Philip Markowitz v. JPMorgan Chase Bank, N.A.

 O 1 2 3 4 5 6 7 8 United States District Court 9 Central District of California 10 11 PHILIP MARKOWITZ, Case № 2:23-cv-06528-ODW (MRWx) 12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART DEFENDANT’S MOTION FOR SUMMARY 14 JPMORGAN CHASE BANK, N.A. et al., JUDGMENT [32] 15 Defendants. 16 17 I. INTRODUCTION 18 Plaintiff Philip Markowitz brings this action against Defendant JPMorgan 19 Chase Bank, N.A. (“Chase”) for alleged improper retention of funds in Markowitz’s 20 bank accounts. (Notice of Removal (“NOR”) Ex. 1 (“Compl.”), ECF Nos. 1, 1-1.) 21 Chase now moves for summary judgment. (Mot. Summ. J. (“Motion” or “Mot.”), 22 ECF No. 32.) For the reasons discussed below, the Court GRANTS IN PART AND 23 DENIES IN PART Chase’s Motion.1 24 25 26 27 28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 II. BACKGROUND 2 The Court takes the following undisputed facts from Chase’s Statement of 3 Uncontroverted Facts (“SUF”), (ECF No. 32-1), and Markowitz’s Statement of 4 Genuine Disputes of Material Fact (“SGDF”), (ECF No. 34-1). 5 On May 2, 2017, Markowitz signed a “Personal Signature Card” for a Chase 6 Better Banking Checking account ending in 7449 (the “Account”), agreeing to be 7 bound by the Deposit Account Agreement, effective March 2017 (“2017 DAA”) and 8 “as amended from time to time.” (SUF ¶¶ 1, 3–4.) The Deposit Account Agreement, 9 effective March 2023 (“2023 DAA”), governed the Account as of March 19, 2023. 10 (Id. ¶ 6.) The 2017 DAA and 2023 DAA (the “DAAs”) provide that Chase or 11 Markowitz may close the Account “at any time for any reason or no reason without 12 prior notice.” (Id. ¶ 12.) The DAAs further provide that upon closing the Account, 13 Chase will “return the balance less any fees, setoffs, or other amounts if the balance is 14 greater than $1.” (Id. ¶ 13.) Moreover, Chase “may decline or prevent any or all 15 transactions” to and from the Account, “including refusing, freezing, reversing or 16 delaying any specific withdrawal, payment or transfer of funds” to or from the 17 Account, “or removing funds from” the Account “to hold them pending investigation 18 in one or more of” listed circumstances.2 (Id. ¶¶ 14, 25.) Identified circumstance 19 include Chase “suspect[ing] that any transaction may involve illegal activity or may 20 be fraudulent” and “reasonably believe[ing] that” restricting withdrawals “is necessary 21 to avoid a loss or reduce risk to” Chase. (Id. ¶ 14.) 22 On May 3, 2023, Markowitz deposited two checks (the “Checks”) totaling 23 $683,246.97 (the “Funds”) into his Account. (Id. ¶ 18.) The proceeds of one of the 24 25 2 Markowitz contends that Chase may only place restrictions on the Account if there are “pending transactions, the [A]ccount is overdrawn, or [the A]ccount is subject to legal process (such as 26 garnishment, attachment, execution, levy or similar order).” (SGDF ¶¶ 25, 28.) This is not what the DAAs state. For instance, the 2017 DAA states only that Chase is “not required to close” the 27 Account at Markowitz’s request under the above described circumstances. (Decl. Jane Kespradit 28 ISO Mot. (“Kespradit Decl.”) Ex. 2 (“Chase RFAs”) Ex. B (“2017 DAA”) at 13, ECF No. 32-2 (emphasis added); see Def.’s Resp. SGDF 25, 28, ECF No. 40.) 1 Checks became available in the Account on May 4, 2023, while the other became 2 available on May 12, 2023. (Id. ¶¶ 19–20.) On May 11, 2023, Chase closed the 3 Account (and Markowitz’s other Chase accounts) based on an “abusive customer” 4 case submission.3 (Id. ¶ 21.) That same day, Chase restricted the Account. (Id. ¶ 22.) 5 As part of its closure process, Chase restricts and reviews the exited customer’s 6 account to verify that the funds can be released. (Id. ¶ 28.) If such funds cannot be 7 verified, Chase may hold the amount in suspense pending verification. (Id.) 8 In a letter dated May 11, 2023, Chase notified Markowitz that it “believe[s] that 9 it’s in our mutual interest to close account(s) due to inappropriate conduct with our 10 employees.” (Id. ¶ 23.) Around two days later, Markowitz alleges that while he was 11 in a Chase branch, a Chase employee informed him that he could not make a 12 withdrawal as the Account had been closed due to his inappropriate conduct with a 13 Chase employee. (Id. ¶ 27.) 14 On May 18, 2023, in connection with the closure process, a Chase fraud 15 department employee reviewed the Account and restricted the Funds. (Id. ¶ 29.) 16 Chase purports that it restricted the Funds because it was concerned that the payee 17 name on the Checks, SureTec Insurance Company (“SureTec”), may have been 18 altered, and Chase suspended transfer of the Funds pending SureTec’s verification of 19 issuance. (Id. ¶¶ 30, 32–33.) Markowitz contends that this was a “feigned reason” for 20 Chase’s restriction of the Funds. (SGDF ¶¶ 30, 32.) 