Degtiarova v. JPMorgan Chase Bank N.A.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 25-cv-02658-DDD-NRN
YELYZAVETA DEGTIAROVA,
Plaintiff,
v.
JPMORGAN CHASE BANK N.A.,
Defendant.
REPORT AND RECOMMENDATION ON
MOTION TO DISMISS BY JPMORGAN CHASE BANK, N.A. (ECF No. 16)
N. REID NEUREITER
UNITED STATES MAGISTRATE JUDGE
This matter is before the Court pursuant to an Order, ECF No. 18, issued by
Judge Daniel D. Domenico referring JPMorgan Chase Bank, N.A.’s (“Chase Bank”)
Motion to Dismiss, ECF No. 16, filed on October 14, 2025. Plaintiff Yelyzaveta
Degtiarova (“Plaintiff” or “Ms. Degtiarova”) filed her response on October 16, 2025. ECF
No. 17. Chase Bank filed a reply on October 30, 2025. ECF No. 19. With leave of Court,
Plaintiff filed a sur-reply on October 31, 2025. ECF No. 20. The Court heard oral
argument on December 9, 2025. See ECF No. 26.
The Court has taken judicial notice of the Court’s file, considered the applicable
Federal Rules of Procedure and case law. Now, being fully informed and for the
reasons discussed below, the Court makes the following recommendation.
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I. 	BACKGROUND1
Plaintiff brings this lawsuit seeking the release of funds from a wire transfer to her
account which are currently being retained by Chase Bank. Following the death of
Plaintiff’s relatives in Russia, she inherited multiple properties, which she subsequently
sold. On October 30, 2024, a wire transfer was initiated to send the resulting inheritance
proceeds—totaling 7,790,574.20 Russian rubles (roughly the equivalent of
$101,500.00) —from Raiffeisen Bank in Russia to Plaintiff’s account at Chase Bank in
the United States. To date, Plaintiff’s funds from her incoming wire transfer have not
been released to her.
Plaintiff alleges that she “made repeated efforts to engage Chase Bank through
every available channel . . . . All of them were ignored, blocked, or dismissed without
substantive response.” ECF No. 1 at 3. She spent several hours between November
2024 and March 2025 on the phone with Chase Bank representatives and even
attempted to contact Chase Bank executives directly. Finally, on March 10, 2025,
Chase Bank informed Plaintiff that the funds in question were frozen due to a “litigation-
related freeze on [Chase Bank]’s accounts in Russia, which purportedly prevented them
from processing transactions originating in Russia.” Id. at 4.
Chase attributes the delay in forwarding Plaintiff’s funds to an arbitration order
emanating from Russia. On April 22, 2024, the Arbitration Court of St. Petersburg and
Leningrad Region entered an order against Chase Bank and eight related entities—
1 Unless otherwise stated, all factual allegations are taken from the Complaint,
ECF No. 1, and all non-conclusory allegations are presumed true for the purposes of
the pending motion to dismiss. All citations to docketed materials are to the page
number in the CM/ECF header, which sometimes differs from a document’s internal
pagination.
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including J.P. Morgan Bank International (“JPMBI”)—to “seize cash, movable and
immovable property, and claims belonging to [the Chase entities] and held by them or
other persons” in the amount of $439,468,033.12 USD (the “Freeze Order”). See ECF
No. 16-1 at 4 .2 The Russian court ordered the seizure of “funds in all bank accounts,
including correspondent and other accounts, opened in the name of [the Chase entities]
in any currency . . . . “ Id. Chase Bank argues that per the Freeze Order, “any ruble
credits Chase receives must be held indefinitely—preventing Chase from converting
rubles to USD, crediting domestic deposit accounts like [Plaintiff]’s or even returning
transfers to originating banks. . . . [Plaintiff]’s incoming wire was not singled-out, but was
unfortunately swept in by the Freeze Order.” ECF No. 16 at 3. In its motion, Chase Bank
states that it is currently in the process of appealing the Freeze Order. Id. Chase Bank
further argues that if it is successful in its challenge and the Freeze Order is lifted,
Plaintiff, along with other impacted customers, will re-gain access to the restricted
funds. Id.
In her Complaint, Plaintiff challenges whether the Freeze Order is “so broad” as
to extend to customer accounts. She argues that Chase had “both the capacity and the
duty to distinguish between its own institutional assets and the private funds of U.S.
2 The Court takes judicial notice of the English translation of the Russian court
freeze order of April 22, 2024, which was submitted by Chase Bank along with their
motion. The authenticity of the original document and the provided English translation
do not seem to be disputed by Plaintiff. Judicial notice may be taken during any stage of
the judicial proceeding, including the stage of a motion to dismiss. See 21B C. Wright &
K. Graham, Federal Practice & Procedure § 5110, at 294 & n.17 (2d ed. 2005). And
while ordinarily a motion to dismiss must be converted to a motion for summary
judgment when the court considers matters outside the complaint, see Fed. R. Civ. P.
