Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Allstate Life Ins. Co. Litigation

United States District Court, D. Arizona

September 13, 2013

In Re: Allstate Life Insurance Company Litigation

Page 931

[Copyrighted Material Omitted]

Page 932

[Copyrighted Material Omitted]

Page 933

For Allstate Life Insurance Company, an Illinois Life Insurance Company (3:09-cv-08162), Plaintiff, Counter Defendant: Matthew K LaVelle, LEAD ATTORNEY, Michael Joseph LaVelle, LEAD ATTORNEY, LaVelle & LaVelle PLC, Phoenix, AZ; Michael Patrick Cillo, Patrick J Kanouff, Scott Warren Wilkinson, Valeri Susan Pappas, Davis & Ceriani PC, Denver, CO.

For Ronald Covin, Individually, on behalf of themselves and all others similarly situated, Bernard Patterson, Individually, on behalf of themselves and all others similarly situated, Allen Patzke, Individually, on behalf of themselves and all others similarly situated, Walter Krause, Individually, on behalf of themselves and all others similarly situated (3:09-cv-08162), Plaintiffs, Counter Defendants: Matthew K LaVelle, Michael Joseph LaVelle, LEAD ATTORNEYS, LaVelle & LaVelle PLC, Phoenix, AZ; Paul B Civello, LEAD ATTORNEY, Alain M Baudry, Jonathan S Parritz, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For Larry Verhulst, Individually, on behalf of themselves and all others similarly situated (3:09-cv-08162), Plaintiff: Matthew K LaVelle, Michael Joseph LaVelle, LEAD ATTORNEYS, LaVelle & LaVelle PLC, Phoenix, AZ; Alain M Baudry, Jonathan S Parritz, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For Robert W. Baird & Company Incorporated, a Wisconsin corporation (3:09-cv-08162), Defendant, Counter Defendant, Counter Claimant, ThirdParty Plaintiff: Christopher J Barber, Jonathan D Miller, Joshua M Wiersma, Peter J Meyer, Steptoe & Johnson LLP, Chicago, IL; Darren Bernens Kinkead, Donald F Brosnan, Steptoe & Johnson LLP - Chicago, IL, Chicago, IL; David Jeremy Bodney, Steptoe & Johnson LLP - Phoenix, AZ, Phoenix, AZ; James Christopher Moeser, Steptoe & Johnson LLP, Phoenix, AZ.

For M.L. Stern & Company LLC, a California corporation (3:09-cv-08162), Defendant, Counter Claimant: Christopher J Barber, Jonathan D Miller, Joshua M Wiersma, Peter J Meyer, Steptoe & Johnson LLP, Chicago, IL; Darren Bernens Kinkead, Steptoe & Johnson LLP - Chicago, IL, Chicago, IL; James Christopher Moeser, Steptoe & Johnson LLP, Phoenix, AZ; Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For Edward Jones LP, a Missouri limited partnership (3:09-cv-08162), Defendant, Counter Defendant, Counter Claimant, ThirdParty Plaintiff: Abby Risner, David M Harris, Wendy S Menghini, Greensfelder Hemker & Gale PC, St Louis, MO; Christopher J Barber, Jonathan D Miller, Joshua M Wiersma, Peter J Meyer, Steptoe & Johnson LLP, Chicago, IL; Darren Bernens Kinkead, Donald F Brosnan, Steptoe & Johnson LLP - Chicago, IL, Chicago, IL; David Jeremy Bodney, Steptoe & Johnson LLP - Phoenix, AZ, Phoenix, AZ; James Christopher Moeser, Steptoe & Johnson LLP, Phoenix, AZ; Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For Prescott Valley, Town of, a political subdivision of the State of Arizona (3:09-cv-08162), Defendant: Steven G Zraick, LEAD ATTORNEY, Town of Prescott Valley, Prescott Valley, AZ; Brian Condon, Elizabeth St John, Matthew T Heartney, Arnold & Porter LLP - Los Angeles, CA, Los Angeles, CA; Ryan M Nishimoto, Arnold & Porter, Los Angeles, CA.

For Prescott Valley Event Center LLC, an Arizona limited liability company (3:09-cv-08162), Defendant, Counter Defendant: John R Hoopes, Patricia Ann Alexander, Hoopes & Adams PLC, Chandler, AZ; Ryan Matthew Scharber, Hoopes Adams & Alexander PLC, Chandler, AZ.

