Guilbert Tex, Inc.. v. Citibank N.A.

• Court: District Court, District of Columbia
• Decided: March 31, 2023
• Docket: Civil Action No. 2021-2016
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GUILBERT TEX, INC.,

Plaintiff,

v. Civil Action No. 21-2016 (TSC)

CITIBANK, N.A., et al.,

Defendants.

MEMORANDUM OPINION

Plaintiff Guilbert Tex, Inc. (“Guilbert”) has sued Defendant Citibank, N.A. (“Citibank”)

along with ten unidentified individuals, asserting claims for negligence and declaratory relief

related to Guilbert’s efforts to recover funds from a non-party to this case that allegedly

maintains an account with Citibank. Citibank has moved to dismiss the suit. See Mot. to

Dismiss, ECF No. 34. Because Guilbert has failed to state a claim upon which relief may be

granted, the court will GRANT Citibank’s motion and DISMISS this action. 1

I. BACKGROUND

In assessing Citibank’s motion to dismiss, the court assumes the truth of the following

allegations. In August 2020, Guilbert entered negotiations with an entity called “US Fed Group”

to purchase N95 surgical masks. Compl. ¶ 9, ECF No. 1. US Fed Group referred Guilbert to a

partner entity, Datta Holdings, from whom Guilbert agreed to purchase 10,000 masks. Id. ¶¶ 10-

1 Citibank argues in its motion to dismiss that there is an independent ground for dismissal: The funds Guilbert seeks are no longer in the Citibank account referenced in its Complaint. See Memo. of Points and Authorities in Supp. of Def. Citibank’s Mot. to Dismiss at 8, ECF No. 34-2. Because the court will dismiss on other grounds, it need not reach that alternative argument.

Page 1 of 6 13. Guilbert made an $11,000 deposit with Datta Holdings but did not receive the masks within

the promised thirty days. Id. ¶¶ 15-16. Guilbert contacted US Fed Group and Datta Holdings

(collectively, the “Sellers”) about the undelivered masks and was told that the minimum mask

order quantity was actually 125,000, not 10,000, and that Guilbert would need to deposit

$258,750 to secure that order. Id. ¶¶ 20, 23. On September 25, 2020, Guilbert agreed to do so,

and the Sellers promised to deliver the masks within thirty days. Id. ¶¶ 21-22. Guilbert wired

the $258,750 to the Sellers’ Citibank account, but in early October was informed that the

minimum order had again been changed, this time to 20,000,000. Id. ¶¶ 24-25. On October 6,

Guilbert cancelled both its 10,000 and 125,000 mask orders and requested a refund. Id. ¶ 26.

Datta Holdings returned Guilbert’s $11,000 from the first order, but never returned the $258,750.

Id. ¶¶ 28, 34.

On March 24, 2023, Guilbert sent a demand letter to Citibank, requesting that it place a

permanent hold on the account allegedly containing Guilbert’s $258,750 and prevent those funds

from being withdrawn by the Sellers or their affiliates. Id. ¶ 39. The letter included an affidavit

that those funds belonged to Guilbert and that Guilbert had been informed by the Federal Bureau

of Investigation and the U.S. Department of Justice that the $258,750 was still in the Citibank

account. Id. ¶ 40. On March 26, 2021, Citibank replied, refusing to place a hold on any account

or otherwise transfer any funds to Guilbert. Id. ¶ 41.

On March 30, 2021, Guilbert filed this Complaint in the Central District of California

against Citibank and ten unidentified Doe Defendants. Id. ¶¶ 3-6. The Complaint asserts two

counts against all Defendants. Count 1 alleges negligence in Defendants’ refusal to grant

Guilbert’s request for a hold to be placed on a Citibank account, and Count 2 seeks “Declaratory

Relief” that $258,750 in the Citibank account belongs to Guilbert and that Defendants violated

Page 2 of 6 California and District of Columbia law in failing to place a hold on those funds. Id. ¶ 53-58.

Upon Citibank’s motion, the Central District of California transferred the case to this district on

July 22, 2021. See Notice of Motion and Motion to Vacate Default, ECF No. 12; Order, ECF

No. 24.

This suit is not the only one involving Guilbert and the Sellers. 2 In December 2021,

Guilbert filed a separate action in the Central District of California against the Sellers and their

affiliates to recover the same $258,750. See Guilbert Tex, Inc. v. United States Fed Group

Consortium Syndicate et al., Case No. 2:20-cv-11420-SVW-AGR (C.D. Cal.). In late 2022, that

court ordered the defendants in that case to pay Guilbert $258,750. See id. at ECF Nos. 113,

122. Separately, Guilbert was joined as a third-party defendant in a 2021 civil action by the

United States under the Fraud Injunction Statute against the Sellers and related entities. See

United States v. US Fed Group, et al., 21-cv-008-CJW-MAR (N.D. Iowa). The third-party

claims against Guilbert in that case were dismissed. See id. at ECF No. 110.

II. LEGAL STANDARD

“A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a plaintiff’s complaint; it

does not require a court to assess the truth of what is asserted or determine whether a plaintiff has

any evidence to back up what is in the complaint.” Herron v. Fannie Mae, 861 F.3d 160, 173

(D.C. Cir. 2017) (internal citation and quotation omitted). To survive a Rule 12(b)(6) motion, a

complaint must allege facts sufficient to “state a claim to relief that is plausible on its face.” Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009). “[T]he Court need not accept inferences drawn by plaintiff if those inferences are not

2 “A court may take judicial notice of facts contained in public records of other proceedings.” Detroit Int’l Bridge Co. v. Gov’t of Canada, 133 F. Supp. 3d 70, 84 (D.D.C. 2015) (citing Abhe & Svoboda, Inc. v. Chao, 508 F.3d 1052, 1059 (D.C. Cir. 2007)).

