Nunez v. JPMorgan Chase Bank
| Jurisdiction | United States,Federal,New York |
| Parties | GRISSEL NUNEZ, as parent and natural guardian of I.N.P., an infant, Plaintiff, v. JPMORGAN CHASE BANK, N.A., Defendant. |
| Decision Date | 23 January 2024 |
| Court | U.S. District Court — Southern District of New York |
| Docket Number | 23 Civ. 7569 (PAE) |
Plaintiff Grissel Nunez, on behalf of her daughter, I.N.P., and a putative class of minors, alleges that JPMorgan Chase Bank (“Chase”) “committed a tortious act” by failing to place children's court-ordered settlement funds in “the highest interest bearing account possible.” Dkt. 1 (“Notice of Removal”) Ex. 1 (“Compl.”) ¶ 4; see also Notice of Removal ¶ 1. Nunez filed suit in New York State Supreme Court. Chase removed the case to this Court asserting subject matter jurisdiction based both on diversity, 28 U.S.C. § 1332(a), and the Class Action Fairness Act (“CAFA”), id. § 1332(d).
Pending now are two motions. Nunez has moved to remand this case to state court. Chase has moved to compel arbitration based on the Deposit Account Agreement (“DAA”) that Nunez signed when she deposited her daughter's settlement funds. For the reasons that follow, the Court denies both motions.
In April 2023, after three years of litigation, Grissel Nunez's daughter, I.N.P., was awarded $750,000 in a medical-malpractice settlement. See Compl. at 9; see also Nunez v. Baez, No. 24297/2020E (N.Y. Sup. Ct., Bronx County), Dkt. 87 (filed May 24, 2023). Of that $750,000, $523,937.52 was set aside for I.N.P. to access on her 18th birthday. Compl. at 9. Until then, that sum was to be divided up in three bank accounts. Id. Relevant here, $200,000 was to be deposited with Chase, “in the highest interest bearing account possible.” Id. On May 24, 2023, Justice Michael A. Frishman of the New York Supreme Court in Bronx County so-ordered the settlement and appointed a referee to examine reports of the relevant fiduciaries, including Chase. See id. at 8-18.
On July 7, 2023, Nunez duly opened a Certificate of Deposit (“CD”) account with Chase, in which she deposited the relevant sum. Id. at 19. To her surprise, however, Chase refused to pay I.N.P. the then-prevailing interest rate of 4.5%; instead, it offered only a savings account paying 0.01% each year. Id. ¶¶ 5-6; see also id. at 19 ().
Two weeks later, on July 26, 2023, Nunez filed suit against Chase on I.N.P.'s behalf, alleging that Chase “committed a tortious act within New York State in that it failed to comply with an Order of the Hon. Michael A. Frishman dated May 23, 2023 . . . which Order mandated that it open ‘the highest interest bearing account possible'” with Chase to deposit “the $200,000.00 settlement check.” Id. ¶ 4. Nunez also brought suit on behalf of a putative “[c]lass of [i]nfants whose funds from legal cases were not placed in the highest interest bearing accounts possible despite [c]ourt [o]rders mandating same.” Id. at 1. As relief, Nunez sought an order (1) “[c]ertifying the class,” (2) requiring Chase “to immediately convert the savings account opened for [I.N.P.] to a CD account paying [I.N.P.] the highest current interest rate,” (3) awarding “[a]ctual damages lost by the class because of the lower interest rate given to ‘court ordered' accounts,” (4) awarding “[p]unitive damages,” and (5) awarding “[a]ttorney's fees, plus costs and disbursements.” Id. at 3-4.
On July 26, 2023, Nunez filed this action in the New York State Supreme Court in Bronx County, Dkt. 1, Ex. 1 (“Compl.”), which Chase removed to this Court on August 25, 2023. See Dkt. 1 (“Notice of Removal”); id., Exs. 3 (“Simson Removal Decl.”), 5 (“Leicht Decl.”). On August 29, 2023, Nunez moved to remand the case to state court. Dkt. 10 (“Pl. Remand Br.”). On September 12, 2023, Chase filed a memorandum of law in opposition. Dkt. 13 (“Def. Remand Br.”). On September 13, 2023, upon notice from Chase that it intended to move to compel arbitration, the Court set a briefing schedule for that motion, and notified the parties that it would resolve the two motions concurrently. Dkt. 15. On September 14, 2023, Chase moved to compel arbitration and stay this action, Dkt. 18, and filed a memorandum of law in support, Dkt. 19 (“Def. Arbitration Br.”), and three declarations, Dkts. 20 (“Deck Decl.”), 21 (“Reid Decl.”), 22 (“Garrett Decl.”). On September 26, 2023, Nunez filed a declaration in opposition to the motion to compel arbitration. Dkt. 23 (“Pl. Arbitration Br.”). On October 5, 2023, Chase filed a reply, Dkt. 29 (“Def. Arbitration Reply Br.”), and a declaration, Dkt. 29 (“Simson Arbitration Decl.”).
