Gonzales v. National Westminster Bank PLC
847 F. Supp. 2d 567
S.D.N.Y.2012Background
- Plaintiffs allege NatWest engaged in fraud related to a BLIPS tax shelter and a purported $912 million loan to Birch Ventures.
- Birch Ventures formed in March 2000; Gonzales deposited $22.23 million and NatWest opened an account for Birch Ventures.
- On April 10, 2000, all Birch Venture funds were transferred to Logan Investment Fund managed by Presidio; account funds later misrepresented as a loan.
- Gonzales withdrew Birch Venture’s investment on June 5, 2000; NatWest allegedly returned $5,135,941, reflecting a $17,094,059 loss.
- Plaintiffs contend the loan was a sham, with fees and interest charged as if bona fide, while collateral exceeded the loan amount.
- Court provides public-domain context on BLIPS, noting that banks allegedly provided non-risky loans to facilitate the transactions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the claims are time-barred under NY CPLR statutes | Gonzales | NatWest | Untimely; claims barred |
| Whether discovery rule applies to the fraud/bid fiduciary claims | Gonzales | NatWest | Discovery rule does not save them; notice existed well before filing |
| Whether equitable tolling/fraudulent concealment tolls the limitations period | Gonzales | NatWest | Not tolled; concealment not pleaded with plausible specificity |
| Whether the complaint plausibly states fraud or fiduciary-duty claims | Gonzales | NatWest | Not plausible; claims fail on timeliness and pleading |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must be plausible)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for complaints)
- In re Salomon Analyst Winstar Litig., 373 F. Supp. 2d 241 (S.D.N.Y. 2005) (limitations issues may be addressed on motion to dismiss)
- IDT Corp. v. Morgan Stanley, 12 N.Y.3d 132 (N.Y. 2009) (fraud discovery rule applied to fiduciary claims)
- Klamath Strategic Investment Fund LLC v. United States, 472 F. Supp. 2d 885 (E.D. Tex. 2007) (NatWest did not make loans; issue of loan substance in BLIPS)
- Tayebi v. KPMG, 18 Misc. 3d 1139(A) (N.Y.Sup. Ct. 2008) (BLIPS-related claims and discovery notice considerations)