Dog Bites Back, LLC v. JPMorgan Chase Bank, N.A., 563 F.Supp.3d 1120

Dog Bites Back, LLC (DBB) opened a business account with Washington Mutual Bank in July 2008; JPMorgan Chase acquired Washington Mutual in September 2008 and assumed the account.
DBB’s accounting manager forged 43 checks between June 18, 2019 and March 24, 2020, totaling about $142,457.35.
DBB notified JPMorgan of the forgeries and sought reimbursement; JPMorgan denied reimbursement (April 8, 2020) and did not respond to a June demand letter.
DBB sued in Nevada state court alleging violations of NRS 104.3405 and 104.3406 (UCC), breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence; JPMorgan removed and moved to dismiss.
The court dismissed the UCC claims (NRS 104.3405/104.3406) without prejudice for failure to plead how JPMorgan’s procedures violated the statutory ordinary-care standard, denied dismissal of the implied-covenant claim, dismissed breach of contract without prejudice (per plaintiff’s stipulation), and dismissed negligence with prejudice as displaced by the UCC.
The court granted DBB leave to amend the dismissed UCC claims within 21 days but held amendment of the negligence claim would be futile.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DBB plausibly alleged JPMorgan failed to exercise ordinary care under NRS 104.3405/104.3406	JPMorgan failed to examine/compare signatures and failed to flag forged checks	DBB did not plead JPMorgan’s procedures or how omission violated the statutory definition of ordinary care (NRS 104.3103)	Dismissed without prejudice for failure to plead how bank procedures or general banking usage were violated; leave to amend granted
Whether DBB stated a claim for breach of the implied covenant of good faith and fair dealing	The account relationship (WaMu → JPMorgan) created a contract and JPMorgan breached duties to monitor and safeguard DBB’s assets	JPMorgan contends plaintiff failed to plead existence of a contract with sufficient specificity	Claim survives; motion to dismiss denied (plausible contract alleged at pleading stage)
Whether the UCC displaces a common-law negligence claim	DBB seeks negligence recovery for the same facts underlying its UCC claims	JPMorgan argues the UCC preempts common-law claims in areas covered by the Code	Negligence dismissed with prejudice as displaced by NRS chapter 104; amendment futile
Whether the breach of contract claim may proceed	DBB alleges a contract existed but lacks the written agreement	JPMorgan moved to dismiss	Breach of contract dismissed without prejudice (plaintiff stipulated to dismissal)

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
Ashcroft v. Iqbal, 556 U.S. 662 (factual allegations must permit reasonable inference of liability)
Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542 (court may consider materials properly submitted as part of complaint)
Branch v. Tunnell, 14 F.3d 449 (documents alleged in complaint may be considered on Rule 12(b)(6))
Mack v. S. Bay Beer Distrib., 798 F.2d 1279 (courts may take judicial notice of public records)
DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655 (leave to amend ordinarily granted)
Foman v. Davis, 371 U.S. 178 (factors governing leave to amend)
A.C. Shaw Constr. v. Washoe Cty., 105 Nev. 913 (Nevada law recognizing implied covenant of good faith and fair dealing)
Perry v. Jordan, 111 Nev. 943 (elements for breach of implied covenant under Nevada law)
Zengen, Inc. v. Comerica Bank, 41 Cal. 4th 239 (UCC displaces common-law claims in areas covered by the Code)
Comm. Standard Ins. Co. v. Tab Constr., Inc., 94 Nev. 536 (Nevada courts look to California law when Nevada law is silent)