Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Canters Deli Las Vegas, LLC v. Banc of America Merchant Services, LLC

United States District Court, W.D. North Carolina, Charlotte Division

October 8, 2019

CANTERS DELI LAS VEGAS, LLC, et al., Plaintiffs,
v.
BANC OF AMERICA MERCHANT SERVICES, LLC, et al., Defendants.

          ORDER

          Max O. Cogburn Jr., Judge

         THIS MATTER comes before the Court on a Motion to Dismiss by Defendants Banc of America Merchant Services, LLC and Bank of America, N.A. (Doc. No. 43).

         I. BACKGROUND

         In this action brought by Plaintiffs against Defendants Banc of America Merchant Services, LLC (“BAMS”) and Bank of America, N.A. (“BANA”), Plaintiffs bring various claims against Defendants after Mikhail Siretskiy (a non-party) allegedly wrongfully diverted thousands of dollars from Plaintiff's merchant accounts into his own accounts.

         Plaintiffs own and operate two deli locations in Las Vegas. (Doc. No. 1 at ¶¶ 12-13). On or about December 6, 2016, Plaintiffs each entered into a contract with Defendants for the purpose of processing credit card transactions. (Id. at ¶ 16). The contracts between Defendants and each Plaintiff consist of a Merchant Processing Application (“MPA”) (Doc. No. 1-2 at 2-19) and a “Program Guide.” (Doc. No. 12-1). Although each Plaintiff entered into a separate contract with Defendants, they are substantively identical (compare Doc. No. 1-2 at 2-10 (Linq location MPA) with Doc. No. 1-2 at 11-19 (Tivoli location MPA)). The Court therefore refers to both contracts together as the “Canters Contracts.” On or about June 12, 2017, each Plaintiff entered into a separate agreement (the “FreedomPay Contracts”) with FreedomPay, Inc. (“FPI”). Under the FreedomPay Contracts, FPI agreed to act as an intermediary between Plaintiffs and Defendants, essentially linking the equipment FPI provided to Plaintiffs with Plaintiffs' merchant accounts with Defendants. (Doc. No. 1 at ¶¶ 19-20; Doc. No. 1-3).

         Mikhail Siretskiy is an “indirect” owner of Plaintiffs. That is, he owns High Roller Holding Firm, LLC and Tivoli Holding Firm, LLC, which are, apparently, members of Plaintiffs Canters Deli Las Vegas, LLC and Canters Deli Tivoli Village, LLC, respectively. (Doc. No. 1 at ¶ 14). Plaintiffs allege that each Plaintiff's operating agreement makes clear that Siretskiy has no right to participate in the management or control of either Plaintiff. (Id. at ¶ 15).

         In or around June 2018, Siretskiy opened accounts with Defendants BANA and BAMS. (Id. at ¶¶ 21-22). BAMS opened accounts for Canters Deli Tivoli, Inc. and Canters Deli Linq, Inc. See (Doc. No. 44 at ¶ 9: Declaration of Adam Kjeldgaard). These accounts were entirely separate from Plaintiffs' accounts. According to Plaintiffs, Siretskiy falsely claimed to a BAMS representative that he had won a lawsuit against Plaintiffs and that he would be taking over their Las Vegas restaurants. (Doc. No. 1 at ¶ 23). Siretskiy was then able to obtain a “VAR Sheet” from BAMS. (Id. at ¶ 24). A VAR Sheet is an instructions file containing information such as merchant account numbers and bank and deposit accounts associated with those merchant accounts that is provided to a third-party payment gateway, such as FPI. (Id. at ¶ 25).

         Siretskiy presented the VAR Sheets to FPI, which began processing Plaintiffs' transactions through the Siretskiy Accounts. (Id. at ¶ 26). From the time the Siretskiy Accounts were first opened, Defendants processed a total of $30, 396.24 for Canters Deli Linq, Inc. and $27, 770.50 for Canters Deli Tivoli, Inc. (all amounts exclusive of fees), for a total amount of $58, 166.74 that Siretskiy allegedly wrongfully diverted. See (Doc. No. 44 at ¶¶ 26-28). On June 20, 2018, counsel for Plaintiffs spoke to a representative of FPI, who claimed that FPI was merely a third-party intermediary payment processor and implied that the issue must have arisen based on conduct by BAMS and BANA. (Doc. No. 1 at ¶ 28). On June 27, 2018, counsel for Plaintiffs spoke to a BAMS representative, who explained that before Plaintiffs brought this action, no changes has been made to the Canters Accounts, thus implying that the issue must have arisen based on conduct by FPI. (Id. at ¶ 29). BAMS placed a hold on Plaintiffs' Accounts (Doc. No. 1 at ¶ 31), and no transactions have been processed since the placement of the hold. See (Doc. No. 44 at ¶¶ 29).

         On October 2, 2018, Plaintiffs filed this lawsuit in the District of Nevada, bringing the following claims against Defendants: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) negligence; (4) and breach of fiduciary duty. (Doc. No. 1). Plaintiffs seek both compensatory and punitive damages. Plaintiffs assert in the Complaint that subject matter jurisdiction in federal court is based on diversity of citizenship under 28 U.S.C. § 1332. (Id. at ¶ 9).

         On November 9, 2018, Defendants filed a motion to dismiss based, in part, on the fact that the Canters Contracts had a forum selection clause requiring the suit to be brought against BAMA and BANA in North Carolina. (Doc. No. 12). On July 10, 2019, the District of Nevada construed Defendants' motion to dismiss as a motion to transfer pursuant to 28 U.S.C. § 1404(a), and that court granted the motion, transferring this case to this Court.[1] (Doc. No. 36 at 6, 13). Because the District of Nevada granted the motion to transfer, it did not reach Defendants' then-pending motion to dismiss pursuant to Rule 12(b)(6). (Id. at 13).

         Defendants now move to dismiss this action without prejudice pursuant to Rule 12(b)(1), on the grounds that Plaintiffs cannot establish that the amount in controversy is in excess of $75, 000.00, and that this Court therefore does not have jurisdiction over the subject matter of this dispute. Alternatively, Defendants request that this Court dismiss this action with prejudice pursuant to Rule 12(b)(6) on the grounds that Plaintiffs have failed to state any legally cognizable claims. Defendants filed their motion to dismiss on July 24, 2019, Plaintiffs filed their response in opposition on August 21, 2019, and Defendants filed their Reply on August 28, 2019. Thus, this matter is ripe for disposition.

         II. DISCUSSION

         A. Defendants' Motion to Dismiss Based on Lack of Subject Matter Jurisdiction under Fed.R.Civ.P. 12(b)(1)

         The Court first addresses Defendants' motion to dismiss for lack of subject matter jurisdiction. Plaintiffs rely on 28 U.S.C. § 1332 as the basis for this Court's jurisdiction. (Doc. No. 1 at ¶ 9). Under Section 1332, federal courts have original jurisdiction over civil actions between citizens of different states if the amount in controversy exceeds $75, 000 and complete diversity exists between the parties. See 28 U.S.C. ยง 1332(a). In their motion to dismiss, Defendants argue that the Court lacks subject matter jurisdiction over this action ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.