ImagePoint, Inc. v. JPMorgan Chase Bank, National Ass'nImagePoint, Inc. v. JPMorgan Chase Bank, National Ass'n
REPORT AND RECOMMENDATION
Plаintiffs, identified as “ImagePoint, Inc., and ImagePoint, Inc., by James R. Martin, Secured Creditor,” have brought this action against JPMorgan Chase Bank, National Association (“JPM”) for various claims arising out of a contract ImagePoint had entered into with JPM for the provision of certain services and materials. JPM now moves to dismiss the second amended complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. For the foregoing reasons, this motion should be granted in part and denied in part.
I. BACKGROUND
A. Facts Alleged in the Complaint
On October 3, 2003, ImagePoint, and Wachovia Bank, National Association
In July 2005, ImagePoint and JPM entered into a Master Procurement Agreement (the “Procurement Agreement”), in which JPM agreed to pay ImagePoint for performing various services and supplying certain materials.2d Am. Compl. ¶ 3; Master Procurement Agreement, dated July 2005 (annexed as Ex. 1 to 2d Am. Compl.) (“Procurement Agreement”). Pursuant to this agreement, ImagePoint provided JPM with services and materials totaling $802,082.74, but JPM has yet to pay Im-agePoint except for a deposit of $39,794.82. 2d Am. Compl. ¶¶ 4-5. Thus, according to plaintiffs, JPM currently owes ImagePoint $762,287.92 plus interest and attorney’s fees. Id. ¶¶ 6-7. On March 3, 2009, ImagePoint filed an Involuntary Petition under Chapter 7 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Eastern District of Tennessee, and pursuant to
During the pendency of the ImagePoint bankruptcy proceeding, on September 3, 2010, Wachovia entered into an Assignment, Amendment, and Settlement Agreement (the “AASA”), in which it assigned its rights and interests under the Loan and Security Agreement, including any rights to ImagePoint’s collateral, to James A. Haslam III. See id. ¶ 10; Assignment, Amendment and Settlement Agreement, dated Sept. 3, 2010 (annexed as Ex. 4 to 2d Am. Compl.) (“AASA”), § 3(a) (“Existing Lender [Wachovia] hereby sells, transfers and assigns to Haslam, and Haslam hereby purchases, assumes ... all right, title and interest of Existing Lender in and to, and all obligations of Existing Lender under, the Loan Agreement.”). Thus, Haslam purportedly received Wa-chovia’s security interest in ImagePoint’s accounts receivable for the goods and services ImagePoint provided to JPM under the Procurement Agreement. See 2d Am. Compl. ¶ 10. On April 8, 2011, Haslam assigned these same rights in the accounts receivable to Martin. See id. ¶ 11; Assignment, dated Apr. 8, 2011 (annexed as Ex. 5 to 2d Am. Compl.).
On January 31, 2012, Martin and Jones filed a joint motion for approval of the settlement agreement with the bankruptcy court, 2d Am. Compl. ¶ 13, and on February 14, 2012, the bankruptcy court issued an order approving the settlement agreement, id. ¶ 14; Order Granting Joint Motion for Approval of Settlement Agreement, filed Feb. 14, 2012 (annexed as Ex. 7 to 2d Am. Compl.) (“Settlement Order”). Counsel for JPM “approved” the entry of this order. See Settlement Order at 4. The bankruptcy court’s order acknowledged, “[notwithstanding any term of the Settlement Agreement or this Order which may appear to the contrary, no rights nor remedies of JPMorgan shall be impaired or prejudiced by the Settlement Agreement or this Order, except as provided in paragraph (B) hereinbelow.” Id. at 1-2. Paragraph (B) provided that “in the event Martin decides to drop his claim against a Defendant ... the Defendant’s claims (or counterclaims) against the estate must be liquidated in the bankruptcy court through the claims process.” Id. at 2.
