United States District Court, D. Arizona
HONORABLE RANER C. COLLINS, SENIOR UNITED STATES DISTRICT
conversion action arises from allegedly fraudulent transfers
made by one of Plaintiff's employees from Plaintiff's
legitimate business checking account into an unauthorized
savings account. Plaintiff alleges that the Defendant, Wells
Fargo Bank (“Wells Fargo”), aided in carrying out
the fraudulent transfers. After a thorough and careful de
novo review of the record, this Court adopts Magistrate Judge
Markovich's Report and Recommendation
(“R&R”) (Doc. 22) dismissing Plaintiff's
Complaint (Doc. 1) with prejudice.
was the sole owner of Western International Aviation
(“WIA”), a business based out of Tucson, Arizona.
Doc. 1 at ¶ 2. Plaintiff's business held a business
checking account (account ending in -9621) with Wells Fargo.
Id. at ¶ 4. On September 4, 2009, one of
Plaintiff's employees opened an allegedly unauthorized
business savings account (account ending in -3696) at Wells
Fargo without Plaintiff's knowledge. Id. at 4-7.
Then, Plaintiff's employee made two transfers totaling
$79, 185.00 transferring the money from Plaintiffs legitimate
business account into the unauthorized savings account.
Id. at ¶ 7.
November 16, 2018, Plaintiff filed a Complaint against Wells
Fargo Bank and two of its employees. Doc. 1. The case was
subsequently referred to Magistrate Judge Markovich. Doc. 5.
While under Judge Markovich, the Parties stipulated to the
dismissal of the Wells Fargo Bank employees, Dax McMenamin
and Chris Federman, leaving Wells Fargo as the sole
defendant. Docs. 7 & 11. Defendant Wells Fargo responded
to the Complaint with a Motion to Dismiss
(“Motion”). Doc. 15. The Parties filed timely
responses and the Motion was fully briefed as of March 25,
2019. Docs. 17 & 18. Thereafter, Magistrate Judge
Markovich issued an R&R recommending that this Court
grant Defendant's Motion and dismiss this action with
prejudice. Doc. 22. Plaintiff filed Objections to the R&R
and Defendant replied to Plaintiff's objections. Docs. 23
judges have the power to refer a case to magistrate judge to
hear and determine pretrial matters before the court.”
28 U.S.C. § 636(b)(1); LRCiv. 72.1(a). While magistrate
judges do not have the authority to dismiss, they may prepare
a [R&R] to aid the district judge in the disposition of
the case. § 636(b)(1)(B)-(C). After receiving the
magistrate judge's R&R, the parties may file written
objections to the magistrate judge's recommendation.
§ 636(b)(1)(C). After receiving the magistrate
judge's R&R and any objections from the parties, the
district judge conducts a de novo review of the portions of
the record to which the parties object. Id. Finally,
the district judge determines whether to accept, reject, or
modify the magistrate judge's recommendation.
Complaint is untimely since his claim was filed well-beyond
any time the statute of limitations allows. Plaintiff's
Complaint alleges a single count of conversion. The statute
of limitations in Arizona for a conversion action is two
years. Ariz. Rev. Stat. § 12-542(5).
Arizona follows the discovery rule. The discovery rule
determines when the two-year time limit starts. The discovery
rule states that the statute of limitations begins to run
when the Plaintiff knows, or in the exercise of reasonable
diligence, should have known of the facts giving rise to the
cause of action. See Gust, Rosenfeld & Henderson v.
Prudential Ins. Co. of Am., 898 P.2d 964, 966 (1995);
see also 11333 Inc. v. Certain Underwriters at
Lloyd's, London, 261 F.Supp.3d 1003, 1024 (D. Ariz.
2017), appeal dismissed, No. 17-16331, 2019 WL 2591204 (9th
Cir. Jan. 30, 2019). This means that a Plaintiff attempting
to bring a conversion action must do so within two yuers of
the date that Plaintiff knew or should have known of the
injury. There is no dispute that the statute of limitations
is two years. Thus, the dispositive inquiry is when the
Plaintiff knew or should have known of the unauthorized
transfers causing his injury.
the transfers took place in September of 2009. Plaintiff did
not file suit until November of 2018. Plaintiff, without
reason, asserts that he did not actually discover the
transfers until 2015. Conversely, Defendant alleges that
Plaintiff's cause of action began accruing sometime
between September 2009, when the transfers were made, and
November 15, 2018, when the Complaint was filed. This Court
need not venture into the weeds to determine exactly when
Plaintiff's action accrued. Assuming arguendo that
Plaintiff's cause of action did not accrue until November
2015, Plaintiff still waited three additional years before
filing his Complaint. Consequently, Plaintiff's claim is
barred by the two-year statute of limitations. This Court
agrees with the conclusions set forth in Judge
IT IS HEREBY ORDERED that the R&R is
ADOPTED Plaintiffs Complaint is DISMISSED
WITH PREJUDICE. The Clerk of the Court is directed