Opinion
11 Civ. 8955 (KBF)
07-23-2012
JACKIE BODLEY, Plaintiff, v. WILLIAM EDMUND CLARK, et al., Defendants.
MEMORANDUM & ORDER
:
On December 7, 2011, pro se plaintiff Jackie Bodley ("plaintiff") sued William Edmund Clark ("Clark") and an unnamed manager of a branch of TD Bank, NA ("the unnamed manager") (collectively, "defendants"). (Compl. (Dkt. No. 2).) In his amended complaint, filed February 16, 2012, plaintiff asserts that defendants violated his Fourteenth Amendment due process rights. (Am. Compl. (Dkt. No. 7).) Defendants now move to dismiss the amended complaint (Dkt. Nos. 12, 17), and plaintiff has applied for pro bono counsel (Dkt. No. 16).
For the reasons discussed below, defendants' motion to dismiss is GRANTED; plaintiff's Fourteenth Amendment claim is DISMISSED with prejudice; and all remaining claims are DISMISSED without prejudice, with leave to amend. Plaintiff's application for pro bono counsel is DENIED as moot.
I. BACKGROUND
In his amended complaint, plaintiff alleges that on February 22, 2005, he sold a property located in the Washington, DC area for $599,000. (Am. Compl. at 5.) He claims that $166,000 from that transaction was transferred to two of his accounts maintained by Commerce Bank, now known as TD Bank, NA ("TD Bank"). (Id. at 6.) On June 18, 2011, plaintiff apparently learned that TD Bank had "release[d] all [of his] monies to an unknown source without notifying [him]." (Id. at 3.) As a result, plaintiff "suffer[s] mentally from stress and anxiety and [is] being treated with lithium for a disorder prevalent [sic] to this matter." (Id.) In addition, plaintiff "had to live in a shelter for six months because [he] was destitute." (Id.)
Plaintiff further alleges that
Clark is the CEO, President of TD Bank and he is the top controller of all matters pertaining to any dealing with the corporation as a whole. Any and all employees of the bank falls [sic] under the leadership of its CEO, President and he is the sole boss of all employees and responsible for all their actions in the banking field legit [sic] or illegal. All monies in accounts are under the protection of the FDIC along with the CEO, President of said banking institution. [Plaintiff] is holding William Edmund Clark liable in his professional capacity as well as in his individual capacity in regards to the unexplained disappearance of said funds. William Edmund Clark was notified by mail at his Toronto Canada office of the fact that someone in his employ has removed funds from [plaintiff's] two
accounts illegally and his staff will not cooperate with [plaintiff] in regards to the whereabouts of said money.(Id. at 6.)
Plaintiff further alleges that the unnamed manager
at the 125th street bank in Harlem on June 18, 2011 would not give [plaintiff] his name or his business card, [and] further told [plaintiff] that he knew my monies were removed illegally but he did not feel he had to give me his identity . . . The [unnamed] manager of the Harlem branch TD bank which use[d] to be Commerce Bank had [plaintiff's] money along with others under his care and protection under the banking laws of America and there is [a] procedure that [the unnamed manager] is bound by when it comes to protecting such accounts at all times. He failed to protect [plaintiff's] monies.(Id. at 6-7.) Plaintiff asserts that those actions violated his Fourteenth Amendment due process rights. (Id. at 2.)
Defendants moved to dismiss the amended complaint on March 1, 2012 (Dkt. No. 12), and plaintiff applied for pro bono counsel on April 24, 2012.
II. DISCUSSION
A. Standard of Review
On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court must accept a plaintiff's factual allegations in his complaint as true and draw all reasonable inferences in the plaintiff's favor. See Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010). Despite the well-established rule that a court must liberally construe and interpret pro se complaints to raise "the strongest arguments they suggest," to survive a motion to dismiss, a pro se plaintiff must still plead sufficient facts to state a claim that is plausible on its face. Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474-75 (2d Cir. 2006).
Thus, the plaintiff must provide "more than an unadorned, the-defendant-unlawfully-harmed me accusation," and a claim will only have "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Accordingly, "where 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 shown--that the pleader is entitled to relief." Id. at 679 (internal punctuation omitted); see also Fed. R. Civ. P. 8(a)(2).
