Namer et al v. Bank of America, N.A. et al
ORDER denying 41 Motion for Reconsideration; Granting 37 Motion to Dismiss Third Amended Complaint without leave to amend. Signed by Judge Jeffrey T. Miller on 10/02/2017. (jpp)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
ROBERT NAMER; IAR COMPANY;
INFORMATION SYSTEM, INC.; and
AMERICA ACADEMY OF POOL
ORDER DENYING MOTION FOR
MOTION TO DISMISS THIRD
AMENDED COMPLAINT WITHOUT
LEAVE TO AMEND
BANK OF AMERICA, N.A.,
CASE NO. 16cv3024 JM(WVG)
Pursuant to Fed.R.Civ.P. 59(e), Plaintiffs Robert Namer, IAR Company,
18 Business Management Information System, Inc., and America Academy of Pool
19 Designers, Inc. move for reconsideration of this court’s July 10, 2017 Order Granting
20 Motion to Dismiss Second Amended Complaint Without Leave to Amend (“Order”).1
21 Pursuant to Fed.R.Civ.P. 12(b)(6), Defendant Bank of America, N.A. (“BANA”) moves
22 to dismiss the only remaining claim alleged in the Third Amended Complaint (“TAC”),
23 the aiding and abetting conversion claim. All motions are opposed. Pursuant to Local
24 Rule 7.1(d)(1), the court finds the matters presented appropriate for resolution without
25 oral argument. For the reasons set forth below, the court denies the motion for
26 reconsideration and grants the motion to dismiss the claim for aiding and abetting
The court incorporates the Order as if fully set forth herein.
1 conversion without leave to amend. The Clerk of Court is instructed to close the file.
On March 30, 2017, the court granted BANA’s motion to dismiss the claims
4 alleged in the First Amended Complaint: the negligence and aiding and abetting
5 conversion claims were dismissed as time-barred, without leave to amend, and the
6 claims for breach of contract, aiding and abetting breach of fiduciary duty and breach
7 of fiduciary duty were dismissed with leave to amend. The Second Amended
8 Complaint (“SAC”), filed on April 13, 2017, alleged three claims for relief: (1) breach
9 of contract; (2) aiding and abetting breach of fiduciary duty; and (3) beach of fiduciary
10 duty. On July 10, 2017, the court granted the motion to dismiss these claims with
On June 1, 2017, the court granted in part and denied in part Plaintiffs’ motion
13 for reconsideration of the dismissal with prejudice of the aiding and abetting
14 conversion claims. In light of the representations that Plaintiffs could allege a basis to
15 toll the statute of limitations on the aiding and abetting conversion claim, the court
16 granted leave to amend this claim, but declined to reconsider dismissal of the
17 negligence claim. On June 9, 2017, Plaintiffs filed the TAC asserting the same three
18 claims alleged in the SAC, in addition to the aiding and abetting conversion claim.
The Motion for Reconsideration
Reconsideration is generally appropriate “if the district court (1) is presented
21 with newly discovered evidence, (2) committed clear error or the initial decision was
22 manifestly unjust, or (3) if there is an intervening change in controlling law. . . . There
23 may also be other, highly unusual circumstances warranting reconsideration." School
24 Dist. No. 1J, Multnomah County, Oregon v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.
25 1993) (citations omitted); Fed.R.Civ.P. 60(b) and 59(e).
Plaintiffs primarily contend that when, upon reconsideration, the court granted
27 leave to file an amended claim for aiding and abetting conversion, the claims in the
28 SAC were rendered moot and the operative claims replaced by those alleged in the
1 TAC. This argument is not persuasive for two reasons. First, the court granted leave
2 to amend the claim for aiding and abetting conversion, and not the other claims alleged
3 in the SAC. Second, the claims (breach of contract, aiding and abetting breach of
4 fiduciary duty, and beach of fiduciary duty) and supporting allegations in both
5 complaints are the same. Accordingly, consistent with Fed.R.Civ.P. 1, the court’s
6 order dismissing the SAC’s claims applies equally to the same claims alleged in the
In sum, the motion for reconsideration is denied.
9 The Aiding and Abetting Conversion Claim
This court’s March 30, 2017 order dismissed the aiding and abetting conversion
11 claim as both time-barred and on the merits. The court concludes that the TAC
12 adequately alleges grounds to toll the three-year statute of limitations. See Cal.
13 Civ.Pro. §338(c). Plaintiffs allege that the statute of limitations was tolled during
14 (1) the period of disability caused by the severity of Namer’s stroke; (2) the pursuit of
15 Plaintiffs’ claims against BANA in the district court of Louisiana; and (3) the period
16 during which Plaintiffs and BANA pursued purported settlement negotiations. (TAC
17 ¶¶ ). The court now turns to the merits of Plaintiffs’ aiding and abetting conversion
A civil cause of action for aiding and abetting “necessarily requires a defendant
20 to reach a conscious decision to participate in tortious activity for the purpose of
21 assisting another in performing a wrongful act. A plaintiff's object in asserting such a
22 theory is to hold those who aid and abet in the wrongful act responsible as joint
23 tortfeasors for all damages ensuing from the wrong.” Howard v. Superior Court, 2
24 Cal.App.4th 745, 749 (1992). Liability for aiding and abetting an intentional tort arises
25 if the defendant substantially assists or encourages another party to act, with the
26 knowledge that the other party's conduct constitutes a breach of duty. See Casey v.
