Pub. Serv. Co. of Okla. v. A Plus, Inc.

• Decision Date: 02 August 2011
• Docket Number: NO. CIV-10-651-D,CIV-10-651-D
• Parties: PUBLIC SERVICE COMPANY OF OKLAHOMA, an Oklahoma corporation, Plaintiff, v. A PLUS, INC., an Oklahoma corporation, a/k/a JARVIS FURNITURE, a/k/a A PLUS SPRAYING; RANDEL R. STONE, an individual; KIMBERLY A. STONE, an individual; PATRICIA ANN WILLIAMS, an individual; JERRY DUAYNE WILLIAMS, an individual; and FIRST STATE BANK OF ANADARKO, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

PUBLIC SERVICE COMPANY OF OKLAHOMA, an Oklahoma corporation, Plaintiff, v. A PLUS, INC., an Oklahoma corporation, a/k/a JARVIS FURNITURE, a/k/a A PLUS SPRAYING;

RANDEL R. STONE, an individual; KIMBERLY A. STONE, an individual; PATRICIA ANN WILLIAMS,

an individual; JERRY DUAYNE WILLIAMS, an individual;

and FIRST STATE BANK OF ANADARKO, Defendants.

NO. CIV-10-651-D

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

Dated: August 2, 2011

ORDER

Before the Court is the Motion to Dismiss [Doc. No. 55] of Defendant First State Bank of Anadarko ("the Bank"). Pursuant to Fed. R. Civ. P. 12(b)(6), the Bank contends the factual allegations in the Amended Complaint fail to state a claim upon which relief may be granted against the Bank. Plaintiff Public Service Company of Oklahoma ("PSO") timely responded to the motion, and the Bank filed a reply.

Background:

PSO brought this action to recover sums it paid to A Plus, Inc. a/k/a Jarvis Furniture a/k/a A Plus Spraying (collectively, "A Plus") pursuant to invoices submitted to PSO by A Plus and/or its owners, defendants Randel R. Stone and Kimberly A. Stone (the "Stones"). PSO alleges the invoices were false or fraudulent because they reflected work which was never performed by A Plus.According to PSO, its payments based on the allegedly false invoices totaled nearly $600,000.00 during the time period of 2006 through 2009.

In the Amended Complaint, PSO named additional defendants, including the Bank.¹ A Plus and the Stones maintained accounts at the Bank during the relevant time period. According to PSO, it paid the amounts reflected on the allegedly fraudulent invoices by checks made payable to A Plus. PSO further alleges the Stones, acting on behalf of A Plus, did not deposit these checks in the A Plus account at the Bank; instead, they cashed the checks, asked the Bank to convert them into cashier's checks made payable to the Stones or a third party, or deposited the checks in the Stones' personal account at the Bank.

PSO's claims against the Bank are set forth in its Sixth Cause of Action. PSO asserts claims of negligence and gross negligence against the Bank, alleging it breached a duty to PSO arising under common law or statute. According to PSO, the Bank was negligent in allowing the Stones to engage in the foregoing banking transactions and in failing to report those transactions "as required by law." Amended Complaint, ¶¶ 66-67. PSO alleges the Bank had a duty to accept the checks only for deposit into the A Plus account, and it was negligent in allowing the Stones to obtain cash or cashier's checks and/or to deposit the checks into their personal account. PSO also alleges the Bank failed to generate "anti-structuring" reports regarding these transactions, and that it was required to do so by law. Amended Complaint ¶¶ 33-34, 17-18. PSO alleges the Bank's negligent conduct resulted in injury to PSO.

The Bank seeks dismissal of these claims pursuant to Fed. R. Civ. P. 12(b)(6). It argues the common law negligence claim against it must be dismissed because the Bank does not, as a matter of law, have a duty to PSO on which an Oklahoma common law negligence claim can be based. The Bank also argues PSO cannot base its negligence claim on the Bank's alleged violation of statutory bank reporting requirements because there is no private cause of action based on those requirements. PSO argues the Bank owed it a duty under both theories, asking the Court to find that Oklahoma would recognize a common law cause of action in negligence under these circumstances. Alternatively, PSO contends the Bank is not entitled to dismissal because PSO has also alleged a claim against the Bank based on the contention that it aided and abetted the Stones and A Plus in committing fraud. PSO also seeks leave to amend to cure the deficiencies in the Amended Complaint; if the Court finds it has not properly alleged an aiding and abetting claim, it seeks leave to add that claim in an amended complaint.

