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Troxler v. Capital One Bank (USA), N.A.

United States District Court, M.D. Pennsylvania

September 21, 2017

RICHARD TROXLER, Plaintiff,
v.
CAPITAL ONE BANK (USA), N.A., Defendant.

          MEMORANDUM OPINION

          MATTHEW W. BRANN UNITED STATES DISTRICT JUDGE.

         I. BACKGROUND

         Plaintiff Richard Troxler (“Mr. Troxler”) entered into a credit card agreement with Defendant Capital One Bank (USA), N.A. (“Capital One”), in which Capital One provided a credit card to Plaintiff upon his payment of a $750 dollar security deposit.[1] This card holder's agreement provided that Capital One would return the $750.00 dollar deposit to Mr. Troxler upon closure of the credit card account.[2] Mr. Troxler alleges that he closed the credit card account on or about April 21, 2016, but Capital One thereafter refused to refund the deposit until November 21, 2016.[3] Based solely on these facts, Mr. Troxler alleges the following causes of action: (1) trespass to chattels; (2) conversion; (3) breach of contract; and (4) violations of the Credit Card Accountability and Responsibility Act of 2009. Capital One has since filed a Motion to Dismiss the Amended Complaint in its entirety for failure to state a claim upon which relief can be granted.[4] This matter is now ripe for disposition.

         II. LAW

         Under Federal Rule of Civil Procedure 12(b)(6), a defendant may file a motion to dismiss for “failure to state a claim upon which relief can be granted.” Such a motion “tests the legal sufficiency of a pleading” and “streamlines litigation by dispensing with needless discovery and factfinding.”[5] “Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law.”[6]This is true of any claim, “without regard to whether it is based on an outlandish legal theory or on a close but ultimately unavailing one.”[7]

         Beginning in 2007, the Supreme Court of the United States initiated what some scholars have termed the Roberts Court's “civil procedure revival” by significantly tightening the standard that district courts must apply to 12(b)(6) motions.[8] In two landmark decisions, Bell Atlantic Corporation v. Twombly and Ashcroft v. Iqbal, the Roberts Court “changed . . . the pleading landscape” by “signal[ing] to lower-court judges that the stricter approach some had been taking was appropriate under the Federal Rules.”[9] More specifically, the Court in these two decisions “retired” the lenient “no-set-of-facts test” set forth in Conley v. Gibson and replaced it with a more exacting “plausibility” standard.[10]

         Accordingly, after Twombly and Iqbal, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'”[11] “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[12] “Although the plausibility standard does not impose a probability requirement, it does require a pleading to show more than a sheer possibility that a defendant has acted unlawfully.”[13] Moreover, “[a]sking for plausible grounds . . . calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of [wrongdoing].”[14]

         The plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”[15] No matter the context, however, “[w]here a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'”[16]

         When disposing of a motion to dismiss, a court must “accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to [the plaintiff].”[17] However, “the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions.”[18] “After Iqbal, it is clear that conclusory or ‘bare-bones' allegations will no longer survive a motion to dismiss.”[19] “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”[20]

         As a matter of procedure, the United States Court of Appeals for the Third Circuit has instructed that:

Under the pleading regime established by Twombly and Iqbal, a court reviewing the sufficiency of a complaint must take three steps. First, it must tak[e] note of the elements [the] plaintiff must plead to state a claim. Second, it should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, [w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.[21]

         III. ANALYSIS

         A. Counts I and II: Trespass to Chattels and Conversion

         Based on the above factual allegations, Mr. Troxler lays out within his Amended Complaint tort claims of trespass to chattels and conversion. Capital One, in turn, responds that these tort claims must be dismissed with prejudice pursuant to the “gist of the action” doctrine.[22] Accepting as true Mr. Troxler's factual allegations, I agree that his claims for conversion and trespass to chattels are subsumed by the “gist of action” doctrine.

         The “gist of the action” doctrine precludes tort claims where the true gravamen, or gist, of the claim sounds in contract.”[23] The critical conceptual distinction between a breach of contract claim and a tort claim is therefore based upon whether the breach which occurred arose from mutual agreements between particular individuals (contract), or based on law as a matter of social policy (tort).[24] In Bruno v. Erie Insurance Company, the Supreme Court of Pennsylvania reaffirmed this “duty-based demarcation” under the “gist of the action” doctrine, and stated that “the nature of the duty alleged to have been breached” is “the critical determinative factor in determining whether the claim is truly one in tort, or for breach of contract.”[25] The Bruno Court further explained that “if the facts of a particular claim establish that the duty breached is one created . . . by the terms of their contract, ” then the claim sounds in contract.[26] If, however, the claim involves a broader social duty which “exists regardless of the contract, ” then a tort claim exists.[27] “Whether the gist of the action doctrine applies in any particular setting is a question of law.”[28]

         Pennsylvania courts have recognized four instances when the gist of the action doctrine precludes tort recovery: (1) where liability arises solely from the contractual relationship between the parties; (2) when the alleged duties breached were grounded in the contract itself; (3) where any liability stems from the contract; and (4) when the tort claim essentially duplicates the breach of contract claim or where the success of the tort claim is dependent on the success of the breach of contract claim.[29] Furthermore, “courts have applied the ‘gist of the action' doctrine to conversion[30] claims when entitlement to the chattel is predicated solely on the agreement between the parties.”[31]

         In the instant matter, I find that the alleged conduct of Capital One underlying his conversion claim-failure to timely return a deposit-arises from the cardholder agreement between it and Mr. Troxler. Specifically, the Complaint itself states that, while Capital One returned the deposit upon closure of the account, it did so in an untimely fashion-presumably in violation of an allotted timeframe within the agreement. This claim is therefore subsumed by the gist of action doctrine and dismissal is appropriate. Furthermore, because trespass to chattels and conversion are essentially the same intentional tort, Mr. Troxler's trespass to chattels claim is barred as well.[32]

         B. Count III: Breach of Contract

         Capital One next moves for the dismissal of Mr. Troxler's breach of contract claim for failure to state a claim upon which relief can be granted. To plead a cause of action for breach of contract, a plaintiff must establish: (1) the existence of a contract, including its essential terms; (2) a breach of a duty imposed by that contract; and (3) resultant damages.[33] “While not every term of a contract must be stated in complete detail, every element must be specifically pleaded.”[34] Capital One specifically argues that that this claim fails for lack of factual allegations showing breach and resultant damages.[35]

         Accepting the allegations of Mr. Troxler's Complaint as true, I find that Mr. Troxler has failed to plausibly allege a breach of contract claim.[36] First, while alleging that Capital One belatedly returned a deposit of $750 dollars, Mr. Troxler fails to identify a contractual provision which this action breached. He has therefore, on this ground alone, failed to allege a breach of contract claim.[37] Second, Plaintiff has acknowledged that the $750 dollar deposit was returned and the Court can therefore not find resultant damages for an alleged breach.[38]

         “[I]f a complaint is subject to a Rule 12(b)(6) dismissal, a district court must permit a curative amendment unless such an amendment would be inequitable or futile.”[39] This principle applies equally in situations where a Plaintiff does not affirmatively seek a leave to amend, though a court may ultimately dismiss if the Plaintiff does not submit such an amended pleading.[40] Here, the Court cannot say that amendment of this claim would be futile. Therefore, to the extent that Plaintiff can plausibly allege that the belated return of this deposit is in breach of an essential term of the contract, he is granted leave to amend this claim.

         C. Count IV: Credit Card Accountability and ...


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