United States District Court, W.D. Washington, Tacoma
ORDER ON DEFENDANT'S MOTION TO DISMISS
J. BRYAN United States District Judge.
matter comes before the Court on the Defendant Wells Fargo
Bank NA's (“Wells Fargo”) Motion to Dismiss.
Dkt. 11. The Court has considered the pleadings filed in
support of and in opposition to the motion and the file
case arises from Wells Fargo's alleged improper handling
of bank accounts for two trust funds, the Busey Family Lopez
Property Trust (“BFLIPT”) and the Ann Busey
Revocable Living Trust (“ABRLT”) of which the
Plaintiff, James Busey, was the co-trustee and successor
trustee, respectively. Dkt. 1-1. Wells Fargo now moves to
dismiss the case arguing that the lawsuit is barred by
collateral estoppel and that the Plaintiff's negligence
and contract claims fail as a matter of law. Dkt. 11. For the
reasons provided below, Wells Fargo's Motion to Dismiss
(Dkt. 11) should be granted, in part, and denied, without
prejudice, in part.
FACTS AND PROCEDURAL HISTORY
reviewing a motion to dismiss for failure to state a claim as
is the case here, the court is generally limited to review of
“the face of the complaint, materials incorporated into
the complaint by reference, ” and matters of which
judicial notice may be taken. In re Rigel
Pharmaceuticals, Inc. Securities Litigation, 697 F.3d
869, 876 (9th Cir. 2012). “A court may take judicial
notice of matters of public record without converting a
motion to dismiss into a motion for summary judgment, as long
as the facts noticed are not subject to reasonable
dispute.” Id. (internal quotations
omitted). The following facts are taken from the
Plaintiff's Complaint and the public record.
Wells Fargo Accounts
Complaint alleges that after the death of his parents, around
December 26, 2014, the Plaintiff went to Wells Fargo in
Chelan, Washington, where he lives, to open a checking and
savings account for the ABRLT, in his capacity of trustee.
Dkt. 1-1, at 3. It asserts that Wells Fargo filled out the
paperwork for the “Certification of Trustee, ”
that same day, December 26, 2014. Id.
Complaint maintains that around January 6, 2015, the
Plaintiff went back to Wells Fargo to open a checking and
savings account for the BFLIPT, in his capacity of
co-trustee; (the Plaintiff was one of four trustees). Dkt.
1-1, at 3. It alleges that Wells Fargo “opened the
BFLIPT checking account (ending in 9043) on January 6, 2015,
and the BFLIPT savings account (ending in 1854) on January
21, 2015.” Id. The Complaint asserts that
Wells Fargo “retrieved the Certification of Trustee
form filled out on December 26, 2014 for the ABRLT and
erroneously wrote in the account number for the BFLIPT
savings account (ending in 1854)” on the form.
Id. It maintains that Wells Fargo filled out the
wrong certification of trustee form for the BFLIPT accounts -
a “California Certification of Trustee” form for
this Washington trust and includes a wrong account number.
Id. The Complaint alleges around that same day,
January 21, 2015, Wells Fargo “retrieved the
Certification of Trustee form filled out on December 26, 2014
for the ABRLT and erroneously wrote in the account number for
the BFLIPT savings account (ending in 1854) on line 2 under
the ‘Account Information' section of the
form.” Id., at 3.
Complaint asserts that the Plaintiff, James Busey, made
“routine deposits as he was receiving checks from
closing his mother's (Ann Busey's) multiple accounts
after her passing.” Id., at 4. It maintains
that the Plaintiff went to Wells Fargo and “asked the
teller to transfer $200K out of the ABRLT checking account
and into the ABRLT savings account Plaintiff believed had
been opened pursuant to his instructions to Defendant in
December 2014.” Id. The Complaint states that
“shortly thereafter, ” he checked the account
balances and discovered that Wells Fargo had mistakenly
transferred the funds to the BFLIPT checking account.
Id. The Plaintiff went into the branch and was
informed that there was no ABRLT savings account.
Id. At that point, a savings account was opened for
the ABRLT and the money was taken out of the BFLIPT checking
account and deposited into the newly opened ABRLT savings
account. Id., at
State Court Lawsuit brought by one of the Trustees of the
BFLIPT, Jennifer Mavin, against the Plaintiff and other
13, 2016, Jennifer Mavin (the niece of the Plaintiff, a
co-trustee of the BFLIPT, and a beneficiary of the BFLIPT)
filed a lawsuit in San Juan County, Washington Superior
Court, In re Busey Family Lopez Island Property
Trust, case number 16-4-05055-5 (“State
Case”). Ms. Mavin sought an order removing the
Plaintiff, James Busey from being a co-trustee of the BFLIPT,
appointing a successor trustee, and requiring an accounting.
