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Gazian v. Wells Fargo Bank Na

United States District Court, D. Arizona

September 18, 2014

Ken Gazian, et al., Plaintiffs,
v.
Wells Fargo Bank NA, et al., Defendants.

ORDER

DAVID G. CAMPBELL, District Judge.

Defendant/Cross-Plaintiff Wells Fargo Bank NA has filed a motion for partial summary judgment. Doc. 108. The motion is fully briefed. The Court will deny the motion.[1]

Cross-Defendants Hubert Kelly and Kelly & Kelly, P.C. (the "Kelly Defendants") have also filed a motion for summary judgment. Doc. 110. The motion is fully briefed. The Court will grant the motion in part and deny it in part.

I. Background.

Plaintiffs are Ken Gazian, Pierre Investments, Inc., and Aragadz Foods, Inc. d/b/a Devanche Jewelers. Gazian is a Texas resident and both Pierre and Devanche are Texas corporations, wholly owned by Gazian. Plaintiffs originally brought this action against both Wells Fargo and the Kelly Defendants based on an allegedly fraudulent scheme perpetrated by the Kelly Defendants. Plaintiffs allege that they transferred $80, 000 to the Kelly Defendants' Wells Fargo bank account for the "purchase of securities allegedly posted on the London Stock Exchange." Doc. 101, ¶ 10. The transaction was purportedly represented "as having a total value in excess of $45, 000, 000, " and Plaintiffs were led to believe their investment "would yield a return of $280, 000." Id.

Plaintiffs allege that they "sought assurance from Wells Fargo" that the Kelly Defendants were legitimate business people and were in the process of putting together a large securities transaction. Id. Wells Fargo employees from a branch in Mesa, Arizona apparently represented to Plaintiffs "on multiple occasions that there was a transaction being put together for the purchase of the securities, that funds were present for the purchase of securities, and that Wells Fargo had undertaken numerous successful transactions" with the Kelly Defendants. Id., ¶ 11. Plaintiffs claim that they entered into an "Irrevocable Commitment" with the Kelly Defendants and Wells Fargo that set forth the terms discussed above. Id., ¶ 12.

Plaintiffs assert that they were convinced by the Kelly Defendants in October 2011 to reinvest the $280, 000 promised by the Irrevocable Commitment - rather than withdrawing it as scheduled - to "fund a $5, 000, 000 loan to purchase and renovate the Park Plaza Tower, " an office tower in Dallas. Id., ¶ 16. Plaintiffs also agreed to pay an additional $50, 000 to fund the transaction. Id. Plaintiffs assert that on November 29, 2011, when they attempted to transfer the funds guaranteed by the Irrevocable Commitment to the Kelly Defendants, they "were informed by Wells Fargo that the accounts had been emptied and that accordingly Wells Fargo would not transfer any amount to Plaintiffs pursuant to the Irrevocable Commitment." Id., ¶ 21. Neither the Irrevocable Commitment nor the Park Plaza transaction was ever performed.

Plaintiffs reached a settlement with the Kelly Defendants in late 2013, and the Court dismissed the Kelly Defendants on November 26, 2013. Doc. 58. Wells Fargo filed an answer and a cross-claim for indemnity against the Kelly Defendants. Doc. 56. The Court declined to dismiss Wells Fargo's cross-claim. Doc. 73.

II. Legal Standard.

A party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

III. Analysis.

A. Wells Fargo's Motion.

Wells Fargo moves for partial summary judgment on the issue of lost profits, arguing that the report of Plaintiffs' expert, Michael Van Amburgh, is based on flawed ...


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