For Prescott Valley Signature Entertainment LLC, an Arizona limited liability company, Fain Signature Group LLC, an Arizona limited liability company (3:09-cv-08162), Defendants, Counter Defendants: David J Ouimette, Gary L Birnbaum, Scot L Claus, Dickinson Wright/Mariscal Weeks, Phoenix, AZ.

For Global Entertainment Corporation, a Nevada corporation, Richard Kozuback, individual (3:09-cv-08162), Defendants: Emily Heath Mann, Stockton D Banfield, LEAD ATTORNEYS, Daxton Reese Watson, Mack Watson & Stratman PLC, Phoenix, AZ.

For Kutak Rock LLP, a Nebraska limited liablity partnership (3:09-cv-08162), Defendant, Counter Defendant, Cross Defendant: John E DeWulf, Pamela Lynn Judd, Roshka DeWulf & Patten PLC, Phoenix, AZ.

For Stinson, Morrison, Hecker LLP, a Missouri limited liability partnership (3:09-cv-08162), Defendant, Counter Defendant: Kevin E O'Malley, Mark Andrew Fuller, Gallagher & Kennedy PA, Phoenix, AZ.

For TL Hocking & Associates LLC, an Arizona limited liability company, Thomas L Hocking, individual (3:09-cv-08162), Defendants: Michael J O'Connor, Jennings Strouss & Salmon PLC, Phoenix, AZ; Paul G Johnson, Jennings Strouss & Salmon PLC - Phoenix - Washington St, Phoenix, AZ.

For W James Treliving (3:09-cv-08162), Defendant, Counter Defendant: Laura Michelle Kam, Mark A Nadeau, LEAD ATTORNEYS, DLA Piper LLP (U.S.) - Phoenix, AZ, Phoenix, AZ; Stockton D Banfield, LEAD ATTORNEY, Daxton Reese Watson, Mack Watson & Stratman PLC, Phoenix, AZ.

For Wells Fargo Bank NA (3:09-cv-08162), ThirdParty Defendant, Cross Claimant: Matthew K LaVelle, Michael Joseph LaVelle, LEAD ATTORNEYS, LaVelle & LaVelle PLC, Phoenix, AZ; Stefan Mark Palys, LEAD ATTORNEY, Lewis & Roca LLP; Alain M Baudry, Jonathan S Parritz, Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For Prescott Valley, Town of, a political subdivision of the State of Arizona (3:09-cv-08162), ThirdParty Plaintiff, Cross Claimant, Counter Claimant, Counter Defendant: Brian Condon, Elizabeth St John, Matthew T Heartney, Arnold & Porter LLP - Los Angeles, CA, Los Angeles, CA; Ryan M Nishimoto, Arnold & Porter, Los Angeles, CA.

For Wells Fargo Bank NA (3:09-cv-08162), Cross Defendant: Alain M Baudry, Jonathan S Parritz, Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN; Matthew K LaVelle, Michael Joseph LaVelle, LEAD ATTORNEYS, LaVelle & LaVelle PLC, Phoenix, AZ; Stefan Mark Palys, Lewis & Roca LLP, Phoenix, AZ.

For Larry Verhulst, Individually (3:09-cv-08162), Counter Defendant: Matthew K LaVelle, Michael Joseph LaVelle, LEAD ATTORNEYS, LaVelle & LaVelle PLC, Phoenix, AZ; Alain M Baudry, Jonathan S Parritz, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For Wells Fargo Bank NA (3:09-cv-08162), Counter Defendant: Alain M Baudry, Jonathan S Parritz, Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN; Matthew K LaVelle, Michael Joseph LaVelle, LEAD ATTORNEYS, LaVelle & LaVelle PLC, Phoenix, AZ.

For Global Entertainment Corporation, a Nevada corporation, Richard Kozuback, individual (3:09-cv-08162), Counter Defendants: Stockton D Banfield, LEAD ATTORNEY, Daxton Reese Watson, Mack Watson & Stratman PLC, Phoenix, AZ.

For Thomas L Hocking, individual (3:09-cv-08162), Counter Defendant: Michael J O'Connor, Jennings Strouss & Salmon PLC, Phoenix, AZ.

