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Perry v. Ocnac #1 Federal C.U.

United States District Court, D. New Jersey

October 28, 2019

JOE PERRY, Plaintiff,
OCNAC #1 FEDERAL C.U., and/or its agents; NCUA, and or its agents; JOHN DOES 1-99, Defendants.

          MONTELL FIGGINS, Attorneys for Plaintiff Joe Perry.

          JESSICA ROSE O'NEILL OFFICE OF THE U.S. ATTORNEY DISTRICT OF NEW JERSEY, Attorneys for Defendant National Credit Union Administration.



          NOEL L. HILLMAN, U.S.D.J.

         In this action, Plaintiff Joe Perry (“Plaintiff”) alleges that Defendants National Credit Union Administration (“NCUA”) and OCNAC #1 Federal Credit Union (“OCNAC”) (collectively, “Defendants”) are liable for damages arising from unauthorized transfers from Plaintiff's financial accounts. This matter comes before the Court on Defendants' motions to dismiss Plaintiff's first amended complaint. For the reasons expressed below, these motions will be granted.


         We take our recitation of the facts from Plaintiff's and first amended complaint.

         On or about July 9, 2014, Plaintiff opened two accounts with OCNAC. (ECF No. 21 (“FAC” or “Amended Complaint”) at ¶1).[1]Shortly after doing so, Plaintiff relocated and informed OCNAC that it needed to update his mailing address accordingly. (FAC at ¶2). At his new address, Plaintiff received various communications from OCNAC but alleges he never received quarterly account statements. (FAC at ¶2).

         On March 30, 2017, Plaintiff visited OCNAC's offices and learned of several unauthorized transfers from his accounts. (FAC at ¶3). Plaintiff's initial complaint explains that these transactions occurred between July 10, 2014 and April 22, 2015.[2] (ECF No. 1-1 (“Initial Comp.” or “Initial Complaint”) at 11). Plaintiff asserts that these transfers - which occurred by check, transfer, and Automated Clearing House (ACH) payment -were initiated by his estranged wife who he never authorized to access these accounts. (FAC at ¶3). Plaintiff disputed these transactions with OCNAC. (FAC at ¶4).

         On May 20, 2017, Plaintiff also filed a complaint with NCUA relating to these unauthorized transactions. (FAC at ¶6). Plaintiff sought, as a remedy, a refund of the total amount withdrawn without his authority. (FAC at ¶6).

         Around that same time, on July 26, 2017, Plaintiff wrote OCNAC requesting resolution of his claim. (FAC at ¶9). On August 2, 2017, OCNAC denied Plaintiff's claim on the basis that he failed to notify OCNAC within 60 days of the unauthorized transactions, as was required under OCNAC's account-holder agreement.[3] (FAC at ¶10).

         On October 2, 2017, NCUA denied Plaintiff's complaint on the grounds that the transactions at issue were not “unauthorized[, ]” as that term is defined by the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq. (the “EFTA”). (FAC at ¶11). Plaintiff was advised of his appeal rights and subsequently retained counsel to appeal NCUA's decision. (FAC at ¶¶11-12). Plaintiff's appeal was unsuccessful. (FAC at ¶12).

         On December 4, 2018, Plaintiff filed the Initial Complaint in the Superior Court of New Jersey, Camden County. NCUA removed the action to this Court on January 7, 2019. Plaintiff filed the Amended Complaint on May 14, 2019. The Amended Complaint contains four (4) counts:

• Count One sounds in negligence, and is brought against all Defendants;
• Count Two sounds in breach of contract, and is brought against all Defendants;
• Count Three is brought against OCNAC for alleged violations of the EFTA; and
• Count Four is brought against NCUA for alleged violations of the Federal Credit Union Act (“FCUA”), 12 U.S.C. § 1751 et seq.

         Defendants moved to dismiss the Amended Complaint on May 28, 2019 and June 17, 2019 respectively (the “Motions to Dismiss”). (ECF Nos. 22 & 25). Plaintiff opposed Defendants' Motions to Dismiss. (ECF No. 26). As such, the present motions are fully briefed and ripe for adjudication.


         A. Subject Matter Jurisdiction

         Plaintiff filed this action against several defendants, including NCUA, which is a federal agency. NCUA removed this action to this Court pursuant to 28 U.S.C. § 1442(a)(1). This Court exercises subject matter jurisdiction pursuant to that statute.

         B. Motion to Dismiss Standard

         NCUA seeks to dismiss Plaintiff's Amended Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), or otherwise for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). OCNAC also asks this Court to dismiss the Amended Complaint pursuant to Rule 12(b)(6).

         1. Federal Rule of Civil Procedure 12(b)(1) Standard

         Under Federal Rule of Civil Procedure 12(b)(1), a claim can be dismissed for “lack of jurisdiction over the subject matter.” A motion under Rule 12(b)(1) “attacks the right of a plaintiff to be heard in Federal Court.” Doughty v. U.S. Postal Serv., 359 F.Supp.2d 361, 364 (D.N.J. 2005) (quoting Cohen v. Kurtzman, 45 F.Supp.2d 423, 428 (D.N.J. 1999)). There are two types of Rule 12(b)(1) motions: one which presents a “facial challenge” and one which presents a “factual challenge.” See Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014) (citing In re Schering Plough Corp. Intron, 678 F.3d 235, 243 (3d Cir. 2012)); Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006) (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)).

         If a motion to dismiss presents a “facial attack, ” a court must assume the allegations in a complaint are true and may only dismiss claims when the pleadings fail to present an action within a court's jurisdiction. Mortensen, 549 F.2d at 891. “[I]n that respect such a Rule 12(b)(1) motion is similar to a Rule 12(b)(6) motion.” Petruska, 462 F.3d at 302 n.3 (citing Mortensen, 549 F.2d at 891). By contrast, when the motion to dismiss presents a factual attack,

there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.

Mortensen, 549 F.2d at 891; see also Aichele, 757 F.3d at 358 (explaining differences between a facial and factual attack under Rule 12(b)(1)).

         2. Federal Rule of Civil Procedure 12(b)(6) Standard

         When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). It is well settled that a pleading is sufficient if it contains “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do . . . .” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (citations omitted) (first citing Conley v. Gibson, 355 U.S. 41, 47 (1957); Sanjuan v. Am. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994); and then citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).

To determine the sufficiency of a complaint, a court must take three steps. First, the court must “tak[e] note of the elements a plaintiff must plead to state a claim.” Second, the court should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Third, “whe[n] there are well-pleaded factual allegations, a court should ...

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