Dkt. 12-2. Ms. Mavin also sought declaratory relief and
Superior Court appointed an interim trustee, Marketa Vorel,
and ordered an accounting. Dkt. 1-1, at 5. As part of the
Superior Court's ordered report on September 30, 2016,
the interim trustee noted that as one of 40 discrepancies
between bank statements and trust accounting documents that
caused the interim trustee “the most concern, ”
was an “[u]nexplained deposit and withdrawal of $200,
000. On 2/5/15, the [Wells Fargo bank records for account
ending in 9043] show a $200, 000 deposit, followed by $200,
000 withdrawal on the following day, but neither transaction
is recorded in [James Busey's] records.” In re
Busey Family Lopez Island Property Trust, San Juan
County, Washington Superior Court case number 16-4-05055-5;
filed here at Dkt. 14-5. In a November 30, 2015 report, the
interim trustee stated that her “original conclusions
regarding accounting and bank records prior to September 16,
2016, have not changed: [she] suspect[s] the removed trustees
used bank account(s) to receive, hold and distribute trust
assets which have not been disclosed to all beneficiaries,
the Court or the court appointed trustee.”
Id., filed here at Dkt. 14-6.
Complaint filed in this case also alleges that during her
investigation, Ms. Vorel, approached Wells Fargo, requested
records related to BFLIPT. Dkt. 1-1, at 5. It maintains that
Wells Fargo “compounded the errors described herein by
then releasing all of [Plaintiff's] personal information
to Ms. Vorel.” Id.)
Ms. Mavin filed an amended petition in the State Case,
alleging in part, that:
[The Plaintiff here, James Busey] set up secret BFLIPT bank
accounts to hide trust income, to the detriment of his dying
brother Michael Busey [Ms. Mavin's father]. The story
devised by James Busey explaining the BLFIPT account at North
Cascades Bank is not plausible, and confirms [Ms.
Mavin's] initial suspicion that [James Busey] was buying
the cabin for himself. [James Busey] set up a BFLIPT bank
account with money lent to him from himself and the Ann Busey
Revocable Living Trust to buy the Lopez cabin, and not to
help facilitate his personal loan to [others] as he claims,
as he has provided no proof of this arrangement. The
existence of the secret BFLIPT bank account was not disclosed
to [Ms. Mavin] until her receipt of responsive records to her
subpoena of Wells Fargo bank accounts in mid-March, 2017.
In re Busey Family Lopez Island Property Trust, San
Juan County, Washington Superior Court case number
16-4-05055-5; filed here at Dkt. 14-7, at 7. In the amended
petition, Ms. Mavin added the two other BFLIPT co-trustees,
Steven Busey and Virginia Busey-Ferrari, in addition to
naming James Busey. Id. They were each added in
their capacity as co-trustees and individually as
beneficiaries of the BFLIPT. Id.
Award of Attorneys' Fees in State Court Case
the prevailing at trial in the State Case, the Plaintiff in
this case, James Busey, and the others, Steven Busey and
Virginia Busey-Ferrari, moved for an award of $345, 000 in
attorneys' fees and costs. In re Busey Family Lopez
Island Property Trust, San Juan County, Washington
Superior Court case number 16-4-05055-5; filed here at Dkt.
1-7. In a letter explaining her decision, the superior court
indicated that it would award them $184, 455.60 in
attorneys' fees and costs. Id., filed here at
Dkt. 1-8. That letter provided, in part:
In considering the equities of the parties' positions the
Court has concluded that they were more or less equal at the
inception of the litigation and remained so for some time
thereafter. The Court expressed as much in its introductory
remarks to [sic] the oral ruling at the close of [Ms.
Mavin's] case in chief on November 15, 2017. Accordingly,
the Court will not award [James Busey and the others] any
attorneys' fees for any work performed prior to the time
the North Cascades Bank (“NCB”) records were
received by Petitioner. Up until the Court ordered the sale
of the property . . . [Ms. Mavin] had a reasonable basis to
question whether or not the Trust was contractually obligated
to close that sale. Thereafter, and until she received the
NCB records, she had a reasonable basis to believe her claims
of wrongdoing by James Busey were well founded.
While [James Busey and the others] make much of the fact that
early on [Ms. Mavin] did not avail herself of every
opportunity to obtain the records she sought, and that she in
fact already had some of what she was requesting, an equally
important fact in the Court's perception of matters is
that James Busey did not, for whatever reason, demonstrate a
willingness to work proactively and with full cooperation in
meeting [Ms. Mavin's] requests. He in fact demonstrated
the opposite. That behavior only served to heighten [Ms.
Mavin's] initial concerns and suspicions, leading quickly
to the filing of the . . . Petition. Had that Petition not
been filed, enabling [Ms. Mavin] to subpoena records, it is
almost certain that James Busey would not have provided the
NCB records to [Ms. Mavin]. Ironically, those are the records
that finally provided the information which should have
resolved [Ms. Mavin's] remaining concerns about financial
wrongdoing by James Busey. Because [Ms. Mavin] elected to
pursue her claims against [James Busey and the others] after
receiving the NCB records, the Court considered the equities
to have shifted substantially in [their] favor at that point.
. . .
The Court would also note that, even after Ms. Vorel was
appointed as Interim Trustee, James Busey continued to
approach matters in an unnecessarily confrontational manner,
thereby creating doubt and suspicion even for Ms. Vorel and
unquestionably increasing [Ms. Mavin's] belief that Mr.
Busey was hiding important financial information. The fees
incurred by [James Busey and the others] in their effort to
limit Ms. Vorel to serving as a placeholder, as the Court had
intended, and for her to refrain from conducting a financial
investigation regarding the extent of Trust assets, were
perhaps unavoidable, but their effort might well have been
unnecessary if Mr. Busey had elected to cooperate ...