Page 3 of 6 supported by the facts set out in the complaint, nor must the court accept legal conclusions cast

as factual allegations.” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012). “To

survive a motion to dismiss, a complaint must have ‘facial plausibility,’ meaning it must ‘plead[]

factual content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.’” Id. (quoting Iqbal, 556 U.S. at 678).

III. ANALYSIS

Guilbert fails to adequately state a claim that Defendants acted negligently or that it is

otherwise entitled to a declaratory judgment. The suit will therefore be dismissed.

A. Negligence

Guilbert’s first claim is that Defendants negligently refused to place a hold on funds held

in the Citibank account. To establish a negligence claim “under D.C. law, a plaintiff must prove

a duty of care owed by the defendant to the plaintiff, a breach of that duty by the defendant, and

damage to the interests of the plaintiff, proximately caused by the breach.” Sigmund v. Starwood

Urban Retail VI, LLC, 617 F.3d 512, 514 (D.C. Cir. 2010) (internal citation and quotation

omitted). Guilbert’s attempt to state a negligence claim founders at the first step; it does not

plausibly allege that Defendants owed it a duty of care.

The Complaint only alleges two bases for Defendants’ duty to honor Guilbert’s request to

place a hold on the funds: California Financial Code § 1450(a) and District of Columbia Code

§ 26-803. Compl. ¶¶ 49-51. 3 But Guilbert fails to allege facts that would give rise to a duty

3 In its briefing, Guilbert attempts to assert two additional common-law theories of negligence. See Memo. in Opp’n to Def. Citibank, N.A.’s Mot. to Dismiss at 9-12, ECF No. 35. Both attempts fall short. First, Guilbert cites several California cases for the proposition that banks owe a duty to investigate or stop transactions when it is reasonably foreseeable that fraud is involved. Id. at 9-10. But even assuming the law of those cases applies to Citibank, all of them involved banks’ duties to their own customers or parties in the relevant transaction, and Guilbert neither held the Citibank account in question nor would have been party to the Sellers

Page 4 of 6 under either code provision. The California provision permits banks to disregard a request for a

hold on an account unless the request includes an affidavit that the account holder is the

requester’s fiduciary. Cal. Fin. Code § 1450; see also Casey v. U.S. Bank Nat. Assn., 127 Cal.

App. 4th 1138, 1149 (Cal. Ct. App. 2005) (“[U]nder California law, a bank owes no duty to non-

depositors to investigate or disclose suspicious activities on the part of an account holder.”).

Here, Guilbert does not allege that the Sellers were its fiduciary, much less that its request to

Citibank included an affidavit to that effect. See Compl. ¶¶ 39-40. Likewise, the D.C. provision

only requires a bank to honor a request to place a hold on a non-fiduciary’s account if the

requester provides either (1) a court order requiring it, or (2) a bond indemnifying the bank from

any liability. See D.C. Code § 26-803. Guilbert does not allege that it presented Citibank with a

court order or bond when requesting the hold at issue in this case. Thus, no duty arose from

either provision.

Because Guilbert fails to allege any legal basis for Defendants’ duty to grant its request to

place a hold on the Citibank account, Guilbert has failed to plausibly allege Defendants’

negligence in refusing that request. Accordingly, Count 1 will be dismissed.

B. Declaratory relief

Guilbert’s “declaratory relief” claim fares no better. The Declaratory Judgment Act

permits a court with jurisdiction over an action to “declare the rights and other legal relations of

any interested party seeking such declaration.” 28 U.S.C. § 2201(a). A request for declaratory

withdrawing funds from it. Second, Guilbert argues that Citibank voluntarily assumed a duty to it when it previously placed a temporary hold on the account after being informed by the FBI of possible fraud. Here, too, Guilbert fails to cite any authority that Citibank assumed a duty to Guilbert, which would be contrary to the general rule that banks owe no duty to “non- depositors,” “noncustomers,” or “strangers.” See Reply Memo. in Supp. of Def. Citibank’s Renewed Mot. to Dismiss at 5-6, ECF No. 36 (collecting cases).

Page 5 of 6 judgment “is not a separate cause of action, but rather a prayer for relief.” Glenn v. Thomas

Fortune Fay, 222 F. Supp. 3d 31, 35 (D.D.C. 2016). The court therefore considers “whether the

facts alleged, under all the circumstances, show that there is a substantial controversy, between

parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance

of a declaratory judgment.” Id. (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273

(1941)).

Those considerations do not warrant a declaratory judgment here. Guilbert seeks

declarations that (1) Citibank must “turn[] over” the $258,750, and (2) that Defendants violated

the California and (3) D.C. Code provisions. Compl. ¶ 57. As for the latter two declarations, the

court has already explained that Guilbert has failed to plausibly plead that Defendants violated

those provisions. And the Complaint establishes no basis for the court to declare that Citibank

must turn over any money; the only separate cause of action that Guilbert identifies is

negligence, which has also not been plausibly alleged. Guilbert has failed to state any claim

giving rise to a substantial controversy with these Defendants, much less one “of sufficient

immediacy and reality to warrant the issuance of a declaratory judgment.” Glenn, 222 F. Supp.

3d at 35. As a result, Count 2 will also be dismissed.

IV. CONCLUSION

For these reasons, the court will GRANT Citibank’s Motion to Dismiss, ECF No. 34, and

DISMISS this action. A corresponding Order will accompany this Memorandum Opinion.

Date: March 31, 2023

Tanya S. Chutkan TANYA S. CHUTKAN United States District Judge

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