For M.L. Stern & Company LLC, a California corporation (3:09-cv-08162), Counter Defendant, ThirdParty Plaintiff: Christopher J Barber, Jonathan D Miller, Joshua M Wiersma, Peter J Meyer, Steptoe & Johnson LLP, Chicago, IL; David Jeremy Bodney, Steptoe & Johnson LLP - Phoenix, AZ, Phoenix, AZ; James Christopher Moeser, Steptoe & Johnson LLP, Phoenix, AZ; Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN.

For TL Hocking & Associates LLC, an Arizona limited liability company (3:09-cv-08162), Counter Defendant: Michael J O'Connor, Jennings Strouss & Salmon PLC, Phoenix, AZ.

For Ronald Covin, Individually, on behalf of themselves and all others similarly situated, Bernard Patterson, Individually, on behalf of themselves and all othes similarly situated, Allen Patzke, Individually, on behalf of themselves and all others similarly situated, Walter Krause, Individually, on behalf of themselves and all others similary situated (3:09-cv-08174), Plaintiffs: Alain M Baudry, Jonathan S Parritz, Paul B Civello, Maslon Edelman Borman & Brand LLP, Minneapolis, MN; Matthew K LaVelle, Michael Joseph LaVelle, LaVelle & LaVelle PLC, Phoenix, AZ.

For Robert W. Baird & Company Incorporated, a Wisconsin corporation, M.L. Stern & Company LLC, a California corporation (3:09-cv-08174), Defendants: Christopher J Barber, Jonathan D Miller, Peter J Meyer, Steptoe & Johnson LLP, Chicago, IL; David Jeremy Bodney, Steptoe & Johnson LLP - Phoenix, AZ, Phoenix, AZ; James Christopher Moeser, Steptoe & Johnson LLP, Phoenix, AZ.

For Edward Jones LP, a Missouri limited partnership (3:09-cv-08174), Defendant: Abby Risner, David M Harris, Wendy S Menghini, Greensfelder Hemker & Gale PC, St Louis, MO; Christopher J Barber, Jonathan D Miller, Peter J Meyer, Steptoe & Johnson LLP, Chicago, IL; David Jeremy Bodney, Steptoe & Johnson LLP - Phoenix, AZ, Phoenix, AZ; James Christopher Moeser, Steptoe & Johnson LLP, Phoenix, AZ.

For Prescott Valley Event Center LLC, an Arizona limited liability company (3:09-cv-08174), Defendant: John R Hoopes, Hoopes & Adams PLC, Chandler, AZ.

For Prescott Valley Signature Entertainment LLC, an Arizona limited liability company, Fain Signature Group LLC, an Arizona limited liability company (3:09-cv-08174), Defendants: Scot L Claus, Dickinson Wright/Mariscal Weeks, Phoenix, AZ.

For Kutak Rock LLP, a Nebraska limited liability partnership (3:09-cv-08174), Defendant: Darlene Marie Wauro, John E DeWulf, Pamela Lynn Judd, Roshka DeWulf & Patten PLC, Phoenix, AZ.

For Stinson, Morrison, Hecker LLP, a Missouri limited liability partnership (3:09-cv-08174), Defendant: Mark Andrew Fuller, LEAD ATTORNEY, Gallagher & Kennedy PA, Phoenix, AZ.

For Richard Kozuback, an individual, Global Entertainment Corporation, a Nevada corporation, W James Treliving, an individual (3:09-cv-08174), Defendants: Jamey Anderson Thompson, Robert Clifford Hackett, Thomas M Quigley, Sherman & Howard LLC - Phoenix, AZ, Phoenix, AZ.

For Yavapai County Industrial Development Authority, a political subdivision of the State of Arizona, H W Smith, an individual, Kenneth E Renken, an individual (3:09-cv-08174), Defendants: Katherine V Brown, Polsinelli PC - Phoenix, AZ, Phoenix, AZ; Kelly Joyce Flood, Marty Harper, Polsinelli Shughart PC, Phoenix, AZ.

For Prescott Valley, Town of, a political subdivsion of the State of Arizona (3:09-cv-08174), Defendant: Matthew T Heartney, Arnold & Porter LLP - Los Angeles, CA, Los Angeles, CA; Ryan M Nishimoto, Arnold & Porter, Los Angeles, CA.

For Larry Verhulst, Individually (3:09-cv-08174), Defendant: Alain M Baudry, Maslon Edelman Borman & Brand LLP, Minneapolis, MN; Matthew K LaVelle, Michael Joseph LaVelle, LaVelle & LaVelle PLC, Phoenix, AZ.

