Avarden Investments,LLC v. JPMorgan Chase Bank, N.A.

2015 DNH 173

• Court: District Court, D. New Hampshire
• Decided: September 9, 2015
• Docket: 15-cv-79-PB
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Avarden Investments,LLC

Case No. 15-cv-79-PB v. Opinion No. 2015 DNH 173

JPMorgan Chase Bank, N.A.

O R D E R

The defendant, JPMorgan Chase Bank, N.A. (“Chase”), has

filed a motion to dismiss for failure to state a claim. For the

reasons set forth in this Order, I grant the defendant’s motion.

The complaint alleges that the plaintiff, Avarden

Investments, LLC, entered into a contract with Deutsche Bank to

sell a property that Deutsche Bank acquired in foreclosure.

Chase signed the contract for Deutsche Bank as its attorney in

fact. Plaintiff’s manager, Gabriel Bilc, is the former owner of

the property, which he lost after Deutsche Bank foreclosed.

Chase, acting on behalf of Deutsche Bank, cancelled the contract

after it learned that Bilc was the former owner of the property.

In doing so, it relied on a clause in the contract that provides

that it may terminate the agreement “in its sole discretion” if

“. . . [b]uyer is the former mortgagor of the Property whose interest was foreclosed . . . or is related to or affiliated in

any way with the former mortgagor, and Buyer has not disclosed

this fact to Seller in writing prior to Seller’s acceptance of

the Agreement and this Addendum.” Doc. No. 4-4, Ex. C at 8-9.

Avarden asserts claims for breach of contract (Count I), a

violation of the New Hampshire Consumer Protection Act (Count

II), breach of the implied covenant of good faith and fair

dealing (Count III), and Fraud (Count IV).

This is not a close case. Avarden has sued the wrong party

on its breach of contract and good faith and fair dealing claims

because it is undisputed that Chase was acting as an agent for a

disclosed principal when it executed the contract. Except in

unusual circumstances not present here, an agent cannot be held

liable for a subsequent breach of the contract by the principal.

See, e.g., Universal Truck & Equip. Co. v. Southworth-Milton,

Inc., 765 F.3d 103, 108 (1st Cir. 2014)(applying Rhode Island

law); see also Restatement (Third) of Agency § 6.01 cmt. b

(2006)(explaining that an agent for a disclosed principal

generally “is not subject to liability if the principal fails to

perform”). Any remedy Avarden has for breach of contract or

breach of the duty of good faith and fair dealing thus should be

directed to Deutsch Bank rather than Chase. The complaint also

fails to allege that Chase committed fraud with specificity. 2 Nor does it allege facts which would support an actionable

Consumer Protection Act violation. Accordingly, these claims

must be dismissed as well.

The motion to dismiss (doc. no. 4) is granted. The clerk

is instructed to close the case.

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

September 9, 2015

cc: Kenneth R. Bernard, Esq. Nathan Reed Fennessy, Esq.