On March 2, 2012, the bankruptcy court entered a second order in which it modified the automatic stay under
On July 20, 2012, a hearing was held in bankruptcy court regarding JPM’s motion to dismiss a collection action that had Martin brought against JPM. See 2d Am. Compl. ¶ 16. At this hearing, the bankruptcy court acknowledged that the trustee had consented in the settlement agreement to allow Martin to pursue this action in ImagePoint’s name. See id. The bankruptcy court summarized JPM’s argument that the action must be dismissed for lack of subject matter jurisdiction because of “the fact that Mr. Martin has been granted stay relief and the unlikelihoоd that the action will produce any benefit for unsecured creditors.” Id.; Transcript of Bankruptcy Court Hearing, dated July 20, 2012 (annexed as Ex. 9 to 2d Am. Compl.) (“7/20/12 Tr.”), at 16. The bankruptcy court then noted that “neither the parties, nor the Court have been able to locate a decision where the secured creditor after
B. Procedural History
Shortly thereafter, on September 24, 2012, ImagePoint filed the original complaint in this action, alleging that defendant JPM was liable for breach of the Procurement Agreement and for unjust enrichment. See Compldint, filed Sept. 24, 2012 (Docket # 1). On October 19, 2012, JPM answered, asserting that ImagePoint lacked standing to bring this suit. See Answer, filed.Oct. 19, 2012 (Docket #4), ¶¶ 24-25. On November 30, 2012, Image-Point, now joined by Martin, filed the first amended complaint. See First Amended Complaint, filed Nov. 30, 2012 (Docket # 13). On December 19, 2012, JPM filed a motion to dismiss the first amended complaint, alleging inter alia that Martin did not have standing to bring suit against JPM because any assignment to Martin was null and void. See Notice of Motion, filed Dec. 19, 2012 (Docket #21); Defendant’s Memorandum of Law in Support of Motion to Dismiss First Amended Complaint, filed Dec. 19, 2012 (Docket # 22), at 7. Following oral argument on July 9, 2013, see Transcript, filed Sept. 26, 2013 (Docket # 50), this Court issued an order granting plaintiffs leave to amend their complaint for a second time, see Order, filed July 10, 2013 (Docket # 42).
On July 29, 2013, plaintiffs ImagePoint, Inc., and “ImagePoint, Inc., by James R. Martin, Secured Creditor” filed the second amended complaint against defendant JPM. See 2d Am. Compl. In addition to asserting breach of contract and unjust enrichment claims against JPM, see id. ¶¶ 25-28, plaintiffs allege in the second amended complaint that Martin has the right pursuant to New York Uniform Commercial Code (“N.Y. U.C.C.”) § 9-607(a)(l) to foreclose on the security interest in the accounts receivable owed to ImagePoint under the Procurement Agreement, see id. ¶¶ 18-24. Plaintiffs further claim that Martin has proceeded in a “commercially reasonable manner,” as required by
On September 10, 2013, JPM filed the instant motion to dismiss the second amended complaint under Fed. R. Civ. Pro. Rule 12(b)(1) for lack of subject matter jurisdiction and under Rule 12(b)(6) for failure to state a claim.
A. Standing
JPM asserts that plaintiffs’ claims should be dismissed for lack of subject matter jurisdiction because Martin does not have standing to pursue his claims. See Def. Mem. at 7.
“A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States,
Under Article III of the United States Constitution, federal courts may hear only “[c]ases” and “[cjontroversies.”
To meet the Article III standing requirement, a plaintiff must show;
that he “suffered an injury-in-fact — -an invasion of a legally protected interest which is (a) concrete and particularized ... and (b) actual or imminent, not conjectural or hypothetical”; [2] that there was a “causal connection between the injury and the conduct complained of’; and [3] that it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife,504 U.S. 555 , [560-61],112 S.Ct. 2130 ,119 L.Ed.2d 351 (1992) (citations and internal quotation marks omitted). “[E]ach element [of standing] must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e:, with the manner and degree of evidence required at thesuccessive stages of the litigation.” Id. at 561, 112 S.Ct. 2130 .