OPINION

Page 934

ORDER

G. Murray Snow, United States District Judge.

Pending before the Court are Defendants' Joint Motion for Summary Judgment Dismissing the Claims of Non-Party Bondholders (Doc. 644) and the Underwriters' Motion to Exclude the Report and Testimony of Robert M. Smith (Doc. 774). For the reasons discussed below, the Motion for Summary Judgment is granted in part and denied in part, and the Motion to Exclude is denied without prejudice.

BACKGROUND

This suit involves the offering and sale of $35 million in revenue bonds (the " Bonds" ) used to finance the construction of a 5,000-seat Event Center in the Town of Prescott Valley, Arizona. The claims subject to this Motion are those of a number of individual Bondholders whose interests are represented by the Indenture Trustee of the Bonds, Wells Fargo. The Defendants in this case are numerous. They include the underwriters for the Bonds, attorneys for the underwriters, and the various entities that received the proceeds for the Bonds and built the Event Center. [1]

The suit is based on a number of purported misstatements made by the Defendants. These misstatements allegedly were made in the Preliminary Official Statement and the Official Statement, collectively referred to as the Official Statements (" OS" ). The OS provided two sources for paying debt service on the Bonds: (1) the net operating income from the Event Center and (2) Transaction Privilege Tax Revenues (" TPT Revenues" ), allegedly pledged by the Town,

Page 935

consisting of sales taxes generated by the Event Center and certain areas near the Event Center. The alleged misstatements pertained to (1) the annual attendance and profitability of the Event Center and (2) the existence of a lien or other security device on the TPT Revenues for the benefit of the Bondholders. Wells Fargo claims that the above misstatements caused Fitch, a bond rating agency, to issue the Bonds an investment grade rating of " A-." It asserts that the Bondholders directly or indirectly relied on either the misrepresentations or the investment grade rating in making the decision to purchase the Bonds. The Event Center has failed to realize net operating revenues in the amounts projected by the OS, and while the Town has made TPT Revenue payments, Plaintiffs allege that it reserves the right to stop making those payments at any time.

Wells Fargo, on behalf of the Individual Bondholders, asserts claims of negligent misrepresentation and violation of the Arizona Securities Act (" ASA" ) against Defendants. [2] (Doc. 466 at 107-09.) However, throughout the course of litigation, Wells Fargo was less than timely in response to Defendants' discovery requests. It was not until early 2012, in light of a deadline that the Court set on June 15, 2012, that Wells Fargo sent out questionnaires to Bondholders requesting information on how to contact them and how they acquired the Bonds. (Doc. 572 at 3.) In light of the late production of such information, the Court placed restrictions on Wells Fargo's ability to introduce certain evidence into the litigation. As such, Wells Fargo is prohibited from offering any testimony from the fifty-three Bondholders who never returned questionnaires. ( Id. at 9.) It is also prohibited from offering any testimony relating to causation or damages from twenty-seven Bondholders who responded " No," " Do Not Recall," or left blank the answers to questions asking if they relied on the OS or their brokers in purchasing the bonds. ( Id. ) Wells Fargo is further limited to calling only the nine employees it expressly named in its June 15 disclosure and it cannot offer any documents or exhibits supporting claims on behalf of bondholders it did not expressly name prior to the June 15 deadline. ( Id. ) Finally, the Court barred Wells Fargo from bringing suit on behalf of any Bondholders not named by the June 15 deadline. ( Id. at 5-6.)

Defendants now bring this Motion for Summary Judgment, arguing that Wells Fargo has not summoned sufficient evidence to support a finding in favor of the Bondholders on either claim. Defendants also move to exclude the testimony of Wells Fargo's expert Robert M. Smith, on whose report Wells Fargo relies in making its argument against summary judgment. Defendants set forth three arguments in bringing their Motion for Summary Judgment. First, they assert generally that the claims of Bondholders who cannot demonstrate " essential elements" must be dismissed, including the claims of the fifty-three and twenty-seven Bondholders who were precluded or partially precluded from testifying, as well as the claims of Bondholders who purchased in the secondary market. Second, they argue that, for a number of reasons, Wells Fargo is unable to establish the element of transaction causation for the ASA claims. Finally, they argue that Wells Fargo is unable to establish individualized reliance for each Bondholder

Page 936

on their negligent misrepresentation claims.

DISCUSSION

I. Legal Standard


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.