Wisdom et al v. Wells Fargo Bank NA

Filing 100

ORDER denying Plaintiffs' 94 Motion for Reconsideration. Signed by Judge G Murray Snow on 1/25/12.(REW)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Don M. Wisdom and Eloise Wisdom, husband and wife, 10 Plaintiffs, 11 vs. 12 13 Wells Fargo Bank NA, 14 Defendant. ) ) ) ) ) ) ) ) ) ) ) ) No. CV-10-2400-PHX-GMS ORDER 15 16 17 18 Pending before the Court is Plaintiffs’ Motion for Reconsideration. (Doc. 94). For the reasons discussed below, the motion is denied. BACKGROUND 19 The facts in this case are set forth in the order granting Defendant Wells Fargo Bank’s 20 Motion for Partial Dismissal. (Doc. 93). In that Order, the Court found that losses sustained 21 by Stand World, Plaintiff Don Wisdom’s business entity, could not be recovered in a claim 22 alleging violations under the Fair Credit Reporting Act (“FCRA”) because a business is not 23 a “consumer” under the FCRA, and because Stand World is not a party to this action. (Id.). 24 Plaintiff now claims that “Stand World and Don Wisdom operate as one entity,” that “[t]here 25 isn’t any realistic separation of interests, finances or objectives,” and that “[n]one of the 26 customary formalities are observed.” (Doc. 94 at 2–3). Plaintiff alleges that because he fails 27 to observe the corporate formalities, “[a]ny losses suffered by Stand World were also direct 28 losses to Don Wisdom” and should be recoverable as consumer losses under FCRA (Id.). 1 2 DISCUSSION 1. Legal Standard 3 Under Rule 59(e), a motion for reconsideration may be granted only on one of four 4 grounds, “1) the motion is necessary to correct manifest errors of law or fact upon which the 5 judgment is based; 2) the moving party presents newly discovered or previously unavailable 6 evidence; 3) the motion is necessary to prevent manifest injustice or 4) there is an intervening 7 change in controlling law.” Turner v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058, 1063 8 (9th Cir. 2003) (internal quotations and emphasis omitted). Motions for reconsideration are 9 disfavored and are not the place for parties to make new arguments not raised in their original 10 briefs and arguments. See Northwest Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 11 918, 925-26 (9th Cir. 1988). Nor should such motions ask the Court to “rethink what the 12 court has already thought through–rightly or wrongly.” See United States v. Rezzonico, 32 13 F. Supp. 2d 1112, 1116 (D. Ariz. 1998) (quoting Above the Belt, Inc. v. Mel Bohannon 14 Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)). 15 2. Analysis 16 Plaintiff cites case law allowing direct claims against the shareholders of corporations 17 who fail to observe the corporate formalities, or in circumstances where a small number of 18 shareholders “operated more as partners than in strict compliance with the corporate form.” 19 Johnson v. Gilbert, 127 Ariz. 410, 412, 621 P.2d 916, 918 (App. 1980). Plaintiff does not 20 allege that he operated Stand World more as a partnership than a corporation; he alleges that 21 he failed to respect the corporate form at all. In his declaration, he acknowledges that he 22 failed to appoint directors, failed to hold director or shareholder meetings, and co-mingled 23 his personal funds with Stand World’s. He states, for example, that if Stand World is unable 24 to pay the rent it owes Plaintiff as Plaintiff’s tenant, it simply does not pay, and “no 25 accounting is made of delinquent rent.” (Doc. 94-1). Plaintiff acknowledges “loaning” money 26 to and “borrowing” money from Stand World, although “[t]he loans are not ‘formalized’ by 27 documents” and are only repaid, if at all, “to me and occasionally to Brandon as salary.” 28 -2- 1 (Id.). 2 If Plaintiff’s description of his business is accurate, he is undoubtedly correct that “if 3 a judgment were entered against Stand World and Stand World could not pay the judgment, 4 the creditor could collect from Don Wisdom in an alter ego claim.” (Doc. 94). Abuse of the 5 corporate form grants creditors the right to recover from the abusing shareholder. Plaintiffs 6 offer no authority, however, suggesting that an abusing shareholder has the right to recover 7 the corporation’s losses as though they were personal losses. Plaintiff cannot recover Stand 8 World’s losses based upon the theory that he has misused the corporate form. The motion for 9 reconsideration is denied. 10 11 12 IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Reconsideration (Doc. 94) is denied. DATED this 25th day of January, 2012. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3-

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