Opinion
INDEX NO. 650330/2019
10-18-2019
JING DENG, GOOD CARE MEDICAL, P.C., Plaintiffs, v. JPMORGAN CHASE & CO., QUEENS LUMBER CO., INC., P.M. TUNG ARTS, ELLIOT STEVENS ASSOCIATES, LTD., RB GALLERY, MICHAANS AUCTIONS, DOUGLAS W MORSE ANTIQUES, ABC CO. 1, ABC CO. 2, JOHN DOE, JANE DOE, Defendants.
NYSCEF DOC. NO. 19 PRESENT: HON. BARBARA JAFFE Justice MOTION DATE __________ MOTION SEQ. NO. 001, 002
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 8-12 were read on this motion to dismiss. The following e-filed documents, listed by NYSCEF document number (Motion 002) 13-17 were read on this motion to dismiss.
By notice of motion, defendant JPMorgan Chase & Co. a/k/a Chase Ink moves pursuant to CPLR 3211(a)(7) for an order dismissing plaintiffs' complaint against it for failure to state a cause of action (mot. seq. one).
By notice of motion, defendant Michaans Auctions moves pursuant to CPLR 3211(a)(5), (7), and (8) for an order dismissing plaintiffs' complaint against it for lack of jurisdiction, failure to state a cause of action, and as time-barred (mot. seq. two).
Plaintiffs fail to oppose the motions, which are consolidated for decision.
I. THE COMPLAINT (NYSCEF 2)
Plaintiffs sue defendants for unlawful and unauthorized credit card charges made by defendant-merchants and imposed by Chase on plaintiffs' Chase Ink business credit card. They allege that between 2015 and 2018, defendant-merchants made various unauthorized charges to the card, that they challenged them with Chase which first credited the amounts back to the card and then recharged the amounts without notifying them, and that Chase continues to charge interest and late fees. They contend that due to the debt now incurred, plaintiff Deng's credit score was reduced significantly, and that plaintiffs cannot run their medical clinic business without a decent credit score, impacting their ordinary business operations and borrowing activities. They assert as claims: (1) conversion by taking or depriving them of plaintiffs' available credit card limit for their use and benefit and without plaintiffs' knowledge and consent; (2) misappropriation of the credit card limit; (3) defendants' fraud in making unauthorized charges and Chase's fraud in failing to stop it; (4) Chase's negligence in breaching the duty to exercise reasonable care to make sure that no unauthorized charges were made; (5) Chase's negligence in failing to investigate and reverse the unauthorized charges; and (6) unjust enrichment.
II. CHASE'S MOTION
Having alleged that the item converted or misappropriated by defendants was plaintiffs' available credit limit on the credit card, plaintiffs fail to establish that any tangible property of theirs was diverted or misappropriated, and thus fail to state claim for conversion and misappropriation. (See e.g., Austin v Gould, 168 AD3d 626 [1st Dept 2019] [conversion of intangible property not actionable; claim that defendant transferred interest in company to nonparty without consideration or consent not conversion]; Ippolito v Lennon, 150 AD2d 300 [1st Dept 1989] [conversion and misappropriation claims dismissed where interest at issue was intangible]).
Plaintiffs' fraud claim is insufficiently particularized, especially as they fail to separate their allegations against each defendant. (CPLR 3016[b]; Tsinias Enter. Ltd. v Taza Grocery, Inc., 172 AD3d 1271 [2d Dept 2019] [fraud claim dismissed as complaint contained no specific allegations setting forth misrepresentations allegedly made by defendants]).
Plaintiffs' negligence claim premised on the allegation that Chase owed them a duty to investigate the alleged fraudulent charges cannot be sustained as Chase owed no legal duty of reasonable care to plaintiffs by virtue of the credit card issuer-customer relationship. (See Polzer v TRW, Inc., 256 AD2d 194 [1st Dept 1998] [no special relationship arises from credit/debtor relationship]; Ladino v Bank of Am., 52 AD3d 571 [2d Dept 2008] [claim that company negligently issued a loan in plaintiff's name to imposter should have been dismissed as plaintiff alleged no special relationship giving rise to duty to exercise care in verifying identity of imposter]; First Select, Inc. v Washington, 2002 WL 31109817, 2002 NY Slip Op 50384[U] [App Term, 1st Dept] [dismissing negligence counterclaim where defendant credit card owner denied having opened account or incurred debt at issue, as card issuer owed no special duty to owner]).
Plaintiffs' claim for unjust enrichment against Chase is dismissed as plaintiffs do not allege that they conferred a benefit on Chase for which Chase did not adequately compensate them. Rather, plaintiffs state that have not paid the alleged unauthorized charges. Moreover, as plaintiffs contend that there is a credit card agreement between them and Chase which governs here, they are precluded from asserting an unjust enrichment claim as well. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382 [1987]; One Step Up, Ltd. v Webster Business Credit Corp., 87 AD3d 1 [1st Dept 2011] [unjust enrichment claim not viable as express contracts governed same subject matter at issue]).
III. MICHAANS AUCTIONS' MOTION
As plaintiffs do not allege in their complaint that Michaans transacted business in New York, and as Michaans denies having done so, it establishes that the court lacks personal jurisdiction over it. (CPLR 302 [specific jurisdiction exists over defendants that transact business in New York]; Jackson v Sanchez-Pena, 104 AD3d 574 [1st Dept 2013] [as defendant denied having transacted business in New York, court properly dismissed action based on lack of personal jurisdiction]).
In any event, plaintiffs fail to state a cause of action for fraud (supra, II.), and their conversion and misappropriation claims are barred by the applicable three-year statute of limitations, as Michaans is alleged to have made the unauthorized charges in 2015 (NYSCEF 2) and plaintiffs did not commence this action until 2019.
Moreover, as Michaans establishes that plaintiffs sued it under its trade name, which has no jural existence, rather than its corporate name, plaintiffs' claims against it must be dismissed. (Honeyman v Curiosity Works, Inc., 120 AD3d 1302 [2d Dept 2014] [court should have dismissed complaint against defendant sued under trade name]; Holtzman v KTB Athletics SB TM, 113 AD3d 656 [2d Dept 2014] [complaint dismissed as defendant established it was jural entity not amenable to suit]).
IV. CONCLUSION
Accordingly, it is hereby
ORDERED, that the motion of defendant JPMorgan Chase & Co. a/k/a Chase Ink for dismissal of plaintiff's complaint against it (mot. seq. one) is granted, and the complaint is severed and dismissed as against said defendant; and it is further
ORDERED, that the motion of defendant Michaans Auctions for dismissal of plaintiff's complaint against it (mot. seq. two) is granted, and the complaint is severed and dismissed as against said defendant. 10/18/2019
DATE
/s/ _________
BARBARA JAFFE, J.S.C.