United States District Court, S.D. California
RUBEN M. BARRETT, an individual, Plaintiff,
JP MORGAN CHASE BANK, a New York corporation, et al., Defendants.
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY
JUDGMENT AND GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION FOR SUMMARY ADJUDICATION OF CLAIMS
DANA M. SABRAW, UNITED STATES DISTRICT JUDGE
case comes before the Court on the motion for summary
judgment, or in the alternative, for summary adjudication of
claims and issues filed by Defendant JP Morgan Chase Bank.
Plaintiff Ruben Barrett filed an opposition to the motion,
and Defendant filed a reply. For the reasons set out below,
the Court denies the motion for summary judgment and grants
in part and denies in part the motion for summary
adjudication of claims and issues.
of 2012, Plaintiff Ruben Barrett, through a Hillcrest, San
Diego branch of Defendant, JP Morgan Chase Bank
(“Chase”), transferred $150, 000 to a client
trust account of a third-party attorney, Larry Busch, for the
purpose of investing in an “offshore oil”
investment deal. (Def.’s Evidentiary App’x, Ex. A
(Pl. Dep. at 15:8-12; 150:10-19; 153:11-18, Oct. 30, 2015).)
Plaintiff believed that within three weeks of investing, he
would gain profits of $2, 250, 000. (Id. at
36:7-25.) Instead, the deal turned out to be a scam.
(Id. at 46:1-12; 68:3-19.) As a result, Plaintiff
suffered economic loss of $150, 000. (See Id. at
deal called for Plaintiff to wire $150, 000 to Busch who
would hold this money in escrow and combine it with the
monies of a third-party individual, Jamario Dyson, to reach a
total of $750, 000. (Id. at 34:3-16; 105:14-23.)
Plaintiff was under the impression that Busch would then
release the $750, 000 to a third-party corporation, SSMG,
Inc., who would facilitate the off-shore oil transaction.
(See generally Id. at 29:10-32:25; 105:6 -106:3.)
Instead, upon receiving Plaintiff’s $150, 000, Busch
sent $147, 000 to a company called Westbridge Mutual, LLC and
retained $3, 000 as legal fees. (Def.’s Evidentiary
App’x, Ex. E (Busch Letter to Pl., July 9, 2012).)
Busch claims he acted pursuant to an escrow agreement sent to
him by an individual named Michael Briscoe, who informed him
that Plaintiff’s $150, 000 was really from SSMG, Inc.
and instructed him to direct the money to Westbridge Mutual,
LLC. (Def.’s Evidentiary App’x, Ex. A (Pl. Dep.
at 53:2-54:6); Ex. E (Busch Letter to Pl.).) The escrow
agreement sent by Briscoe to Busch listed Busch, Dyson,
Briscoe, and Briscoe’s company, Frucom Capital, as the
only parties to the transaction and did not mention
Plaintiff’s involvement in the investment.
(Def.’s Evidentiary App’x, Ex. A (Pl. Dep. at
55:21-56:3); Ex. E (Busch Letter to Pl.).)
7, 2012, Plaintiff visited his local Chase branch for the
purpose of facilitating the $150, 000 funds transfer and
worked with a Chase representative, Alex Fava. (Def.’s
Evidentiary App’x, Ex. A (Pl. Dep. at 151:1-10;
153:11-16).) According to Plaintiff, prior to requesting the
transfer, he asked Fava to “issue pre-advice” by
way of calling Busch to inform him that the funds were being
sent by Plaintiff and were to be used in furtherance of the
off-shore oil investment with SSMG, Inc. (See Id. at
151:4-14.) Plaintiff claims Fava agreed to perform the
“pre-advice” and then left his desk for roughly
forty-five minutes. (Id. at 151:11-19.) When Fava
returned, Plaintiff asked whether he had gotten in touch with
Busch to which he replied “yes.” (Id. at
183:1-25.) Relying on the representation that
“pre-advice” had been “issued, ”
Plaintiff signed the wire transfer request and permitted the
funds to be transferred to Busch. (See id.)
