Chau Kieu Nguyen v. JP Morgan Chase Bank, NA ( 2013 )

  •             Case: 12-11128   Date Filed: 02/22/2013   Page: 1 of 10
                          FOR THE ELEVENTH CIRCUIT
                                  No. 12-11128
                              Non-Argument Calendar
                        D.C. Docket No. 0:11-cv-60608-KMW
    as Representative of Dung Kim Nguyen,
    and the Estate of Luong Trung Nguyen,
                                                           Plaintiff - Appellant,
    DUNG KIM NGUYEN, et al.,
                                                           Defendant - Appellee.
                     Appeal from the United States District Court
                         for the Southern District of Florida
                                 (February 22, 2013)
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    Before TJOFLAT, WILSON and ANDERSON, Circuit Judges.
          This is a breach of contract case between Chau Kieu Nguyen, as
    representative of her mother, Dung Kim Nguyen, and the estate of her father,
    Luong Trung Nguyen, deceased, and J.P. Morgan Chase Bank, N.A. (“Chase”).
          Between 1966 and 1975, Luong Trung Nguyen deposited money with a
    branch of Chase bank in Saigon, Vietnam in a checking account and a savings
    account, and purchased a certificate of deposit payable to Dung Kim Nguyen. In
    April 1975, in anticipation of the fall of Saigon to the North Vietnamese army,
    Chase began evacuating its bank personnel. On April 24, 1975, without giving
    notice to its depositors, Chase closed its Saigon branch. Saigon fell to North
    Vietnamese forces on April 30, 1975.
          On March 2, 2006, Chau Kieu Nguyen sent Chase a letter demanding
    payment of the sums in her father’s bank accounts plus interest and the redemption
    of the certificate of deposit, which her mother had assigned to her. Chase indicated
    that it could not locate records to verify her father’s bank accounts or the certificate
    of deposit and recommended that she contact the Chase branch in Hanoi, Vietnam.
          On March 23, 2011, Nguyen filed this action against Chase in the United
    States District Court for the Southern District of Florida to recover the amounts
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    itemized in her March 2, 2006 demand letter. Nguyen invoked the District Court’s
    subject matter jurisdiction under 28 U.S.C. § 1332 (diversity of citizenship) and 12
    U.S.C. § 632 (civil suits at common law or in equity involving a U.S. corporation
    and international or foreign banking transactions), and sought the recovery of the
    demanded amounts under theories of breach of contract, breach of fiduciary duty,
    money had and received, unjust enrichment, conversion, constructive trust, and
    accounting. Chase moved the court to dismiss the case under Federal Rule of Civil
    Procedure (“Rule”) 12(b)(1) on the grounds (1) that Nguyen lacked standing to sue
    on the certificate of deposit and to represent the estate because it did not exist and
    (2) that the court lacked § 1332 jurisdiction because the amount in controversy was
    less than $75,000. Conceding that the court had subject matter jurisdiction under §
    632 and, assuming that Nguyen had standing to prosecute the claims asserted in
    her complaint, Chase also moved the court to dismiss her complaint under Rule
    12(b)(6) on the grounds that the statutes of limitations of New York, N.Y. C.P.L.R.
    §§ 213-14 (McKinney 2012), and Florida, Fla. Stat. § 95.11 (2012), barred her
    claims. 1
           The District Court, acknowledging the presence of § 632 jurisdiction and
    without resolving the § 1332 jurisdictional issue, addressed the merits of Chase’s
    Rule 12(b)(6) motion. The court ruled that the New York statute of limitations
      Chase asserted the affirmative defense in a Rule 12(b)(6) motion to dismiss on the ground that
    the allegations of the complaint revealed that Nguyen’s claims were time-barred.
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    barred Nguyen’s claims. It therefore dismissed Nguyen’s complaint with prejudice
    and gave Chase a final judgment. Nguyen now appeals the court’s judgment.
           We are satisfied that the District Court had subject matter jurisdiction under
    12 U.S.C. § 632 to entertain Nguyen’s complaint and that Nguyen had standing to
    assert her claims. 2 We therefore address whether Nguyen’s claims are time-barred.
    To answer that question, we must determine whether the court was correct in
    applying the New York statute of limitations instead of the Florida statute of
    limitations. We review the District Court’s application of a statute of limitations
    de novo. Berman v. Blount Parrish & Co., Inc., 
    525 F.3d 1057
    , 1058 (11th Cir.
