Opinion
CV-22-1253-PHX-DGC (JFM)
07-29-2022
Sharletha Hollinquest, Plaintiff v. JP Morgan Chase, Defendant.
REPORT AND RECOMMENDATION RE SCREENING IFP COMPLAINT
James F. Metcalf United States Magistrate Judge
A. REPORT AND RECOMMENDATION
This matter is before the undersigned magistrate judge awaiting consents pursuant to 28 U.S.C. § 636(c). Because the appropriate resolution of this matter is dispositive of claims or defenses, the undersigned proceeds by way of a Report & Recommendation to Senior District Judge McNamee, pursuant to 28 U.S.C. § 636(b)(1)(B) and General Order 21-25.
B. SCREENING OF COMPLAINT
1. Screening Required
In cases filed by persons appearing in forma pauperis the court is required by 28 U.S.C. § 1915(e)(2) to dismiss cases that are frivolous, malicious, fail to adequately state a claim, or seek monetary relief from a defendant who is immune.
2. Pleading Standards
A pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2) (emphasis added). While Rule 8 does not demand detailed factual allegations, “it demands more than an unadorned, the -defendant- unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
“[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. Thus, although a plaintiff's specific factual allegations may be consistent with a constitutional claim, a court must assess whether there are other “more likely explanations” for a defendant's conduct. Id. at 681.
“The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Iqbal, 556 U.S. at 678.
Reasonable inferences can be drawn from the facts. “Iqbal demands more of plaintiffs than bare notice pleading, but it does not require us to flyspeck complaints looking for any gap in the facts.” Lacey v. Maricopa County, 693 F.3d 896, 924 (9th Cir. 2012).
And, as the United States Court of Appeals for the Ninth Circuit has instructed, courts must “continue to construe pro se filings liberally.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). A “complaint [filed by a pro se prisoner] ‘must be held to less stringent standards than formal pleadings drafted by lawyers.'” Id. (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam)).
3. Application to Complaint
In her Complaint (Doc. 1) Plaintiff names as Defendants JP Morgan Chase Bank, CashApp, and Unclaimed Property CA. Plaintiff alleges diversity jurisdiction, lists her address as Arizona, listing Texas, Missouri and California address for Defendants, and asserting her claim is for in excess of $75,000.
Plaintiff's Complaint includes allegations that, if taken literally, would suggest the loss of fantastic sums of money, leading to a lack of plausibility to her allegations. For example, she reports a transfer to the third party of what could be seen as $1,541,468,211,000 (or more than $1.5 trillion dollars). But in another location, this amount is reduced to just over $1.5 billion. She reports making a bitcoin deposit of one hundred quadrillion in bitcoin (“100,000,000,000 million”), but then asserts it has been reduced to 769 million. She subsequently demands the return of 769 quadrillion (“769,000000000 million”) Giving Plaintiff the benefit of the doubt, it is assumed that Plaintiff is simply not proficient in expressing large numbers.
a. Unknown Parties
The Court observes that the Clerk has docketed Unclaimed Property CA as an unknown party. Upon review of the Complaint it appears that Plaintiff knows the identity of this entity, and has even submitted an address. The Clerk will be directed to correct the docket to eliminate Unknown Party and to add Unclaimed Property CA as a defendant.
The address provided in the Complaint for Defendant Unclaimed Property (P.O. Box. 942850, Sacramento, CA) corresponds with that of Unclaimed Property Division of the California State Controller's Office. See https://www.sco.ca.gov/updcontact.html (last accessed 7/27/22). This raises questions whether sovereign immunity would apply. But, sovereign immunity “may be forfeited where the state fails to assert it and therefore may be viewed as an affirmative defense.” In re Bliemeister, 296 F.3d 858, 861 (9th Cir. 2002). Accordingly, an absence of sovereign immunity need not be alleged to adequately state a claim.
b. Unclaimed Property CA
Plaintiff alleges that Defendant Unclaimed Property has allowed a third party, Michael G. Barrett, and others to obtain properties in which Plaintiff has asserted claims of ownership, including 1,129 shares of Magnite Inc., aka The Rubicon Project, valued at $32,421, plus an additional claim. Plaintiff does not explain the legal basis for her claim.
