2012 Ohio 3424
D. Ariz.2012Background
- Plaintiff Florin V. Ivan has a $229,000 line of credit with Wells Fargo secured by real property.
- As of March 22, 2011, Ivan owed $102,000 on the line; on March 23, 2011 he attempted to draw an additional $126,000.
- Wells Fargo refused the $126,000 draw but later disbursed $500 at Ivan's request the same day.
- Ivan sues Wells Fargo for breach of the covenant of good faith and fair dealing, Arizona Consumer Fraud Act (Doe), and tortious interference/negligence by unknown Does.
- Wells Fargo moves to dismiss under Rule 12(b)(6) for failure to state a claim; the court addresses both Wells Fargo claims and Doe defendants.
- The court denies Wells Fargo’s motion to dismiss the 12(b)(6) claims and outlines a procedure for identifying and amending Doe defendants in Counts 2 and 3.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the covenant claim survives 12(b)(6). | Ivan alleges the loan contract allows advances and Wells Fargo’s refusal breached good faith. | Wells Fargo argues the contract permits reductions/suspensions under six listed reasons and Ivan must plead none apply. | The claim survives; contract allows discretion but failure to honor advances can breach good faith. |
| Doe defendants—whether discovery to identify Does is permissible. | Discovery should identify Doe defendants; unlimited Does allowed. | Doe discovery should be limited or not allowed; raise discovery issues later. | Limited discovery to identify Does may be allowed; court rejects unlimited Doe approach and requires a staged plan. |
| Whether the court should dismiss Doe-related claims at this stage. | Doe claims should proceed with identification. | Doe claims should be dismissed absent proper identity. | Doe-related matters not dismissed; procedural plan required for identifying and amending Doe defendants. |
Key Cases Cited
- Southwest Sav. & Loan Ass'n v. SunAmp Sys., 838 P.2d 1314 (Ariz. App. 1992) (breach of implied covenant possible despite contractual discretion to freeze credit line)
- Bike Fashion Corp. v. Kramer, 46 P.3d 431 (Ariz. App. 2002) (implied covenant breach possible when actions contradict justified expectations)
- Gillespie v. Civiletti, 629 F.2d 637 (9th Cir. 1980) (recognizes limited discovery to identify Does in appropriate circumstances)
- Shwarz v. United States, 234 F.3d 428 (9th Cir. 2000) (recognizes 12(b)(6) standard and fact-acceptance for purposes of motion)