Gould v. JPMorgan Chase Bank

JONATHAN GOULD, Plaintiff, v. JPMORGAN CHASE BANK, N.A., JPMORGAN CHASE &CO., AND CORPORATIONS 1-10, Defendants.

Civ. No. 21-04663 (KM) (ESK)

United States District Court, D. New Jersey

September 21, 2021

OPINION

Hon Kevin McNulty, United States District Judge.

Several years ago, JPMorgan Chase Bank (“Chase”) transmitted to the police an investigative report (the “Carroll Report”) alleging that Plaintiff Gould was stealing from his elderly mother. Gould was arrested for theft, but charges were quickly dropped and then expunged. Gould sued Chase for setting these events in motion. Now Chase moves to dismiss. (DE 5.)^[1] For the following reasons, the motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Jonathan Gould was responsible for the care of his mother, Dr. Carrol S. Gould, before her death in July 2015. (Compl. ¶ 41.) Gould had a durable power of attorney from his mother that allowed him to help manage her finances, including accounts with Chase, and he was an authorized user of her Chase credit cards. (Id. ¶ 9-12.) Gould's power of attorney was on file with the bank. (Id. ¶ 10.) Sometime before February 2015, Chase provided an investigatory report, drafted by Walter G. Carroll (the “Carroll Report”), to the Essex County Prosecutor's Office (“ECPO”). (Id. ¶ 29-30.) Based on the Carroll Report, the ECPO arrested Gould and charged him with second-degree theft by unlawful taking (theft exceeding $75, 000) in violation of N.J.S.A. 2c:20-3(a). (Id. ¶ 33). Gould pleaded not guilty to that charge on February 26, 2015, and was released on the condition he have no contact with his mother. (Id. ¶ 35.) In early March 2015, a detective from the ECPO spoke with Dr. Gould, who stated that her son had full, authorized access to her accounts and had her permission for all of the transactions at issue. (Id. ¶ 38.) As a result, charges against Gould were dropped and were fully expunged in August 2015. (Id. ¶ 39, 43.)

In December 2016, Gould brought claims for false arrest and malicious prosecution against the police officers and prosecutor involved in his arrest. (DE 1-2.) That case (the “related action”) is ongoing and a motion for summary judgment is currently pending.^[2] In that case, Gould sought discovery from Chase, aiming to obtain copies of all communications Chase had with the ECPO regarding his case. Chase refused to turn over documents to Gould for more than a year, until Magistrate Judge James B. Clark granted Gould's motion to compel in September 2019. (DE 10-1; DE 10-2, Ex. B.) Fact witnesses in the related action were deposed in March and April 2020. (DE 101 ¶ 35.) Gould states that it was at this point, in Spring 2020, that he discovered Chase's responsibility for his arrest and the resulting emotional trauma. (Id. ¶ 37.)

Gould filed this case in the Superior Court of New Jersey, Law Division, Essex County, on February 4, 2021 (DE 1-2.) Gould brought claims of malicious prosecution, intentional infliction of emotional distress, and defamation against Chase.^[3] Chase removed the case to this court. (DE 1.) Now, Chase moves to dismiss all of Gould's claims. (DE 5.)

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 8(a) does not require that a pleading contain detailed factual allegations, but it must assert “more than labels and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must raise a claimant's right to relief above a speculative level, so that a claim is “plausible on its face.” Id. at 570. That standard is met when “factual content [] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 12(b)(6) provides for the dismissal of a complaint if it fails to state a claim. The defendant bears the burden to show that no claim has been stated. Davis v. Wells Fargo, 824 F.3d 333, 349 (3d Cir. 2016). I accept facts in the complaint as true and draw reasonable inferences in the plaintiff's favor. Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (en banc).

III. DISCUSSION

a. Malicious Prosecution

Under New Jersey law, a malicious prosecution claim requires proof of four elements: “(1) that the criminal action was instituted by the defendant against the plaintiff, (2) that it was actuated by malice, (3) that there was an absence of probable cause for the proceeding, and (4) that it was terminated favorably to the plaintiff.” Lind v. Schmid, 67 N.J. 255, 262 (1975). “The plaintiff must establish each element. Upon failure to prove any one, the cause must fail.” Id. In Lind, the court stated that the tort of malicious prosecution is necessary because “ one who recklessly institutes criminal proceedings without any reasonable basis should be responsible for such irresponsible action.” Id.

Here, Gould plausibly alleges that all four factors are present.