21 Chase verified the remaining Account balance (excluding the Funds) in the 22 Account and released those funds, totaling $8,791.01, to Markowitz in a May 22, 23 2023 check.4 (SUF ¶ 35.) Markowitz regularly called Chase during May and June 24 25 3 While irrelevant to the outcome of this Motion, the Court notes that Markowitz denies being abusive to any Chase employee. (SGDF ¶ 21.) 26 4 Markowitz contends that Chase “presented no evidence that it verified” the $8,791.01. (SGDF ¶ 35.) Chase has provided such evidence: a contemporaneous business record that includes an entry 27 dated May 18, 2023, stating, “Remainder of funds have been verified and approved to be released.” 28 (Def.’s Resp. SGDF ¶9; Decl. Kevin Kesterson ISO Mot. (“Kesterson Decl.”), Ex. A at 2, ECF No. 32-4.) 1 2023 to inquire about the Funds. (Decl. Philip Markowitz ISO Opp’n (“Markowitz 2 Decl.”) ¶¶ 17–18, 22, ECF No. 34-2.) 3 On May 23, 2023, Chase attempted to contact SureTec through its parent 4 company, but was informed it was outside of business hours. (SUF ¶ 36.) Between 5 July 24, 2023, and November 7, 2023, after Markowitz initiated this action, Chase 6 requested that Markowitz provide it with information that might assist in its 7 investigation of the Checks, including a contact at SureTec. (Id. ¶¶ 38–39.) 8 Markowitz did not provide Chase with the requested information. (Id. ¶ 40.) On 9 December 4, 2023, Chase sent a letter to two firms that had appeared as counsel of 10 record for SureTec in unrelated court filings to confirm whether SureTec believed the 11 Checks were authentic. (Id. ¶¶ 41–42.) On December 8, 2023, SureTec confirmed 12 that the Checks were genuine and unaltered. (Id. ¶ 43.) On or about February 27, 13 2024, Markowitz received a check from Chase in the amount of the Funds. (Id. ¶ 44.) 14 On July 6, 2023, Markowitz filed this action against Defendants Chase and 15 Claire Dawson, a Chase employee who Markowitz alleged was “the decision maker” 16 with regard to his Account, in Los Angeles County Superior Court. (Compl ¶¶ 2–3, 17 25.) Markowitz asserts four claims: (1) conversion, (2) claim and delivery, 18 (3) intentional infliction of emotional distress (“IIED”), and (4) negligent infliction of 19 emotional distress (“NIED”). (Id. ¶¶ 26–55.) Markowitz seeks consequential and 20 incidental damages, punitive and exemplary damages, attorneys’ fees, and costs. (Id., 21 Prayer for Relief). Markowitz also sought the amount of the Funds, (id.), but Chase 22 has since returned those Funds, (SUF ¶ 44). 23 Chase removed the action to federal court based on diversity jurisdiction. (See 24 NOR.) The Court granted Dawson’s motion to dismiss pursuant to Rule 12(b)(2) for 25 lack of personal jurisdiction. (Order Mot. Dismiss, ECF No. 24; Min. Order, ECF 26 No. 25.) 27 28 1 Chase now moves for summary judgment on Markowitz’s claims against it. 2 (Mot.) The Motion is fully briefed. (Opp’n Mot. (“Opp’n”), ECF No. 34; Reply ISO 3 Mot. (“Reply”), ECF No. 39.)5 4 III. LEGAL STANDARD 5 A court “shall grant summary judgment if the movant shows that there is no 6 genuine dispute as to any material fact and the movant is entitled to judgment as a 7 matter of law.” Fed. R. Civ. P. 56(a). A disputed fact is “material” where it might 8 affect the outcome of the suit under the governing law, and the dispute is “genuine” 9 where “the evidence is such that a reasonable jury could return a verdict for the 10 nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The 11 burden of establishing the absence of a genuine issue of material fact lies with the 12 moving party. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). 13 Once the moving party satisfies its initial burden, the nonmoving party cannot 14 simply rest on the pleadings or argue that any disagreement or “metaphysical doubt” 15 about a material issue of fact precludes summary judgment. Matsushita Elec. Indus. 16 v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see Celotex, 477 U.S. at 324. The 17 non-moving party must show that there are “genuine factual issues that . . . may 18 reasonably be resolved in favor of either party.” Cal. Architectural Bldg. Prods., Inc. 19 v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (emphasis omitted) 20 (quoting Anderson, 477 U.S. at 250). Courts should grant summary judgment against 21 a party who fails to make a sufficient showing on an element essential to its case when 22 it will ultimately bear the burden of proof at trial. Celotex, 477 U.S. at 322–23. 23 In ruling on summary judgment motions, courts “view the facts and draw 24 reasonable inferences in the light most favorable” to the nonmoving party. Scott v. 25 26 5 The Court struck Markowitz’s motion for partial summary judgment on his conversion claim for failure to file the motion at least thirty-five days before the hearing, as required by this Court’s 27 standing order. (Min. Order, ECF No. 37.) Chase separately moves to exclude an expert report and 28 testimony of Markowitz’s expert. (Motion Exclude, ECF No. 33.) That motion is not the subject of this Order. 