Carver v. City of New York,
JPM argues that Martin does not have standing in this case because there were “three indepеndent and insurmountable defects in [Martin’s] purported chain of assignment,” and thus, Martin cannot establish that he is a “real-party-in-interest” who has a right to payment under the Procurement Agreement. Def. Mem. at 1; see also id. at 8-11; Def. Reply at 6-10. According to JPM, any one of these defects is sufficient to break the chain of assignment from ImagePoint to Martin, thus leaving Martin without any interest in the receivables and therefore no standing to pursue this case. See Def. Mem. at 11. In supplemental memoranda, JPM makes the related argument that Martin lacks standing because he has failed to perfect whatever interest he might have under the Procurement Agreement. See Def. Supp. Mem. at 5; Def. Supp. Reply at 5.
We address each of the assignments in turn.
1. Whether the First Assignment Was Valid
“ ‘An assignment is a transfer or setting over of property, or of some right or interest therein, from one person to another, and unless in some way qualified, it is properly the transfer of one whole interest in an estate, or chattel, or other thing.’” De Sole v. Knoedler Gallery, LLC,
As previously discussed, in 2003 Image-Point granted to Wachovia a security interest in its collateral, including present and future accounts, by way of the Loan and Security Agreement. See 2d Am. Compl. ¶ 8; Loan & Security § 7.1(a). Subsequently, in 2005, ImagePoint entered into the Procurement Agreement with JPM, in which JPM was obligated to pay ImagePoint for the provision of certain services and materials. See 2d Am. Compl. ¶ 3; Procurement Agreement. Despite the fact that Wachovia’s security interest in ImagePoint’s collateral pre-dat-ed the Procurement Agreement, JPM now argues that an anti-assignment clause in the Procurement Agreement prevented Wachovia from obtaining ImagePoint’s interest in the JPM accounts receivable. Def. Mem. at 9. The clause in the Procurement Agreement states: “Neither party may assign any rights or delegate any obligations under this Agreement without the prior written consent of the other party.... Any assignment or attempted assignment contrary to this Section 14.2 will be a material breach of this Agreement and null and void.” See id. (quoting Procurement Agrеement § 14.2). Thus, in JPM’s view, because JPM never provided its written consent to allow ImagePoint to assign its rights to payment under the Procurement Agreement to Wachovia, the
Plaintiffs do not contend that Image-Point obtained JPM’s written consent. Rather, they argue that the anti-assignment provision “ha[d] no effect on Martin’s security interest, because ImagePoint did not purport to assign any rights under the Procurement Agreement.” PI. Supp. Mem. rat 2. In plaintiffs’ view, when ImagePoint entered into the Loan and Security'Agreement with Wachovia in -2003, ImagePoint did not “assign” the rights to its accounts; instead, it created a security interest giving Wachovia (and thus ultimately Martin) an independent right to collect upon Im-agePoint’s present and future collateral under N.Y. U.C.C. Article 9 — specifically NY. U.C.C. § 9 — 607(a)(3). See PI. Mem. at 10-12.
Under
According to plaintiffs, because Wacho-via had a preexisting security interest in ImagePoint’s future accounts at the time ImagePoint entered into the Procurement Agreement with JPM, “Martin’s right to recover under
In light of these arguments, it appears that the parties have raised three distinct issues regarding the validity of the alleged assignment from ImagePoint to Wachovia: (1) whether the interest that ImagePoint granted to Wachovia in the Loan and Security Agreement constitutes a secured transaction governed by Article 9 of the N.Y. U.C.C; (2) whether, assuming Article 9 applies, it provides secured creditors like Wachovia (or Martin as assignee) with the means to assert claims against account debtors like JPM; and (3) whether, assuming Article 9 applies, the anti-assignment provision in the Procurement Agreement affected Wachovia’s security interest,
i. Whether Article 9 Applies
In general, Article 9 applies to “a transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract.”