12(d), matters that are judicially noticeable do not have that effect, Pace v. Swerdlow,
519 F.3d 1067, 1072 (10th Cir. 2008).
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customers.” ECF No. 1 at 9. Along with her sur-reply, Plaintiff submitted a certified
English translation of a clarifying order (the “Clarifying Order”) that was issued by the
same court on April 27, 2024. See ECF No. 20-2.3 Importantly, Plaintiff notes that the
Clarifying Order states that “[t]he Court did not impose the seizure on the monetary
funds belonging to other persons, including the clients of the Bank . . . .“ Interpreting this
ruling, Plaintiff argues that the Freeze Order of April 22, 2024 applies only to Chase
Bank’s own corporate funds and does not extend to the accounts of third-parties such
as herself.
Based on the alleged unlawful retention of her funds, Plaintiff brings the following
claims against Chase Bank: (1) Violation of the Electronic Fund Transfer Act (“EFTA”),
15 U.S.C. § 1693 et seq., and Regulation E (12 C.F.R. Part 1005); (2) Violation of UCC
Article 4A (Funds Transfers), including § 4A-212; (3) Breach of Contract; (4)
Negligence; (5) Breach of Fiduciary Duty and Breach of the Implied Covenant of Good
Faith and Fair Dealing; (6) Conversion; (7) (in the alternative) Unjust Enrichment; and
(8) Intentional Infliction of Emotional Distress (“IIED”). See generally ECF No. 1.
In terms of relief, Plaintiff seeks (1) injunctive and declaratory relief ordering
Chase Bank to release the funds from the October 30, 2024 wire transfer to Plaintiff’s
account; (2) compensatory damages in the amount of $750,000; (3) damages for
emotional distress; (3) punitive damages; (5) statutory damages as authorized under
EFTA and Regulation E; and (6) attorney fees and costs along with pre- and post-
judgment interest. Id. at 13–14.
3 The Court takes judicial notice of the submitted Clarifying Order.
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II. 	LEGAL STANDARDS
a. 	Pro Se Plaintiff
Ms. Degtiarova is proceeding pro se. The Court, therefore, “review[s her]
pleadings and other papers liberally and hold[s] them to a less stringent standard than
those drafted by attorneys.” Trackwell v. U.S., 472 F.3d 1242, 1243 (10th Cir. 2007)
(citations omitted). However, a pro se litigant’s “conclusory allegations without
supporting factual averments are insufficient to state a claim upon which relief can be
based.” Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). A court may not assume
that a plaintiff can prove facts that have not been alleged, or that a defendant has
violated laws in ways that a plaintiff has not alleged. Associated Gen. Contractors of
Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983); see also
Whitney v. N.M., 113 F.3d 1170, 1173–74 (10th Cir. 1997) (court may not “supply
additional factual allegations to round out a plaintiff’s complaint”); Drake v. City of Fort
Collins, 927 F.2d 1156, 1159 (10th Cir. 1991) (the court may not “construct arguments
or theories for the plaintiff in the absence of any discussion of those issues”). A
plaintiff’s pro se status does not entitle her to an application of different rules. See
Montoya v. Chao, 296 F.3d 952, 957 (10th Cir. 2002).
b. Rule 12(b)(6)
Rule 12(b)(6) provides that a defendant may move to dismiss a claim for “failure
to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “The court’s
function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties
might present at trial, but to assess whether the plaintiff’s complaint alone is legally
sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc.,
336 F.3d 1194, 1201 (10th Cir. 2003) (citations and quotation marks omitted). “A court
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reviewing the sufficiency of a complaint presumes all of plaintiff’s factual allegations are
true and construes them in the light most favorable to the plaintiff.” Hall, 935 F.2d at
1109. “To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570 (2007)).
Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded
facts which allow “the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. The Iqbal evaluation requires two prongs of analysis.
First, the court identifies “the allegations in the complaint that are not entitled to the
assumption of truth,” that is, those allegations which are legal conclusions, bare
assertions, or merely conclusory. Id. at 679–81. Second, the court considers the factual
allegations “to determine if they plausibly suggest an entitlement to relief.” Id. at 681. If
the allegations state a plausible claim for relief, such claim survives the motion to
dismiss. Id. at 679.
