United States District Court, D. Arizona
ORDER AND OPINION [RE: MOTIONS AT DOCKET 127, 129, 131 AND 132]
JOHN W. SEDWICK SENIOR UNITED STATES DISTRICT JUDGE
I. MOTIONS PRESENTED
Before the court are four summary judgment motions. At docket 127 third-party defendants Theodore Kritza and Michelle Lee Kritza (collectively, “Kritza”) filed a motion for partial summary judgment supported by a statement of facts at docket 128. Defendant, counter-claimant, and third-party plaintiff Richard Jefferson (“Jefferson”) filed an opposition to Kritza’s motion at docket 160 supported by a separate statement of facts and controverting statement of facts at docket 161. Kritza filed a reply in support of his motion at docket 212 and a supplemental statement of facts at docket 226. Jefferson filed a sur-response at docket 228 and a controverting statement of facts regarding Kritza’s supplemental statement of facts at docket 229.
At docket 131 plaintiff and counter-defendant Western Alliance Bank (“Alliance”) filed a motion for summary judgment supported by a statement of facts at docket 134. Alliance argues that it is entitled to summary judgment pursuant to the ratification doctrine and A.R.S. § 47-4406. At docket 163 Jefferson filed an opposition to Alliance’s motion supported by his controverting statement of facts, objections, and additional statement of facts at dockets 166 and 167. At docket 174 Alliance filed a reply in support of its motion, and at docket 177 it filed a separate response to Jefferson’s controverting statement of facts and additional statement of facts. At docket 227 the court granted Jefferson’s motion to strike Alliance’s filing at docket 177.
At docket 132 Kritza filed a joinder to Alliance’s motion as it relates to the issue of ratification and a motion for summary judgment on that issue. At docket 164 Jefferson filed an opposition to Kritza’s motion supported by his objections and controverting statement of facts at docket 165. At docket 188 Kritza filed a reply in support of his motion.
At docket 129 Jefferson filed a motion for partial summary judgment against Kritza or, in the alternative, an order treating certain facts as established. Jefferson’s separate statement of facts in support of his motion is at docket 130. Kritza’s opposition to Jefferson’s motion is at docket 158, which is supported by his controverting statement of facts at docket 159. Jefferson filed his reply at docket 175 and unredacted copies of Exhibits 4 and 7 to Kritza’s controverting statement of facts at docket 176, both under seal.
Finally, at docket 162 Jefferson’s counsel submitted an affidavit in which he states that Jefferson cannot present facts essential to his oppositions to Kritza’s and Alliance’s motions and therefore asks the court to deny those motions pursuant to Rule 56(d).
Oral argument was held on November 9, 2015.
Jefferson is a professional basketball player in the National Basketball Association (“NBA”) who employed Kritza from 2001 to 2013 as his personal business manager in charge of his day-to-day affairs, investments, and business ventures.
A. The Alliance Line of Credit
Alliance alleges that on October 5, 2004 it issued Jefferson a revolving line of credit in an original principal amount not to exceed $500, 000 (“LOC”) that Jefferson failed to pay by its maturity date. Alliance attached to its complaint the following documents as evidence of the parties’ contractual relationship:
1. An October 5, 2004 Consumer Revolving Line of Credit agreement (loan number 0129104825, “Loan 4825”) with an October 5, 2005 maturity date;
2. A September 13, 2005 Change in Terms Agreement to loan 4825 that extended the LOC’s maturity date to October 5, 2006;
3. A September 25, 2006 Change in Terms Agreement to loan 4825 that extended the LOC’s maturity date to October 5, 2007;
4. An August 13, 2007 Change in Terms Agreement to loan 4825 that extended the LOC’s maturity date to October 5, 2008;
5. An August 5, 2008 Change in Terms Agreement to loan 4825 that extended the LOC’s maturity date to August 15, 2009;
6. An August 15, 2009 Change in Terms Agreement to loan 4825 that extended the LOC’s maturity date to August 15, 2010;
7. An August 16, 2010 Consumer Revolving Line of Credit agreement (loan number 129125289, “Loan 5289”) with an August 15, 2011 maturity date;
8. A December 23, 2011 Promissory Note and Business Loan Agreement (loan number 0602129169, “Loan 9169”) with a November 15, 2012 maturity date; 9. A November 15, 2012 Change in Terms Agreement to loan 9169 that extended the loan’s maturity date to January 15, 2013;
10. A January 15, 2013 Change in Terms Agreement to loan 9169 that extended the loan’s maturity date to November 15, 2013.