           Under 12 U.S.C. § 632, the court applies the choice-of-law principles of the
    federal common law, Corp. Venzolana de Fomento v. Vintero Sales, 
    629 F.2d 786
    795 (2d Cir. 1980), which follows the approach of the Restatement (Second) of
    Conflict of Laws. See Morewitz v. West of England Ship Owners Mut. Protection
    and Indem. Ass’n (Luxembourg), 
    62 F.3d 1356
    , 1363 n.13 (11th Cir. 1995) (citing
    Scoenberg v. Exportadora de Sal, S.A. de C.V., 
    930 F.2d 777
    , 782 (9th Cir. 1991)).
    Under the Restatement, a federal court should apply the statute of limitations of the
     Because we accept the allegations made in the complaint as true, Chase’s standing argument is
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    forum—in this case, Florida’s statute of limitations. Restatement (Second) of the
    Conflicts of Laws § 142 (1988).
           Nguyen made her demand on Chase on March 2, 2006. Florida’s statute of
    limitations for breach of contract (for contracts in writing) is five years. Fla. Stat.
    § 95.11(2). The statute bars that claim because more than five years elapsed
    between March 2, 2006, and March 22, 2011, the day she filed suit. Nguyen’s
    other claims are subject to Florida’s four-year statute of limitations, Id. § 95.11(3),
    and are also barred.
           The next question thus becomes whether the court would have reached a
    different result had it adjudicated the case in the exercise of its diversity
    jurisdiction and applied New York’s statutes of limitations. 3 New York’s
    limitations period for breach of contract and other actions not specified by statute
    is six years. 4 N.Y. C.P.L.R. § 213(1)-(2) (McKinney 2012). The question is
    whether Nguyen’s contract claim accrued on March 2, 2006, the date when she
      New York’s statutes of limitations would apply because, in a diversity case, the district court
    applies the forum state’s choice-of-law rules. Grupo Televisa, S.A. v. Telemundo Comm. Group,
    485 F.3d 1233
    , 1240 (11th Cir. 2007). Under Florida’s choice-of-law rules, the statute of
    limitations of the state having the most significant relationship to the occurrence and parties
    applies. Merkle v. Robinson, 
    737 So. 2d 540
    , 542 (Fla. 1999). Since New York has the most
    significant relationship to the occurrence and parties, its statutes of limitations govern.
      Under New York’s limitation statute, Nguyen’s claims for unjust enrichment, accounting, and
    constructive trust would also have a six-year limitations period. See N.Y. C.P.L.R. § 213(1).
    Nguyen’s other claims, conversion and breach of fiduciary duty, are governed by a three-year
    statute of limitations. N.Y. C.P.L.R. § 214 (McKinney 2012).
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    demanded payment, or on April 24, 1975, the date the Saigon branch closed. We
    conclude that the latter date controls.
           Under New York law, there is an implied contract between banks and their
    depositors that “banks shall keep a deposit until called for[,] and until the banks
    refuse to pay on demand, they are not in default.” Sokoloff v. Nat’l City Bank of
    New York, 
    164 N.E. 745
    , 749 (N.Y. 1928). Where a demand is required, the
    statute of limitations does not begin to run until the bank refuses a demand. 5 A
    demand, however, is not required where it would be impossible or useless to make.
    Sokoloff, 164 N.E. at 749 (“Where the bank has disclaimed liability, or for any
    other reason the demand would be manifestly futile, none need be made.”). Where
    no demand is required, the statute of limitations begins to run when the cause of
    action accrues. See Tillman v. Guar. Trust. Co., 
    171 N.E. 61
    , 61 (N.Y. 1930)
    (“The period of limitation during which an action may be brought must be
    computed from the time of the accruing of the right to relief by action, except as
    otherwise specifically prescribed by statute.”). 6
      N.Y. C.P.L.R. § 206(a) (“[W]here a demand is necessary to entitle a person to commence an
    action, the time within which the action must be commenced shall be computed from the time
    when the right to make the demand is complete, except that . . . (2) where there was a deposit of
    money to be repaid only upon a special demand, or a delivery of personal property not to be
    returned specifically or in kind at a fixed time or upon a fixed contingency, the time within
    which the action must be commenced shall be computed from the demand for repayment or
      Though Tillman construed § 15 of New York’s Civil Practice Act, N.Y. C.P.L.R. § 206 was
    “derived from § 15 of the civil practice act . . . without effecting any change in substance.”
