Metz v. Unizan Bank
649 F.3d 492
| 6th Cir. | 2011Background
- Carpenter orchestrated a Ponzi scheme (1998–2000) selling debentures in Rawhide, Serengeti, and Lomas, falsely guaranteeing >10% annual returns.
- Blair bought Rawhide debentures; Metz and Loyd bought Serengeti and Lomas debentures; funds were deposited into Carpenter-related accounts.
- Carpenter opened accounts in the banks used to execute the scheme; victims received some payments before the fraud collapsed.
- A Posen class action settled, releasing Carpenter and his daughter Ashley Carpenter from further liability; Yoder later replaced Metz as plaintiff.
- District court dismissed UCC and fraud claims as time-barred or meritless; two fraud claims against Unizan proceeded but failed at trial.
- Court addresses CAFA jurisdiction, class-certification issues, and whether a release forecloses vicarious-liability claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Should discovery rule apply to UCC claims? | Blair/Loyd seek discovery tolling for §1304.09 and §1303.16(G). | Ohio law does not permit discovery tolling for these UCC claims. | No discovery rule applied; claims time-barred. |
| Are UCC claims time-barred absent discovery rule? | No discovery rule but should toll limitations due to Ponzi facts. | Three-year limits run from accrual; 2003 cutoff reached by 2005/2008 filing. | UCC claims time-barred. |
| Should Blue Sky fraud apply to Metz/Loyd fraud claims? | Common-law fraud could apply regardless of securities sale label. | Blue Sky statute governs securities-based fraud claims. | Blue Sky statute applies; claims untimely. |
| Did CAFA jurisdiction survive denial of class certification? | CAFA jurisdiction may be divested by denial of class status. | Jurisdiction remains; filing date matters for CAFA. | Jurisdiction retained post-denial of class certification. |
| Does the Ashley Carpenter release bar Unizan's vicarious-liability claim against Yoder? | Release should not extinguish all liability against employer for conspiracy. | Release of the servant extinguishes the master’s liability under subrogation. | Release extinguished Yoder's conspiracy claim against Unizan. |
Key Cases Cited
- Wyser-Pratte Mgmt. Co. v. Telxon Corp., 413 F.3d 553 (6th Cir. 2005) (blue sky limitations apply to fraud arising from sale of securities)
- Investors REIT One v. Jacobs, 46 Ohio St.3d 176 (Ohio 1989) (discovery rule timing in certain Ohio claims)
- Collins v. Sotka, 81 Ohio St.3d 506 (Ohio 1998) (accrual and discovery rules in Ohio)
- Ferritto v. Alejandro, 139 Ohio App.3d 363 (Ohio Ct. App. 2000) (blue sky limitations generally applicable to securities-related fraud)
- Nickels v. Koehler Mgmt. Corp., 541 F.2d 611 (6th Cir. 1976) (precedent considered on blue sky applicability)
- Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) (CAFA jurisdiction concepts after class-cert denial)
- United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union v. Shell Oil Co., 602 F.3d 1087 (9th Cir. 2010) (CAFA jurisdiction and class action prerequisites)