III. 	ANALYSIS
a. 	Claim One: Violation of the EFTA and Regulation E
The EFTA seeks to protect consumers who “use . . . electronic systems to
transfer funds.” 15 U.S.C. § 1693. To that end, it sets forth “a basic framework
establishing the rights, liabilities, and responsibilities of participants in electronic fund
and remittance transfer systems.” Id. § 1693(b). Under Plaintiff’s first claim, she alleges
that Chase Bank violated the EFTA and its implementing regulation (Regulation E) by
freezing her funds and failing to provide Plaintiff with “timely written notice of error
resolution or explanation of her rights.” ECF No. 1 at 5.
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The EFTA defines an “electronic fund transfer” as “any transfer of funds that is
initiated through an electronic terminal, telephone, computer, or magnetic tape for the
purpose of ordering, instructing, or authorizing a financial institution to debit or credit a
consumer’s account.” 12 C. F. R. § 1005.3(b)(1). Specifically excluded from coverage
under the EFTA are “wire or other similar transfers,” defined as “[a]ny transfer of funds
through Fedwire or through a similar wire transfer system that is used primarily for
transfers between financial institutions or between businesses.” Id. § 1005.3(c)(3).
This suit concerns a wire transfer of funds sent from Raiffeisen Bank on behalf of
Plaintiff, to her account with Chase Bank via an intermediary institution, JPMBI. Plaintiff
does not dispute that the transaction at issue constitutes an incoming wire transfer.
Chase Bank argues, and the Court agrees, that because Plaintiff’s claims are based on
a wire transfer, the EFTA does not apply. See, e.g., Nazimuddin v. Wells Fargo Bank,
N.A., No. 24-20343, 2025 WL 33471, at *2 (5th Cir. Jan. 6, 2025) (“As the transfers from
Nazimuddin’s account were undisputedly wire transfers, they are outside the scope of
the EFTA and its protections do not apply.”); McClellon v. Bank of Am., N.A., 2018 WL
4852628, at *6 (W.D. Wa. Oct. 5, 2018) (dismissing because EFTA does not apply to
wire transfers); Fischer & Mandell LLP v. Citibank, N.A., 2009 WL 1767621, at *4
(S.D.N.Y. June 22, 2009) (noting that “‘wire or other similar transfers’ are explicitly
excluded from the definition of ‘electronic fund transfer’”). Accordingly, the Court finds
that Plaintiff’s claim under EFTA and Regulation E should be dismissed.4
4 Plaintiff brings this suit under federal question jurisdiction pursuant to 28 U.S.C.
§ 1331. Although the Court recommends dismissing Plaintiff’s federal claim, the Court
finds Plaintiff’s claims sufficiently establish diversity jurisdiction under 28 U.S.C. § 1332.
Plaintiff is domiciled in Colorado, and Defendant JPMorgan Chase Bank, N.A. is a
national banking association incorporated in Columbus, Ohio, with its principal place of
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b. Claim Two: Violation of UCC Article 4A (Fund Transfers),
including § 4A-212
Claim two alleges a violation of Article 4A of the UCC, codified under Title 4 of
the Colorado Revised Statutes, which governs “fund transfers,” defined as
the series of transactions, beginning with the originator’s payment order,
made for the purpose of making payment to the beneficiary of the order.
The term includes any payment order issued by the originator’s bank or an
intermediary bank intended to carry out the originator’s payment order. A
funds transfer is completed by acceptance by the beneficiary’s bank of a
payment order for the benefit of the beneficiary of the originator’s payment
order.
Colo. Rev. Stat. § 4-4.5-104. Chase Bank concedes that the wire transfer at issue in this
case constitutes such a funds transfer and is thus governed by the statute. ECF No. 16
at 7.
Plaintiff alleges violations under both UCC §§ 4A-404 and 4A-212 (adopted by
Colorado under Colo. Rev. Stat. §§ 4-4.5-404 and 4-4.5-212, respectively). Colo. Rev.
Stat. § 4-4.5-212 provides as follows:
If a receiving bank fails to accept a payment order that it is obliged by
express agreement to accept, the bank is liable for breach of the agreement
to the extent provided in the agreement or in this article, but does not
otherwise have any duty to accept a payment order or, before acceptance,
to take any action, or refrain from taking action, with respect to the order
except as provided in this article or by express agreement. Liability based
on acceptance arises only when acceptance occurs as stated in section 4-
4.5-209, and liability is limited to that provided in this article. A receiving
bank is not the agent of the sender or beneficiary of the payment order it
accepts, or of any other party to the funds transfer, and the bank owes no
duty to any party to the funds transfer except as provided in this article or
by express agreement.
Id. “Payment order” means “an instruction of a sender to a receiving bank, transmitted
orally or in a record, to pay, or to cause another bank to pay, a fixed or determinable
business in New York, New York. Additionally, the amount in controversy exceeds
$75,000.