Standards applicable to Rule 12(b)(6):

To avoid dismissal pursuant to Rule 12(b)(6), a complaint "must contain enough factual allegations 'to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Robbins v. Oklahoma, 519 F. 3d 1242, 1247 (10th Cir. 2008); VanZandt v. Oklahoma Dept. of Human Services, 276 F. App'x 843, 846 (10th Cir. 2008) (unpublished opinion). To state a plausible claim, "the Plaintiff has the burden to frame a 'complaint with enough factual matter (taken as true) to suggest' that he or she is entitled to relief." VanZandt, 276 F. App'x at 846 (quoting Robbins, 519 F. 3d at 1247.) "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U. S. at 555. Thus, plaintiffs must allege sufficient facts to "nudge[ ] their claims across the line from conceivable to plausible." Id. at 570;Robbins, 519 F. 3d at 1247. The "mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." Ridge at Red Hawk, L.L.C. v. Schneider, 493 F. 3d 1174, 1177 (10th Cir. 2007) (emphasis in original). Although the Court must construe well-pleaded facts as true, not all factual allegations are "entitled to the assumption of truth." Ashcroft v. Iqbal, _U.S. _, 129 S.Ct. 1937, 1951 (2009). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Id. The Court need not accept as true the assertions in a complaint which contain only "labels and conclusions" or "amount to nothing more than a 'formulaic recitation of the elements'" of a claim. Ashcroft, 129 S. Ct. at 1951 (quoting Twombly, 550 U.S. at 554-555).

In its response to the Bank's motion, PSO devotes most of its argument to a recitation of its allegations against A Plus and the Stones, including a discussion of evidence it claims to have obtained in discovery. Those arguments are not responsive to the Bank's motion because material outside the pleadings is not properly considered in connection with a Rule 12(b)(6) motion.² "In deciding a Rule 12(b)(6) motion, a federal court generally "should not look beyond the confines of the complaint itself." MacArthur v. San Juan County, 309 F.3d 1216, 1221 (10th Cir. 2002) (citing Dean Witter Reynolds, Inc. v. Howsam, 261 F.3d 956, 960 (10th Cir.2001), rev'd on other grounds, 537 U.S. 79 (2002)). The question presented by the Bank's motion is not whether PSO has stateda claim for relief against the Stones and/or A Plus or whether PSO can present evidence that the Stones and/or A Plus presented false invoices to PSO. The sole issue presented by the Bank's motion is whether PSO has alleged sufficient facts in the Amended Complaint to state a plausible claim for relief based on the Bank's purported negligence. Accordingly, the Court will confine its ruling to that issue.

Application:

Common law negligence:

To state a claim for relief based on negligence under Oklahoma common law, a plaintiff must plead facts sufficient to show (1) the defendant owed a duty to the plaintiff; (2) the defendant breached that duty; and (3) the defendant's breach of its duty was the proximate cause of injury to the plaintiff. Consolidated Grain & Barge Co. v. Structural Systems, Inc., 212 P. 3d 1168, 1171 n. 8 (Okla. 2009). The threshold question in a negligence action is whether the defendant owes the plaintiff a duty of care. First Natl. Bank in Durant v. Honey Creek Entertainment Corp., 54 P. 3d 100, 105 (Okla. 2002). "'It is an established rule of law that there can be no actionable negligence where the defendant has breached no duty owed to the plaintiff.'" Henry v. Merck and Co., Inc., 877 F. 2d 1489, 1492 (10th Cir. 1989) (citing Nicholson v. Tacker, 512 P. 2d 156, 158 (Okla. 1973)). Even if a defendant "has created a risk which harmed the plaintiff that does not mean that, in the absence of some duty to the plaintiff, the defendant will be held liable." Id.

"The issue of the existence of a duty is a question of law for the court." Jennings v. Badgett, 230 P. 3d 861, 865 (Okla. 2010). A court determines the existence of a duty by examining "whether the defendant stands in such a relationship to a plaintiff that the law will impose upon the defendant an obligation of reasonable conduct for the benefit of the plaintiff." Gaines-Tabb v. ICI ExplosivesUSA, Inc., 995 F. Supp. 1304, 1316 (W. D. Okla. 1996), aff'd, 160 F. 3d 613 (10th Cir. 1998); Delbrel v. Doenges Bros. Ford, Inc., 913 P. 2d 1318, 1320-21 (Okla. 1996).

In this case, the Bank argues PSO has not pled facts sufficient to show the Bank owed PSO any legal duty on which a common law negligence claim could be based. As the Bank points out, PSO does not allege that it was a depositor or customer of the Bank or that it had any legal relationship with the Bank; in its response, PSO concedes that it cannot do so. Further, the Court notes that no facts are alleged which suggests PSO relied upon the Bank for any action or information during the course of conduct complained of here. As the Bank also argues, Oklahoma courts have never recognized a duty owed by a state bank to one who is not its depositor under circumstances similar to those in the present case. Thus, the Bank contends that, even if the facts alleged are taken as true, they cannot form the basis for a plausible claim for relief based on common law negligence.

In its response, PSO concedes no Oklahoma court has held that a state bank owes a duty to a third-party non-bank customer under these circumstances, and it does not dispute that it had no business relationship with the Bank. The parties' briefs suggest that the Oklahoma courts have not been...