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Jones v. Commerce Bank

September 15, 2006


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


Plaintiff pro se Keisha Jones ("Jones") brought this action for negligence, breach of fiduciary duty, intentional and negligent infliction of emotional distress, commercial bad faith, consumer fraud and breach of contract against defendant Commerce Bank, N.A. ("Commerce").*fn1 On May 23, 2006, I granted in part Commerce's motion to dismiss. See Jones v. Commerce Bancorp, Inc., No. 06 Civ. 835, 2006 WL 1409492 (S.D.N.Y. May 23, 2006) ("Commerce I") (dismissing plaintiff's claims for negligent and intentional infliction of emotional distress, commercial bad faith and consumer fraud). Commerce now moves for summary judgment on plaintiff's remaining claims for negligence, breach of fiduciary duty, and breach of contract. In addition, Jones moves to amend her complaint to add claims against Commerce for "invasion of privacy," deceptive trade practices in violation of N.Y. General Business Law Section 349, fraud, and defamation. Plaintiff also seeks to add several additional defendants. For the reasons set forth below, Commerce's motion for summary judgment is GRANTED, and plaintiff's motion to amend is GRANTED in part and DENIED in part.*fn2


The facts set forth below are taken from the affidavits and deposition testimony submitted by the parties in connection with this motion. Jones owned a business checking account at Commerce in the name of ILV Enterprises, Ltd. ("ILV"). Through ILV, Jones "consult[ed] with individuals to build businesses" and taught "individuals how to manage their personal finances like profitable small businesses." (Pltf.'s Affidavit in Opposition to Commerce's Motion for Summary Judgment, dated August 11, 2006 ("Jones Aff.") ¶ 6(h).*fn3 On May 22, 2005, Jones discovered that funds had been fraudulently withdrawn from her ILV account. In all, four unauthorized withdrawals totaling $1,860 were made from the account on May 19th, 20th and 21st.*fn4 After plaintiff complained to Commerce, the money was credited back to her account on June 9, 2006. (Affidavit of Henry V. Byrd, dated August 1, 2006 ("Byrd Aff."), Ex. L). Plaintiff asserts that she instructed Commerce to close her account on July 13, 2005. However, the account was not closed until August 10, 2005.

An unidentified female (captured on Commerce's security cameras) withdrew the funds from plaintiff's ILV account using fake identification. Another unidentified female (perhaps the same person) opened a separate fraudulent account at a Commerce branch in Philadelphia in plaintiff's name, and attempted to deposit and cash fraudulent checks through that account. Commerce discovered this fraud and froze the fraudulent account on May 25, 2006. (Byrd Aff., ¶ 12, Ex. M). Unfortunately, plaintiff's woes stemming from the theft of her identity did not stop there. Plaintiff asserts, inter alia, that a fraudulent utility account was opened in her name, a fraudulent tax return was filed and a rapid refund" processed, her social security record was falsified, and her credit rating was ruined. Plaintiff asserts that she suffers from a psychiatric condition known as Adjustment Disorder" that has been aggravated by these events, and that as a result she was forced to close her business.


A. Summary Judgment

A court will not grant a motion for summary judgment unless it determines that there is no genuine issue of material fact and the undisputed facts are sufficient to warrant judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250 (1986). In determining whether there is a genuine issue of material fact, the Court must resolve all ambiguities, and draw all inferences, against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam ); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir.1987). However, a disputed issue of material fact alone is insufficient to deny a motion for summary judgment, the disputed issue must be "material to the outcome of the litigation," Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986), and must be backed by evidence that would allow "a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

Plaintiff asserts claims for negligence, breach of contract and breach of fiduciary duty against Commerce, all stemming from Commerce's failure to safeguard her personal identifying information and failure to prevent the unauthorized withdrawals from her ILV account. "'To establish a prima facie case of negligence, a plaintiff must establish the existence of a duty owed by a defendant to the plaintiff, a breach of that duty, and that such breach was the proximate cause of injury to the plaintiff.'" Commerce I, 2006 WL 1409492, *2 (quoting Alvino v. Lin, 300 A.D.2d 421 (N.Y. App. Div. 2nd Dep't 2002)). In addition, in some circumstances, the failure to safeguard a client's personal identifying information may give rise to a claim for breach of fiduciary duty. See Daly v. Metropolitan Life Ins. Co., 782 N.Y.S.2d 530, 535 (Sup. Ct. N.Y. Cty. 2004).

However, here plaintiff has adduced no evidence linking Commerce to the theft of her personal information. Plaintiff alleges that the unauthorized withdrawals from her Commerce account may be connected to an incident in New Jersey in which several Commerce employees were implicated in the theft of customers' personal information. However, plaintiff has turned up no evidence through discovery linking her case to that purported fraud. Indeed, Commerce attests that plaintiff was not one of the customers whose data was compromised in the New Jersey incident. (See Affidavit of Christopher J. Tucci, dated April 19, 2005 (Tucci Aff.") ¶¶ 2-5).

At most, plaintiff has raised questions of fact as to whether Commerce was negligent in failing to prevent the four withdrawals from her ILV account. However, Commerce replaced these funds within weeks. Plaintiff has submitted no evidence that she suffered any compensable injury stemming from the loss of access to these funds between May 22, 2005 and June 9, 2005.

Plaintiff asserts that she suffered severe emotional distress as a result of the theft of her identity, that her credit rating was adversely affected, and that she ultimately became unable to run her business.*fn5 However, Commerce's connection to these injuries is wholly speculative. Commerce was merely responsible for failing to prevent four unauthorized withdrawals from plaintiff's account. It was the theft of plaintiff's identity by unidentified individuals, in an unknown manner, that caused plaintiff's injuries, not four unauthorized withdrawals that were soon rectified.

Plaintiff devotes much of her affidavit in opposition to Commerce's motion to discussing the severe emotional harm she has suffered as a result of this ordeal and the debilitating affect such stress has had on her business and finances. However, as I stated in dismissing plaintiff's claims for negligent and intentional infliction of emotional distress, recovery for emotional harm "'generally must be premised upon the breach of a duty . . . which either unreasonably endangers the plaintiff's physical safety, or causes the plaintiff to fear for his or her own safety.'" Commerce I, 2006 WL 1409492, *4 (quoting Sheila C. v. Povich, 11 A.D.3d 120, 130 (N.Y. App. Div. 1st Dep't 2004)). Such claims "'must be supported by allegations of conduct . . . so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.'" Id. (quoting Sheila C., 11 A.D.3d at 130-31). Negligently failing to prevent third parties from negotiating four fraudulent withdrawals does not constitute atrocious and utterly intolerable behavior.

Thus, because plaintiff has produced no evidence that Commerce proximately caused any compensable injury to her, Commerce's ...

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