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amount of money to a beneficiary . . . .” Colo. Rev. Stat. § 4-4.5-103. “Receiving bank”
means the bank to which the sender’s instruction is addressed. Id. “Absent a contrary
agreement, no bank has any obligation to honor a payment order issued by a customer
or another bank,” but “most banks have an agreement of one sort or another to accept
payment orders from particular banks or customers. The process of completing a funds
transfer to an account in a particular bank will vary depending upon the structure of the
agreements to which that bank is a party.” § 85:1. Basic concepts and terminology, 2A
Colo. Prac., Methods Of Practice § 85:1 (7th ed.)
In this matter, a payment order was sent from Plaintiff to Raiffeisen Bank, then to
JPMBI (acting as an intermediary receiving bank), which subsequently forwarded the
payment order to Chase Bank. Plaintiff pleads two alternative theories: either (1) Chase
Bank wrongfully failed to accept the payment order from JPMBI, and the funds remain
(in the form of rubles) in the custody of JPMBI; or (2) Chase Bank accepted the
payment order and received the funds and is wrongfully refusing to release them to
Plaintiff. The issue of which entity has actual possession of the funds is disputed by the
parties.
Under the first theory, Plaintiff alleges that Chase Bank, acting as both the
receiving bank and the beneficiary’s bank, wrongfully failed to accept the payment order
forwarded from JPMBI in violation of § 4-4.5-212. While Chase Bank alleges that the
Freeze Order prevented it from accepting the wire transfer from JPMBI and crediting
Plaintiff’s account, there is a non-frivolous factual dispute regarding exactly what the
Russian court order means and to what funds it applies. At the motion to dismiss stage,
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without any expert testimony on foreign law, the Court is in no position to interpret the
ruling from a foreign court.
In its motion, Chase Bank argues that § 4-4.5-212 is “simply inapplicable”
because the transfer was accepted by JPMBI. ECF No. 16 at 7. The Court is not
persuaded. Within the context of Plaintiff’s claim under § 4-4.5-212, the “receiving bank”
is Chase Bank, not JPMBI. As Plaintiff points out in her response, a “receiving bank”
includes any bank to which a payment order is issued. ECF No. 17 at 7. Chase Bank
raises no other arguments against Plaintiff’s claim under § 4-4.5-212. Accepting the
well-pled non-conclusory facts in the light most favorable to Plaintiff, the Court finds that
Plaintiff’s allegations permit an inference that Chase Bank wrongfully rejected the
payment order forwarded from JPMBI. Consequently, Chase Bank’s motion to dismiss
Plaintiff’s claim under § 4-4.5-212 should be denied.
Under Plaintiff’s second theory, she pleads a violation of § 4-4.5-404, which
reads as follows:
[I]f a beneficiary’s bank accepts a payment order, the bank is obliged to pay
the amount of the order to the beneficiary of the order. Payment is due on
the payment date of the order, but if acceptance occurs on the payment
date after the close of the funds-transfer business day of the bank, payment
is due on the next funds-transfer business day. If the bank refuses to pay
after 	demand 	by 	the 	beneficiary 	and 	receipt 	of 	notice 	of 	particular
circumstances that will give rise to consequential damages as a result of
nonpayment, the beneficiary may recover damages resulting from the
refusal to pay to the extent the bank had notice of the damages, unless the
bank proves that it did not pay because of a reasonable doubt concerning
the right of the beneficiary to payment.
Id. Plaintiff argues that, “to the extent [Chase Bank] accepted the payment order for
Plaintiff as a beneficiary” from JPMBI, Chase Bank owed her a duty “to pay or notify the
beneficiary upon acceptance.” ECF No. 1 at 6. She alleges (in the alternative) that
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“Chase Bank accepted the wire transfer but failed to execute the payment order, failed
to credit the funds, and failed to return them to the originating bank.” Id. She further
alleges that despite her “multiple written and oral inquiries, Chase Bank did not notify
Plaintiff in a lawful or timely manner of its refusal or inability to complete the transfer.” Id.
Chase Bank argues that Plaintiff has failed to allege a violation of § 4-4.5-404 because
“the statute allows a beneficiary bank” “to withhold funds to comply with applicable law.”
ECF No. 16 at 7. In support, Chase Bank cites to § 4-4.5-503, which provides, “[f]or
proper cause and in compliance with applicable law, a court may restrain . . . the
beneficiary’s bank from releasing funds to the beneficiary.” Id. Chase Bank asserts that
“under this exception, JPMBI (Moscow) and Chase [Bank] acted within their rights and
this Article 4A claim must fail.” ECF No. 16 at 8.
