United States District Court, E.D. New York
September 7, 2005.
PETR TORCIK, Plaintiff,
THE CHASE MANHATTAN BANK, INC., and DOES 1-10, Defendants.
The opinion of the court was delivered by: FREDERIC BLOCK, District Judge
MEMORANDUM AND ORDER
Plaintiff, Petr Torcik ("Torcik"), proceeding pro se, brings
this diversity action against defendants, The Chase Manhattan
Bank, Inc., and ten unnamed bank employees (collectively
"Chase"), and raises claims of tortious interference with
contractual relations and negligence. Chase moves for summary
judgment on the ground that Torcik has failed to adduce
sufficient evidence to establish essential elements of those
claims. For the following reasons, the Court grants the
On March 3, 1999, Vladamir Stepanik ("Stepanik") entered into a
contract with CityNet Ltd. ("CityNet"), a Czech corporation.
Under the contract, CityNet agreed to provide a $4 million line
of credit, the proceeds of which were to be used "for business
activities in connection with the development of the company
ACTIVITY ECOP." Rosenbaum Aff., Ex. G.*fn3 Although later
incorporated under New York law, the status of Activity ECOP at
the time the contract was executed is unclear. Stepanik claims to
have signed the contract "on behalf of Torcik's Activity ECOP"
and "confirm[s] that Torcik was the primary party of interest of
the contract." Stepanik Aff. ¶ 2.*fn4
The contract with CityNet provided that "the debtor shall draw
credit in a singular payment into a bank account, the number of
which shall be communicated in writing to the creditor at the
latest 30 days before the request for drawing of credit."
Rosenbaum Aff., Ex. G. On November 13, 1999, Torcik and Stepanik
went to a Chase branch in Staten Island to add Stepanik as a signatory to
Torcik's account, which had been opened on September 7, 1999; the
ostensible purpose of adding Stepanik to the account was to allow
the proceeds of the CityNet contract to be deposited in the
During his November 13 visit, Torcik gave his Social Security
number to a Chase employee, who called a third-party verification
service to confirm Torcik's identity. During the call, the
employee misread the number; Torcik tried to correct her, but she
cut him off. Torcik told the Chase employee his Social Security
number was issued in Mississippi in 1998, the verification
service told her that the number she had read was issued in
Arizona in 1980. Because the information did not match, a
notation that Torcik was a "fraud suspect" was placed in his
account profile. As a result, Torcik's individual account was not
converted to a joint account; Torcik also had problems using his
debit card between November 13 and 23, 1999. On November 17,
1999, Chase sent Torcik a letter indicating that his account
would be closed on November 29, 1999; however, the account
remained open until Torcik closed it in August 2000.
Torcik did not tell anyone at Chase about the CityNet contract
when he opened his account. Moreover, Torcik did not tell anyone
at Chase about the contract during his November 13 visit; he told
the teller only that "we have an important matter, a business
matter that we need to resolve today." Rosenbaum Aff., Ex. E, at
Jaroslav Post ("Post"), an official from CityNet, was with
Torcik and Stepanik at the bank and heard the Chase employee
accuse Torcik of fraud; he informed CityNet of the accusation. At
Post's request, a CityNet executive, David Kopriva ("Kopriva"),
came to New York to investigate. Before returning to the Czech
Republic, Kopriva gave Stepanik a letter, which, in translation, read as follows:
[C]onsidering [the] limitations on your disposition
right on [Torcik's account] at Chase Manhattan Bank
and [b]earing in mind the bank's suspicion of the
genuineness of your Social Security Card and
considering the bank[']s internal suspicion of an
attempt to defraud on your part, we hereby cancel the
Contract on credit concluded in Prerov on May 3rd,
Pl.'s Aff. in Opp. to Defs.' Mot. at 26. CityNet further claimed
that, by virtue of the cancellation, Stepanik was required to pay
a fine of $150,000; negotiation of a new contract was conditioned
on payment of the fine. On April 20, 2000, Kopriva wrote Stepanik
"to remind you that even despite having made repeated requests, I
have not yet received from you damages of the amount of USD
150.000 . . . arising from the contract on provision of credit,"
id. at 27; the fine remains unpaid. Torcik has offered no
evidence of the net profits that would have been realized had
CityNet not cancelled the contract.
Torcik sued Chase for negligence, tortious interference with
contractual relations, slander per se, libel per se and
defamation of character; he alleged that "[a]s a result of the
false assertion that Plaintiff was `fraud suspects' Plaintiff was
unable to fulfill their contractual obligations with CityNet and
etc., under the terms of their contract [sic]." Compl. ¶ 15. He
seeks compensatory damages of "not less than $4,000,000" and
punitive damages of "no less than $8,000,000." Id. at 6.
