NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 11a0371n.06
Case No. 09-1973
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BETTY CRAWFORD, aka Betty Sampson, )
)
Plaintiff-Appellant, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE EASTERN
) DISTRICT OF MICHIGAN
JP MORGAN CHASE BANK, NA, )
) FILED
Defendant-Appellee. )
_______________________________________ ) Jun 02, 2011
LEONARD GREEN, Clerk
Before: BATCHELDER, Chief Judge; ROGERS and KETHLEDGE, Circuit Judges.
ALICE M. BATCHELDER, Chief Judge. This is an appeal from the district court’s
dismissal of the plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Because
we find that the plaintiff has failed to state a claim upon which relief may be granted, we AFFIRM.
I.
On or about August 12, 2002,1 Janet Sparks issued a check from Entech Personal Services
Inc. (Troy, Mich.) to Betty Sampson (now Betty Crawford, plaintiff) in the amount of $200,000 (this
is the “Original Check”). The Original Check was drawn on an account at Bank One (now JP
Morgan Chase, or “Chase”). Crawford was and is a Florida resident and Sparks’s sister. The record
contains no explanation of the circumstances surrounding the issuance of the Original Check.
1
W hile both parties and the district court stated that this was August 2, 2002, we conclude from our review of
the record that August 2 is almost certainly a typographical error that has been reproduced unchecked throughout the
course of these proceedings. The Original Check is dated Friday, August 9, 2002; the Cashier’s Check is dated Monday,
August 12, 2002; and all parties have acknowledged that Crawford received the Original Check from Sparks and
redeemed it for the Cashier’s Check at the Chase branch on the same day, most likely August 12, 2002.
No. 09-1973, Crawford v. JP Morgan
On that same day, Crawford took the Original Check to a Chase branch in Bloomfield Hills,
Michigan, and presented it for payment. Chase determined that funds were available in Entech’s
account, honored the Original Check, and issued a $200,000 cashier’s check (“the Cashier’s Check”)
made payable to Crawford. Crawford then returned home to Florida and, on August 21, 2002,
attempted to deposit the Cashier’s Check in her local bank. The record contains no explanation of
why Crawford had immediately converted the Original Check into the Cashier’s Check.
Meanwhile, on August 19, 2002, Entech had been subjected to involuntary bankruptcy,2 and
requested that Chase stop payment on the Original Check and the Cashier’s Check. Chase credited
$200,000 back to Entech’s account and stopped payment on the Cashier’s Check. When Crawford’s
local (Florida) bank on August 24 or 26, 2002, presented the Cashier’s Check to Chase for payment
through the interbank system, Chase dishonored it and it was returned unpaid.
Although the Cashier’s Check was dishonored in August 2002, Crawford did not sue to
obtain payment for almost six years. Crawford filed her first complaint in Oakland County (Mich.)
Circuit Court on May 22, 2008, asserting four causes of action against Chase, all premised on
provisions of the Uniform Commercial Code (UCC) as adopted in Michigan. Chase removed the
case to federal court on diversity grounds on June 20, 2008, and moved to dismiss under Federal
Rule of Civil Procedure 12(b)(6). Crawford amended her complaint to add common law claims for
breach of contract and promissory estoppel, and a violation of the Expedited Funds Availability Act
(EFAA), 12 U.S.C. § 4001.
2
According to the E.D. Michigan Bankruptcy Court docket, Entech’s bankruptcy case was terminated on
October 15, 2002. See In re Entech Personal Servs., Inc., No. 02-bk-59054 (E.D. Mich. Bankr. 2002).
2
No. 09-1973, Crawford v. JP Morgan
The district court held oral argument on February 24, 2009, at which time Crawford
dismissed the EFAA claim because it was barred by the EFAA’s statute of limitations. On March
11, 2009, Crawford moved for leave to amend her first amended complaint to add a common law
claim of unjust enrichment. Chase opposed the motion on the ground that the claim would be futile.
On June 30, 2009, the district court dismissed Crawford’s complaint. The district court held
that, pursuant to M.C.L. § 440.3301 (i.e., UCC § 3-301), Crawford was not entitled to enforce3 the
Original Check against Chase because she was not in possession of the Original Check, nor could
she satisfy the statutory requirements for a “person not in possession who is entitled to enforce the
instrument,” see M.C.L. § 440.3309 (i.e., UCC § 3-309).4 The district court also held, in the
alternative, that even if Crawford could satisfy § 440.3309, Chase had discharged its obligations on
the Original Check by issuing the Cashier’s Check. The district court further held that any claims
based on the Cashier’s Check were time barred by the three-year statute of limitations that applies
to enforcement of cashier’s checks, a portion of the opinion that Crawford does not contest on
appeal. Finally, the district court held that the UCC preempts common law claims for breach of
contract, promissory estoppel, and unjust enrichment. The district court dismissed the complaint.