However, as previously discussed, the impact of the Freeze Order and whether it
actually prohibits Chase Bank from releasing Plaintiff’s funds to her is not something
that can be decided on a motion to dismiss, especially in light of the clarifying order that
Plaintiff has submitted. Accepting the well-pled allegations in the light most favorable to
Plaintiff, the Court finds that, at least for the purposes of a motion to dismiss, Plaintiff
has sufficiently stated a claim under § 4-4.5-404. Therefore, Chase Bank’s motion to
dismiss Plaintiff’s claim under § 4-4.5-404 should be denied.
c. 	Claim Three
i. 	Breach of Contract
Under Claim Three, Plaintiff brings a claim against Chase Bank for breach of
contract. ECF No. 1 at 7. Specifically, Plaintiff alleges that Chase Bank breached the
Deposit Account Agreement (“DAA”). Both parties agree that the DAA governs the
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relationship between Plaintiff and Chase Bank. Plaintiff states that under the DAA,
“Chase Bank undertook contractual obligations to accept and process incoming wire
transfers, to credit Plaintiff’s account, and to handle transactions in good faith and in
compliance with applicable law.” She alleges that, “[d]espite accepting the wire order,
Chase Bank failed to credit the funds, failed to return them, and failed to provide Plaintiff
with an effective mean of recovery” in a “material breach of its contractual duties under
the DAA.” Id.
Chase Bank argues that these “failures” were “demanded by Russian law” and
“breached no provision of the DAA.” ECF No. 16 at 4. It asserts that it cannot process
transactions originating in Russia, and that it never converted the rubles—which, per
Chase Bank, are in the custody of JPMBI in Moscow—to U.S. dollars. Id. at 5. Chase
Bank alleges that the funds are not in the U.S., and “Russian law absolutely controls
what Chase does with rubles located in Russia. Chase’s actions were mandated and,
therefore, any theory of liability against it fails.” It further argues that the situation is “no
different than circumstances where a bank cannot process a domestic transaction due
to a court order.” Id.
In support of its argument, Chase Bank references the provision in the DAA that
reads, “if Chase [Bank] does not complete a transaction from your personal account on
time or in the correct amount, we will be liable for your losses or damages. . . .
[H]owever, [Chase Bank] is not liable for any failed transactions if . . . circumstances
beyond our control prevent the transactions.” ECF No. 16-3 at 13. Chase Bank also
asserts that under the DAA, Plaintiff “acknowledge[s] and agree[s] that [Chase Bank]
may decline or prevent any or all transactions to or from [her] account, including . . .
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freezing . . . any transfer of funds” in limited circumstances. Id. at 22. Furthermore,
under the “General Liability” heading, the DAA reads, “[Chase Bank] will not be liable if .
. . we reasonable believe” completing a transaction “would expose us to potential loss or
civil or criminal liability.” Id. Chase Bank takes the position that releasing the funds from
the incoming wire transfer to Plaintiff would violate the Russian court order and subject
them to liability, and therefore Chase Bank did not breach any provision of the DAA by
refusing or delaying completion of the funds transfer. For the reasons set forth below,
the Court finds that Plaintiff has failed to state a claim for breach of the DAA.
A federal court with diversity-based jurisdiction over a case applies the laws of
the forum state in analyzing the underlying claims. See Erie R.R. Co. v. Tompkins, 304
U.S. 64, 78 (1938); Essex Ins. Co. v. Vincent, 52 F.3d 894, 896 (10th Cir. 1995). To
state a claim for breach of contract under Colorado law, a plaintiff must sufficiently plead
the following elements: (1) the existence of a contract; (2) performance by the plaintiff or
some justification for nonperformance; (3) failure to perform the contract by the
defendant; and (4) resulting damages to the plaintiff. PayoutOne v. Coral Mortg.
Bankers, 602 F. Supp. 2d 1219, 1224 (D. Colo. 2009) (citing W. Distrib. Co. v. Diodosio,
841 P.2d 1053, 1058 (Colo. 1992)).
Neiter side disputes that the DAA is a valid contract between the parties.
However, Plaintiff does not point to any specific provision in the DAA to support her
breach of contract claim. While Plaintiff alleges that under the DAA, “Chase Bank
undertook contractual obligations to accept and process incoming wire transfers, to
credit Plaintiff’s account, and to handle transactions in good faith and in compliance with
applicable law,” it is not clear to the Court what provision of the DAA Plaintiff is referring
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to. While the Court liberally construes Plaintiff’s pro se filings, it does not act as her
advocate. See Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir.
2005). Accordingly, the Court finds that Plaintiff’s breach of contract claim fails.
ii. 	Breach of Implied Covenant of Good Faith and Fair Dealing
Plaintiff’s breach of contract claim also incorporates a claim for breach of the
implied contractual duty of good faith and fair dealing. ECF No. 1 at 7. “In Colorado,
every contract contains an implied duty of good faith and fair dealing.” Transamerica
Premier Ins. Co. v. Brighton Sch. Dist. 27J, 940 P.2d 348, 351 (Colo. 1997). The good
faith doctrine is necessary to effectuate the intentions of the parties and to honor their
reasonable expectations. Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 (Colo. 1995).