Liberally construed, Plaintiff adequately alleges a claim for constructive bailment. A constructive bailment “arises where the person having possession of personal property holds it under such circumstances that the law imposes on the holder the obligation of delivering it to another, where a person has lawfully acquired possession of personal property of another otherwise than by a mutual contract of bailment, or where a person has lawfully acquired the possession of personal property of another and holds it under circumstances whereby that person should, on principles of justice, keep it safely and restore it or deliver it to the owner.” 8A Am. Jur. 2d Bailments § 12.
“One of the essential elements of a bailment is that the property be taken into the possession of the bailee.” 8A Am. Jur. 2d Bailments § 4. Although Plaintiff does not affirmatively allege that Defendant Unclaimed Property had possession of the property, a reasonable inference from the allegation that Defendant allowed the third parties to obtain the properties is that Defendant had possession.
“The bailee has an obligation, arising from the relationship created by the bailment contract, to exercise due care to protect the bailed property from loss, damage, or destruction.” 8A Am. Jur. 2d Bailments § 106. Moreover, a bailee who fails to return the property to the owner may be held liable for the value of the property.
c. CashApp
Plaintiff alleges that CashApp has allowed third parties to withdraw money from Plaintiff's accounts (despite the deactivation of her CashApp account) as a result of security breaches, resulting in substantial losses of her Bitcoin deposits ($769 million), stocks, and money, and identity theft and fraud, some of which Plaintiff attributes to employees of CashApp. Again, Plaintiff fails to allege the legal basis for her claim. The undersigned has discerned none.
Plaintiff does not allege any contractual agreements nor any other facts to infer a breach of contract claim. Plaintiff does not suggest that CashApp had possession of her lost property, merely that its security breaches resulted in access to property in the possession of third properties.
Nor does Plaintiff allege any facts to suggest that the purported security breaches leading to her losses resulted from Defendant's negligence, or other tortious conduct. Her simple assertion that CashApp has “allowed people” to withdraw funds from her account does not assert facts sufficient facts to show negligent or intentional conduct.
Plaintiff does attribute fraudulent conduct to an employee of CashApp, suggesting a claim of respondeat superior liability against CashApp. But she offers no facts to make plausible her conclusion that any fraud has been by an employee as opposed to the vast number of others she asserts have accessed her accounts as a result of the security breach.
d. JP Morgan Chase
Plaintiff makes no allegations as to Defendant JP Morgan Chase. Accordingly, Plaintiff fails to adequately state a claim against this Defendant, and this Defendant should be dismissed without prejudice.
4. Conclusions
Plaintiff fails to adequately state a claim for relief against Defendants CashApp and JP Morgan Chase, and these defendants should be dismissed without prejudice. Plaintiff adequately states a claim of constructive bailment against Defendant Unclaimed Property CA, and an answer to this claim should be required.
C. EFFECT OF RECOMMENDATION
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment.
However, pursuant to Rule 72, Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the Court. Thereafter, the parties have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any findings or recommendations of the Magistrate Judge will be considered a waiver of a party's right to de novo consideration of the issues, see United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003)(en banc), and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to the recommendation of the Magistrate Judge, Robbins v. Carey, 481 F.3d 1143, 1146-47 (9th Cir. 2007).
In addition, the parties are cautioned Local Civil Rule 7.2(e)(3) provides that “[u]nless otherwise permitted by the Court, an objection to a Report and Recommendation issued by a Magistrate Judge shall not exceed ten (10) pages.”
D. RECOMMENDATIONS
IT IS THEREFORE RECOMMENDED
(A) The docket be AMENDED to reflect Defendant Unknown Party's name as Defendant Unclaimed Property CA.
(B) Defendants CashApp and JP Morgan Chase be DIMISSED WITHOUT PREJUDICE.
(C) An answer be required of Defendant Unclaimed Property CA.
(D) That Plaintiff be given 60 days from the filing of the Order directing such answer to complete service on Defendant Unclaimed Property CA.
E. EFFECT OF RECOMMENDATION
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment.
However, pursuant to Rule 72, Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the Court. Thereafter, the parties have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any findings or recommendations of the Magistrate Judge will be considered a waiver of a party's right to de novo consideration of the issues, see United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc), and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to the recommendation of the Magistrate Judge, Robbins v. Carey, 481 F.3d 1143, 1146-47 (9th Cir. 2007).
In addition, the parties are cautioned Local Civil Rule 7.2(e)(3) provides that “[u]nless otherwise permitted by the Court, an objection to a Report and Recommendation issued by a Magistrate Judge shall not exceed ten (10) pages.”