B. Analysis
1. Fourteenth Amendment Claim
Here, plaintiff cannot, as a matter of law, sustain a Fourteenth Amendment claim against defendants. It is well-established that only government actors can violate constitutional rights. See, e.g., Edmonson v. Leesville Concrete Co., Inc., 500 U.S. 614, 619 (1991). Therefore, a plaintiff must show that she was injured by either a state actor or a private entity acting under color of state law. See Spear v. Town of West Hartford, 954 F.2d 63, 68 (2d Cir. 1992). A private entity may be liable for a constitutional violation if and only if
(1) the entity acts pursuant to the "coercive power" of the state or is "controlled" by the state ("the compulsion test"); (2) when the state provides "significant encouragement" to the entity, the entity is a "willful participant in joint activity with the [s]tate," or the entity's functions are "entwined" with state policies ("the joint action test" or "close nexus test"); or (3) when the entity "has been delegated a public function by the [s]tate," ("the public function test") . . . [Further,] plaintiff must allege that the state was involved "with the activity that caused the injury" giving rise to the action.Sybalski v. Indep. Group Home Living Program, Inc., 546 F.3d 255, 257-58 (2d Cir. 2008)(citations omitted).
On the facts alleged, the amended complaint fails to state a claim according to this standard. First, both Clark and the unnamed manager are private actors--i.e., employees of a private banking institution--and plaintiff does not allege that a state actor ordered or induced defendants or TD Bank to transfer funds from his accounts without his permission. Although federal and state governments heavily regulate the financial industry, "[t]he mere fact that a business is subject to state regulation does not by itself convert its action into that of the state." Jackson v. Metro. Edison Co., 419 U.S. 345, 351 (1974).
Second, there are no allegations that the "State has so far insinuated itself into a position of interdependence with [defendants] that it must be considered a joint participant in the challenged activity." Burton v. Wilmington Parking Auth., 365 U.S. 715, 725 (1961).
Finally, plaintiff does not allege that the state has delegated a public function to defendants that is "exclusively 'associated with sovereignty.'" Young v. Halle Hous. Associates, L.P., 152 F. Supp. 2d 355, 365 (S.D.N.Y. 2001). As a result, plaintiff's amended complaint fails to state a Fourteenth Amendment claim pursuant to the above standard. See Wright v. Zabarkes, 347 Fed. Appx. 670, 672 (2d Cir. 2009).
Further, based on the facts alleged, it is implausible that plaintiff could ever establish there was state action involved in the purported transfer of funds were he allowed to amend his pleading. Accordingly, the Court dismisses plaintiff's Fourteenth Amendment claim with prejudice. See Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000)(denying amendment on futility grounds because the "problem with [the plaintiff's] complaint is substantive [and] better pleading will not cure it").
2. Additional Claims
This Court must "liberally construe" plaintiff's pro se pleading to determine whether it states other claims. Triestman, 470 F.3d at 474-75. Although plaintiff initiated this action under the Court's federal question jurisdiction (see Am. Compl. at 1), the Court will liberally construe his pleading and examine potential federal and New York state law claims contained in the amended complaint.
a. Federal Claim
The Court interprets plaintiff's amended complaint to allege a violation of 15 U.S.C. § 1693(b), the Electronic Funds Transfer Act ("EFTA"), which creates "a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund and remittance transfer systems" and safeguards "individual consumer rights." See also 15 U.S.C. § 1693m (creating a private cause of action). EFTA requires that "[f]or each electronic fund transfer initiated by a consumer from an electronic terminal, the financial institution holding such consumer's account shall, directly or indirectly, at the time the transfer is initiated, make available to the consumer written documentation of such transfer." 15 U.S.C. § 1693d(a).
To state a claim under the EFTA, plaintiff must allege that the accounts in question 1) were "demand deposit, savings deposit, or other asset account[s]"; 2) "established primarily for personal, family, or household purposes"; and 3) that the unauthorized "electronic fund transfer" was "initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account." See Fischer & Mandell LLP v. Citibank, N.A, No. 09-1160, 2009 WL 1767621, at *3 (S.D.N.Y. June 22, 2009). Checks and wire transfers are explicitly excluded from EFTA's definition of "electronic fund transfers." Id.
