The account holder alleged that he had been “scammed into depositing money orders and cashier’s checks totaling $94,345 into various bank accounts.” The police confirmed that the accounts were scam accounts and that the deposited money had been transferred overseas. After the account holder filed claims against the bank, the bank returned $26,815. However, the account holder alleged that the bank had improperly declined to pay the remaining $68,000. The account holder asserted claims for fraud and negligence per se, and sought actual and exemplary damages, attorneys’ fees, and pre- and post-judgment interest.” The bank removed the case to federal court and filed a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). In response, the account holder moved to remand the case to the state court.
In Venkatraman v. Bank of Am., N.A., No. 3:24-CV-2821-K-BW, 2025 WL 1335660, 2025 U.S. Dist. LEXIS 87903 (N.D. Tex. Apr. 7, 2025) (unpublished opinion), the magistrate court recommended that the district court deny the account holder’s motion to remand and grant the bank’s motion to dismiss. First, the court addressed the motion to remand and recommended that it be denied. At the time the action was removed, the account holder’s complaint exceeded the $75,000 amount-in-controversy requirement for diversity jurisdiction in the federal courts; however, after the case had been removed, the account holder had amended his complaint and limited the requested relief to $68,000 (the amount not yet returned by the bank). The court explained, however, that amending the amount in controversy after removal cannot defeat removal. The account holder relied on Butler and St. Paul Mercury to persuade the court to remand the case. However, neither the Butler nor the St. Paul Mercury’s holdings helped the account holder’s case. The court in Butler held that “a pleading amendment cannot deprive the court of federal jurisdiction after a proper removal from state court.” Butler v. CitiMortgage, Inc., No. H-12-3315, 2013 U.S. Dist. LEXIS 1307, 2013 WL 69230 (S.D. Tex. Jan. 4, 2013). The court in St. Paul Mercury held that the amount in controversy cannot be changed to defeat the case’s removal. St. Paul Mercury Indemn. Co. v. Red Cab Co., 303 U.S. 283 (1938). The court then addressed the motion to dismiss and recommended that it be granted. Under Fed. R. Civ. P. 9(b), seven elements must be met for a defendant to be liable for fraud. The court found the account holder failed to allege three of the seven elements. Additionally, the account holder failed to comply with Fed. R. Civ. Pro. 9(b)’s heightened pleading standards, in which the account holder must allege a misrepresentation of the bank and provide details about “the ‘who, what, when, where, and how’ of the fraud.” Maiden Biosciences, Inc. v. Document Sec. Sys. Inc., No. 3:21-CV-0327-D, 2021 U.S. Dist. LEXIS 148390, 2021 WL 3492339, at *3 (N.D. Tex. Aug. 9, 2021). The court also found that the account holder’s negligence claim failed under the pleading standards of Rule 12(b)(6). In order to assert a claim for negligence, a “plaintiff must allege (1) a legal duty on the part of the defendant; (2) breach of that duty; and (3) damages proximately resulting from that breach.” Lane v. Halliburton, 529 F.3d 548, 565 (5th Cir. 2008). The account holder did not establish the first element—that the bank owed any duty. Therefore, the account holder’s motion to remand was denied, the bank’s motion to dismiss was granted, and the account holder was given an opportunity to file an amended complaint.
By Alexander Shim [email protected]
Edited By Conor Doris [email protected]
Edited By Kristin Meurer [email protected]
Edited By Hayden Mariott [email protected]