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Barrett v. JPMorgan Chase Bank

United States District Court, S.D. California

February 13, 2015

RUBEN M. BARRETT, an individual, Plaintiff,
JPMORGAN CHASE BANK, a New York corporation, et al., Defendants.


DANA M. SABRAW, District Judge.

This case comes before the Court on Defendant JP Morgan Chase Bank, N.A.'s motion to dismiss Plaintiff's Complaint. Plaintiff filed an opposition to the motion, and Defendant filed a reply. For the reasons set out below, the Court grants in part and denies in part Defendant's motion.



In May 2012, Plaintiff Ruben M. Barrett entered into an investment agreement with SSMG, Inc. (Compl. ¶ 6.) It appears the agreement required Plaintiff to provide $150, 000 to SSMG to be placed towards an off-shore oil investment. (Id. ) Plaintiff was to send his investment to the client trust account of Arizona attorney Larry Busch of the Larry Busch Law Center, where the monies would be held in escrow subject to their release to the entity making the actual purchase. (Id. ) SSMG was serving as an intermediary, allegedly combining Plaintiff's money with other investments to accumulate a total of $750, 000. (Id. ) SSMG would then be the name on the investment prior to its release to the actual buyer of the fuel, Nacim Energy, LLC. (Id. )

On or about May 8, 2012, Plaintiff went to his local Chase bank located in Hillcrest, California. (Id. ¶ 7.) Plaintiff informed a Chase representative that he wished to execute a wire transfer. (Id. ) Plaintiff was led to a private desk where he was assisted by a single Chase employee. (Id. )

Plaintiff informed the employee that he wished to execute the transfer and provided him with specific wiring instructions. (Id. ¶ 8.) Plaintiff alleges he informed the employee he would need pre-advice to be sent to Busch to confirm the transaction was executed properly. (Id. ) Plaintiff alleges he specifically requested pre-advice in the following form: "Pre-Advice payment and Transaction Codes Must Be Sent to Larry@Buschlawcenter.Com Please call XXXXXXXXXX To Notify That Wire Has Sent." (Id. )

Plaintiff alleges the employee then left the desk for several minutes before returning and informing Plaintiff that the pre-advice had been sent, and that the transaction had been successful. (Id. ¶ 10.)

Plaintiff alleges that within a matter of days, it became clear to him that things were not moving as planned. (Id. ¶ 11.) He contacted SSMG in an attempt to recover his funds, but those attempts were unsuccessful. (Id. ) He also contacted Busch and demanded return of the funds. (Id. ) Busch informed him that the funds had been released pursuant to an escrow agreement between him, SSMG and a Colorado corporation entitled FRUCOM CAPITAL. (Id. ) Busch informed Plaintiff that he had never heard of him, and told Plaintiff he was under the impression the funds were coming directly from SSMG and were to go directly to FRUCOM. (Id. ¶ 11.)

Immediately after the transfer and on several occasions over the following years, Plaintiff spoke with Chase representatives about the transfer. (Id. ¶ 12.) Plaintiff alleges the Chase representatives repeatedly reassured Plaintiff that pre-advice had been issued to Busch. (Id. )

In the months following the transfer, Plaintiff learned that he was the victim of a scam and had been defrauded out of $150, 000 by SSMG and FRUCOM. (Id. ¶ 13.) Plaintiff notified federal law enforcement authorities and law enforcement in California and Arizona about the scam, but he was unable to secure a return of his funds. (Id. )

At some time in 2013, Plaintiff was informed by a Chase representative that he could request a recall of the May 2012 wire transfer, which Plaintiff did. (Id. ¶ 14.) Chase denied Plaintiff's request on October 25, 2013. (Id. ¶ 15.)

In November 2013, Plaintiff filed a complaint against Chase with the Consumer Financial Protection Bureau ("CFPB") regarding its refusal to recall the wire transfer. (Id. ¶ 16.) In response to the claim and in its defense, Chase sent a letter to the CFPB stating it did not perform the pre-advice instruction as Plaintiff requested. (Id. ) Shortly after receiving this letter, the CFPB closed Plaintiff's claim. (Id. ¶ 18.)

On November 13, 2014, Plaintiff filed the present case against Chase in San Diego Superior Court alleging claims for professional negligence, negligent misrepresentation, and two claims for fraud. Chase removed the case to this Court on December 19, 2014, ...

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