1 Harris, 550 U.S. 372, 378 (2007) (internal quotation marks omitted). Conclusory, 2 speculative, or “uncorroborated and self-serving” testimony will not raise genuine 3 issues of fact sufficient to defeat summary judgment. Villiarimo v. Aloha Island Air, 4 Inc., 281 F.3d 1054, 1061 (9th Cir. 2002); Thornhill Publ’g Co. v. GTE Corp., 5 594 F.2d 730, 738 (9th Cir. 1979). Moreover, though the court may not weigh 6 conflicting evidence or make credibility determinations, there must be more than a 7 mere scintilla of contradictory evidence to survive summary judgment. Addisu v. 8 Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). 9 The court may assume that material facts claimed and adequately supported are 10 undisputed except to the extent that such material facts are (a) included in the 11 opposing party’s responsive statement of disputes and (b) controverted by declaration 12 or competent written evidence. C.D. Cal. L.R. 56-4. The Court is not obligated to 13 look any further in the record for supporting evidence other than what is actually and 14 specifically referenced. Id. 15 IV. EVIDENTIARY OBJECTIONS 16 Chase objects to several of Markowitz’s responses to Chase’s set of facts. (See 17 Def.’s Objections SGDF (“Def.’s Obj.”), ECF No. 41.) 18 Chase objects primarily on the grounds of relevance or improper legal 19 argument. (Id. at 2–6.) The Court does not consider improper argument and legal 20 conclusions offered in Markowitz’s Statement of Genuine Disputes of Material Fact, 21 (see Scheduling & Case Management Order 7–9, ECF No. 21), so Chase’s objections 22 on that basis are moot. Moreover, evidentiary objections on the grounds that such 23 evidence is “irrelevant, speculative, and/or argumentative, or that it constitutes an 24 improper legal conclusion are all duplicative of the summary judgment standard 25 itself.” Burch v. Regents of Univ. of Cal., 433 F. Supp. 2d 1110, 1119 (E.D. Cal. 26 2006). Accordingly, the Court overrules Chase’s objections on the grounds of 27 relevance and improper legal argument. 28 1 Additionally, to the extent the Court relies on objected-to evidence in this order 2 without further discussion, those objections are overruled. See id. at 1122 (proceeding 3 with only necessary rulings on evidentiary objections). 4 V. DISCUSSION 5 Chase moves for summary judgment on all four counts. (Mot.) The Court 6 takes each in turn. 7 A. Conversion 8 Chase seeks summary judgment on Markowitz’s conversion claim. (Mot. 16– 9 21.) “Conversion is the wrongful exercise of dominion over the property of another.” 10 Lee v. Hanley, 61 Cal. 4th 1225, 1240 (2015). To succeed on a claim for conversion, a 11 plaintiff must prove “(1) the plaintiff’s ownership or right to possession of the 12 property, (2) the defendant’s conversion by a wrongful act or disposition of property 13 rights; and (3) damages.” Id. Markowitz alleges that Chase “intentionally, knowingly 14 and maliciously interfered” with his property by refusing to return the Funds. (Compl. 15 ¶ 28.) Markowitz contends that Chase’s conversion has caused him severe emotional 16 distress, and he also seeks consequential and punitive damages. (Id. ¶¶ 31–34.) 17 Chase challenges Markowitz’s conversion claim on multiple grounds: (1) the 18 economic loss rule bars this claim, (2) Markowitz cannot establish Chase’s conduct 19 was wrongful, and (3) the DAAs preclude Markowitz from recovering the damages he 20 seeks. (Mot. 16–21.) 21 1. The Economic Loss Rule 22 Chase first argues that the economic loss rule bars Markowitz’s conversion 23 claim. (See id. at 16–18; Reply 6–8.) 24 “The economic loss rule is a device . . . that courts have developed to address 25 and protect the often elusive boundary line between tort and contract law.” Rattagan 26 v. Uber Techs., Inc., 17 Cal. 5th 1, 19 (2024). “Given the tension created by the policy 27 of assuring predictability in contractual relations and the expansive scope of potential 28 tort recovery,” courts developed the economic rule “to ensure that the law of contract 1 would not drown in a sea of tort.” Id. at 20 (internal quotation marks omitted). While 2 “tort recovery for breach of a contract duty is generally barred,” “the economic loss 3 rule does not act as an absolute bar to tort recovery in every case in which the parties 4 have a contractual relationship.” Id. at 20, 23. Accordingly, “[c]ourts generally 5 permit tort suits if the defendant allegedly violated a duty rooted in tort principles that 6 is independent of the parties’ contractual rights and obligations and exposed the 7 plaintiff to a risk of harm beyond the parties’ reasonable contemplation when they 8 entered into the contract.” Id. at 23. 9 The California Supreme Court recently announced facts courts must consider 10 when evaluating whether the economic loss rule bars a claim: 11 First, applying standard contract principles, it must ascertain the full scope of the parties’ contractual agreement, including the rights created 12 or reserved, the obligations assumed or declined, and the provided 13 remedies for breach. Second, it must determine whether there is an 14 independent tort duty to refrain from the alleged conduct. Third, if an independent duty exists, the court must consider whether the plaintiff can 15 establish all elements of the tort independently of the rights and duties 16 assumed by the parties under the contract. 