Henry v. Capital One, N.A. ( 2023 )

22-1088
Henry v. Capital One, N.A.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY
ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL
APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY
CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY
COUNSEL.
At a stated term of the United States Court of Appeals for the
Second Circuit, held at the Thurgood Marshall United States Courthouse, 40
Foley Square, in the City of New York, on the 16th day of June, two thousand
twenty-three.
PRESENT:
WILLIAM J. NARDINI,
MYRNA PÉREZ,
MARIA ARAÚJO KAHN,
Circuit Judges.
_____________________________________
Michelle Henry,
Plaintiff-Appellant,
v. No. 22-1088
Capital One, N.A.,
Defendant-Appellee.
_____________________________________
FOR PLAINTIFF-APPELLANT: MICHELLE HENRY, pro
se, Jamaica, NY.
FOR DEFENDANT-APPELLEE: STEPHEN J. STEINLIGHT,
Troutman Pepper
Hamilton Sanders LLP,
New York, NY.
Appeal from a judgment of the United States District Court for the Eastern
District of New York (Cogan, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment is AFFIRMED IN PART,
VACATED IN PART, and REMANDED for further proceedings.
Plaintiff-Appellant Michelle Henry, proceeding pro se, appeals the district
court’s dismissal of her action. Henry, then counseled, sued Defendant-Appellee
Capital One, N.A. in New York State Supreme Court for breach of contract,
negligence, gross negligence, and deceptive business practices, alleging that her
safe deposit box at a Capital One branch in Queens was inexplicably drilled open
and its cash contents went missing. Capital One removed the action to the district
court based on diversity. The district court granted Capital One’s motion to
dismiss, reasoning that various exculpatory provisions in Capital One’s lease
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agreement for the safe deposit box immunized the bank from liability for loss of
cash, that Henry’s gross negligence allegation was conclusory, and that Henry
failed to state a claim for deceptive business practices. On appeal, Henry moved
for appointment of counsel, and Capital One moved to dismiss the appeal. In
November 2022, a panel of this Court denied both motions, allowing the appeal to
proceed in the ordinary course and directing the parties to address in their briefs
whether Henry stated a claim for gross negligence. We assume the parties’
familiarity with the case.
As an initial matter, Henry has waived any appellate challenge to the district
court’s dismissal of the deceptive business practices claim because she did not
address that claim in her brief. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir.
1998) (“Issues not sufficiently argued in the briefs are considered waived and
normally will not be addressed on appeal.”). Accordingly, we address only the
dismissal of Henry’s claims for breach of contract, negligence, and gross
negligence.
We review de novo the grant of a motion to dismiss, “accepting as true all
factual claims in the complaint and drawing all reasonable inferences in the
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plaintiff’s favor.” Fink v. Time Warner Cable, 714 F.3d 739, 740–41 (2d Cir.
2013). “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) (internal quotation marks omitted).
“As we have repeatedly stated, [w]e liberally construe . . . briefs submitted by pro
se litigants, reading such submissions to raise the strongest arguments they
suggest.” McLeod v. Jewish Guild for the Blind, 864 F.3d 154, 156 (2d Cir. 2017)
(internal quotation marks omitted).
Henry argues that the district court erred by dismissing her breach of
contract claim against Capital One. We agree. The lease agreement between
Henry and Capital One provides that Capital One “will in no event be liable for
alleged loss or destruction of any cash claimed to have been placed in the Safe
Deposit Box.” Supp. App’x at 21. And “an exculpatory provision ordinarily will
be enforced when its language expresses in unequivocal terms the intention of the
parties to relieve a defendant of liability for the defendant’s negligence.” Uribe v.
Merchants Bank of N.Y., 91 N.Y.2d 336, 341 (1998) (internal quotation marks
omitted). But public policy in New York “forbids a party’s attempt to escape
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liability, through a contractual clause, for damages occasioned by grossly
negligent conduct.” In re Part 60 Put-Back Litig., 36 N.Y.3d 342, 352 (2020)
(internal quotation marks omitted). “Gross negligence, when invoked to pierce
an agreed-upon limitation of liability in a commercial contract, must smack of
intentional wrongdoing or evince a reckless indifference to the rights of others.”
Id. (alterations adopted and internal quotation marks omitted).
Henry’s complaint alleged that Capital One “drilled open [her] safe deposit
box without her notice or permission” and that she was told “the contents were
missing from the box.” Supp. App’x at 7–8. Allegedly, none of the limited
circumstances enumerated in the lease agreement that would have allowed
Capital One to “force open” the safe deposit box was present here. Id. at 21.
Drawing all reasonable inferences in Henry’s favor and liberally construing her
arguments on appeal, the allegations that a bank drilled open a safe deposit box
for no evident reason, without providing notice to or receiving permission from
the box’s lessee, and that contents were thereafter “missing” from the box,
plausibly establish grossly negligent conduct. There can be no doubt that the
bank’s alleged act of drilling open the box was intentional, and that allegedly
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doing so in the absence of any justification “smack[s] of intentional wrongdoing.”
In re Part 60 Put-Back Litig., 36 N.Y.3d at 352. It is at least a plausible inference
that the subsequent disappearance of the alleged funds was the result of gross
negligence. Accordingly, based solely on the allegations of the complaint, the
exculpatory provision in the lease agreement does not bar Henry’s claim for
breach of contract, to the extent she bases that claim on such allegations of grossly
negligent conduct.
Henry also argues that the district court erred by dismissing her claims for
negligence and gross negligence. We disagree. Ordinarily, under New York
law, “the allegations that a breach of contract occurred as a result of gross
negligence do[] not give rise to a duty independent of the contractual
relationship.” Abacus Fed. Sav. Bank v. ADT Sec. Servs., Inc., 18 N.Y.3d 675, 684–85
(2012). And Henry has not plausibly alleged that this case “falls in the borderland
between tort and contract,” nor that Capital One had “[a] legal duty independent
of contractual obligations.” Sommer v. Fed. Signal Corp., 79 N.Y.2d 540, 550–51
(1992). Accordingly, Henry failed to state a claim for negligence or gross
negligence. See Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 389
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(1987) (“It is a well-established principle that a simple breach of contract is not to
be considered a tort unless a legal duty independent of the contract itself has been
violated.”).
We have considered Henry’s remaining arguments and find them
unpersuasive. Accordingly, we AFFIRM IN PART and VACATE IN PART the
judgment of the district court, and we REMAND for further proceedings
consistent with this order.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk of Court
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