Duzanson-Baptiste v. Bank of Am. Corp.

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MILDRED DUZANSON-BAPTISTE, individually and on behalf of all others similarly situated, Plaintiff, v. BANK OF AMERICA CORPORATION, Defendant.

CIVIL No. 23-2417 (MAS) (RLS)

United States District Court, D. New Jersey

January 16, 2024

NOT FOR PUBLICATION

MEMORANDUM OPINION

Michael A. Shipp, United States District Judge

This matter comes before the Court upon Defendant Bank of America Corporation's (“Defendant”) Motion to Compel Arbitration, Stay Proceedings, and Strike and/or Dismiss Class Allegations regarding Plaintiff Mildred Duzanson-Baptiste's (“Plaintiff') putative Class Action Complaint, filed individually and on behalf of all other similarly situated persons (ECF No. 1). (ECF No 10.) Plaintiff opposed the Motion (ECF No. 13), and Defendant replied (ECF No. 20). The Court has considered the parties' written submissions and decides the Motion without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth below, Defendant's Motion is denied.

I. BACKGROUND^[1]

Plaintiff is an individual who worked at Defendant's subsidiary,^[2] Merrill Lynch, as a Financial Solutions Advisor (“FSA”). (Compl. ¶¶ 2, 8, ECF No. 1.) Plaintiff began working at Merrill Lynch in 2014 and became an FSA in 2016. (Id. ¶ 13.) As an FSA, Plaintiff built a strong and successful client base of “over 115 individuals and families, [as well as] 225 accounts with a collective $28.9 million of assets under management” by around late 2021. (Id. ¶¶ 14,16.) Through her FSA position, Plaintiff received approximately $90,000 in incentive compensation in 2022 based on her assets under management and earned a salary of approximately $84,000. (Id. ¶ 15.)

In late 2021, Plaintiffs manager suggested that she apply to become a Merrill Financial Solutions Advisor (“MFSA”), a newly created position, by applying to partake in the MFSA-Advisor Development Program (“MFSA-ADP”), a 12-to-18-month training program for the position. (Id. ¶¶ 2,17, 18.) From late 2021 until the spring of 2022, Plaintiff spoke with various executives of Defendant and of Merrill Lynch, through which she was encouraged to apply to the MFSA-ADP. (Id. ¶ 18.) Importantly, Plaintiff asserts that during each of the conversations, she was told that the policies of the MFSA-ADP would allow FSAs to: (1) retain the clients' FSAs developed in the FSA role while partaking in the MFSA-ADP; (2) “continue to be entitled to financial opportunities ... from . . . [the FSA's] existing client relationships and receive incentive compensation for any new or existing business from these clients”; and (3) transfer existing FSA clients to the new MFSA wealth-management platform if beneficial to the FSA client. (Id.) Additionally, Plaintiff was told that “[o]nly after completing ... the MFSA-ADP . .. would the [former] FSA's clients who [are] not eligible to be transferred to the new wealth-management platform ... be redistributed back to a pool of FSAs.” (Id.) Plaintiff states that other FSAs already in the MFSA-ADP confirmed that they were informed of the same policies regarding retention of existing clients throughout the MFSA-ADP. (Id. ¶ 19.)

Based on the above representations, Plaintiff applied to the MFSA-ADP and was accepted in July 2022.^[3] (Id. ¶¶ 21-22.) On August 22, 2022, Plaintiff left the FSA position and entered the MFSA-ADP while continuing to service her existing clients. (Id. ¶ 23-24.) On December 5, 2022, however, supervisors of the MFSA-ADP informed potential MFSAs, including Plaintiff, that their existing clients from their FSA role would be transferred to other FSAs, effective January 1, 2023. (Id. ¶25.)

Plaintiff alleges that, as a consequence, Plaintiff lost at least $90,000 in incentive compensation which she expected to earn in 2023, as well as her existing clientele that she built for six years. (Id. ¶ 26.) Although Plaintiff requested that she return to her former FSA position, Plaintiff was informed that there were no FSA positions available in her geographical area. (Id. ¶ 27.) Plaintiff asserts that she was forced to resign from the MFSA position and accept a different position with another financial services firm because of the compensation change. (Id. ¶ 29.)