Plaintiff testified he would not have agreed to send the
funds unless he or a representative on his behalf
communicated with Busch to confirm his knowledge of the
transaction. (Id. at 23:4-23.) Despite
Plaintiff’s own past failed attempts to connect with
Busch,  he believed Fava was able to reach him.
states that in the months following the May 7 transaction, he
called Chase customer claims roughly 100 times and spoke with
many representatives who repeatedly assured him
“pre-advice” had been given. (Pl.’s
Evidentiary App’x, Ex. A (Pl. Dep. at 59:7 - 60:21).)
Yet several months later, when Plaintiff had not heard back
from anyone regarding the investment, he corresponded with
Busch who claimed he had no knowledge of Plaintiff’s
involvement in the transaction, and never received
“pre-advice” from Defendant. (Id. at
53:17-54:15.) In 2013, Plaintiff filed a complaint against
Defendant with the Consumer Financial Protection Bureau, and
in response, a high ranking representative of the corporation
sent him a letter informing him no “pre-advice”
had been given as the payment did not require such a phone
call be made. (Pl.’s Evidentiary App’x, Ex. D (JP
Morgan Chase Response to Compl. filed by Pl. with Consumer
Financial Protection Bureau, Dec. 9, 2013).)
November 13, 2014, Plaintiff filed the present case against
Defendant in San Diego Superior Court alleging claims for
professional negligence, negligent misrepresentation, and two
claims for fraud. Defendant removed the case to this Court on
December 19, 2014, on the ground of diversity jurisdiction.
Defendant filed a motion to dismiss the claims, which this
Court granted in part and denied in part. The remaining
claims in controversy are Plaintiff’s claims for
professional negligence, negligent misrepresentation, and one
claim for fraud.
moves for summary judgment, or in the alternative, for
summary adjudication on all of Plaintiff’s claims for
relief. First, Defendant argues Plaintiff’s
professional negligence claim fails because Plaintiff did not
designate an expert to testify as to the standard of care for
bankers issuing wire transfers. (Mem. of P. & A. in Supp.
of Mot. at 8-10.) Second, Defendant contends
Plaintiff’s negligent misrepresentation claim fails
because the evidence only supports a theory of intentional
misrepresentation. (Id. at 10-12.) Third, Defendant
argues Plaintiff’s claim for fraud fails as a matter of
law because there is no adequate causal relationship between
the alleged fraud and Plaintiff’s damages.
(Id. at 12-13.) Fourth, Defendant alleges that
Plaintiff’s request for punitive damages fails as a
matter of law because Plaintiff has failed to provide
evidence that any leader in the corporation participated in
misconduct. (Id. at 13-14.) Fifth, Defendant argues
the wire transfer form Plaintiff executed in connection with
the transfer of his funds limits Defendant’s liability
to amounts “specifically required by Article 4A of the
Uniform Commercial Code.” (Id. at 14-15.)
Defendant asserts Plaintiff’s claims do not arise under
the UCC, therefore Defendant is not liable for
Plaintiff’s alleged damages. (Id.)
Standard of Review
judgment is appropriate if there is no genuine issue as to
any material fact, and the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving
party has the initial burden of demonstrating that summary
judgment is proper. Adickes v. S.H. Kress & Co.,
398 U.S. 144, 157 (1970). The moving party must identify the
pleadings, depositions, affidavits, or other evidence that it
“believes demonstrates the absence of a genuine issue
of material fact.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). “A material
issue of fact is one that affects the outcome of the
litigation and requires a trial to resolve the parties’
differing versions of the truth.” S.E.C. v.
Seaboard Corp., 677 F.2d 1301, 1306 (9th Cir. 1982).
burden then shifts to the opposing party to show that summary
judgment is not appropriate. Celotex, 477 U.S. at
324. The opposing party’s evidence is to be believed,
and all justifiable inferences are to be drawn in its favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). However, to avoid summary judgment, the opposing
party cannot rest solely on conclusory allegations. Berg
v. Kincheloe, 794 F.2d 457, 459 (9th Cir. 1986).
Instead, it must designate specific facts showing there is a
genuine issue for trial. Id. See also Butler v. San Diego
District Attorney’s Office, 370 F.3d 956, 958 (9th
Cir. 2004) (stating if defendant produces enough evidence to
require Plaintiff to go beyond pleadings, Plaintiff must
counter by producing ...