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           Nguyen claims that the statute of limitations began to run when she made a
    demand on Chase’s New York office on March 2, 2006. Because Nguyen brought
    her suit on March 23, 2011, and because some of her claims are subject to New
    York’s six-year statute of limitations, she asserts that the District Court erred when
    it dismissed those claims as time-barred. Chase contends that a demand was futile
    because of the circumstances surrounding the close of the Saigon branch. Nguyen
    responds that the branch’s closure did not render a demand futile because Chase’s
    home office in New York was still open and capable of receiving demands. There
    is no dispute that it would have been impossible for Nguyen or her parents to make
    a demand on the Chase branch in Saigon, for it was forced to shutter its doors due
    to wartime conditions. The pivotal issue is whether New York law considers a
    demand futile when a foreign branch closes but the home office is still open and
    capable of receiving a demand.
           We conclude that under New York law a demand is not necessary in this
    context. In Sokoloff v. National City Bank of New York, the plaintiff opened an
    account in National City’s branch in Petrograd, Russia and deposited funds within
    the account. 164 N.E. at 746-47. Beginning in November 1917, the plaintiff made
    several attempts to either transfer his funds to another financial institution or to
    CPLR 206, Legislative Studies and Reports, at 53 (1958), available at Practice Commentaries,
    N.Y. C.P.L.R. § 206 (McKinney 2012).
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    withdraw them from the Petrograd branch, all of which failed. Id. at 747-48. By
    September 1, 1918, during the throes of the Russian Civil War, the Petrograd
    branch ceased to exist—the Soviet government had seized the bank for other
    purposes and its employees had fled the country. Id. at 749. When the plaintiff
    brought suit against National City to recover his deposit, the New York Court of
    Appeals held that no demand was required to maintain his action because the
    closing of the branch in Petrograd rendered such a demand futile. Id. Because a
    demand would have been futile, the plaintiff’s cause of action accrued the moment
    the bank breached its contract. Id. (“When the bank ceased to do business so that
    [the plaintiff], who wanted his money, could not make a demand and could not
    draw upon his account, the contract was broken.”).
           Sokoloff therefore stands for the proposition that a demand is futile where
    the deposit-holding foreign branch has gone out of business because it would be
    impossible and useless to make a demand on a defunct branch. See id. (“The fact
    that the bank had gone out of business on that date made a demand useless and
    unnecessary; the law by reason of the contract between the parties will consider the
    case as if a demand had been made.”). 7
      Though it is not readily apparent from the face of the decision in Sokoloff, we find it
    reasonable to infer that the National City home office in New York was still operational and not
    subject to the wartime conditions brought about by the Russian Civil War in Petrograd, Russia.
    Given this obvious observation, we regard the New York Court of Appeals decision to deem a
    demand futile because of the closure of a foreign bank branch illuminating to the case at hand.
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          The circumstances surrounding the closure of the Saigon branch in this case
    are similar to those in Sokoloff. In both instances, a depositor stored funds in a
    foreign branch of an American bank; the foreign branch was forced to close due to
    wartime conditions; and, consequently, the depositor was unable to access the
    funds deposited at that branch. Because New York law has held that a demand by
    the plaintiff in Sokoloff would have been futile, we conclude that a demand in this
    case would also have been futile.
          Because no demand was required here, the statute of limitations began to run
    when Chase breached its contract. Tillman, 171 N.E. at 61. A bank’s implied
    contract with its depositor is breached when the bank’s branch ceases to function.
    See Sokoloff, 164 N.E. at 750 (“The contract was broken, as of September 1, 1918,
    when the Petrograd branch ceased to function.”). Accordingly, Nguyen’s cause of
    action accrued, and the statute of limitations began to run, on the date of the Saigon
    branch’s closure, April 24, 1975. Because the suit was not brought within six
    years of the closure, Nguyen’s claims are time-barred under New York law. See
    Tillman, 171 N.E. at 62 (“By failure to make a demand which is unnecessary, a
    depositor cannot prevent the period of limitation from running against a cause of
    action which he is entitled to maintain without demand.”).
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          Nguyen’s claims are barred by the statute of limitations under New York
    law. The District Court’s order granting Chase’s motion to dismiss Nguyen’s
    complaint for failure to state a claim is therefore