We disagree. First, the Loan and Security Agreement itself reflects that the security interest was not granted in satisfaction of a preexisting debt. Instead, the assignment of ImagePoint’s collateral to Wachovia was made “[t]o secure the payment, observance and performance of the Secured Obligations,” Loan & Security § 7.1(a), which consisted of “the principal of, and interest and premium, if any, on, the Revolving Credit Loans” that were authorized pursuant to the agreement, id. § 1.1 at 28. In other words, by granting Wachovia an interest in its collateral, Im-agePoint was providing it with security for the repayment of loans ImagePoint intended to accept pursuant to the Loan and Security Agreement. In Filer, by contrast, the assignor assigned its rights and interests in an account receivable in exchange for the assignee’s relinquishment of “all debts owed to it.”
As for the
In our case, the very purpose of the Loan and Security Agreement was to “make ... available to [ImagePoint] a revolving credit facility in an aggregate amount up to $27,500,000.... ” See Loan & Security Preamble. Thus, Wachovia’s security interest was directly related to a “commercial financing transaction” and was not solely for the purpose of collection, as that concept has been interpreted in case law. The Agreement established that Wachoviа would receive not merely a right to receive repayment of its loans but also a security interest to ensure that repayment. Additionally, the fact that the Agreement created a security interest in “all of the Collateral of Borrower,”
ii. Whether Article 9 Provide Recourse
JPM points to two cases in support of its view that
In situations like Buckeye, where there is a dispute between the secured creditor and the debtor as to who has the right to collect from an account debtor, the secured creditor cannot be said to be “exercis[ing] the rights of the debtor with respect to the obligation of the account debtor.” See
In our case, Martin is not asking us- to look to
This section permits a secured party to collect and enforce obligations included in collateral in its capacity as a secured party. It is not necessary for a secured party first to become the owner of the collateral pursuant to a disposition or acceptance. However, the secured party’s rights, as between it and the debtor, to collect from and enforce collateral against account debtors and others obligated on collateral ... are subject to ... other applicable law.... This section establishes only the baseline rights of the secured party vis-a-vis the debt- or — the secured party is entitled to enforce and collect after default or earlier if so agreed.
NY. U.C.C.
The other case that JPM cites, McCullough v. Goodrich & Pennington Mortg. Fund, Inc.,
Furthermore, as plaintiffs have noted, case law routinely recognizes that secured creditors have the right to collect from account debtors pursuant to § 9 — 607(a)(3). For example, in Agri-Best Holdings, LLC v. Atlanta Cattle Exch., Inc.,
Finally, JPM argues for the first time in its supplemental reply letter that Martin cannot recover from JPM because JPM never received notice and proof of the assignment as required by
For these reasons, Martin- as secured creditor has authority pursuant to
in. Effect of the Anti-Assignment Provision
Having found that the Loan and Security Agrеement granted Wachovia a security interest that was subject to Article 9, we now address whether the statutory right to enforce this security interest was affected by the anti-assignment provision in the Procurement Agreement that-was subsequently entered into by Image-Point and JPM. This issue essentially boils down to a determination of whether an anti-assignment clause can affect a third party’s prior existing security interest in future accounts receivable. JPM makes two arguments as to why the anti-assignment clause in the Procurement Agreement invalidated any attempt by Image-Point to transfer its interests in the JPM account to Wachovia or to any of the subsequent assignees. First, JPM points to the “Official Comment” to
In response to these arguments, plaintiffs contend that “the secured party (Wa-chovia) already stood in the shoes of the debtor (ImagePoint) with respect to the collateral (the accounts receivable), by operation of
More to the point, however, JPM’s argument is foreclosed by the plain and specific language of
Former Section 9-318(4) rendered ineffective an agreement between an account debtor and an assignor which prohibited assignment of an account(whether outright or to secure an obligation) .... Subsection (d) essentially follows former Section 9-318(4), but expands the rule of free assignability ... and explicitly overrides both restrictions and prohibitions of assignment. The policies underlying the ineffectiveness of contractual restrictions under this section build on common-law developments that essentially have eliminated legal restrictions on assignments of rights to payment as security and other assignments of rights to payment such as accounts .... Like former Section 9-318(4), subsection (d) provides that anti-assignment clauses are “ineffective.” Thе quoted term means that the clause is of no effect whatsoever; the clause does not prevent the assignment from taking effect between the parties and the prohibited assignment does not constitute a default under the agreement between the account debtor and assign- or....