17 Id. at 26. 18 Chase argues that Markowitz’s conversion claim “arises out of the parties’ 19 contractual relationship and conduct that is covered by the DAA[s], i.e., whether and 20 under what circumstances Chase had the right to close the Account and restrict 21 Funds.” (Mot. 17.) However, the Court must also consider whether an independent 22 tort duty exists, and that the DAAs contemplate these circumstances does not mean 23 that Chase has no independent duty to refrain from converting the Funds. 24 Courts in this district have held that whether a defendant owes a plaintiff an 25 independent duty to not convert the plaintiff’s property turns on “whether the 26 ownership interest that formed the basis for the conversion claim preexisted the 27 contract or arises from the contract.” Fine v. Kan. City Life Ins. Co., 627 F. Supp. 3d 28 1153, 1161 (C.D. Cal. 2022) (quoting Expedited Packages, LLC v. Beavex Inc., 1 No. 2:15-cv-00721-MMM (AGRx), 2015 WL 13357436, at *4 (C.D. Cal. Sept. 10, 2 2015)). Where the plaintiff has an ownership interest in the property “independent” of 3 the contract, courts have found that the economic interest rule does not bar a 4 conversion claim. Akhtar v. Compound Labs, Inc., No. 2:19-cv-07440-CBM (ASx), 5 2023 WL 8870134, at *4 (C.D. Cal. Nov. 6, 2023); see, e.g., Flint CPS Inks N. Am. 6 LLC v. Trend Offset Printing Servs., Inc., No. 8:20-cv-00651-JLS (JDEx), 2020 WL 7 7862127, at *4 (C.D. Cal. Dec. 14, 2020) (holding conversion claim lies where 8 plaintiff’s property interest in the converted goods was not a product of the contract, 9 but preexisted the contract). Conversely, where the property rights “flow[] from [the] 10 contract,” courts have found the economic interest rule bars a conversion claim. 11 Motivo Eng’g, LLC v. Black Gold Farms, No. 2:22-cv-01447-CAS (JCx), 2022 WL 12 3013227, at *4 (C.D. Cal. June 27, 2022); see, e.g., First Am. Cinema, LLC v. Chicken 13 Soup for the Soul Ent., Inc., No. 2:19-cv-09577-PSG (GJSx), 2020 WL 11025582, 14 at *5 (C.D. Cal. Mar. 12, 2020) (holding economic loss rule barred conversion claim 15 where plaintiff had no “preexisting independent ownership interest” in any of the 16 alleged ad revenue profits from the license agreements). 17 Chase’s authorities confirm this result. For example, in Perez v. JPMorgan 18 Chase Bank, N.A., Judge Gutierrez initially dismissed the plaintiff’s conversion claim 19 for the defendant’s failure to return the contents of the plaintiff’s safety deposit box. 20 No. 2:20-cv-01692-PSG (MRWx), 2020 WL 2515950, at *4–5 (C.D. Cal. May 8, 21 2020). Chase omits that in a subsequent order, “[u]pon further reflection,” Judge 22 Gutierrez held that the economic loss rule did not bar the plaintiff’s claim. Perez v. 23 JPMorgan Chase Bank, No. 2:20-cv-01692-PSG (MRWx), 2020 WL 9259703, at *5 24 (C.D. Cal. Sept. 8, 2020). There, Judge Gutierrez explained that “while the duty not 25 to steal Plaintiffs’ money was undoubtedly implicit in the contract, Defendant also had 26 an independent duty under tort law, which existed before, during, and after any 27 contractual duties arose or ceased, not to convert Plaintiff’s property.” Id. 28 1 The same is true in this case. The DAAs provide that Chase can refuse to 2 transfer the contents of Markowitz’s Account under certain circumstances. This does 3 not alter the fact that Chase had an independent duty to not convert Markowitz’s 4 property. Markowitz’s ownership interest in the Funds—given to him by SureTec— 5 “existed independent of his” contract with Chase. Akhtar, 2023 WL 8870134, at *4. 6 Thus, Markowitz would have had a right to the Funds with or without the DAAs, and 7 Chase would owe him a duty to not convert his property with or without the DAAs. 8 For the same reasons, Markowitz can establish all elements of conversion 9 independently of the rights and duties assumed by the parties under the contract: 10 (1) his right to possession of the Funds, (2) Chase’s conversion by a wrongful act or 11 disposition of property rights; and (3) damages. See Lee, 61 Cal. 4th at 1240 12 (describing elements of conversion). 