Thursday, October 30, 2014


The District Court Judge presiding over the suit by Megaval Enterprises, Ltd., against Bank of America, arising out of the Rosemont Financial Seizure case, has been dismissed, though the Court has allowed the plaintiff to amend, one additional time. The case turns upon incorrect legal advice, allegedly given, by the defendant, to Rosemont Financial, that plaintiff was not required to register, as a money service business, with either FinCEN, or the Florida Office of Financial Regulation, to operate through Rosemont's B of A accounts.

To summarize the Court's ruling, which was in response to a Rule 12(b)(6) motion to dismiss, for failure to state a claim upon which relief may be granted:

(1) On the negligence claim, (which hinges on the requirements that the defendant had a duty of care, that the duty was breached, that the breach caused an injury, and that plaintiff was damaged as a result) the Court found that "Megaval was not Bank of America's Customer, and Bank of America did not owe Megaval a Duty of Care. If you followed the Rosemont case, you know that its customers, including Megaval, held "sub-accounts" at B of A, through Rosemont.

(2)"Even if Megaval was Bank of America's customer, Plaintiff still had failed to State a Claim."The plaintiff has failed to plead a fiduciary relationship between the parties.

(3) The bank had no duty, under the Uniform Commercial Code (UCC), to insure that Megaval, a non-client, had the appropriate state and federal licenses and permits.

(4) The Plaintiff's claim for negligent misrepresentation also failed. The elements, as stated by the Court, are:   ( a) A statement, made by the defendant, which he believed  to be true, but which was in fact false.  (b) The defendant was negligent in making the statement, because the defendant should have known that it was false.(c) In making the statement, the defendant intended that the plaintiff would have relied upon it. (d) The plaintiff justifiably relied upon the statement. (e) The plaintiff suffered loss, damage or injury as a result. The Court held that, since claims for negligent misrepresentation are fraud claims, they must be pled with particularity (specificity). the facts pled are insufficient. Additionally, Bank of America was not aware that its legal advice, which was rendered to Rosemont, was false, according to the pleadings.

As I have previously stated, when the case was filed, Megaval's reliance upon a legal opinion of a third party, and without having competent counsel research the issues, and issue an opinion, based upon the law, was a major blunder. Their failure to obtain an independent legal opinion cost them $250,000 .

The Court has given the plaintiff until tomorrow (October 31, 2014) to file its Amended Complaint. Can the plaintiff state a cause of action, given the facts of the case, or does the bank owe no duty to Megaval ? Stay tuned.

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