“Good faith performance of a contract involves ‘faithfulness to an agreed common
purpose and consistency with the justified expectations of the other party.’” ADT Sec.
Servs., Inc. v. Premier Home Prot., Inc., 181 P.3d 288, 293 (Colo. App. 2007) (quoting
Amoco Oil Co., 908 P.2d at 498). For that reason, the doctrine “may be relied upon only
when the manner of performance under a specific contract term allows for discretion on
the part of either party.” Amoco Oil Co., 908 P.2d at 498. “Discretion in performance
occurs ‘when the parties, at formation, defer a decision regarding performance terms of
the contract’ leaving one party with the power to set or control the terms of performance
after formation.” City of Golden v. Parker, 138 P.3d 285, 292 (Colo. 2006) (quoting
Amoco Oil Co., 908 P.2d at 498). This duty prohibits a party from exercising “discretion
conferred by the contract to act dishonestly or to act outside of accepted commercial
practices to deprive the other party of the benefit of the contract.” Alpine Bank v.
Hubbell, 555 F.3d 1097, 1104 (10th Cir. 2009) (citation omitted).
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Plaintiff alleges that Chase Bank breached the implied covenant of good faith
and fair dealing by “providing contradictory, misleading, and pretextual explanations for
withholding Plaintiff’s funds.” ECF No. 1 at 7. Though Plaintiff does not point to a
specific contract term in her pleading, in its motion, Chase Bank cites to the “General
Liability” and “Blocking or Delaying Transactions” provisions of the DAA, which give
Chase Bank discretion to refuse to complete certain transactions when Chase Bank
“reasonably believes” doing so would expose Chase Bank to civil or criminal liability or
other risk. See ECF No. 16-3 at 22 (emphasis added). Chase Bank relies on these
provisions in its defense. Arguing that the Russian Freeze Order does not extend to
client accounts, Plaintiff alleges that Chase Bank acted unreasonably in exercising that
discretion and withholding her funds from her. At least at the motion to dismiss stage,
the Court finds this is sufficient to make out a claim of breach of the implied covenant of
good faith and fair dealing.
d. Claim Five: Breach of Fiduciary Duty and Breach of the Implied
Covenant of Good Faith and Fair Dealing
Under Claim Five, Plaintiff combines her claims for breach of fiduciary duty and
breach of the implied covenant of good faith and fair dealing. She alleges that,
as Plaintiff’s depository bank, Chase Bank owed duties of loyalty, honestly,
and care in safeguarding Plaintiff’s funds and acting in good faith with
respect to the contractual banking relationship. A special relationship of
trust and confidence arose when Defendant accepted Plaintiff’s wire for
safekeeping and repeatedly directed Plaintiff to rely on its internal process
and determinations.
ECF No. 1 at 8. However, as Chase Bank argues, “in the absence of special
circumstances, the legal relationship between a lending institution and its customer is
that of debtor and creditor.” Wells Fargo Realty Advisors Funding, Inc. v. Uioli, Inc., 872
P.2d 1359, 1365 (Colo. App. 1994) (citing First Nat’l Bank v. Theos, 794 P.2d 1055
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(Colo. App. 1990)); see also Premier Farm Credit, PCA v. W–Cattle, LLC, 155 P.3d
504, 523 (Colo. App. 2006) (“In the absence of special circumstances, the relationship
between a lending institution and its customer is merely one of creditor and debtor.”);
Franks v. Colo. Nat’l Bank–Arapahoe, 855 P.2d 455, 458 (Colo. App. 1993) (“A
relationship of debtor and creditor, standing alone, is insufficient to constitute a special
relationship.”). The Court agrees and finds that Plaintiff’s claim for breach of fiduciary
duty necessarily fails.
Under Claim Five, Plaintiff seems to bring an identical claim for breach of the
implied covenant and good faith dealing that was previously alleged under Claim Three.