27 U.S. Nat. Bank Ass’n, 127 Cal.App.4th 1138, 1144 (2005). “The words ‘aid and abet’
28  have a well understood meaning, and may fairly be construed to imply an intentional
1 participation with knowledge of the object to be attained.” Lomita Land Water Co. v.
2 1146 Robinson , 154 Cal. 36, 97 P. 10 (1908).
In Casey, the Court of Appeal explained that “even the ‘ordinary business
4 transactions’ a bank performs for a customer can satisfy the substantial assistance
5 element of an aiding and abetting claim if the bank actually knew those transactions
6 were assisting the customer in committing a specific tort. Knowledge is the crucial
7 element.” Casey, 127 Cal.App.4th at p. 1145. The plaintiff bankruptcy Trustee in
8 Casey sought to impose aiding and abetting liability on several banks by alleging that
9 the banks allowed certain officers and directors of DFJ Fiduciaries to divert more than
10 $36 million in investor funds. The Trustee alleged that the banks allowed the
11 fraudsters to open accounts with invalid tax identification numbers; permitted the
12 fraudsters to remove $6 million from the cash vaults in violation of banking regulations
13 and internal policies; allowed “obviously forged negotiable instruments” to be paid;
14 knew that the DFJ Fiduciaries were engaged in wrongful or illegal conduct, including
15 unauthorized cash withdrawals from the banks; acted with knowledge of the primary
16 wrongdoing and knew that their conduct would assist in accomplishing the wrongful
17 conduct; and ignored the face value of checks by paying sums in excess of such limits.
18 Id. at 1142. The Trustee also alleged, in conclusory fashion, that “each [bank] acted
19 with knowledge of the primary wrongdoing and realized that its conduct would
20 substantially assist the accomplishment of the wrongful conduct.” Id. at 1153. In
21 short, the Trustee alleged that the banks “knew something fishy was going on” because
22 the DFJ Fiduciaries opened accounts in the names of fraudulent entities, used forged
23 checks, and removed unreported amounts of cash from the bank in unmarked duffel
24 bags. Id. at 1149. These allegations, the Court of Appeal concluded, fell short of
25 establishing aiding and abetting liability because the allegations failed to establish the
26 banks’ actual knowledge of the primary wrongful conduct at the time of the
As in Casey, the conclusory allegations set forth in the TAC fail to allege that
1 BANA actually knew that Lahlou was engaged in a fraudulent scheme on June 4, 2013,
2 when she removed Namer as an authorized signer on the banks accounts, and fail to
3 adequately establish that BANA had actual knowledge of Lahlou’s primary wrong:
4 wrongfully removing Namer as an authorized signer on the accounts in order to
5 fraudulently deplete the funds in the Corporate Accounts. The signature cards establish
6 that Lahlou removed Namer as an authorized signer on June 4, 2013. The removal of
7 an authorized signer on an account is a lawful, routine commercial transaction. While
8 Plaintiffs allege that BANA followed the instructions of Lahlou in removing him from
9 the accounts, such an allegation falls short of establishing that BANA knew on June 4,
10 2013, that Lahlou was engaged in a fraudulent scheme to drain the Corporate Plaintiffs’
11 bank accounts.2 Lahlou, as an authorized signer on the accounts, was authorized to
12 remove co-signers on the accounts. The TAC alleges that it was not until September
13 9, 2013, that Namer informed BANA that LahLou was engaged in “a hostile and
14 fraudulent takeover of the Corporate Plaintiffs.” (TAC ¶52). This, and related
15 allegations, are insufficient to establish BANA’s actual contemporaneous knowledge
16 of Lahlou’s fraudulent scheme, and thus fail to state a cause of action for aiding and
17 abetting conversion.
In sum, the court denies the motion for reconsideration and dismisses the aiding
19 and abetting conversion claim with prejudice and without further leave of court. The
20 Clerk of Court is instructed to close the file.
IT IS SO ORDERED.
22 DATED: October 2, 2017
Hon. Jeffrey T. Miller
United States District Judge
Upon learning of Lahlou’s alleged fraud on June 6, 2013, the Corporate
27 Plaintiffs, all entities allegedly controlled by Namer, fail to explain why corporate
resolutions were not drafted to immediately remove Lahlou as an authorized signer on
28 the accounts. Corporate Plaintiffs could have obtained the sought-after relief within
hours, instead of pursing protracted litigation.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?