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Bofi Federal Bank v. Advance Funding LLC

United States District Court, W.D. Washington, Seattle

April 28, 2015

ADVANCE FUNDING LLC, et al., Defendants.



Before the Court is Defendants' Motion for Summary Judgment of Dismissal [29], filed on February 19, 2015. The Motion is fully briefed and ripe for resolution. For the reasons set forth below, Defendants' Motion is granted.

I. Factual and Procedural Background

This case concerns the lottery winnings of Sheena Venzant, [1] who on November 16, 2011, won the Washington State "Lucky for Life" lottery drawing, which entitled her to received $52, 000 annually for the rest of her life or a lump sum payment of $750, 000. Venzant elected to receive $52, 000 annually. Decl. of Sheena Venzant [30] ("Venzant Decl.") ¶ 2; Decl. of Daniel Hefner [39] ("Hefner Decl."), Ex. A. After winning the lottery, Venzant was contacted by various companies with offers to provide her a lump sum payment in return for assignment of her future lottery payments. Venzant Decl. ¶ 3. Venzant discussed an agreement with McLloyd Onwubere, then an employee of Plaintiff BOFI Federal Bank ("BOFI"). Id. On March 7, 2012, Venzant entered into an agreement ("the Agreeement") with BOFI to assign twenty-five annual payments of $47, 000 each to BOFI in return for a lump sum payment of $318, 40175. Id. ; Hefner Decl., Ex. C., p. 18, Ex. D, p. 10, Ex. F. The first payment to BOFI was to be due on November 16, 2012. Hefner Decl., Ex. D, p. 10. BOFI was to provide a lump sum payment to Venzant no later than three business days after the satisfaction of the conditions precedent listed in the Agreement. Hefner Decl., Ex. C, p. 13.

On the same date Venzant also entered into a "Life Contingent Payment Addendum" in which Venzant agreed to cooperate with BOFI to obtain a life insurance agreement that would pay benefits to BOFI should Venzant die prior to the payment of the twenty-five annual payments of $47, 000 that Venzant had agreed to assign to BOFI. Hefner Decl., Ex. D. On June 14, 2012, Venzant received a letter acknowledging the purchase of such a life insurance policy. Hefner Decl., Ex. I. BOFI made the first policy payment of $3308 on September 14, 2012. Hefner Decl. ¶ 11. The policy contained an incontestability provision (which took effect after two years) and a suicide exclusion (which expired after two years). Hefner Decl., Ex. I at 9. According to BOFI, due to regulatory constraints with respect to speculative investments, it was constrained from paying Venzant the lump sum contemplated by the Agreement until the two years had run. Hefner Decl. ¶ 12. According to Venzant, she never agreed to a delay in receiving the lump sum payment. Venzant Decl. ¶ 5.

On March 9, 2012, and March 14, 2012, BOFI filed a UCC Financing Statement and Financing Statement Amendment, respectively, providing public notice of the BOFI agreement. Hefner Decl., Exs. G and H.

Between March 7, 2012, and October 12, 2012, BOFI paid Venzant $15, 750 as "advances." Hefner Decl. ¶ 16, Hefner Decl., Ex. B, Venzant Decl., Ex. C.

At this point the facts presented by the parties differ dramatically. According to Defendants, who provide Venzant's declaration, Venzant became "increasingly unhappy and frustrated" because "month after month passed, and I still had not received the lump sum payment." Venzant Decl. ¶¶ 4-5. Venzant states that on February 5, 2013, she wrote a letter to BOFI purporting to cancel the Assignment and life insurance policy. Venzant Decl. ¶ 5, Venzant Decl., Ex. C. In the letter Venzant stated that she would pay back the $15, 000 advances and $3, 308 life insurance premium; however, according to Plaintiff, Venzant has not done so. Venzant Decl., Ex. C; Hefner Decl. ¶ 23. Several months later, Venzant contacted an account representative at Defendant Advance Funding LLC, Barbara Guerra, and agreed to assign her lottery winnings to Advance Funding. Venzant Decl. ¶¶ 8, 10. Venzant entered into an agreement with Advance Funding on or about May 17, 2013. Decl. of Dan Cevallos [31] ("Cevallos Decl.") ¶ 3. Venzant states that while she had spoken to Guerra when she was being solicited shortly after winning the lottery, she did not consult Guerra prior to cancelling her agreement with BOFI, and no one at Advance Funding attempted to persuade her to cancel her agreement with BOFI. Venzant Decl. ¶ 9. According to Defendant Advance Funding Venzant assured Advance Funding that she did not have "conflicting commitments" and provided a copy of the letter she had sent to BOFI. Cevallos Decl. ¶ 3.

According to Plaintiff, there is no evidence that Venzant's letter purporting to cancel the Agreement was sent, and Plaintiff denies ever receiving the letter. Hefner Decl. ¶ 18, Hefner Decl., Ex. B. Plaintiff also denies any knowledge that Venzant intended to cancel her agreement with BOFI until February, 2014. Hefner Decl. ¶¶ 18, 22. Plaintiff provides further evidence in the form of an internal customer information sheet for Venzant, in which Plaintiff's employee, Chrus Husong, made notes indicating that he continued to speak to Venzant throughout April and May 2013, that Venzant requested further advances, and that Plaintiff sent her approximately $350 in gift cards during this period. Hefner Decl., Ex. B. Plaintiff states that it was not aware of Venzant's agreement with Advance Funding until February 2014 when it contacted the Washington Lottery to verify processing information. Hefner Decl. ¶ 22. Plaintiff also argues that Defendant Advance Funding should have known of the Agreement with BOFI given the UCC financing statement filed by Plaintiff. Pl.'s Opp'n at 7.

Plaintiff filed their Complaint on April 2, 2014. Plaintiff brought claims of tortious interference with a contract and unjust enrichment. Plaintiff sought declaratory relief, money damages, attorney's fees, and costs. Defendants filed their motion for summary judgment on February 19, 2015, prior to discovery.

II. Standard of Review

Defendant moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. "The court shall grant summary judgment if the movant shows 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). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The court "should review all of the evidence in the record... [and] draw all reasonable inferences in favor of the nonmoving party." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). A genuine issue for trial exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, "[t]he mere existence of a scintilla of evidence" in support of a nonmoving party's position is not sufficient to create a genuine issue of material fact. Anderson, 477 U.S. at 252.

III. Analysis

Defendants argue that Plaintiff's tortious interference with contract claim fails because the Agreement between Plaintiff and Venzant is not a valid contract, and ...

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