Treating these allegations as one and the same, the Court finds that Plaintiff’s claim for
breach of the implied covenant of good faith and fair dealing under claim five should be
dismissed as duplicative.
a. 	Claims Four (Negligence), Six (Conversion). and Seven (Unjust
Enrichment)
Under Plaintiff’s fourth claim for negligence, she asserts that Chase Bank had a
“duty of care to properly process, handle, and safeguard incoming wire transfers.” ECF
No. 1 at 7. She alleges that by accepting the payment order but failing to credit
Plaintiff’s account, return the funds, or “provide accurate notice of their disposition,”
Chase Bank acted negligently in handling Plaintiff’s funds. Id. 7–8
Chase Bank argues that Plaintiff’s common law claim of negligence is preempted
by UCC Article 4A, which governs wire transfers. Chase Bank urges the Court to follow
the reasoning in Nirav Ingredients, Inc. v. Wells Fargo Bank, N.A., 516 F. Supp. 3d 535,
at -- (W.D.N.C. 2021), aff’d, No. 21-1893, 2022 WL 3334626 (4th Cir. Aug. 12, 2022),
where the plaintiff’s state law negligence claims concerning wire fund transfer were
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dismissed as preempted by Article 4A of the UCC. The Court agrees that Plaintiff’s
negligence claims are preempted by the statutory framework for resolving disputes
related to funds transfers.
The Official Comment to UCC § 4A–102 states, in relevant part, “[r]esort to
principles of law or equity outside of Article 4A is not appropriate to create rights, duties
and liabilities inconsistent with those stated in this Article.” Plaintiff’s negligence
allegations arise out of conduct that occurred during the wire transfer and fall squarely
within § 4A-212 (Liability and Duty of Receiving Bank Regarding Unaccepted Payment
Order) and § 4A-404 (Obligation of Beneficiary’s Bank to Pay and Give Notice to
Beneficiary). Therefore, the Court finds that Plaintiff’s state law negligence claims
against Chase Bank should be denied as preempted by Article 4A of the UCC. As
previously discussed at oral argument, Plaintiff may wish to amend her Complaint to
bring a claim of negligence against Chase Bank for failure to warn or provide notice of
the Freeze Order to its customers; such an allegation would concern conduct arising
before the initiation of the wire transfer and therefore likely fall outside the scope of the
UCC as adopted by Colorado.5
The Court finds that Plaintiff’s sixth claim for conversion and seventh claim for
unjust enrichment are likewise preempted by Article 4A of the UCC. In Colorado, the
UCC displaces common law remedies if the UCC and the common law would provide “a
means of recovery for the same loss.” Ajjarapu v. AE Biofuels, Inc., 728 F. Supp. 2d
1154, 1164 (D. Colo. 2010) (citing Clancy Sys. Int’l, Inc. v. Salazar, 177 P.3d 1235,
5 See Nirav Ingredients, 516 F. Supp. 3d at 539 (determining that “allegations of
Wells Fargo’s conduct prior to the wire transfer may proceed, but all other allegations
are preempted by Article 4A”).
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1237 (Colo. 2008)). Both of these claims are based on the alleged wrongful exercise of
control by Chase Bank over Plaintiff’s incoming wire transfer—an issue that is covered
by Article 4A of the UCC. See, e.g., Sunset Cmty. Health Ctr., Inc. v. Cap. One Fin.
Corp., 652 F. Supp. 3d 1020 (D. Minn. 2023) (ruling that the plaintiff’s claims against
bank for conversion, civil theft, and unjust enrichment regarding bank’s failure to return
funds that plaintiff mistakenly wire transferred to fraudster related to rights addressed in
Article 4A of the UCC and were therefore preempted).
Accordingly, the Court finds that Chase Bank’s motion with respect to Plaintiff’s
claims for negligence, conversion, and unjust enrichment should be granted.
b. Claim Eight: IIED
In Colorado, “[t]he elements of the tort of intentional infliction of emotional
distress, otherwise known as ‘outrageous conduct,’ are (1) the defendant engaged in
extreme and outrageous conduct; (2) recklessly or with the intent of causing the plaintiff
severe emotional distress; (3) causing the plaintiff to suffer severe emotional distress.”
Lee v. Colo. Times, Inc., 222 P.3d 957, 966–67 (Colo. App. 2009) (Dailey, J., concurring
in part and dissenting in part); see also Coors Brewing Co. v. Floyd, 978 P.2d 663, 666
(Colo. 1999). Chase Bank argues that Plaintiff does not sufficiently allege that it
engaged in extreme or outrageous conduct. ECF No. 16 at 12.
Outrageous conduct has been defined as conduct
so outrageous in character, and so extreme in degree, as to go beyond all
possible bounds of decency, and to be regarded as atrocious, and utterly
intolerable in a civilized community. Generally, the case is one in which the
recitation of the facts to an average member of the community would arouse
his resentment against the actor, and him to exclaim, “Outrageous!”
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Churchey v. Adolph Coors Co., 759 P.2d 1336, 1350 (Colo. 1988) (quoting Rugg v.
McCarty, 476 P.2d 753, 756 (Colo. 1970)).
Moreover, “[a] person acts with intent to cause severe emotional distress when
he engages in conduct with the purpose of causing severe emotional distress to another
person, or he knows his conduct is certain or substantially certain to have that result.”
