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Gazian v. Wells Fargo Bank NA

United States District Court, D. Arizona

May 29, 2015

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

ORDER

David G. Campbell, United States District Judge.

Two days before the final pretrial conference, Plaintiffs filed a motion asking the Court to reopen discovery and to sanction Defendant Wells Fargo. Doc. 213. Plaintiffs base their motion on emails that Wells Fargo recently produced. They argue that the emails are key evidence in support of their claim that Wells Fargo committed fraud, and that the emails should have been produced earlier. After reviewing the parties’ briefing on this issue, the Court will allow limited additional discovery as set forth below.

I. Background.

Plaintiffs in this case 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 Wells Fargo, Kelly & Kelly PC, and Hubert Kelly based on an allegedly fraudulent scheme perpetrated by the Kelly Defendants. Plaintiffs allege that $80, 000 was transferred to the Kelly Defendants’ Wells Fargo account for the “purchase of securities allegedly posted on the London Stock Exchange.” Doc. 101, ¶ 10. The securities transaction was represented “as having a total value in excess of $45, 000, 000, ” and Plaintiffs were to receive “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 allegedly 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 assert that they were convinced by the Kelly Defendants in October 2011 to reinvest $250, 000 of the promised $280, 000 to “fund a $5, 000, 000 loan to purchase and renovate the Park Plaza Tower, ” an office building 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 withdraw $30, 000 and transfer $250, 000 to the Kelly Defendants as agreed, they “were informed by Wells Fargo that the accounts had been emptied and that Wells Fargo would not transfer any amount to Plaintiffs pursuant to the Irrevocable Commitment.” Id., ¶ 21.

The Court dismissed the Kelly Defendants from this case pursuant to stipulation. Docs. 58, 151. The primary claims that remain are Plaintiffs’ claims that Wells Fargo knowingly or negligently made false representations to Plaintiffs that the Kelly Defendants were “reputable businessmen” and that their transactions were “legitimate.” Doc. 101, ¶¶ 30-63.

III. Relevancy of the Email.

On February 10, 2015, more than eight months after the close of discovery, Wells Fargo disclosed to Plaintiffs a set of emails. Plaintiffs argue that one of these emails, from Patrick Brown, strongly supports their claim that Wells Fargo committed fraud by failing to inform them that transactions with the Kelly Defendants were suspect. The email states:

From: BROWN, Patrick [Wells Fargo]
Sent: Tue 8/2/2011 5:36:42 PM
Re: HSBC Bank Guarantee Registration Number BH5843[.]
I have conducted a review on the signor, Craig Cason, for this account, [redacted]7443 - Increase Capital Investments LLC and ...

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