Travis v. Bank of America, N.A.

Background

Svetlana Travis, proceeding without a lawyer, sued Bank of America, N.A. (BANA) for breach of contract. She alleged that, beginning in 2016, Eliot Spitzer deposited checks into her BANA account without her knowledge by forging her endorsement. She also alleged that Spitzer obtained and used a debit or credit card issued to her. Travis claimed BANA should have detected the fraudulent activity and had notice of it after receiving a subpoena for her account records on or about May 31, 2016.

Travis initially filed the same claims in New York City Civil Court on August 5, 2022, voluntarily discontinued that case, and later sued BANA in New York Supreme Court. BANA removed the action to federal court. The court determined that it had jurisdiction based on the parties’ submissions concerning the amount in controversy. BANA then moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim.

Statute of Limitations

BANA argued that Travis’s breach-of-contract claim was barred by New York’s six-year statute of limitations. The court explained that the period generally begins when the claim accrues, and that a plaintiff’s lack of awareness of the alleged breach does not ordinarily delay accrual. If a contract requires continuing performance, each later breach may begin a new limitations period, but Travis’s complaint did not identify the dates of any later breaches.

Based on the allegations in the complaint, the court treated May 31, 2016, as the accrual date because Travis alleged that BANA was on notice of the conduct by then. Travis filed her initial action on August 5, 2022, more than six years later. The court therefore concluded that the claim was untimely under New York Civil Practice Law and Rules § 213(2).

Travis argued that the limitations rule for fraud under § 213(8) should apply. The court rejected that argument for two reasons. First, her claim against BANA was for breach of contract, not fraud; the alleged fraudulent conduct was attributed to Spitzer, who was not a party to the case. Second, even if the claim were treated as one based on fraud, the court concluded that Travis had not shown that she could not have discovered the alleged fraud before 2020. The court said the circumstances known to Travis in 2016—including unexplained money deposited into her account and BANA’s alleged decision to cut her off as a client shortly before her arrest—created a duty to investigate. The court also found her assertion that she did not learn about the forged checks until 2022 conclusory and unsupported.

Disposition

Because the claim was time-barred, the court did not reach the merits of Travis’s breach-of-contract allegation. The court granted BANA’s motion to dismiss, dismissed the complaint with prejudice, directed the Clerk of Court to close the motion, and closed the case. Judge J. Paul Oetken stated that dismissal with prejudice was appropriate because amendment was highly unlikely to cure the statute-of-limitations problem.