Gibilisco et al v. Wells Fargo & Company

Filing 39

ORDER granting 28 Motion to Dismiss without prejudice. The Clerk shall promptly close this case if no amended complaint is filed by November 3, 2014. Signed by Judge Jeffrey A. Meyer on 10/03/2014. (Ramesh, S)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

PAUL GIBILISCO, TRUSTEE OF THE
GIBILISCO TRUST DATED 2/5/1996, and
PIDRU FAMILY LIMITED PARTNERSHIP
UNDER AGREEMENT DATED 6/26/1995,
Plaintiffs,

No. 3:14-cv-00294 (JAM)

v.
WELLS FARGO BANK, N.A.,
Defendant.

ORDER GRANTING MOTION TO DISMISS WITHOUT PREJUDICE
Plaintiffs are investors who claim that their investment manager failed to follow their
investment guidance and instructions. In late 2007 and early 2008, the parties signed Investment
Management Agreements, which in turn incorporated Investment Policy Statements. Although
these documents reflect plaintiffs’ wish to invest predominantly in equities, plaintiffs claim that
that they orally requested and were assured repeatedly that their funds would be 80% invested in
high-quality corporate bonds and 20% high-quality, dividend-paying stocks. Plaintiffs further
claim significant market losses following the downturn of the stock market in 2008.
Plaintiffs concede that Nevada law governs and that the Nevada parol evidence rule (see,
e.g., Khan v. Baksh, 306 P.3d 411, 413-14 (Nev. 2013)) bars relief on the basis of oral
representations by defendant that preceded or were contemporaneous with the parties’ entry into
the Investment Management Agreements and the corresponding Investment Policy Statements.
Instead, plaintiffs contended at oral argument that they seek recovery solely on grounds that the
parties agreed to a subsequent oral modification of their written agreements. The Court

concludes, however, that the Amended Complaint (Doc. #24)—even when viewed in the light
most favorable to plaintiffs—does not fairly allege a subsequent oral modification of the parties’
written Investment Management Agreements. It is clear that the Amended Complaint was
drafted without the limitations of the parol evidence rule in mind, as it alleges that defendant
failed from the very start of the investment relationship to follow plaintiffs’ risk tolerances and
investment preferences and objectives.
Accordingly, because the Amended Complaint states facts for which recovery would be
barred by the Nevada parol evidence rule, the Court dismisses the Amended Complaint for
failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). On the other hand, because defendant
concedes that Nevada law allows in principle for a subsequent oral modification of a written
agreement, the Court cannot conclude that the filing of an amended complaint would be
necessarily futile.
For the foregoing reasons, defendant’s motion to dismiss is GRANTED. If a proper
factual basis exists to file an amended complaint, see Fed. R. Civ. P. 11(b)(3), then plaintiffs may
file an amended complaint on or before November 3, 2014. The Clerk of Court shall promptly
close this case if no amended complaint is filed on or before November 3, 2014.

It is so ordered.
Dated at Bridgeport this 3rd day of October 2014.

/s/
Jeffrey Alker Meyer
United States District Judge