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Western Alliance Bank v. Jefferson

United States District Court, D. Arizona

August 30, 2016

Western Alliance Bank, Plaintiff,
v.
Richard Jefferson, Defendant. Richard Jefferson, Counter-claimant,
v.
Western Alliance Bank, Counter-defendant. Richard Jefferson, Third-party plaintiff,
v.
Theodore Kritza & Michelle Lee Kritza, Third-party defendants.

ORDER AND OPINION [RE: MOTION AT DOCKET 291]

          JOHN W. SEDWICK SENIOR JUDGE.

         I. MOTION PRESENTED

         At docket 291 Kritza moves for reconsideration of the court's order at docket 286, which resolved his motion in limine at docket 270. In pertinent part, Kritza's motion at docket 270 seeks an order pursuant to Fed.R.Evid. 402 and 403 barring Jefferson from introducing evidence of certain damages that are listed in his January 11, 2016 disclosure statement, and from introducing the schedules he attached to his disclosure statement. Jefferson responds at docket 279, arguing that all of his damages are relevant because they can be traced back to the LOC and that his schedules are summary charts, admissible under Fed.R.Evid. 1006. At docket 286 the court ruled that it could not resolve these disputes because the copy of the schedules then before the court was illegible.

         Kritza submits a legible copy of the schedules with his motion for reconsideration and asks the court to reach the merits of his arguments. The court reviewed these new schedules and found them to be incomplete. At docket 298 the court ordered Kritza to submit a complete, legible copy of the schedules. Kritza did so at docket 299. Oral argument was requested, but would not assist the court.

         II. STANDARD OF REVIEW

         Under LRCiv 7.2(g), motions for reconsideration are usually denied “absent a showing of manifest error or a showing of new facts or legal authority that could not have been brought to [the court's] attention earlier with reasonable diligence.” Courts in this district grant such motions for various reasons, including that the moving party made a convincing showing that the court failed to consider material facts that were before the court at the time of the initial decision.[1]

         III. DISCUSSION

         Because the schedules contain material facts that were technically before the court when it reached its previous decision, yet the court did not consider because they were illegible, Kritza's motion for reconsideration will be granted. The court will reconsider, in turn, Kritza's arguments to exclude (A) Jefferson's evidence regarding transfers from his personal bank accounts into two Stratosphere accounts; (B) evidence of principal and interest payments made on the LOC from Jefferson's personal bank accounts; and (C) the schedules that Jefferson submitted with his disclosure statement.

         A. Evidence Regarding the Transfers from Jefferson's Personal Accounts Into the Stratosphere Accounts Is Inadmissible

         Jefferson's damages disclosure states that Kritza has misappropriated $9, 881, 404.83 in transfers from Jefferson's four bank accounts (Nos. 0230, 2220, 2972, and 4655) into two Stratosphere accounts (Nos. 1497 and 5451).[2] Kritza's motion seeks to preclude Jefferson from mentioning or pursuing these damages at trial because they are not relevant to any claims alleged in this case and, alternatively, they are unfairly prejudicial and would mislead and confuse the jury.[3]

         Although Jefferson responds that these $9.8 million in transfers are relevant because they “relate to” the LOC, he fails to back this up with reliable evidence.[4] First, Jefferson notes that Alliance's responses to Kritza's first set of non-uniform interrogatories[5] show that “Jefferson's accounts ending in -0230, 2220, 2972 and 4655 were all utilized by Kritza to transfer amounts relating the to the subject lines of credit.”[6]This evidence is weak because it merely shows that LOC funds were transferred into Jefferson's personal accounts. Based on this evidence, it is possible that the funds transferred from Jefferson's accounts contained LOC funds, but it is equally possible that the transfers came from other sources, such as Jefferson's salary.

         Second, Jefferson cites the schedules he attached to his disclosure statement, but they suffer the same defect. The schedules merely list the disputed transfers alongside contemporaneous LOC activity. It appears that the only thing that connects the transfers to the LOC is the fact that they occurred at the same time that the LOC was open.[7] Jefferson cannot explain how this evidence might lead a jury to reasonably conclude that the transfers contained LOC funds.

         Jefferson's argument is made even less tenable by the fact that the transfers certainly contain non-LOC funds. His schedules[8] and Alliance's responses to Kritza's first set of non-uniform interrogatories[9] show that only $2, 596.683.16 were advanced from the LOC in total. Jefferson is claiming that Kritza stole $9.8 million from a funding stream that contained, at most, $2.5 million. This is not mathematically possible.

         In this action Jefferson made the strategic choice to allege that Kritza misappropriated the LOC funds, but no others. This limits the damages that Jefferson can recover to those that can be traced back to the LOC. And it is fatal to his attempt to recover damages for funds that were transferred from his four ...


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