Here, the anti-assignment clause in the Procurement Agreement falls under the purview of this rule. First, as we have previously discussed, ImagePoint is the “assignor” with respect to the relevant security interest and JPM is the “account debtor.” Second, the anti-assignment clause, which states “[n]either party may assign any rights or delegate any obligations under this Agreement, without the prior written consent of the other party,” see Procurement Agreement § 14.2, is a strict prohibition on assignment absent consent. Thus, under the plain language of § 9 — 406(d)(1), the anti-assignment clause in the Procurement Agreement is rendered “ineffective.”
Furthermore, case law makes clear that under former § 9-318(4), which the Official Comments recognize as having roughly the same scope, as
Accordingly, because the anti-assignment clause in the Procurement Agreement purported to prohibit an assignment of the JPM account without JPM’s prior written consent, we find that it is invalid under NY. U.C.C. § 9^06(d)(l). Therefore, the anti-assignment clause in the Procurement Agreement did not affect Wachovia’s security interest in the JPM account or any subsequent assignments of that interest.
JPM next asserts that, even if the assignment from ImagePoint to Wachovia was valid, Wachovia’s subsequent assignment of those rights to Haslam by way of the AASA was rendered null and void as the result of an anti-assignment clause contained in Wachovia’s Loan and Security Agreement with ImagePoint. See Def. Mem. at 10. That clause states that Wa-chovia “may assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement.” Loan & Security § 13.2(a). The term “Eligible Assignees” is defined elsewhere in the agreement. See id. at 11-12. Plaintiffs do not assert that Haslam fits within any of the categories of Eligible Assignees. Nevertheless, the Court finds the assignment to Haslam to be effective for at least two reasons.
Before reaching the merits of this issue, however, we must first determine what state’s law governs the construction of the Loan and Security Agreement. Section 15.15 of the Loan and Security Agreement states: “This Agreement and the Notes shall be construed in accordance with and governed by the law of the State of Georgia.” Under New York’s choice of law rules, “[a]bsent fraud or violation of public policy, a court is to apply the law selected in the contract as long as the state selected has sufficient contacts with the transaction.” Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd.,
Applying Georgia law, the Court finds Wachovia’s assignment to Haslam to be enforceable because the Loan and Security Agreement does not contain any language which specifically renders void an assignment by Wachovia that fails to comply with the Section 13.2 assignment clause. In stark contrast, Section 13.1 of the Loan and Security Agreement specifically states that any improper assignment by ImagePoint “shall be null and void, and of no force or effect.” While Georgia law does not require that an anti-assignment clause “specify that any assignment is ‘invalid,’ ‘void’ or that the obligor has the right to disregard any assignment” in order to render an attempted assignment invalid, CGU Life Ins. Co. v. Singer Asset Fin. Co., LLC,
In the alternative, the Court finds that any defect in the assignment to Haslam was plainly waived by ImagePoint by virtue of the position it took in the bankruptcy proceedings. Under Georgia law, “[i]t is well established that a party to a contract may waive a contractual provision for his or her benefit.” Forsyth Cnty. v. Waterscape Servs., LLC,
A waiver may be express, or may be inferred from actions, conduct, or a course of dealing. Waiver of a contract right may result from a party’s conduct showing his election between two inconsistent rights. Acting on the theory that the contract is still in force, as by continuing performance, demanding or urging performance, or permitting the other party to perform and accepting or retaining benefits under the cоntract, may constitute waiver of a breach. However, all the attendant facts, taken together, must amount to an intentional relinquishment of a known right, in order that a waiver may exist.