3
The district court used the term “standing” in reference to Crawford’s statutory “right to enforce” the Original
Check. W hile the district court’s intention was clear, this is not a question of constitutional or Article III “standing” and
need not — indeed cannot — be analyzed as such. W e have, therefore, refrained from using the term “standing” in this
analysis and are not required to proceed as we would be if this were truly a question of “standing.”
4
The district court also explained that Crawford could not satisfy the requirements for “payment or acceptance
by mistake,” M.C.L. § 440.3418(4). This was never actually at issue and Crawford does not press it on appeal.
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No. 09-1973, Crawford v. JP Morgan
II.
We conduct a de novo review of a district court’s dismissal pursuant to Rule 12(b)(6).
Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir. 2005). We construe the complaint in a light most
favorable to the nonmoving party and accept all plausible, well-pled factual allegations as true. Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). “To state a valid claim, a complaint must contain
direct or inferential allegations respecting all the material elements under some viable legal theory.”
Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 336-37 (6th Cir. 2007).
We accept Crawford’s factual allegations as true. We will also assume (without deciding)
that Chase accepted the Original Check from Crawford and that Crawford has a statutory right to
enforce the Original Check against Chase. Given these facts and assumptions, the dispositive
question in this appeal is a purely legal one: whether Chase’s issuance of the Cashier’s Check served
as payment-on-presentation that fulfilled and discharged any and all underlying obligations on the
Original Check.
“Unless otherwise agreed, if a certified check, cashier’s check, or teller’s check is taken for
an obligation, the obligation is discharged to the same extent discharge would result if an amount
of money equal to the amount of the instrument were taken in payment of the obligation.” M.C.L.
§ 440.3310(1). Crawford gave the Original Check to Chase and took the Cashier’s Check (of equal
value) in return. Crawford’s taking of the Cashier’s Check operated to discharge any obligation that
anyone (e.g., Entech, Chase, etc.) might owe to her on the Original Check. See id.
Crawford argues that — prior to her presenting the Original Check at the Chase branch —
Chase did not owe her any “pre-existing obligation” and, therefore, the Cashier’s Check was not
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No. 09-1973, Crawford v. JP Morgan
“taken for an obligation” because Chase did not have any obligation to “discharge” when it issued
the Cashier’s Check to her. Under this theory, § 440.3310(1) is inapplicable and Chase’s obligation
to Crawford remains. This is incorrect. Crawford took the Cashier’s Check in exchange for the
Original Check; i.e., an “obligation” to pay the amount of the Original Check. There is no provision
in § 440.3310 that the issuance of a cashier’s check discharges only pre-existing obligations.
Crawford also argues that, even if § 440.3310(1) applies, discharge of the obligation is not
accomplished until the bank makes “a separate act of payment”; i.e., follows through with the
transfer of funds represented by the cashier’s check. This too is incorrect. Section 440.3310 does
not require a further act of payment on a cashier’s check in order to discharge the underlying
obligation. Quite the contrary, “the obligation is discharged to the same extent discharge would
result if an amount of money equal to the amount of the instrument were taken in payment of the
obligation.” Id. (emphasis added). See also 2 James J. White & Robert S. Summers, Uniform
Commercial Code § 20-4 at 350 (5th ed. 2008) (rejecting the argument Crawford urges).
Chase points out that Crawford could have redeemed the Original Check for cash, but did
not. She could have sued Chase to enforce the Cashier’s Check and, if she had done so within the
three-year statute of limitations, she would have had a colorable claim. She did not do so.
Crawford cannot sue Chase on the Original Check because Chase’s obligation stemming
from the Original Check was discharged by Crawford’s taking the Cashier’s Check. Crawford
cannot sue Chase on the Cashier’s Check because the three-year statute of limitations has expired.
5
No. 09-1973, Crawford v. JP Morgan
Furthermore, because Chase’s obligations stemming from the Original Check have been
discharged, Crawford cannot state a viable claim for any other (i.e., common law) causes of action
relating to that check. That is, Crawford cannot state any claim based on the Original Check.
III.
Because we find that the plaintiff has failed to state any claim upon which relief can be
granted, we AFFIRM the judgment of the district court.
6