13 As explained, Markowitz’s right to the Funds existed independent of the DAAs. 14 With respect to the second element—Chase’s wrongful act—the DAAs permitted 15 Chase to delay return of the Funds “pending investigation” if it suspected a fraudulent 16 transaction and to reduce risk to itself. (SUF ¶ 14.) However, Markowitz alleges that 17 Chase’s stated reasons for delaying return of the Funds are “feigned” and that Chase 18 delayed return of the Funds after it completed its investigation. (See Decl. Craig R. 19 Smith ISO Opp’n (“Smith Decl.”) ¶ 13, ECF No. 34-9; SGDF ¶¶ 29–30.) Lastly, as 20 for damages, while the DAAs may have contemplated damages Markowitz incurred 21 from the delay of return of the Funds pending Chase’s investigation, the DAAs did not 22 allocate risk of harm related to Chase delaying return of the Funds for a reason not 23 permitted by the DAAs. (See Kespradit Decl. Ex. C (“2023 DAA”) at 21, ECF 24 No. 32-2 (“We will have no liability for any action taken under this section and/or 25 related sections, and we may take such action without advance notice.”)); Rattagan, 26 17 Cal. 5th at 44 (considering “the nature of the alleged conduct, the provisions of the 27 contract itself, and whether the conduct exposed a party to a risk of harm neither 28 1 reasonably contemplated nor allocated by the parties before entering their 2 agreement”). 3 Having examined the DAAs, found Chase owes an independent tort duty to 4 refrain from the alleged conduct, and determined that, based on the current record, 5 Markowitz has raised a genuine dispute of fact that he can establish the elements of 6 conversion independently of the rights and duties assumed by the parties, the Court 7 holds that the economic loss rule does not bar Markowitz’s conversion claim. See 8 Rattagan, 17 Cal. 5th at 26. 9 2. Chase’s Wrongful Conduct 10 Next, Chase argues that Markowitz’s conversion claim fails because Markowitz 11 cannot establish that Chase’s conduct was wrongful. (Mot. 18–19.) In short, Chase 12 asserts that because the DAAs expressly authorized Chase to restrict the Account, its 13 conduct was not wrongful. (Id.) Despite Markowitz’s best efforts, (see SGDF ¶ 28), 14 there is no genuine dispute that the DAAs permitted Chase to freeze his Account 15 “pending investigation” if, among other things, Chase “suspect[ed] that any 16 transaction may involve illegal activity or may be fraudulent” or “reasonably 17 believe[d] that doing so is necessary to avoid a loss or reduce risk to” it, (SUF ¶ 14). 18 Therefore, for this claim to survive summary judgment, Markowitz must raise a 19 genuine dispute of material fact that the Account was not “pending investigation” for 20 those permitted reasons. 21 It cannot be genuinely disputed that Chase was investigating the Account from 22 the date of its initial freeze on the Account—May 11, 2023—through receiving 23 confirmation from SureTec that the Checks were not fraudulent—December 8, 2023. 24 As part of its closure process, Chase restricts and reviews a customer’s account to 25 verify that the funds can be released. (Id. ¶ 28.) Chase’s right to freeze an account 26 “to avoid a loss or reduce risk,” (id. ¶ 14), covers this initial freeze. 27 On May 18, 2023, a Chase fraud department employee became concerned that 28 the payee name on the Checks may have been altered. (Id. ¶¶ 29–30.) The DAAs 1 permit Chase’s continued freeze of the Account until it completed its investigation due 2 to suspected fraud and to avoid a loss or reduce risk to it. Markowitz objects that this 3 is a “feigned reason,” (SGDF ¶¶ 29–30), but cites no evidence in support, and thus 4 fails to raise a genuine dispute of fact that this was Chase’s reason for continuing to 5 freeze the Account. He points to Chase’s apparent lack of concern about the 6 authenticity of the Checks between May 11, 2023, and May 17, 2023. (Id. ¶ 30.) 7 Even if true, this does not undermine that Chase became concerned after this brief 8 period—on May 18, 2023—after reviewing the Account in connection with its closure 9 proceedings. 10 Next, Markowitz asserts that Chase made no effort to verify the Checks with 11 SureTec between May 18, 2023, and May 23, 2023. (Id.) But this is consistent with 12 Chase’s contention—as one of Chase’s records states, a Chase employee was 13 “[un]able to call” SureTec “as no active phone # located.” (Kesterson Decl. Ex. A 14 at 2; see Def.’s Resp. SGDF ¶ 7.) 15 Finally, Markowitz asserts that after Chase called SureTec outside of business 16 hours on May 23, 2023, Chase made no effort to verify the Checks until December 4, 17 2023, when Chase contacted counsel representing SureTec in an unrelated case. 18 (SGDF ¶ 30.) This, too, is refuted by the record. Between July 24, 2023, and 19 November 7, 2023, Chase asked Markowitz for information that may assist with the 20 investigation. (SUF ¶ 38.) Despite having access to an email from April 25, 2023, 21 which could have supported the authenticity of the Checks, Markowitz did not provide 22 Chase with the requested information until later in discovery, after Chase had already 23 returned the Funds.6 (Id. ¶¶ 39, 45–46.) Therefore, even if Chase had access to a 24 25 6 After Chase released the Funds, Markowitz produced to Chase an email dated April 25, 2023, from his counsel to Oscar Gallegos of Bond Services of Ca, LLC in which he attached an “Unconditional 26 Release of Claim on Bond” on a bond issued by SureTec in the principal amount of $641,020.50. (SUF ¶ 45.) Markowitz produced another email in which Gallegos stated that interest would be paid 27 on the bond. (Id. ¶ 46.) Markowitz argues it is irrelevant that he did not provide these emails sooner 28 because Chase insisted all information be exchanged in formal discovery. (SGDF ¶¶ 45–46; see also id. ¶¶ 38–39.) The record does not support Markowitz’s contention: Chase provides evidence of 1 working number for Suretec between May 23, 2023, and December 4, 2023, a fact 2 Markowitz has not supported with evidence, (see SGDF), there can be no genuine 3 dispute of material fact that Chase’s refusal to return the Funds to Markowitz was not 4 wrongful through at least December 8, 2023. 