Bank of the West v. Whitney, 2:17-cv-00210

Background

Bank of the West (BOTW) holds a state-court judgment (2012) against BNB Development and guarantors, including Newell Whitney, and previously sued in federal case No. 2:15-cv-622 (BOTW I) to collect on that judgment.
In BOTW I, BOTW sought to amend late to add fraudulent-transfer, resulting-trust, and alter-ego claims; the court denied leave to amend as untimely and prejudicial.
BOTW filed the present separate federal action asserting essentially the same claims it had sought to add in BOTW I. Defendants moved to dismiss.
The district court dismissed Claims 1–2 in the present case as impermissible claim-splitting (preclusion) and dismissed Claims 3–7 for lack of standing because, without Claims 1–2, BOTW could not show the injury was fairly traceable to the remaining defendants.
BOTW moved under Rule 59(e) to (I) reinstate Claims 3, 5–7 and stay the case pending resolution of BOTW I and (II) to reverse the standing ruling; defendants sought attorneys’ fees. The court denied both motions and declined to award fees.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the court should alter its dismissal of Claims 3,5,6 & 7 and stay the case	BOTW: dismissal effectively bars claims due to looming statutes of limitations; stay pending BOTW I will avoid manifest injustice	Defs: court lacks jurisdiction without standing and cannot stay a case without jurisdiction	Denied — court lacks jurisdiction to stay and will not reinstate those claims; dismissal without prejudice remains appropriate
Whether the court should reverse its ruling that BOTW lacks standing for Claims 3–7	BOTW: at pleading stage allegations (resulting trust/alter ego) should be accepted as true; BOTW has adequately alleged injuries fairly traceable to defendants	Defs: dismissal of alter ego/resulting trust claims precludes relying on them to establish traceability; standing was squarely raised earlier	Denied — claim-splitting preclusion removed those core allegations; without them injury is not fairly traceable to the defendants
Whether BOTW’s failure to raise standing earlier justifies denying reconsideration	BOTW: only later appreciated jurisdictional consequence and thus sought reconsideration	Defs: BOTW could and should have raised standing in prior briefing; late arguments are improper on Rule 59(e)	Denied — motions were procedurally improper and arguments could have been raised earlier
Whether attorneys’ fees should be awarded for BOTW’s motions	BOTW: motions sought to preserve claims, not to harass	Defs: seek fees under 28 U.S.C. §1927 and inherent powers for vexatious, bad-faith filings	Denied — conduct did not meet the high threshold for §1927 or inherent-bad-faith sanctions; counsel’s conduct deemed dilatory but not sanctionable

Key Cases Cited

Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury, traceability, redressability)
Servants of the Paraclete v. Does, 204 F.3d 1005 (standards for reconsideration under Rule 59(e))
Southern Utah Wilderness Alliance v. Palma, 707 F.3d 1143 (pleading-stage standing accepts well-pled allegations)
Webber v. Mefford, 43 F.3d 1340 (Rule 59(e) corrects manifest errors or presents new evidence)
Chambers v. NASCO, Inc., 501 U.S. 32 (courts’ inherent power to sanction bad-faith conduct)
Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (awarding fees under inherent power requires specific findings)