“Instituting” a criminal action means more than simply reporting a suspected crime to the police. “[T]here must be encouragement, participation in, and perhaps even pressure asserted on the charging authorities. There has to be something more than merely reporting the activity.” Johnson v. DeBiaso, 2009 WL 1065994, at *4 (N.J.Super.Ct.App.Div. Apr. 22, 2009). See also Epperson v. Wal-Mart Stores, Inc., 373 N.J.Super. 522, 531 (App. Div. 2004) (stating that instituting a criminal action requirement “may be met by proof that defendant took ‘some active part in instigating or encouraging the prosecution'” (quoting Prosser and Keeton, The Law of Torts § 119 at 872 (5th ed., 1984)) (cleaned up).

Gould plausibly alleges that Chase did more than simply report a potential crime to the police. Not only did Chase transmit to the ECPO the Carroll Report, containing the results of Chase's own investigation; Chase also allegedly had numerous communications with the ECPO after transmitting the report. For over a year, Chase resisted turning those communications over to Gould in discovery in the related action (DE 10-2). It is not clear from the face of the pleadings in this action what those communications consisted of, but it is plausible that they could demonstrate that Chase “took some active part in instigating, ” and thus instituted, Gould's prosecution.

“It has long been the law of New Jersey that ‘[t]o warrant a submission of a case of malicious prosecution to the jury it must appear that the prosecution complained of was actuated by malice,' and that ‘[m]alice in the law is the intentional doing of a wrongful act without just cause or excuse.'” Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 395 (2009) (quoting Kearney v. Mallon Suburban Motors, 135 N.J.L. 457, 459 (E. & A. 1947) and McFadden v. Lane, 71 N.J.L. 624, 630 (E. & A. 1905)). The malice that a plaintiff must demonstrate “does not necessarily mean that the defendant was inspired by hatred, spite or ill will.” Epperson, 373 N.J.Super. at 532. In addition, the second and third requirements are intertwined because “malice may be inferred from want of probable cause.” Id. (quoting Hammill v. Mack Int'l Motor Truck Corp., 104 N.J.L. 551, 552 (E. & A. 1928)).

Gould has plausibly alleged that Chase acted with malice in transmitting the Carroll Report accusing him of theft to the police. Gould had his mother's power of attorney, as Chase was aware. Gould alleges that Chase told the ECPO that it had been unable to contact his mother-the account holder-to ascertain whether Gould was engaging in unauthorized transactions, but that this was false; in fact, Chase had never attempted to contact Dr. Gould. (Compl. ¶ 31.) Without taking that basic step, Chase then set in motion the series of events that led to Gould's arrest. It is plausible to infer malice from these allegations, which are sufficient to unlock the doors of discovery.

“In cases of criminal prosecutions, ‘probable cause' means reasonable grounds for suspicion supported by circumstances sufficiently strong in themselves to warrant an ordinarily cautious man in the belief that the accused is guilty of the offence with which he is charged.” Lind, 67 N.J. at 263, (quoting Lane v. Pennsylvania R.R. Co., 78 N.J.L. 672, 674 (E. & A. 1910)). The question the court must ask is “Was the state of facts such as to lead a person of ordinary prudence to believe on reasonable grounds the truth of the charge at the time it was made?” Brunson, 199 N.J. at 398 (quoting Lind, 67 N.J. at 263).

Gould plausibly alleges that Chase did not have probable cause to report him to the police, especially since the truth of the issue could easily have been ascertained by simply speaking to his mother, Chase's depositor. And indeed, once the police finally spoke to Dr. Gould, the case was dropped, and his arrest record was eventually fully expunged. A jury could conclude that an “ordinarily cautious [bank]” would not accuse a man of stealing from his mother without speaking to the mother first. In addition, if “the criminal matter was dismissed for insufficient evidence, the jury could infer there was no probable cause for the criminal prosecution.” Epperson, 373 N.J.Super. at 532. Because the charges against Gould were dismissed and his record expunged, a jury could make a similar inference here.

Finally, the proceeding was terminated in Gould's favor. All charges against him were dropped. (Compl. ¶ 39, 43.) Chase concedes this point. (Mot. at 10.)

It is of course possible that a jury could eventually find in favor of Chase on any of these elements. But at this stage I merely ask if, drawing reasonable inferences in favor of the plaintiff, the complaint is plausible on its face. I find that it is, and therefore deny Chase's motion to dismiss.

b. Intentional Infliction of Emotional Distress

“[T]o establish a claim for...