Construed liberally, the amended complaint alleges that TD Bank debited his account without notification. On its own, that is insufficient to sustain an EFTA claim against defendants. Assuming arguendo that plaintiff's TD Bank accounts were for "personal, family, or household purposes," plaintiff has not alleged that the purported unauthorized transfer was "initiated through an electronic terminal, telephone, computer, or magnetic tape."
Moreover, the EFTA imposes liability on financial institutions themselves--not their employees. Here, plaintiff has not named TD Bank as a defendant. Thus, plaintiff has not stated a plausible claim under the EFTA.
Based on the facts before the Court, plaintiff's true grievance is with TD Bank. Plaintiff could have sued the bank under not only the EFTA, but also under a respondeat superior theory of liability by alleging that a TD Bank employee injured him while acting within the scope of his employment. See Judith M. v. Sisters of Charity Hosp., 93 N.Y.2d 932, 933 (1999).
b. State Claims
The amended complaint could also be read to plead claims for common law conversion and for a violation of Article 4-A of New York's Uniform Commercial Code ("UCC").
i. Conversion
Conversion is the "unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights." State v. Seventh Regiment Fund, Inc., 98 N.Y.2d 249, 259 (2002). Under New York law, "[t]o establish a cause of action to recover damages for conversion, a plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question to the exclusion of the plaintiff's rights." Nat'l Ctr. for Crisis Mgmt., Inc. v. Lerner, 91 A.D.3d 920, 920, 938 N.Y.S.2d 138, 138-39 (2d Dep't 2012).
Here, there are no allegations that defendants ordered or effected the unauthorized transfer of plaintiff's funds. Rather, plaintiff asserts only that defendants are liable for conversion (or any other cause of action) based solely upon their managerial responsibilities at TD Bank. That is insufficient to state a plausible claim for conversion. See Schulman v. Cont'l Ins., 258 A.D.2d 639, 640, 685 N.Y.S.2d 794, 796 (2d Dep't 1999)(holding that supervisor was not liable for employee's failure to return plaintiff's property because there was no evidence that supervisor personally handled plaintiff's property).
Again, based on the facts available, plaintiff may have a colorable claim against TD Bank, but TD Bank is not a party to this action.
ii. Article 4-A of the UCC
Under Article 4-A of the New York UCC, a bank will bear the loss of any unauthorized funds transfer. See N.Y. U.C.C. Law §§ 4-A-202(1), 4-A-204(1); Regatos v. N. Fork Bank, 257 F. Supp. 2d 632, 640 (S.D.N.Y. 2003). If, however, the bank implements a commercially reasonable "security procedure" to ensure that a funds transfer is authorized, the loss sustained from any such transfer must be borne by the customer, provided that the bank processed the unauthorized funds transfer in good faith and in compliance with its "security procedure." See N.Y. U.C.C. Law §§ 4-A-202(2), 4-A-204(1). Like the EFTA, Article 4-A of the UCC imposes liability for unauthorized funds transfers on financial institutions only--not their employees. And as with plaintiff's claim under the EFTA, the claim under Article 4-A of the UCC fails because plaintiff has not named TD Bank as a defendant in this action--only two of its employees. Accordingly, the amended complaint does not state a plausible claim under Article 4-A of the New York UCC.
III. CONCLUSION
For the reasons set forth above, defendants' motion to dismiss is GRANTED.
Plaintiff's Fourteenth Amendment claim is DISMISSED with prejudice.
All remaining claims are DISMISSED without prejudice, with leave to amend. Should plaintiff amend his pleading, he is directed to provide facts that specifically and clearly describe defendants' involvement in the alleged wrongs and "allow[] the court to draw the reasonable inference that the defendant[s] [are] liable for the misconduct alleged." Iqbal, 556 U.S. 662 at 678; see also Ruston v. Town Bd. for Town of Skaneateles, 610 F.3d 55, 59 (2d Cir. 2010).
Plaintiff's application for pro bono counsel is DENIED as moot.
The Clerk of Court is directed to terminate the motions at Dkt. Nos. 12, 16, and 17.
SO ORDERED: Dated: New York, New York
July 23, 2012
/s/_________
Katherine B. Forrest
UNITED STATES DISTRICT JUDGE Copy to: All counsel (via ECF) Jackie Bodley
P.O. Box 286963
New York, NY 10128