5 However, while SureTec confirmed the authenticity of the Checks on 6 December 8, 2023, (SUF ¶ 43), Chase did not return the Funds to Markowitz until at 7 least February 27, 2024, (id. ¶ 44; SGDF ¶ 30). Chase provides no explanation for the 8 delay and does not assert that its authentication of the Checks was still “pending 9 investigation” after that date. (See Mot; Reply; SUF.) Thus, Chase fails to show that 10 no genuine dispute of fact exists as to whether its failure to return the Funds after 11 SureTec confirmed the authenticity of the Checks on December 8, 2023, was 12 wrongful. 13 Even had Chase asserted the investigation was pending after December 8, 2023, 14 Markowitz raises a genuine dispute as to this fact. In a declaration, Markowitz’s 15 counsel states that, on January 11, 2024, Chase’s counsel informed him that “Chase 16 had resolved its concerns about the [C]hecks and was prepared to release the funds” 17 and later “conditioned the release of the funds on Mr. Markowitz’[s] agreement to 18 dismiss the lawsuit.” (Smith Decl. ¶ 13; see SGDF ¶ 30.) If Chase had completed its 19 investigation, but delayed returning the Funds on the condition that Markowitz would 20 dismiss this suit, that fact would raise a genuine dispute that, as of December 9, 2023, 21 at the earliest, through the date Chase returned the Funds, Chase’s refusal to return the 22 Funds was wrongful. 23 Accordingly, the Court GRANTS Chase’s Motion on Markowitz’s conversion 24 claim to the extent that Markowitz alleges Chase converted the Funds through 25 December 8, 2023. Further, the Court DENIES Chase’s efforts to obtain summary 26 27 28 specific requests to assist with verification it made to Markowitz in July and August 2023 outside of formal discovery. (See Kespradit Decl. Exs. 11–12.) 1 judgment on Markowitz’s conversion claim for Chase’s refusal to release the Funds 2 from December 9, 2023, through the eventual release of the Funds. 3 3. Damages 4 Chase also moves for summary judgment on the conversion claim on the basis 5 that the DAAs and California law preclude Markowitz from recovering the 6 consequential and punitive damages he seeks. (Mot. 19–21.) 7 First, Chase notes that the DAAs provide, “We will not be liable for indirect, 8 special or consequential damages regardless of the form of action and even if we have 9 been advised of the possibility of such damages.” (SUF ¶ 16 (emphasis omitted); 10 Mot. 19.) However, Markowitz correctly points out, (Opp’n 20–21), and Chase does 11 not contest, (see Reply), that to the extent this section limits liability for tort claims, 12 this provision violates California law, see Cal. Civ. Code § 1688 (“All contracts which 13 have for their object, directly or indirectly, to exempt any one from . . . willful injury 14 to the person or property of another . . . are against the policy of the law.”); Appel v. 15 Bos. Nat’l Title Agency, LLC, No. 3:18-CV-0873-RSH-AHG, 2022 WL 3582776, at *8 16 (S.D. Cal. Aug. 19, 2022) (“On balance, the weight of California authority favors 17 treating Plaintiffs’ conversion claim as within the scope of section 1668, whether 18 based on treating the claim as an intentional tort, as a strict liability tort for which 19 intentional wrongdoing is alleged, or as a strict liability tort for which the ‘public 20 interest’ is implicated.”). 21 Second, Chase challenges Markowitz’s attempts to obtain punitive damages on 22 the conversion claim. (Mot. 20–21.) A plaintiff may recover punitive damages on a 23 non-contract claim where the defendant has been guilty of malice, fraud, or 24 oppression. Cal. Civ. Code. § 3294(a). To prove punitive damages against a 25 corporate employer, California law requires a plaintiff show the conduct giving rise to 26 punitive damages “must be on the part of an officer, director, or managing agent of the 27 corporation.” Cal. Civ. Code § 3294(b). 28 1 Markowitz asserts that Kevin Kesterson, a Vice President of Business Analysis 2 Manager at Chase, ratified Chase’s wrongful conduct, giving rise to punitive damages. 3 (Opp’n 17; see Kesterson Decl. ¶ 1 (establishing Kesterson’s role at Chase).) 