At his deposition Jefferson testified that he was advised by Kritza, his former agent Todd Eley (“Eley”), and former financial advisor Mark Love (“Love”) to obtain a LOC to cover his expenses during the gap between his first and second NBA contracts. He maintains, however, that his signature on the original Loan 4825 credit agreement was forged. Jefferson also testified that he did not know that the LOC was extended or about any of the subsequent loan commitments that were taken out in his name. The five extensions of Loan 4825,  the original Loan 5289 document,  the Loan 9169 promissory note,  the Loan 9169 “business loan agreement, ” and the two extensions of Loan 9169 all bear Jefferson’s purported signature. Jefferson testified that Kritza has admitted to forging his signature.
Kritza testified that he helped get Jefferson’s signature on the original Loan 4825 paperwork in 2004 and on the 2006 Change in Terms Agreement. Kritza also testified that Jefferson authorized him to extend the LOC and make disbursements from it.
B. Stratosphere Management
Kritza testified that in 2006 Jefferson agreed to help him fund a business he was starting called Stratosphere Management, LLC (“Stratosphere Management”). Kritza described his business plan for Stratosphere Management as a “24-hour concierge-type VIP service that was available to players.” Kritza contends that Stratosphere Management executed a $500, 000 promissory note in Jefferson’s favor. Jefferson did not give these funds to Stratosphere Management directly, Kritza said. Instead, Jefferson allowed Kritza to access the $500, 000 Alliance LOC “so that line continued to carry . . . a balance that was owed by [Kritza].”
According to Kritza, Stratosphere Management executed a second promissory note in 2008 that increased Jefferson’s loan to $2 million and extended the loan’s maturity date to August 31, 2016. Kritza testified as follows:
I put together a plan and went back and . . . discussed it with [Jefferson] on, I think it was two or three different occasions I remember one of them was during the All Star break-of expanding what Stratosphere Management was and to go out and form companies that were specifically related and tied into what the concierge service would need. So there were entities that were created that helped in the transportation of cars, in the customization of vehicles. So a guy would buy a Lamborghini, for example, but he would want different things done to it, so they would go to this-it would stay in-house, basically. And that’s where . . . the whole requirement of an extra million and a half dollars kind of fell on that plate as to creating all these other possibilities.
Kritza has submitted an email exchange purportedly between Jefferson and Kritza in 2008 in which Kritza thanks Jefferson for “agreeing to increase and extend the term of the LOC, so that [Kritza] can look at other opportunities, ” and Jefferson acknowledges Kritza’s email. The alleged 2008 promissory note does not reference the Alliance LOC.
At his deposition Jefferson denied having any involvement with Stratosphere Management. He denied loaning Stratosphere Management either $500, 000 or $2 million, denied that Krtiza gave him either the $500, 000 or the $2 million promissary note, and denied authorizing Kritza to use the Alliance LOC to fund Kritza’s business investments. Jefferson testified that the first time he saw the $2 million note was when Eley emailed it to him, and that his signature on the note was forged.
C. The 2011 NBA Lockout
Between July 1 and December 8, 2011 there was an NBA lockout,  during which time teams could not trade or enter into contracts with players. Jefferson testified that during the lockout Kritza told him he “was stressed” about the “financial strain” Jefferson would suffer if the lockout lasted all season. Jefferson testified that he was disappointed with the state of his personal finances after playing in the NBA for ten years and “confused as to some of the numbers, ” so he had Richard Murnick (“Murnick”), his current financial manager, review his finances.
According to Murnick, Jefferson called him in late 2011 because Jefferson was concerned about not having as much money as he thought he should. Murnick said that after speaking with Jefferson, seeing his brokerage statement, and “thumb[ing] through” his tax return, he agreed with Jefferson “that there were some concerns.”“[T]he amount that was in the brokerage account-that it wasn’t more-I was expecting to see more in the brokerage account, ” testified Murnick. Murnick also testified that Jefferson was concerned ...