Plaintiff asserts, based upon information and belief, that other class members also lost significant amounts of compensation due to the December 5, 2022 decision. (Id. ¶ 28.) Accordingly, Plaintiff brings forth her claims individually and on behalf of other similarly situated MFSAs who were previously FSAs and relied on the same alleged representations. (Id. ¶ 2.) Plaintiff seeks class certification pursuant to Rule 23, but has yet to move for class certification. (Id. ¶¶30, 37.)

II. LEGAL STANDARD

A. Motion to Dismiss Class Allegations

Courts undertake a three-part analysis when considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). See Malleus v. George, 641 F.3d 560,563 (3d Cir. 2011). “First, the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.'” Id. (alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009)). Second, the court must accept as true all of the plaintiffs well-pleaded factual allegations and “construe the complaint in the light most favorable to the plaintiff.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quotation omitted). In doing so, the court is free to ignore legal conclusions or factually unsupported accusations that merely state, “the-defendant-unlawfully-harmed-me.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “[M]ere restatements of the elements of [a] claim[ ] ... are not entitled to the assumption of truth.” Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011) (alterations in original) (quotation omitted). Finally, the court must determine whether “the facts alleged in the complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.'” Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679). “The defendant bears the burden of showing that no claim has been presented.” Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005) (citation omitted).

B. Motion to Compel Arbitration

“It is well established that the Federal Arbitration Act (“FAA”), reflects a ‘strong federal policy in favor of the resolution of disputes through arbitration.'” Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 160 (3d Cir. 2009) (quoting Alexander v. Anthony Int'l, L.P., 341 F.3d 256, 263 (3d Cir. 2003)). “The strong federal policy favoring arbitration, however, does not lead automatically to the submission of a dispute to arbitration upon the demand of a party to the dispute.” Century Indem. Co. v. Certain Underwriters at Lloyd's, 584 F.3d 513,523 (3d Cir. 2009). “Before compelling a party to arbitrate pursuant to the FAA, a court must determine that (1) there is an agreement to arbitrate and (2) the dispute at issue falls within the scope of that agreement.” Id. (citing Kirleis, 560 F.3d at 160).

When deciding a motion to compel arbitration, a court must first determine the applicable standard of review. The Third Circuit has instructed that:

When it is apparent, based on the face of a complaint, and documents relied upon in the complaint, that certain of a party's claims are subject to an enforceable arbitration clause, a motion to compel arbitration should be considered under a Rule 12(b)(6) standard without discovery's delay. But if the complaint and its supporting documents are unclear regarding the agreement to arbitrate, or if the plaintiff has responded to a motion to compel arbitration with additional facts sufficient to place the agreement to arbitrate in issue, then the parties should be entitled to discovery on the question of arbitrability before a court entertains further briefing on [the] question. After limited discovery, the court may entertain a renewed motion to compel arbitration, this time judging the motion under a summary judgment standard.

Guidotti v. Legal Helpers Debt Resol, LLC, 716 F.3d 764,776 (3d Cir. 2013) (alteration in original) (internal quotation marks and citation omitted).

III. DISCUSSION

Plaintiff, individually and on behalf of all other similarly situated persons, filed a putative Class Action Complaint against Defendant, alleging claims for: (1) breach of contract; (2) negligent misrepresentation; and (3) promissory estoppel. (Compl. ¶ 1.) Defendant moves to compel arbitration, stay proceedings, and strike and/or dismiss class allegations. (See generally Def.'s Moving Br.) Specifically, “Defendant requests that the Court strike Plaintiffs class allegations under Rule 23(d)(1) or dismiss Plaintiffs class allegations under Rule 12[.]” (Def's Moving Br. 1 n.l, 12-38.) The Court first considers Defendant's motion regarding Plaintiffs class allegations.

C. Class Allegations

Plaintiff brings forth class action allegations pursuant to Rules 23(a), (b)(2), and (b)(3). (Compl. ¶ 30.) Although Plaintiff has yet to move for class certification, Defendant contends that the class allegations must be stricken or dismissed because, based on Plaintiffs Complaint, common questions of fact or law do not exist or will not predominate over questions affecting individual class members, pursuant to Rule 23(a)(2) and (3). (Def's Moving Br. 1 n.l, 12-38.) Defendant argues that such concerns cannot be resolved even with discovery. (Id.) Plaintiff counters that Defendant's “motions are premature and disfavored because until Plaintiff has the opportunity to take class discovery and move for class certification, the appropriateness of class treatment and the parameters thereof cannot be determined.” (Pl.'s Opp'n Br. 2, ECF No. 13.)

Indeed courts in this district have held that ...