Chase moved to dismiss the claims for slander, libel and
defamation of character on the ground that they were barred by
the applicable statute of limitations. On June 17, 2003, the
Court granted the motion. See Mem. & Order of Jun. 17, 2003, at
3. Chase also moved to dismiss for lack of jurisdiction, arguing
that the amount in controversy was less than $75,000. The Court
initially denied the motion because, based on the allegations of
the complaint, it could not "conclude to a `legal certainty' that
[Torcik] would be entitled to less than the jurisdictional
minimum of $75,000," id. at 4; however, when discovery revealed
that Stepanik, not Torcik, was the party named in the contract
with CityNet, the Court directed Torcik to show cause why the
case should not be dismissed for lack of jurisdiction. See Mem.
& Order of May 27, 2005.
To dismiss for lack of diversity jurisdiction, the Court would
have to conclude "to a legal certainty that the claim is really
for less than the jurisdictional amount [of $75,000]."
Wolde-Meskel v. Vocational Instruction Project Cmly. Servs.,
Inc., 166 F.3d 59, 63 (2d Cir. 1999) (quoting St. Paul Mercury
Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938)). As noted in the
show-cause order, such a conclusion might have been possible here
because it appeared that Torcik was not a party to the CityNet
contract; therefore, he could not have suffered damages when the
contract was cancelled.
Stepanik's affirmation, which Torcik submitted in response to
the show-cause order, changes the analysis. If, as he claims,
Stepanik signed the contract as Torcik's representative, Torcik
could theoretically be liable to CityNet even though he was not a
named party to the contract. See, e.g., J.P. Endeavors v.
Dushaj, 778 N.Y.S.2d 531, 533 (2d Dep't 2004) ("The general rule
is that the undisclosed principal is also `bound by contracts . . .
on his [or her] account by an agent acting within his [or her]
authority.'" (quoting Restatement (Second) of Agency § 186) (alterations in original)).
The Court notes that, although Stepanik signed on behalf of
"Torcik's Activity ECOP," Stepanik Aff. ¶ 2, it does not
affirmatively appear that Activity ECOP was a separate legal
entity when the CityNet contract was executed.
Because it is at least possible that Torcik could be held
liable for the $150,000 contractual fine, the Court cannot
conclude to a legal certainty that his claims against Chase are
for less than $75,000.*fn5 The Court therefore turns to
Chase's motion for summary judgment.
II. Summary Judgment
A court must grant summary judgment "whenever it determines
that there is no genuine issue of material fact to be tried."
Savino v. City of New York, 331 F.3d 63, 71 (2d Cir. 2003)
(citing Fed.R.Civ.P. 56(c) and Celotex Corp. v. Catrett,
477 U.S. 317 (1986)). "A genuine issue of material fact exists `if
the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.'" Id. (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242 (1986).
In considering a motion for summary judgment, the court must
"resolve all ambiguities and draw all factual inferences in favor
of the nonmoving party." Id. (citing Anderson,
477 U.S. at 255). Where, however, the non-moving party bears the burden of
proof at trial, the moving party need only "`show?' that is,
point? out to the district court that there is an absence of
evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325. Upon such a showing, "the non-moving party must
respond with `specific facts showing that there is a genuine
issue for trial.'" Golden Pac. Bancorp. v. FDIC, 375 F.3d 196,
200 (2d Cir. 2004) (quoting Fed.R.Civ.P. 56(e)).
Because Torcik is proceeding pro se, the Court is mindful of
its obligation to liberally construe his submissions to raise the
strongest arguments they suggest. See Forsyth v. Federation
Employment & Guidance Serv., 409 F.3d 565, 569 (2d Cir. 2005).
Nevertheless, summary judgment is appropriate even in an action
by a pro se plaintiff when "the moving party has submitted
facts sufficient to show that the non-moving party's claim has no
merit, and the non-moving party's attempts to rebut the movant's
facts consist only of `mere allegations or denials' of the facts
asserted by the movant." Id. at 570 (quoting Fed.R.Civ.P.
A. Tortious Interference with Contractual Relations
"The tort of inducement of breach of contract, now more broadly
known as interference with contractual relations, consists of
four elements: (1) the existence of a contract between plaintiff
and a third party; (2) defendant's knowledge of the contract; (3)
defendant's intentional inducement of the third party to breach
or otherwise render performance impossible; and (4) damages to
plaintiff." Kronos, Inc. v. AVX Corp., 81 N.Y.2d 90, 94 (1993).
