1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 JAMES DUFFY, Case No.: 2:22-cv-01988-APG-BNW

4 Plaintiff Order Granting Motion to Dismiss Second Amended Complaint 5 v. [ECF No. 46] 6 JP MORGAN CHASE BANK, NATIONAL ASSOCIATION, 7 Defendant 8

9 I previously dismissed James Duffy’s First Amended Complaint. In doing so, I detailed 10 the many defects in Duffy’s claims and theories. ECF Nos. 43, 44. I granted Duffy one final 11 chance to amend. Duffy’s Second Amended Complaint (SAC) does not cure the many defects I 12 previously pointed out, so I grant defendant JP Morgan Chase Bank’s (Chase) current motion to 13 dismiss. 14 The parties are familiar with the facts and procedural history of this case, so I will not 15 repeat those in detail here. The SAC asserts two claims: negligent misrepresentation and aiding 16 and abetting breach of fiduciary duty. ECF No. 45. Duffy alleges that Chase allowed Warren 17 Markowitz (who was licensed to practice law in New York but not Nevada) to open an Interest 18 On Lawyer Trust Account (IOLTA) in 2009. Ten years later, Duffy deposited $420,000 into that 19 account, which Markowitz withdrew and misappropriated. Duffy contends that by allowing 20 Markowitz to open and maintain that IOLTA account, Chase misrepresented to Duffy that 21 Markowitz was a Nevada licensed attorney. Id. at 5-9. Notably, nothing in the name of the 22 account or any Chase document calls it a “Nevada” IOLTA or states that Markowitz held a 23 Nevada license. 1 Duffy’s misrepresentation claim is based on the flawed theory that only Nevada lawyers 2 can open IOLTA accounts in Nevada, so by allowing Markowitz to open an IOLTA account, 3 Chase represented that Markowitz was a Nevada lawyer. ECF Nos. 44 at 14-15; 47 at 8. When I 4 dismissed this claim before, I noted that Duffy cited to no case, rule, or statute to support this

5 theory. He still has not. Duffy relies on Nevada Supreme Court Rule 217, which requires 6 Nevada lawyers to maintain IOLTAs. But that rule applies to lawyers, not to banks. If a bank 7 decides to participate in the IOLTA program, it subjects itself to the Supreme Court’s rules 8 regarding such accounts. But the Supreme Court of Nevada is not a legislative body and cannot 9 pass laws regulating banks or what types of accounts they can open for which customers. ECF 10 No. 44 at 20-24. Nothing prohibits a bank from opening an IOLTA account for a non-Nevada 11 lawyer.1 Because Duffy’s claim is based on this flawed legal theory, and because Chase never 12 referred to Markowitz as a Nevada lawyer, the negligent misrepresentation claim fails as a matter 13 of law. 14 Duffy’s second claim, for aiding and abetting the breach of a fiduciary duty, is likewise

15 fatally flawed. As I stated during the previous hearing, Duffy must plausibly allege that

either had actual knowledge of Markowitz’s breach of his fiduciary duty or knew of facts that 17 would amount to bad faith if Chase failed to investigate. ECF No. 44 at 44-45 (referring to 18 Dunham Tr. Co. as Tr. of Darrell N. Garmann Testamentary Tr. 2012 v. Wells Fargo Bank, 19 N.A., No. 3:18-cv-00181-LRH-WGC,

, at *2 (D. Nev. Oct. 31, 2019)). As I 20 stated then, Chase could not have known when it opened the account in 2009 that Markowitz 21 would breach his fiduciary duty to Duffy 10 years later.

. I also noted the deficiencies of 22

1 As discussed at the prior hearing, New York Rule of Professional Conduct 1.15(b) allows New 23 York lawyers (like Markowitz) to hold funds in banks outside of New York. ECF No. 44 at 17- 20. 1}| Duffy’s allegations that Chase’s monitoring of the account provided Chase sufficient notice of 2|| the breach of fiduciary duty. /d. at 29-35. Duffy’s SAC does not overcome these defects. 3 For these and the many reasons I placed on the record during the September 6, 2023 4 hearing, I dismiss Duffy’s SAC. Duffy has had three opportunities to plead plausible claims against Chase but has failed to do so. I therefore deny him leave to amend another time. 6 I THEREFORE ORDER that the defendant’s motion to dismiss (ECF No. 46) is 7|| granted. The clerk of court is directed to enter judgment in favor of defendant JP Morgan

|| Bank, N.A. and against plaintiff James Duffy, and to close this file. 9 DATED this 28th day of May, 2024. 10

ANDREWP.GORDON. SOS D UNITED STATES DISTRICT JUDGE

13 14 15 16 17 18 19 20 21 22 23