Greater Ga. Life Ins. Co., Inc. v. Eason,
3. Whether the Third Assignment Was Valid
JPM contends that, even if the assignment from Wachovia to Haslam was valid, Haslam’s subsequent assignment of his rights to Martin was invalid because an anti-assignment provision of the AASA required Haslam to first receive Wachovia’s written consent before making an assignment. See Def. Mem. at 10-11. The anti-assignment clause in the AASA states: ‘Without the prior written consent of Existing Agent and Existing Lender, Haslam shall not effectuate, or agree to make, any assignment of the Loan Documents or his rights or obligations thereunder.” AASA
In response, plaintiffs assert that the assignment from Haslam to Martin was valid because Wachovia gave its prior written consent as required by the AASA. See PI. Mem. at 14-15. In support of this assertion, Haslam’s attorney produced an email signed by Wachovia attorney James Cretella which stated, “this email shall constitute [Wachovia’s] consent, as required by Section 8(c) of the assignment agreement, to the assignment of the claim and loan documents referred to in the assignment agreement from James Has-lam to James Martin.” See Notice of Transfer of Claim Email, dated Apr. 6, 2011 (annexed as Ex. A to Declaration оf Dean B. Farmer (annexed as Ex. 1 to Awan Decl.)). As previously discussed, when considering a motion to dismiss for lack of subject matter jurisdiction, a court “may refer to evidence outside the pleadings,” Makarova,
Accordingly, the assignment to Martin was valid, and thus, Martin has made a sufficient showing of standing in this case.
4. Real Party In Interest
JPM makes the alternative argument that Martin cannot establish standing in these circumstances because Martin fails to satisfy the “Real Party In Interest Test.” See Def. Reply at 9-10; Def. Supp. Mem. at 4-5; Def. Supp. Reply at 5. Specifically, JPM argues that Martin is not a real party in interest in this case because he has failed to prove that he “has the exclusive right to payment on any purported receivable from JPMorgan.” See Def. Supp. Mem. at 4 (citing Doble v. Deutsche Bank Nat'l Trust Co. (In re Doble),
As an initial matter, the Court rejects JPM’s assertion that the real party in interest test is governed by New York law. See Def. Supp. Mem. at 4. Instead, “[t]he question of which party is the real party-in-interest is procedural, rather than substantive” and thus that “in diversity cases federal law governs the issue of in whose name a lawsuit must be brought.” Brocklesby Transp., A Div. of Kingsway Transps., Ltd. v. E. States Escort Servs.,
Here, having found that Martin has been properly assigned the right to Image-Point’s accounts receivable and that
JPM suggests that Martin’s failure to perfect his security interest in the JPM account “subjects JPMorgan to a risk of double recovery.” Def. Supp. Mem. at 5. JPM relies on N.Y U.C.C. § 9-318(b), which states, “[f]or purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.” Despite the fact that Martin has not perfected his interest, we believe that Martin has provided sufficient evidence to prove that he is a real party in interest. JPM has been unable to produce any cases holding that a party who has been assigned an enforceable security interest loses his status as a real party in interest simply because that party has failed to perfect the interest. Indeed, as plaintiffs have argued, PI. Supp. Reply at 9-10, case law suggests the opposite. Thus, in Wachovia Bank Nat’l Ass’n v. EnCap Golf Holdings, LLC,
B. Failure to State a Claim
JPM argues that the Second Amended Complaint should be dismissed because it fails to state a claim pursuant to Fed. R.Civ.P.