“Any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). On a motion to remand, “the defendant bears the burden of demonstrating the propriety of removal.” Cal. Pub. Emps.' Ret. Sys. v. Worldcom, Inc., 368 F.3d 86, 100 (2d Cir. 2004) (citation omitted).
In its notice of removal, Chase asserted subject-matter jurisdiction based on both CAFA and diversity jurisdiction. Notice of Removal ¶¶ 15-35. Both grounds support jurisdiction here.
“CAFA provides the federal district courts with original jurisdiction to hear a class action if [1] the class has more than 100 members, [2] the parties are minimally diverse, and [3] the matter in controversy exceeds the sum or value of $5,000,000.” Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013) (citing 28 U.S.C. §§ 1332(d)(2) & (d)(5)(B)). All three criteria are met here.[2] First, there is at least a “reasonable probability” that Nunez's putative class has more than 100 members. Blockbuster, Inc. v. Galeno, 472 F.3d 53, 58 (2d Cir. 2006). To be sure, Nunez's barebones complaint does not quantify the size of her proposed class. But that does not pose an obstacle to removal. Chase has provided the sworn declaration of its employee Phillip Leicht, who has identified “[t]housands of open court-controlled accounts . . . where the ward/ultimate beneficiary of the account was less than 18 years old . . . at the time of account opening,” “[h]undreds” of which are in New York. Leicht Decl. ¶ 3.[3]Removing defendants often rely on such business records to satisfy CAFA's numerosity requirement. See, e.g., Musiello v. CBS Corp., No. 20 Civ. 2569 (PAE), 2020 WL 3034793 (S.D.N.Y. June 5, 2020) (); Shulman v. Chaitman LLP, 392 F.Supp.3d 340, 352-53 (S.D.N.Y. 2019) (); Henry v. Warner Music Grp. Corp., No. 13 Civ. 5031 (PGG), 2014 WL 1224575, at *2 n.1 (S.D.N.Y. Mar. 24, 2014) (). In the absence of countervailing evidence from Nunez, the Court accepts Chase's representation that the putative class, as framed by Nunez's complaint, has more than 100 members.
Second, the parties are minimally diverse-that is, “at least one plaintiff and one defendant are citizens of different states.” Blockbuster, 472 F.3d at 56. The named parties- Nunez and Chase-are diverse. Nunez “resides in Bronx County” and is thus a citizen of New York. Compl. ¶ 1. As a national banking association, Chase is a citizen of Ohio, “the State in which its main office, as set forth in its articles of association, is located.” Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 307 (2006); see also Notice of Removal ¶ 18. Minimal diversity is thus satisfied.
Third, there is at least a “reasonable probability” that the matter in controversy exceeds $5 million. Blockbuster, 472 F.3d at 59. Nunez's counsel has asserted that Chase's “improper interest rate” has caused I.N.P. $50,000 in “actual loss,” and that “the potential verdict for the class” is $50,000,000, “if there are but 1,000 people in the United States who were similarly wronged.” Pl. Remand Br., Ex. 2 at 6 (). Where, as here, “the pleadings are inconclusive as to amount in controversy, then the courts may look to documents outside the pleadings to other evidence in the record to determine the amount in controversy.” Yong Qin Luo v. Mikel, 625 F.3d 772, 775 (2d Cir. 2010). One such source of evidence is settlement offers, when offered in good faith. See, e.g., Champion v. CVS Albany, LLC, No. 22 Civ. 7748 (JMA) (ST), 2023 WL 1766284, at *2 (E.D.N.Y. Feb. 3, 2023) (collecting cases). Here, Nunez's counsel's estimate in the course of settlement discussions is consistent with an amount at issue plausibly exceeding $5 million.[4]
As a result, the Court concludes that removal was proper under CAFA.
A federal court has diversity jurisdiction over a civil action between (1) “citizens of different States,” (2) “where the matter in controversy exceeds the sum or value of $75,000.” 28 U.S.C. § 1332(a); see, e.g., 75,000 Wash. Nat'l Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126, 133 (2d Cir. 2020). Both criteria are met here.
First the parties are “completely diverse”-that is, no plaintiff shares a citizenship with any defendant. See, e.g., Pa. Pub. Sch. Emps.' Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 118 (2d Cir. 2014). There are only two parties: Nunez, a citizen of New York, and Chase, a citizen of Ohio. Notice of Removal ¶¶ 16, 18. “[D]iversity of citizenship is determined by...
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