BOKF, NA v. Estes et al
Filing
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ORDER that plaintiff's motion to dismiss counterclaims (ECF No. 30 ) is GRANTED; Defendants counterclaims (ECF No. 24 ) are DISMISSED in their entirety. Signed by Judge Larry R. Hicks on 4/10/2018. (Copies have been distributed pursuant to the NEF - LH)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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BOKF, NA,
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Plaintiff,
Case No. 3:17-cv-0694-LRH-(WGC)
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v.
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ORDER
ROBERT ESTES, KAREN NILES, JERRY
CARPENTER, SHIRLEY CARVEY, and
JAMES CARPENTER and BECKY LYNN
CARPENTER as Co-Trustees of the
CARPENTER FAMILY REV TRUST UAD
1/19/14,
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Defendants.
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Before the court is plaintiff BOKF, NA’s (“BOKF”) motion to dismiss defendants’
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counterclaims (ECF No. 24). ECF No. 30. Defendants filed an opposition to the motion
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(ECF No. 35) to which BOKF replied (ECF No. 38).
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I.
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Facts and Procedural Background
Plaintiff BOKF is a federally chartered commercial bank. BOKF serves as the indenture
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trustee for conduit municipal bonds issued in the United States. Relevant to this action, BOKF
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served as the indenture trustee for a series of allegedly fraudulent conduit municipal bond
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offerings for the purchase and renovation of senior living facilities located throughout the
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Southeastern and Midwestern United States.
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Defendants are bondholders of the underlying conduit municipal bonds. On June 30,
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2017, defendants initiated arbitration against BOKF pursuant to the Code of Arbitration of the
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Financial Industry Regulatory Authority (“FINRA”) alleging that BOKF engaged in conduct
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violating federal securities laws.
On November 13, 2017, BOKF filed a complaint against defendants alleging two causes
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of action: (1) declaratory judgment that BOKF is not subject to FINRA arbitration; and
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(2) injunctive relief. ECF No. 1. In response, defendants filed counterclaims against BOKF
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alleging two causes of action: (1) declaratory judgment that BOKF is subject to FINRA
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arbitration; and (2) injunctive relief. ECF No. 24. Thereafter, BOKF filed the present motion to
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dismiss defendants’ counterclaims. ECF No. 30.
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II.
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Discussion
In its motion, BOKF contends that defendants’ counterclaims are just the “mirror image”
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of BOKF’s claims for relief and therefore, the counterclaims should be dismissed as redundant.
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See ECF No. 30. The court agrees.
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A district court “has discretion to dismiss, under Rule 12(b)(6), a declaratory relief
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counterclaim which mirrors the complaint or raises the same factual or legal issues as those
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placed at issue in the pleadings.” Englewood Lending, Inc. v. G & G Coachella Invs., LLC,
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651 F.Supp.2d 1141, 1145 (C.D. Cal. 2009); see also, Perez v. Roofing, 2016 WL 898545, at *2
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(W.D. Wash. March 9, 2016) (recognizing that “[i]n the context of counterclaims for declaratory
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relief . . . courts use their discretion to dismiss ‘mirror image’ counterclaims that are redundant
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of affirmative defenses or claims found in the complaint.”).
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Here, both parties are seeking declaratory relief regarding the propriety of the underlying
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FINRA arbitration. In particular, BOKF seeks “[a] declaration that Defendants may not bring an
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action in FINRA’s arbitration forum against BOKF since FINRA has no jurisdiction over
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BOKF.” ECF No. 1. In contrast, defendants seek “[a] declaration that FINRA has jurisdiction to
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arbitrate the claims brought by the [defendants] against BOKF in the [defendants’] claim.”
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ECF No. 24. These competing claims are the direct mirror image of each other and there is a
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complete identity of the legal and factual issues between the parties’ competing claims. As such,
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a decision on the complaint’s merits would necessarily render the counterclaims for declaratory
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relief moot. Perez, 2016 WL 898545, at *2. The only real difference between the complaint and
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the counterclaims is the factual disputes between the parties. Where the only difference between
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the parties is their “differing views of the facts” dismissal of the counterclaims is appropriate. Id.,
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at *2-3. Therefore, the court shall grant BOKF’s motion to dismiss, notwithstanding that the
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legal dispute between the parties shall remain the same.
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IT IS THEREFORE ORDERED that plaintiff’s motion to dismiss counterclaims
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(ECF No. 30) is GRANTED. Defendants’ counterclaims (ECF No. 24) are DISMISSED in their
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entirety.
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IT IS SO ORDERED.
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DATED this 10th day of April, 2018.
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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE
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