Next, a court must determine if a complaint contains “sufficient factual matter” which, if accepted as true, states a claim that is “plausible on its face.” Id. at 678,
1. In Pari Delicto Defense
JPM argues that, even if Martin does have standing, the second amended complaint should nevertheless be dis
The in pari delicto doctrine under New York law provides that “parties to a fraudulent or illegal transaction who are in pari delicto may not invoke judicial aid to undo the consequences of their illegal acts.” Abright v. Shapiro,
Lastly, JPM argues that plaintiffs’ unjust enrichment claim, see 2d Am. Compl. ¶ 28, must be dismissed because the Procurement Agreement was a valid and enforceable contract and “it is black-letter law that ‘the existence of a valid and binding contract governing the subject matter at issue in a particular case does act to preclude a claim for unjust enrichment.’ ” See Def. Mem. at 16 (quoting Ellington Credit Fund, Ltd. v. Select Portfolio Servicing, Inc.,
“Under New York law, a claim of unjust enrichment requires simply an allegation that (1) the defendant was enriched, (2) the enrichment was at the plaintiffs expense, and (3) the defendant’s retention of the benefit would be unjust.” Usov v. Lazar,
In this case, JPM has admitted thаt it entered into the Procurement Agreement with ImagePoint and has not contested the contract’s validity. See Answer to Second Amended Complaint, filed Aug. 19, 2013 (Docket # 45), ¶ 3. In light if this admission, plaintiffs’ unjust enrichment claim must be dismissed.
III. CONCLUSION
For the aforementioned reasons, JPM’s motion to dismiss the second amended complaint (Docket # 47) should be denied except plaintiffs’ claim for unjust enrichment should be dismissed pursuant to Fed. R.Civ.P.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to
Notes
. The Loan and Security agreement defined "Collateral’' as "all of Borrower’s rights, title, and interest in and to each of the following ... wherever located and whether now or hereafter existing or now owned or hereafter acquired or arising: (a) all Accounts, (b) all Chattel Paper, (c) all Contracts, (d) all Contract Rights....” Loan & Security § 1.1 at 6.
. Because the distinction between Wachovia and Wells Fargo is of no consequence for this motion, we refer to the relevant entity simply as "Wachovia” whether discussing it before or after its acquisition by Wells Fargo.
. See Notice of Motion, filed Sept. 10, 2013 (Docket # 47); Defendant’s Memorandum of Law in Support of Motion to Dismiss Second Amended Complaint, filed Sept. 10, 2013 (Docket # 48) ("Def. Mem.”); Plaintiffs' Memorandum of Law in Opposition to Defendant's Motion to Dismiss the Second Amended Complaint, filed Oct. 4, 2013 (Docket # 52) ("PI. Mem.”); Declaration of Shujah A. Awan, filed Oct. 4, 2013 (annexed to PI. Mem.) ("Awan Decl.”); Defendant's Memorandum of Law in Further Support of its Motion to Dismiss Second Amended Complaint, filed Oct. 28, 20Í3 (Docket #54) ("Def. Reply”).
. While the N.Y. U.C.C. does not define "personal property,” it is typically understood that personal property includes accounts receivable. See Interworks Sys. Inc. v. Merch. Fin.
.
. JPM asserts that plaintiffs should not be able to rely on
. Because we have found sufficient grounds for determining that Martin has a valid interest in the JPM receivable by way of the chain of assignments, we need not consider plaintiffs' waiver or judicial estoppel arguments. See PL Mem. at 15-19. Additionally, we need not consider plaintiffs’ argument that the settlement agreement during the Chapter 7 bankruptcy proceedings conferred on Martin an interest in the receivable. See PI. Mem. at 19-20.
. JPM contends that ImagePoint also lacks standing because "[fjederal courts have uniformly held that any claims of a bankruptcy debtor that accrued pre-petition are property of the estate and may be pursued only by the duly-appointed trustee in a Chapter 7 bankruptcy case.” Def. Mem. at 2; see also id. at 11-12; Def. Reply at 14-15. We need not address this issue, however, because it is well-established that where there is at least one plaintiff who has standing, a court "need not consider whether the other individual and corporаte plaintiffs have standing to maintain the suit.” Arlington Heights v. Metro. Hous. Dev. Corp.,
. Notably, the same result would be reached under federal law. See, e.g., BrandAid Mktg. Corp. v. Biss,
In a footnote, JPM mentions that the “unclean hands” doctrine may also apply. See Def. Mem. at 12 n. 5. New York’s “unclean hands” doctrine, however, has the same limitation that dooms JPM’s in pari delicto defense. See, e.g., PHH Mortg. Corp. v. Davis,