Opinion
Case No. 2:21-CV-1619 JCM (NJK)
2023-04-06
NEVADA INTEGRATED BEHAVIORAL SERVICES, INC., Plaintiff(s), v. WELLS FARGO BANK, N.A., Defendant(s).
Liborius I. Agwara, Law Offices of Libo Agwara, Ltd., Las Vegas, NV, Peter Maitland Angulo, Angulo Law Group, LLC, Las Vegas, NV, for Plaintiff(s). Kelly H. Dove, Tanya N. Lewis, Snell & Wilmer L.L.P., Las Vegas, NV, for Defendant(s).
Liborius I. Agwara, Law Offices of Libo Agwara, Ltd., Las Vegas, NV, Peter Maitland Angulo, Angulo Law Group, LLC, Las Vegas, NV, for Plaintiff(s). Kelly H. Dove, Tanya N. Lewis, Snell & Wilmer L.L.P., Las Vegas, NV, for Defendant(s). ORDER James C. Mahan, UNITED STATES DISTRICT JUDGE
Presently before the court is defendant Wells Fargo Bank ("Wells Fargo")'s motion for summary judgment. (ECF No. 16). Plaintiff Nevada Integrated Behavioral Services, Inc. ("NIBS") filed a response (ECF No. 20), to which Wells Fargo replied (ECF No. 21).
I. Background
NIBS brings a single claim for conversion against Wells Fargo. (ECF No. 1-1). NIBS seeks to hold Wells Fargo responsible for hundreds of allegedly unauthorized transactions from NIBS's business deposit account. (See id.).
There is no genuine dispute as to the following material facts. NIBS has maintained a business checking account with Wells Fargo since February 12, 2015. Beginning at some point in 2017, until February 2020, hundreds of allegedly unauthorized electronic disbursements were made from NIBS's account. NIBS's primary principal noticed the missing funds, and subsequently lodged a complaint with Wells Fargo on April 16, 2020. (ECF No. 19-5). Wells Fargo denied a substantial portion of NIBS's claim because too much time had passed before Wells Fargo was notified. (Id.). Pursuant to the account agreements, NIBS was required to notify Wells Fargo of any errors or unauthorized transactions within 30 days after each monthly statement was made available. (ECF Nos. 17-1, 17-2). Wells Fargo now moves for summary judgment on NIBS's sole claim for conversion. (Id.).
The disbursements relate to monthly bills paid for an individual named Christopher Green. NIBS also contends that some transactions relate to another individual with a name similar to the owner of NIBS.
"[NIBS is] obligated to . . . [n]otify [Wells Fargo] within 30 days after [Wells Fargo] ha[s] made [NIBS's] account statement available to [NIBS] of any unauthorized transaction on [NIBS's] account." (ECF Nos. 17-1, 17-2).
II. Legal Standard
The Federal Rules of Civil Procedure allow summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
For purposes of summary judgment, disputed factual issues should be construed in favor of the non-moving party. Lujan v. Nat'l Wildlife Fed., 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). However, to be entitled to a denial of summary judgment, the non-moving party must "set forth specific facts showing that there is a genuine issue for trial." Id.
In determining summary judgment, the court applies a burden-shifting analysis. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000). Moreover, "[i]n such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." Id.
By contrast, when the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the non-moving party's case; or (2) by demonstrating that the non-moving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24, 106 S.Ct. 2548. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the non-moving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970).
If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).
In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex, 477 U.S. at 324, 106 S.Ct. 2548.
At summary judgment, a court's function is not to weigh the evidence and determine the truth, but to determine whether a genuine dispute exists for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The evidence of the nonmovant is "to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255, 106 S.Ct. 2505. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See id. at 249-50, 106 S.Ct. 2505.
The Ninth Circuit has held that information contained in an inadmissible form may still be considered for summary judgment if the information itself would be admissible at trial. Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 2003) (citing Block v. City of Los Angeles, 253 F.3d 410, 418-19 (9th Cir. 2001) ("To survive summary judgment, a party does not necessarily have to produce evidence in a form that would be admissible at trial, as long as the party satisfies the requirements of Federal Rules of Civil Procedure 56.")). . . . .
III. Discussion
Wells Fargo moves for summary judgment, arguing that NIBS's claim for conversion is unsupported by evidence, legally insufficient, and untimely. (See ECF No. 16).
As an initial matter, NIBS contends that the exhibits supplemented by Wells Fargo should not be considered because they are not properly authenticated. (ECF No. 20 at 4). However, proper authentication of evidence is not necessary at this stage of the proceedings. See Fraser v. Goodale, 342 F.3d at 1036. Thus, the court may consider the exhibits. NIBS also argues that summary judgment is premature because Wells Fargo has failed to participate in discovery. (ECF No. 20 at 5). The court is not persuaded; Wells Fargo has provided NIBS with the required Rule 26 disclosures and ample responses to written discovery.
A. NIBS's Claim for Conversion Fails as a Matter of Law
Nevada's version of the Uniform Commercial Code ("UCC") is codified in NRS Chapters 104 and 104A. See NRS 104.1101 et seq. Article 4 governs liability of a bank for events related to payments handled by the bank. See NRS 104.4102. Specifically, "NRS 104.4406 regulates the relationship between a bank and its customers concerning losses sustained due to unauthorized activity in the customer's bank account." C. Nicholas Pereos, Ltd. v. Bank of Am., N.A., 131 Nev. 436, 352 P.3d 1133, 1135 (2015).
The statute, like the account agreements, absolves a bank of liability for an unauthorized transaction when (1) it provides the customer with information sufficient to identify any unauthorized transactions, and (2) the customer subsequently fails to timely act in response. See C. Nicholas Pereos, Ltd., 352 P.3d at 1135; NRS 104.4406. Once the necessary account information is provided, the customer must "exercise reasonable promptness" in examining the information and notifying the bank of any unauthorized transactions. C. Nicholas Pereos, Ltd., 352 P.3d at 1135; NRS 104.4406(3).
Here, Wells Fargo provided NIBS with account statements every month exhibiting the disputed transactions that were sufficient for NIBS to identify the alleged unauthorized transactions. (See ECF Nos. 17-3, 18-1, 18-2). NIBS had a duty to review the monthly statements and promptly notify Wells Fargo of any unauthorized transactions after each monthly statement was made available to it. See NRS 104.4406. It is immaterial that NIBS's owner was "in and out of the country, running several prosperous businesses." (See ECF No. 20). Indeed, NIBS does not dispute its failure to review the relevant monthly statements and promptly notify Wells Fargo of any unauthorized transactions. (See id.).
The disputed transactions began sometime in 2017, until February 2020. (ECF No. 1). NIBS lodged its first dispute to Wells Fargo on April 16, 2020. (See ECF No. 19-5). The court finds that NIBS failed to exercise the requisite promptness in examining its monthly statements and notifying Wells Fargo of any unauthorized transactions as they relate to the $141,298.17 in charges. See NRS 104.4406; (ECF Nos. 17-1, 17-2). Thus, there remains no genuine issue of material fact, and summary judgment is appropriate.
Wells Fargo did not deny all NIBS's claims. Rather, it only denied NIBS's claims as they related to charges that were untimely raised from the date of the initial dispute—April 16, 2020.
IV. Conclusion
Accordingly,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that Wells Fargo's motion for summary judgment (ECF No. 16) be, and the same hereby is, GRANTED.