According to the filing, the star is claiming as much as $100 million in damages after he attempted to purchase a property in California owned by hockey player Wayne Gretzky.
The former sports player is thought to have received a guaranteed $17.5 million mortgage from Washington Mutual (WaMU), which was subsequently acquired by JPMorgan.
However, the bank reneged the total loan, only offering $12 million rather than the full amount.
Mr Dykstra applied for a second loan, which fell through and led to him using promissory notes from the sale of car wash businesses to pay for the property.
In the complaint, the ex-player is quoted by Reuters as saying: âDefendant issued a loan designed to fail. The end result was that plaintiff incurred losses of approximately $100 million.â
Tom Kelly, a JPMorgan spokesman, has declined to comment, according to reports.
The baseball player, who retired from the sport in 1996, filed for bankruptcy in July last year.
By Jim Ottewill