4 However, none of the conduct Markowitz identifies concerns Chase’s post- 5 December 8, 2023 decision to continue withholding the Funds after SureTec 6 confirmed the authenticity of the Checks. (See Opp’n 16–18.) And Kesterson’s 7 declaration—on which Markowitz relies to support his ratification theory—bears no 8 mention of the post-December 8, 2023 decision. (See generally Kesterson Decl.) 9 Markowitz thus fails to meet his burden to establish a genuine dispute that Chase 10 acted with malice, oppression, or reckless disregard towards his rights, or that an 11 officer, director, or managing agent committed or ratified the conduct. See, e.g., 12 Nguyen v. Wal-Mart Assocs., Inc., No. 23-CV-03204-JSW, 2024 WL 4557676, at *5 13 (N.D. Cal. Oct. 23, 2024) (granting summary judgment to defeat punitive damages 14 where plaintiff failed to respond to corporation’s denying punitive damages “with any 15 showing of proof”); Aaron Sowemimo v. DHL Express USA Inc. et al., No. 2:22-cv- 16 04253-AB (MRWx), 2024 WL 4328828, at *8 (C.D. Cal. Aug. 16, 2024) (noting 17 “higher evidentiary standard” for punitive damages and dismissing punitive damages 18 claim where plaintiff “has not put forth sufficient evidence” to support the remedy). 19 Accordingly, the Court DENIES Chase’s Motion as to consequential damages 20 and GRANTS it with respect to punitive damages. 21 In summary, the Court finds no genuine dispute of material fact exists as to the 22 following: Chase’s refusal to release the Funds through the date it authenticated the 23 Checks—December 8, 2023—was not wrongful, and Markowitz has not met his 24 burden to show he is entitled to punitive damages. Conversely, a genuine dispute of 25 material fact exists as to whether Chase’s delay in returning the Funds from 26 December 9, 2023, through the date it returned the Funds to Markowitz was wrongful. 27 The Court also finds a genuine dispute exists as to whether Markowitz is entitled to 28 recover consequential damages for that delay. 1 B. Claim and Delivery 2 Chase moves for summary judgment on Markowitz’s cause of action for claim 3 and delivery. (Mot. 21–23.) Through this cause of action, Markowitz seeks recovery 4 of the Funds and “all of his personal and business banking records from all of his 5 accounts closed by” Chase. (Compl. ¶¶ 36–37.) 6 Chase’s counsel declares that Markowitz’s counsel agreed to dismiss this cause 7 of action during a meet and confer prior to Chase filing the Motion, but acknowledges 8 that the Markowitz has not yet dismissed the cause of action. (Kespradit Decl. ¶ 2; 9 see Mot. 21 n.3.) And Markowitz does not address this cause of action in his 10 Opposition. (See generally Opp’n.) In any event, the Court must grant summary 11 judgment in favor of Chase on this cause of action. 12 “[A]n action for claim and delivery is not an independent cause of action.” 13 Balboa Cap. Corp. v. Wall St. Physician, PLLC., No. 8:22-cv-00009-JVS (DFMx), 14 2023 WL 5503083, at *4 (C.D. Cal. Mar. 2, 2023) (internal quotation marks omitted). 15 Instead, it “is a provisional prejudgment remedy by which a party may recover 16 possession of specific property.” Coste v. Fox Beverages USA Inc, No. 2:23-cv- 17 02053-WLH (RAOx), 2023 WL 8522987, at *9 (C.D. Cal. Oct. 10, 2023) (quoting 18 Teed v. Chen, No. 22-CV-02862-CRB, 2022 WL 16839496, at *10 (N.D. Cal. Nov. 9, 19 2022)). “It provides a plaintiff ‘the right of immediate possession of the property 20 involved in the action for specific recovery of the property without waiting for trial 21 and judgment.’” Id. (quoting Am. Mach. & Foundry Co. v. Pitchess, 262 Cal. App. 2d 22 490, 493 (1968)). 23 As there is no independent claim and delivery cause of action, the Court 24 dismisses this claim. See, e.g., Teed, 2022 WL 16839496, at *10 (dismissing claim 25 and delivery cause of action for this reason). Additionally, Chase has returned the 26 property Markowitz seeks. Specifically, on February 27, 2024, Markowitz received a 27 check from Chase in the amount of the Funds. (SUF ¶ 44.) And, in response to 28 1 Markowitz’s request, Chase produced all available copies of deposit account 2 statements through discovery. (Id. ¶¶ 47–48.) 3 Accordingly, the Court GRANTS Chase’s Motion regarding the claim and 4 deliver cause of action. 5 C. Intentional Infliction of Emotional Distress 6 Chase also moves for summary judgment on Markowitz’s IIED claim. 7 (Mot. 23–25.) Under California law, to prove IIED, a plaintiff must show (1) extreme 8 and outrageous conduct by the defendant with the intention of causing, or reckless 9 disregard of the probability of causing, emotional distress, (2) severe or extreme 10 emotional distress, and (3) actual and proximate causation of the emotional distress. 11 Lawler v. Montblanc N. Am., LLC, 704 F.3d 1235, 1245 (9th Cir. 2013) (citing Hughes 12 v. Pair, 46 Cal. 4th 1035, 1050 (2009)). 13 Chase argues that Markowitz cannot show its conduct was extreme or 14 outrageous. (Mot. 24–25.) Even assuming arguendo Markowitz has met his burden 15 of showing a genuine dispute of material fact that Chase’s conduct was extreme and 16 outrageous, he has not pointed to facts sufficient to raise a genuine dispute that Chase 17 had the intention of causing, or reckless disregard of the probability of causing, 18 emotional distress. (See id. at 23.) 