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Zowine v. Prussin

United States District Court, D. Arizona

February 12, 2016

David Zowine, Plaintiff,
George Prussin, et al., Defendants.


Honorable G. Murray Snow United States District Judge

Pending before the Court are the Motion for Summary Judgment by Defendants George Prussin and Jane Doe Prussin (Doc. 41) and the Motion for Partial Summary Judgment by Plaintiff David Zowine (Doc. 43.) For the following reasons, the Court denies Plaintiff’s motion and grants Defendants’ motion.


In 2005, George Prussin, a resident of New Jersey, invited David Zowine, a resident of Arizona, to participate in a number of investment opportunities. In or around 2007, Zowine invested in two companies promoted by Prussin, Leopard Trading LLC and Bobcat Trading Company LLC, both of which were serviced by the Law Funder, LLC, a pre-settlement funding company that Prussin operated. Zowine also invested in three of what were termed “Special Deals” - investments in the “Siber Air” case, the “SPS v. Motorola” case, and the “Rubin Attorney for Dianna Levine” case. Zowine also purchased interests in a racehorse (the “Racehorse Deal”) named Duke’s Dream.[1] There are issues of fact as to whether the investments in the “Special Deals” involved the purchase of membership interests in the Law Funder, LLC, or whether Zowine’s moneys were invested directly with Prussin. There is no issue as to whether the investment in the first two special deals was profitable, although Zowine complains that his investment in the Rubin Attorney case (while it did result in some return on capital) did not double the investment as promised. See, e.g., Doc. 48 ¶ 27. It appears that the investment in the Siber Air case was unsuccessful although it is not yet clear to the Court that the Siber Air legal matter in which the Plaintiff apparently invested has been finally resolved. The Racehorse Deal was a total loss.

On April 26, 2014, Zowine filed a complaint alleging that he invested over $100, 000 and was “promised and guaranteed . . . a very high rate of return, ” a representation which Zowine alleges was materially false and which induced Zowine to invest to his detriment. (Doc. 1-1 at 4.) Zowine further alleges that Prussin offered and sold unregistered securities to Zowine with the intent to defraud him. (Id. at 6.) Zowine’s complaint includes thirteen counts:

1. Count 1 - Breach of Contract (Rescission)
2. Count 2 - Breach of Contract (Return of Investment)
3. Count 3 - Breach of Warranty of Good Faith and Fair Dealing
4. Count 4 - Breach of Fiduciary Duty
5. Count 5 - Promissory Estoppel
6. Count 5 - Unjust Enrichment [There are two counts labeled “Count 5”]
7. Count 6 - Common Law Fraud
8. Count 7 - Negligent Misrepresentation
9. Count 8 - Civil Conspiracy
10. Count 9 - Pattern of Unlawful Acts (A.R.S. § 13-2301, et. seq.)
11. Count 10 - Violation of “Blue Sky” laws - A.R.S. § 44-1991 Fraud in Purchase or Sale of Securities
12. Count 11 - Action to Void Contract for Sale of Securities, A.R.S. § 44-2001
13. Count 12 - Constructive Fraud

(Id. at 6-17.)

Prussin moves for summary judgment on twelve grounds:

1. “Plaintiff’s securities claims are barred by the applicable statutes of limitation.” (Doc. 41 at 4-7.)
2. “Plaintiff’s other claims are similarly time barred by the statute of limitations.” (Doc. 41 at 7.)
3. “Plaintiff fails to establish the existence of a contract that was purportedly breached.” (Doc. 41 at 7-8.)
4. “Plaintiff has failed to establish the existence of an agreement that creates an implied covenant of good faith and fair dealing or any acts establishing a breach of the implied covenant.” (Doc. 41 at 8-9.)
5. “Plaintiff has failed to cite to any statute, rule or case which would create a fiduciary duty and has further failed to assert any acts on the part of Prussin that would have violated that fiduciary duty.” (Doc. 41 at 9-10.)
6. “Plaintiff has failed to establish many of the key elements of promissory estoppel and unjust enrichment.” (Doc. 41 at 10-11.)
7. “Plaintiff has failed to establish the elements of common law fraud, constructive fraud or negligent misrepresentation.” (Doc. 41 at 11-12.)
8. “Plaintiff has failed to establish the elements for civil conspiracy.” (Doc. 41 at 12-13.)
9. “Plaintiff has failed to establish a violation of A.R.S. 13-2301 [Racketeering]” (Doc. 41 at 13-14.)
10. “Plaintiff has failed to establish a violation of the ‘Blue Sky’ laws and has also failed to establish the elements to void a contract pursuant to A.R.S. 44-2001.” (Doc. 41 at 14-15.)
11. “Defendant is the improper party for the claims made by Plaintiff regarding the purported loan pools as Arizona courts recognize an LLC as a separate legal entity and shareholders and members are not liable for their debts.” (Doc. 41 at 15-17.)
12. “Plaintiff has failed to provide any evidence that he sustained any damages as a result of [Defendant’s] ...

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