Chase argues that Torcik has failed to adduce sufficient evidence
to support those elements.
The Court agrees. Even assuming that Torcik could establish
that he was Stepanik's undisclosed principal on the CityNet
contract, and that he has suffered damages, he cannot establish
elements (2) and (3). With regard to element (2), there is no evidence that Chase knew about the CityNet contract; indeed,
Torcik has affirmatively stated that he did not tell anyone at
Chase about it. With regard to element (3), no reasonable jury
could conclude that Chase intentionally induced Torcik either to
breach the contract or to otherwise render performance
impossible. Even viewed in the light most favorable to Torcik's,
the facts establish, at best, that a Chase employee mistakenly
misread Torcik's Social Security number and refused to correct
her error; such acts and omissions do not even remotely suggest
that she acted with the requisite intent.
Since Torcik has failed to offer sufficient evidence to support
at least two of the elements of tortious interference with
contractual relations, Chase is entitled to summary judgment on
"To sustain a claim for negligence, a plaintiff must show that
the defendant owed the plaintiff a cognizable duty of care, that
the defendant breached that duty, and that the plaintiff suffered
damages as a proximate result of that breach." King v. Crossland
Sav. Bank, 111 F.3d 251, 259 (2d Cir. 1997) (citing, inter
alia, Solomon v. City of New York, 66 N.Y.2d 1026 (1985)). Chase
argues that Torcik has failed to establish these elements.
Courts in this circuit have held that a bank has "a duty to
exercise reasonable skill and care in carrying out its activities
for its customers." Bank Brussels Lambert, S.A. v. Intermetals
Corp., 779 F.Supp. 741, 747 (S.D.N.Y. 1991); see also Dubai
Islamic Bank v. Citibank, N.A., 126 F.Supp.2d 659, 667 (S.D.N.Y.
2000); Colorado Capital v. Owens, 227 F.R.D. 181, 188 (E.D.N.Y.
2005); cf. Crossland Sav. Bank, 111 F.3d at 259 (noting that
district court had conceded existence of duty). The Court
therefore assumes that Chase was under a duty to use reasonable care in relaying Torcik's Social Security number
to its verification service.*fn6 The Court further assumes
that a reasonable jury could conclude that a refusal to correct
an error in relaying such information constitutes a breach of
that duty. See Crossland Sav. Bank, 111 F.3d at 259 ("[T]he
assessment of reasonableness generally is a factual question to
be addressed by the jury.").
Torcik's negligence claim nevertheless fails because he cannot
establish the third element: proximate causation. To show
proximate cause, "a plaintiff must establish that the defendant's
negligence was a substantial foreseeable factor in bringing about
his or her injury." Johnson v. Bryco Arms, 304 F.Supp.2d 383,
395 (E.D.N.Y. 2004) (Weinstein, J.) (citing New York law). With
regard to foreseeability, the test is "whether under all the
circumstances the chain of events that followed the negligent act
or omission was a normal or foreseeable consequence of the
situation created by the [defendant's] negligence." Mirand v.
City of New York, 84 N.Y.2d 44, 50 (1994). Thus,
[w]hile the fact that a defendant did not foresee the
precise manner in which the accident occurred will
not excuse liability, if, with the benefit of
hindsight, it appears highly extraordinary that the
defendant's act should have brought about the harm,
the act will not be considered a proximate cause. Trojcak v. Javcon Machine, Inc., 795 N.Y.S.2d 345,
346 (2d Dep't 2005) (internal citations omitted).
Although proximate causation is usually a question of
fact for the jury, the issue may be decided as a
matter of law when "only one conclusion may be drawn
from the established facts." See Bryco Arms,
304 F. Supp. 2d at 395 (citing Alexander v. Eldred,
63 N.Y.2d 460 (1984)).
Here, as a matter of law, Chase's acts and omissions were not
the proximate cause of the cancellation of the CityNet contract.
The only reason that the Chase employee's accusation that Torcik
was a fraud suspect led to the cancellation of the CityNet
contract was that a CityNet official happened to be present to
overhear the accusation and to report it to CityNet, which
apparently deemed the accusation to be a material breach of the
contract warranting its cancellation. This chain of events is
outside the normal, forseeable consequences of the Chase
employee's misreading of Torcik's Social Security number and
subsequent refusal to correct her error.
Since the only conclusion to be drawn from the facts of this
case is that Chase did not proximately cause the cancellation of
the CityNet contract, Chase is entitled to summary judgment on
Torcik's negligence claims.
Chases's motion for summary judgment is granted and Torcik's
complaint is dismissed.
© 1992-2005 VersusLaw Inc.