19 Markowitz devotes one sentence in his Opposition to this element: “Chase’s 20 [extreme and outrageous] conduct can only be explained by concluding its intention of 21 causing, or reckless disregard of the probability of causing, emotional distress.” 22 (Opp’n 19.) He cites no evidence to support this conclusory and unsupported 23 assertion. (See id.; see generally SGDF); C.D. Cal. L.R. 56-4 (“The Court is not 24 obligated to look any further in the record for supporting evidence other than what is 25 actually and specifically referenced in the Statement of Uncontroverted Facts, the 26 Statement of Genuine Disputes, and the Response to Statement of Genuine 27 Disputes.”). This failure alone supports a ruling for Chase on Markowitz’s IIED 28 claim. See, e.g., Augustus v. City of Los Angeles, No. 2:22-cv-02640-SB (AGRx), 1 2023 WL 4291437, at *14 (C.D. Cal. May 31, 2023) (granting motion for summary 2 judgment on IIED claim where the plaintiff “point[ed] to no evidence suggesting that 3 any Defendant intended to cause him emotional harm or acted outrageously with 4 reckless disregard to such harm”). 5 Moreover, Markowitz’s description of Chase’s alleged extreme and outrageous 6 conduct undermines the inference that Chase restricted the Funds with the intent of 7 causing, or reckless disregard of the probability of causing, emotional distress. For 8 example, Markowitz asserts that Chase “had absolute proof that the checks were valid 9 and not fraudulent” by December 8, 2023, when SureTec confirmed that the checks 10 were authentic. (Opp’n 9–10; see SUF ¶ 41.) He alleges that “[d]espite having 11 absolute proof of the authenticity of the [C]hecks, Chase still refused to release the 12 funds” until February 27, 2024, because it “sought to condition the release of the 13 funds on” his “agreement to dismiss the lawsuit.” (Opp’n 10.) Even if true, this 14 supports that Chase intended to keep Markowitz’s money to induce him to drop the 15 lawsuit, not with the intent of causing him emotional distress. This similarly 16 undermines Markowitz’s claim Chase acted with reckless disregard of the probability 17 of causing emotional distress. Accordingly, the Court GRANTS Chase’s Motion on 18 Markowitz’s claim for IIED. 19 D. Negligent Infliction of Emotional Distress 20 Chase moves for summary judgment on Markowitz’s NIED claim on the bases 21 that it did not owe Markowitz a duty independent of the DAAs, the economic loss rule 22 bars the claim, and the DAAs authorized Chase’s conduct. (Mot. 25–28.) “Negligent 23 infliction of emotional distress is not an independent tort, but the tort of negligence, to 24 which traditional elements of duty, breach of duty, causation, and damages apply.” 25 Downey v. City of Riverside, 16 Cal. 5th 539, 547 (2024) (internal quotation marks 26 omitted). 27 For the reasons discussed above regarding the conversion claim, the Court 28 rejects these arguments, and finds Chase owed Markowitz an independent duty to not 1 convert the Funds and the economic loss doctrine does not bar his claim. (See Compl. 2 ¶ 49b (alleging Chase “[w]rongfully with[eld] his deposited funds”).) However, this 3 independent duty does not extend to the other conduct Markowitz alleges was 4 wrongful. (See id. ¶¶ 49a, 49c–d (alleging NIED claim for Chase’s “[c]losing all of 5 Markowitz’s deposit and credit card accounts,” “[d]isrupting and putting in jeopardy 6 his personal affairs and conduct of his business,” and “[p]utting his credit rating in 7 jeopardy”).) 8 As with the conversion claim, Markowitz has raised a triable issue of fact that 9 Chase’s conduct after authenticating the Checks on December 8, 2023, gives rise to a 10 tort. None of the challenges to Markowitz’s NIED claim that Chase raises supports a 11 ruling that this claim entirely fails at this stage. Accordingly, the Court GRANTS 12 Chase’s Motion to the extent Markowitz’s NIED claim seeks recovery on account of 13 Chase’s pre-authentication conduct and DENIES Chase’s Motion regarding its post- 14 authentication conduct. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 VI. CONCLUSION 2 For the reasons discussed above, the Court GRANTS partial summary 3 || judgment in favor of Chase. In particular, the Court GRANTS Chase’s Motion for 4|| Summary Judgment on Markowitz’s causes of action for claim and delivery and ITED. 5 || The Court also GRANTS Chase’s Motion as to Markowitz’s claim for punitive 6 || damages. Further, the Court GRANTS Chase’s Motion as to the conversion and 7|| NIED causes of action for Chase’s conduct prior to SureTec confirming the 8 | authenticity of the Checks on December 8, 2023. Finally, the Court DENIES Chase’s 9 || Motion as to the conversion and NIED causes of action for Chase’s conduct after this 10 || date (4.e., December 9, 2023) through the date Chase returned the Funds to 11 | Markowitz. (ECF No. 32.) 12 13 IT IS SO ORDERED. 14 15 December 23, 2024 i 16 N\A of 18 OTIS IGHT, II 9 UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28