662, 129 S.Ct. 1937, the Supreme Court reaffirmed Twombly and clarified that two underlying principles must guide a court's assessment of the adequacy of pleadings when evaluating whether a complaint can survive a Rule 12(b)(6) motion. First, the court must identify any conclusory allegations in the complaint as such allegations are not entitled to an assumption of truth. Id., at 1949. Specifically, the court is not compelled to accept legal conclusions set forth as factual allegations in the complaint. Id. Further, “threadbare 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, 127 S.Ct. 1955);see also Peñalbert–Rosa v. Fortuño–Burset, 631 F.3d 592, 595 (1st Cir.2011) (). In other words, “[a] plaintiff is not entitled to ‘proceed perforce’ by virtue of allegations that merely parrot the elements of the cause of action.” Ocasio–Hernandez v. Fortuño–Burset, 640 F.3d 1, 12 (1st Cir.2011).
Second, a complaint survives only if it states a plausible claim for relief. Twombly, 550 U.S. at 556, 127 S.Ct. 1955. Thus, any nonconclusory factual allegations in the complaint, accepted as true, must be sufficient to give the claim facial plausibility. Id. A claim has facial plausibility when the pleaded facts allow the court to reasonably infer that the defendant is liable for the specific misconduct alleged. Id., at 1949, 1952. Such inferences must amount to more than a sheer possibility and be as plausible as any obvious alternative explanation. Id., at 1949, 1951. Plausibility is a context-specific determination that requires the court to draw on its judicial experience and common sense. Id., at 1950.
The aforementioned requirements complement a bedrock principle of the federal judicial system: a complaint must contain enough detail to give “a defendant fair notice of the claim and the grounds upon which it rests.” Ocasio–Hernandez, 640 F.3d at 8 (citing Fed.R.Civ.P. 8(a)(2)). Accordingly, “[w]hile a plaintiff's claim to relief must be supported by sufficient factual allegations to be plausible under Twombly [and Iqbal ], nothing requires a plaintiff to prove her case in the pleadings.” Chao v. Ballista, 630 F.Supp.2d 170, 177 (D.Mass.2009). Put differently, even after Twombly and Iqbal, “[d]ismissal of a complaint under Rule 12(b)(6) is inappropriate if the complaint satisfies Rule 8(a)(2)'s requirementof a short and plain statement of the claim showing that the pleader is entitled to relief.” Ocasio–Hernandez, 640 F.3d at 11.
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