Grimmer v. Citibank

Background

Pro se (self-represented) plaintiff James Andrew Grimmer originally filed this case in Minnesota state court in Carver County. Citibank, N.A. removed it to federal court based on federal question jurisdiction (Grimmer's federal statutory claims) and diversity jurisdiction (the parties are citizens of different states). Grimmer is a Minnesota citizen; Citibank is a South Dakota citizen.

Grimmer alleged he held a Citibank credit card account governed by a "Card Agreement" — a written contract. The account carried a balance of $18,598. In early 2024, Grimmer sent Citibank a $500 check designated as "full and final settlement" of whatever he owed. Citibank neither rejected nor returned the check. Grimmer argued this created a legally binding "accord and satisfaction" — a legal doctrine under which a creditor who accepts a substitute payment in lieu of a larger debt is deemed to have discharged the original debt. Despite this, Grimmer alleged, Citibank continued reporting the account as "charged-off" with the full $18,598 balance to the three major credit reporting agencies and referred the account to a collection agency called Phillips and Cohen. Grimmer also alleged he requested documents and an accounting from Citibank, which Citibank did not provide. He sought $3.5 million in damages plus equitable relief.

The Card Agreement — a document the court considered as "necessarily embraced" by the complaint and therefore reviewable at this stage — contained a clause prohibiting Grimmer from including "restrictive endorsements" on checks sent to Citibank and providing that Citibank could accept a payment without waiving its rights if the payment instructions were not followed.

Legal Standard

Citibank moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Under this standard, the court accepts well-pleaded factual allegations as true and draws reasonable inferences in the plaintiff's favor, but the complaint must allege facts that make the plaintiff's right to relief "plausible on its face" — not merely speculative. Legal conclusions, as opposed to factual allegations, are not accepted as true. Because Grimmer is pro se, his complaint was entitled to liberal (lenient) construction, though that rule does not excuse a failure to allege sufficient facts.

Rulings on Each Claim

UCC § 3-311 — Accord and Satisfaction (Breach of Contract)

The Uniform Commercial Code (UCC) is a model set of commercial laws that becomes binding only when a state legislature adopts it. The court identified two independent grounds for dismissal.

First, Grimmer never identified which state's version of § 3-311 he was invoking. Both Minnesota (Minn. Stat. § 336.3-311) and South Dakota (S.D. Codified Laws § 57A-3-311) have adopted the provision, but their courts interpret it differently, and Grimmer made no choice-of-law argument.

Second, and more fundamentally, both states' versions require the claimant to prove that the debt amount was "unliquidated" (uncertain or not readily determinable) or subject to a "bona fide dispute" (a genuine disagreement between the parties, not just the debtor's unilateral refusal to pay). Grimmer's complaint explicitly identified the debt as $18,598 — a fixed, determinable credit card balance. He alleged no facts showing a genuine dispute about what he owed. This element was not plausibly alleged, so the claim was dismissed.

UCC § 9-210 — Request for Accounting

This UCC provision gives a debtor the right to request an accounting of unpaid obligations that are "secured by collateral" — meaning backed by a specific asset pledged as security. Both Minnesota's and South Dakota's versions of this provision apply only to collateralized (secured) debts. Grimmer's Citibank credit card was not alleged to be secured by collateral, and the Card Agreement contained no indication it was. The claim was dismissed because the provision simply does not apply to Grimmer's account.

Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681s-2 and 1681i

Grimmer alleged Citibank violated the FCRA by continuing to report the $18,598 balance after the alleged accord and satisfaction. The court noted this claim depended entirely on accepting the legal conclusion that an accord and satisfaction had occurred — which the court rejected in analyzing the UCC § 3-311 claim. Because the predicate legal conclusion failed, the FCRA claims failed with it.

Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692e and 1692g

Grimmer alleged Citibank violated the FDCPA by referring his account to a collection agency after receiving what he characterized as a "cease and desist." The FDCPA imposes liability only on "debt collectors" — entities whose principal business purpose is debt collection or who regularly collect debts owed to someone else. Citibank, as the original creditor collecting its own debt, is not a debt collector under the statute. The complaint alleged no facts suggesting otherwise. The claim was dismissed.

Truth in Lending Act (TILA), 15 U.S.C. § 1666d and 12 C.F.R. § 1026.9

Grimmer alleged Citibank failed to provide an "original signed contract or full accounting ledger." The cited TILA provision, 15 U.S.C. § 1666d, addresses how creditors must handle credit balances — situations where a consumer has overpaid and the creditor holds excess funds. It imposes no obligation to produce original contracts or accounting ledgers. The cited regulation, 12 C.F.R. § 1026.9, addresses creditor disclosure requirements but contains no obligation to produce the specific documents Grimmer requested. Because the cited law had no connection to the alleged facts, the claim was dismissed.

Gramm-Leach-Bliley Act (GLBA), 12 C.F.R. § 1016, and Tax Code, 26 U.S.C. § 6050P

Neither of these provisions creates a "private right of action" — the legal authority for a private individual to sue for violations. The Consumer Financial Protection Bureau has expressly stated there is no private right of action under Regulation P (the GLBA's implementing rule). Multiple courts have held the same regarding 26 U.S.C. § 6050P (an IRS provision concerning reporting of cancelled debts). Without a private right of action, Grimmer has no legal vehicle to bring these claims, and they were dismissed.

ADA Claim (Not Addressed)

Grimmer's opposition brief suggested he was asserting a claim under Title II of the Americans with Disabilities Act (ADA). The court declined to consider it because the complaint itself contained no ADA claim — it mentioned the ADA only to request scheduling accommodations from the court. A plaintiff cannot add new claims through a brief opposing a motion to dismiss.

Dismissal With Prejudice

The court dismissed the complaint with prejudice, meaning Grimmer cannot refile these same claims. The court exercised its discretion to do so because: (1) Grimmer never requested leave to amend in his opposition brief; (2) he never identified what additional facts or claims he might add; (3) even a later, passing reference to wanting to amend in a separate filing lacked any specifics; and (4) the fundamental mismatch between the complaint's sparse factual allegations and its legal theories made it difficult to conceive how amendment could cure the problems. The court found amendment would be futile.

Sanctions Issue — AI-Generated Fake Citations

Citibank's reply brief flagged that Grimmer's opposition brief contained numerous citations to cases that do not exist — apparently generated by an artificial intelligence tool. Federal Rule of Civil Procedure 11(b) requires parties (including self-represented litigants) to certify that their legal contentions are supported by existing law after a reasonable pre-filing investigation. Citing fabricated cases can violate this rule.

Grimmer acknowledged most of the errors in a filing he called a "Notice of Clarification and Correction of Authorities," attributing them to reliance on AI-based drafting tools without adequate verification, as well as cognitive-processing disorders affecting memory. However, the court observed that Grimmer's acknowledgment was incomplete — he failed to address four additional nonexistent citations that Citibank identified, and the court independently confirmed those cases do not exist. The court also noted that Grimmer improperly used the "clarification" filing as an unauthorized additional argument brief.

Nevertheless, the court declined to order Grimmer to show cause why his conduct did not violate Rule 11(b), giving three reasons: (1) Grimmer offered plausible explanations and a seemingly sincere apology and described corrective steps; (2) the errors had already damaged his credibility and his adversaries in future cases — including another pending case in the same district, Grimmer v. Gurstel L. Firm, P.C., No. 25-cv-1024 — would scrutinize his citations carefully, providing sufficient deterrence; and (3) the resources required for a formal sanctions proceeding would be disproportionate to any additional deterrent benefit.

Disposition

Citibank's motion to dismiss was granted. The complaint was dismissed with prejudice. Judgment was ordered to be entered accordingly.