Gasho v. Wells Fargo Bank NA

• Court: District Court, D. Arizona
• Decided: November 20, 2019
• Docket: 4:18-cv-00552
• Status: Unknown

Opinion

1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 John R Gasho, Sr., No. CV-18-00552-TUC-RCC (EJM)

10 Plaintiff, ORDER

11 v.

12 Wells Fargo Bank NA,

13 Defendant. 14 15 This conversion action arises from allegedly fraudulent transfers made by one of 16 Plaintiff’s employees from Plaintiff’s legitimate business checking account into an 17 unauthorized savings account. Plaintiff alleges that the Defendant, Wells Fargo Bank 18 (“Wells Fargo”), aided in carrying out the fraudulent transfers. After a thorough and 19 careful de novo review of the record, this Court adopts Magistrate Judge Markovich’s 20 Report and Recommendation (“R&R”) (Doc. 22) dismissing Plaintiff’s Complaint (Doc. 21 1) with prejudice. 22 Factual Background 23 Plaintiff was the sole owner of Western International Aviation (“WIA”), a 24 business based out of Tucson, Arizona. Doc. 1 at ¶ 2. Plaintiff’s business held a 25 business checking account (account ending in -9621) with Wells Fargo. Id. at ¶ 4. On 26 September 4, 2009, one of Plaintiff’s employees opened an allegedly unauthorized 27 business savings account (account ending in -3696) at Wells Fargo without Plaintiff’s 28 knowledge. Id. at 4-7. Then, Plaintiff’s employee made two transfers totaling $79, 185.00 1 transferring the money from Plaintiffs legitimate business account into the unauthorized 2 savings account. Id. at ¶ 7. 3 Procedural History 4 On November 16, 2018, Plaintiff filed a Complaint against Wells Fargo Bank and 5 two of its employees. Doc. 1. The case was subsequently referred to Magistrate Judge 6 Markovich. Doc. 5. While under Judge Markovich, the Parties stipulated to the dismissal 7 of the Wells Fargo Bank employees, Dax McMenamin and Chris Federman, leaving 8 Wells Fargo as the sole defendant. Docs. 7 & 11. Defendant Wells Fargo responded to 9 the Complaint with a Motion to Dismiss (“Motion”). Doc. 15. The Parties filed timely 10 responses and the Motion was fully briefed as of March 25, 2019. Docs. 17 & 18. 11 Thereafter, Magistrate Judge Markovich issued an R&R recommending that this Court 12 grant Defendant’s Motion and dismiss this action with prejudice. Doc. 22. Plaintiff filed 13 Objections to the R&R and Defendant replied to Plaintiff’s objections. Docs. 23 & 24. 14 Standard of Review 15 “District judges have the power to refer a case to magistrate judge to hear and 16 determine pretrial matters before the court.” 28 U.S.C. § 636(b)(1); LRCiv. 72.1(a). 17 While magistrate judges do not have the authority to dismiss, they may prepare a [R&R] 18 to aid the district judge in the disposition of the case. § 636(b)(1)(B)-(C). After receiving 19 the magistrate judge’s R&R, the parties may file written objections to the magistrate 20 judge’s recommendation. § 636(b)(1)(C). After receiving the magistrate judge’s R&R 21 and any objections from the parties, the district judge conducts a de novo review of the 22 portions of the record to which the parties object. Id. Finally, the district judge determines 23 whether to accept, reject, or modify the magistrate judge’s recommendation. Id. 24 Legal Analysis1 25 Plaintiff’s Complaint is untimely since his claim was filed well-beyond any time 26 the statute of limitations allows. Plaintiff’s Complaint alleges a single count of 27 conversion. The statute of limitations in Arizona for a conversion action is two years. 28 1 A more detailed analysis is set forth in the R&R. Doc. 22. 1 Ariz. Rev. Stat. § 12-542(5). 2 Additionally, Arizona follows the discovery rule. The discovery rule determines 3 when the two-year time limit starts. The discovery rule states that the statute of 4 limitations begins to run when the Plaintiff knows, or in the exercise of reasonable 5 diligence, should have known of the facts giving rise to the cause of action. See Gust, 6 Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 898 P.2d 964, 966 (1995); see also 7 11333 Inc. v. Certain Underwriters at Lloyd's, London, 261 F. Supp. 3d 1003, 1024 (D. 8 Ariz. 2017), appeal dismissed, No. 17-16331, 2019 WL 2591204 (9th Cir. Jan. 30, 2019). 9 This means that a Plaintiff attempting to bring a conversion action must do so within two 10 yuers of the date that Plaintiff knew or should have known of the injury. There is no 11 dispute that the statute of limitations is two years. Thus, the dispositive inquiry is when 12 the Plaintiff knew or should have known of the unauthorized transfers causing his injury. 13 Here, the transfers took place in September of 2009. Plaintiff did not file suit until 14 November of 2018. Plaintiff, without reason, asserts that he did not actually discover the 15 transfers until 2015. Conversely, Defendant alleges that Plaintiff’s cause of action began 16 accruing sometime between September 2009, when the transfers were made, and 17 November 15, 2018, when the Complaint was filed. This Court need not venture into the 18 weeds to determine exactly when Plaintiff’s action accrued. Assuming arguendo that 19 Plaintiff’s cause of action did not accrue until November 2015, Plaintiff still waited three 20 additional years before filing his Complaint. Consequently, Plaintiff’s claim is barred by 21 the two-year statute of limitations. This Court agrees with the conclusions set forth in 22 Judge Markovich’s R&R. 23 … 24 … 25 … 26 … 27 … 28 … 1 Accordingly, IT IS HEREBY ORDERED that the R&R is ADOPTED. Plaintiff's Complaint is DISMISSED WITH PREJUDICE. The Clerk of the Court is 3 || directed to close this case and docket accordingly. 4 Dated this 19th day of November, 2019. 5 6 4] 7 Lb pL tK~ Cub 8 Honorable Raner ©. Collins 9 senior United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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