Culpepper v. Pearl St. Bldg., Inc., 877 P.2d 877, 882 (Colo. 1994). “A person acts
recklessly in causing severe emotional distress in another if, at the time of the conduct,
he knew or reasonably should have known that there was a substantial probability that
his conduct would cause severe emotional distress to the other person.” Id. at 882–83.
“[T]he question of whether conduct is outrageous is generally one of fact to be
determined by a jury[.]” Id. at 883. However, the Court has the responsibility “to
determine whether reasonable persons could differ on the question.” Id.
Accepting Plaintiff’s factual allegations as true and construing all reasonable
inferences in her favor, the Court cannot find as a matter of law that Plaintiff has
sufficiently pled either intent or recklessness. Plaintiff alleges that Chase Bank’s
“wrongful withholding of Plaintiff’s inheritance disrupted her life at a crucial stage. As a
licensed realtor and a student, Plaintiff relied on these funds to invest in her career,
education, and financial independence.” ECF No. 1 at 11. Chase Bank’s actions
allegedly “severely impacted Plaintiff’s ability to grow professionally, pursue her
education without debt, and live with basic financial security.” Id.
Even accepting these assertions at face-value, the Court finds that Plaintiff’s
allegation that Chase Bank “knew or should have known” that its conduct “would cause
Plaintiff severe emotional harm” is merely conclusory. Id. While Chase Bank may have
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inappropriately handled Plaintiff’s personal funds and incorrectly interpreted the Freeze
Order, there is nothing in the pleading to suggest that Chase Bank acted with reckless
disregard of the risk of emotional distress to Plaintiff. See Maryott v. First Nat’l Bank of
Eden, 2001 S.D. 43, 624 N.W.2d 96 (holding that although the bank’s freeze on a
customer’s account was illegal and irresponsible, it did not rise to the level of
outrageous conduct. Nor was there evidence of the bank’s requisite intent). Accordingly,
the Court finds that Chase Bank’s motion should be granted with respect to Plaintiff’s
claim for IIED.
IV. 	RECOMMENDATION
The bottom line is that the Court is confronted with two arguably competing and
conflicting Russian legal documents—the Freeze Order of April 22, 2024 and the
Clarifying Order of April 27, 2024. If the Freeze Order stands for what Chase Bank says
it does, then it most likely has a valid reason for withholding the funds from the incoming
wire transfer in question. The issue here is that Plaintiff challenges Chase Bank’s
interpretation of the Russian court order and has submitted an English certified
translation of the Clarifying Order which credibly calls into question Chase Bank’s
position. Without additional guidance on how to interpret the Russian court orders, the
Court cannot grant Chase Bank’s Motion to Dismiss in its entirety.
For the reasons set forth above, the Court RECOMMENDS that Defendant
JPMorgan Chase Bank, N.A.’s Motion to Dismiss, ECF No. 16, be GRANTED in part
and DENIED in part as follows:
Chase Bank’s motion should be GRANTED with respect to the following claims:
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• 	Claim One: Violation of the Electronic Fund Transfer Act (EFTA), 15 U.S.C. §
1693 et seq., and Regulation E (12 C.F. R. Part 1005);
• 	Claim Three: Breach of Contract
• 	Claim Four: Negligence;
• 	Claim Five: Breach of Fiduciary Duty and Breach of the Implied Covenant of
Good Faith and Fair Dealing;
• 	Claim Six: Conversion;
• 	Claim Seven: Unjust Enrichment; and
• 	Claim Eight: Intentional Infliction of Emotional Distress.
Chase Bank’s motion should be DENIED with respect to the following claims:
• 	Claim Two: Violation of UCC Article 4A (Funds Transfers)
• 	Claim Three: Breach of the Implied Covenant of Good Faith and Fair Dealing
NOTICE: Pursuant to 28 U.S.C. § 636(b)(1)(C) and Fed. R. Civ. P. 72(b)(2),
the parties have fourteen (14) days after service of this recommendation to serve
and file specific written objections to the above recommendation with the District
Judge assigned to the case. A party may respond to another party’s objections
within fourteen (14) days after being served with a copy. The District Judge need
not consider frivolous, conclusive, or general objections. A party’s failure to file
and serve such written, specific objections waives de novo review of the
recommendation by the District Judge, Thomas v. Arn, 474 U.S. 140, 148–53
(1985), and also waives appellate review of both factual and legal questions.
Makin v. Colo. Dep’t of Corrs., 183 F.3d 1205, 1210 (10th Cir. 1999); Talley v.
Hesse, 91 F.3d 1411, 1412-13 (10th Cir. 1996).
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Dated at Denver, Colorado this 20th Day of February
N. Reid Neureiter
United States Magistrate Judge
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