Taya Agri Feed Mill v. Byishimo ( 2022 )

Case: 22-20239 Document: 00516578140 Page: 1 Date Filed: 12/14/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
No. 22-20239 December 14, 2022
Lyle W. Cayce
Clerk
Taya Agricultural Feed Mill Company,
Plaintiff—Appellant,
versus
Heritier Byishimo; JP Morgan Chase Bank, N.A.; Marco
Garcia,
Defendants—Appellees.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:21-CV-03088
Before Stewart, Haynes, and Oldham, Circuit Judges.
Per Curiam:*
Taya Agricultural Feed Mill Company alleges that Heritier Byishimo
defrauded Taya by convincing it to enter a fake contract with a fictitious
company, Alaxco International. According to Taya, Byishimo enlisted Marco
Garcia to open a fraudulent account under Alaxco International’s name at
JPMorgan Chase Bank, N.A. Taya then wired over $150,000 into the account
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-20239 Document: 00516578140 Page: 2 Date Filed: 12/14/2022
No. 22-20239
in exchange for goods that were never delivered.1 Taya demanded the money
back but never received any of it.
Taya initially sued Byishimo, Alaxco International, and Chase Bank.
The district court dismissed the complaint without prejudice and gave Taya
leave to amend its complaint. Taya then filed an amended complaint against
Byishimo, Chase Bank, and Garcia. It brought conversion and fraud claims
against all three defendants and a negligence claim against Chase Bank. The
district court dismissed the claims against Chase Bank and Garcia with
prejudice and the claims against Byishimo without prejudice.
On appeal Taya challenges the district court’s dismissal of its claims
for fraud against Chase Bank and Garcia and its claim for negligence against
Chase Bank. We review the dismissals de novo. Vizaline, L.L.C. v. Tracy, 949
F.3d 927, 931 (5th Cir. 2020).
First, the claims for fraud. To bring a claim for fraud, a plaintiff must
“state with particularity the circumstances constituting fraud or mistake.”
Fed. R. Civ. P. 9(b). “Malice, intent, knowledge, and other conditions of
a person’s mind may be alleged generally.” Id. State-law fraud claims brought
in federal court must meet the federal pleading requirements. Williams v.
WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1998). “Pleading fraud with
particularity in this circuit requires time, place and contents of the false
representations, as well as the identity of the person making the
misrepresentation and what that person obtained thereby.” Id. (quotation
omitted).
To bring a claim of fraud by misrepresentation under Texas law, a
plaintiff must allege: “(1) a misrepresentation that (2) the speaker knew to be
1
The record isn’t clear on whether Taya lost $152,000 or $152,500. Both figures
appear in the record.
2
Case: 22-20239 Document: 00516578140 Page: 3 Date Filed: 12/14/2022
No. 22-20239
false or made recklessly (3) with the intention to induce the plaintiff’s
reliance, followed by (4) actual and justifiable reliance (5) causing injury.”
Rio Grande Royalty Co., Inc. v. Energy Transfer Partners, L.P., 620 F.3d 465,
468 (5th Cir. 2010). For a fraud-by-omission claim, the plaintiff must identify
specific circumstances, usually a confidential or fiduciary relationship,
creating a duty to speak. Id.Taya claims Garcia committed fraud by misrepresentation. But Taya
does not sufficiently allege that Garcia misrepresented anything. According
to Taya, “Byishimo . . . approached” Taya with the contract, “Byishimo
represented that Alaxco could deliver” the goods in exchange for payment
and entered the contract with Taya, “Byishimo provided [Taya] with an
invoice,” which included information on wiring money to the fraudulent
bank account, and in providing the wire information, “Byishimo represented
to [Taya] that Alaxco was, in fact, a legitimate entity that could deliver the
necessary goods and that it had a legitimate bank account at Chase Bank.”
(All emphases added.) Taya tries to connect Garcia to Byishimo’s
misconduct by claiming that Garcia engaged in misrepresentation when he
opened a fraudulent bank account on behalf of Byishimo. But Taya provides
no authority for the proposition that merely opening a bank account
constitutes a material misrepresentation under Texas law.
Taya next claims that Chase Bank committed fraud by omission. But
Chase had no duty to disclose. Chase Bank and Taya did not have a
“confidential or fiduciary relationship,” and Chase Bank did not “make[] a
partial disclosure [or] convey[] a false impression.” Rio Grande Royalty Co.,
620 F.3d at 468 (quotation omitted). The district court correctly dismissed
the claims for fraud.
Second, the negligence claim against Chase Bank. To plead
negligence, Taya must show plausible facts demonstrating “the existence of
3
Case: 22-20239 Document: 00516578140 Page: 4 Date Filed: 12/14/2022
No. 22-20239
a legal duty, a breach of that duty, and damages proximately caused by the
breach.” Rodriguez-Escobar v. Goss, 392 S.W.3d 109, 113 (Tex. 2013)
(quotation omitted). Taya admits that banks do not owe duties to non-
customers under Texas law. Thus, absent such a relationship between the
parties or other extenuating circumstances, Taya cannot prevail on its
negligence claim. See JPMorgan Chase Bank, N.A. v. Pro. Pharmacy II, 508
S.W.3d 391, 417 (Tex. App.—Fort Worth 2014, no pet.); Owens v. Comerica
Bank, 229 S.W.3d 544, 547 (Tex. App.—Dallas 2007, no pet.); Guerra v.
Regions Bank, 188 S.W.3d 744, 747 (Tex. App.—Tyler 2006, no pet.).2
Taya also raises a negligent supervision claim against Chase Bank. But
because Taya cannot prevail on a tort claim against Chase Bank’s employee,
it cannot succeed on a negligent supervision claim against Chase Bank. See
Wansey v. Hole, 379 S.W.3d 246, 247 (Tex. 2012); Waffle House, Inc. v.
Williams, 313 S.W.3d 796, 800 (Tex. 2010).
AFFIRMED.
2
Even if Chase Bank had a duty to Taya, and Chase Bank breached that duty,
Chase Bank did not proximately cause Taya’s injury. “Proximate cause has two elements:
cause in fact and foreseeability.” W. Invs., Inc. v. Urena, 162 S.W.3d 547, 551 (Tex. 2005).
“These elements cannot be established by mere conjecture, guess, or speculation.” Id.(quotation omitted). The negligent act must be “a substantial factor in causing the injury.”
Id. It’s not enough if “the defendant’s negligence merely furnished a condition that made
the injuries possible.” Id. Chase Bank merely furnished a condition by opening a bank
account. It was not foreseeable that Byishimo would enter this false contract, induce Taya
to deposit over $150,000 in the account, and then escape with the funds as a result.
4