NNN Siena Office Park I 2, LLC v. Wachovia Bank National Ass'n
673 F. App'x 725
| 9th Cir. | 2016Background
- Investors sued Wachovia for securities fraud (aiding and abetting) and Holland & Hart (H&H) for breach of fiduciary duty related to a commercial property sale and holdback funds.
- Property manager GERI managed the investors’ interests and handled litigation concerning Val Southwick and frozen Holdback Funds; GERI hired Holland & Hart to pursue release of funds.
- GERI’s November 2008 quarterly report disclosed the litigation, Southwick’s involvement, and that a national law firm had been retained; later reports and expense statements showed H&H fees and invited investors to calls discussing the litigation.
- Investors filed the complaint in July 2012—more than three years after the November 2008 disclosures.
- District court granted summary judgment for Wachovia (statute of limitations) and for H&H (implied authority to retain counsel and no actionable conflict causing damages); Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations for securities/aid-and-abet fraud | Investors argued claims were timely or discovery tolled later | Wachovia argued investors should have discovered fraud by Nov 2008 so claims are time-barred | Court: claims accrued by Nov 2008; suit filed in 2012 is barred under Nevada statutes of limitation |
| Authority for H&H to represent investors in receivership | Investors argued GERI lacked authority to retain H&H to represent investors without consent | H&H (and GERI) argued GERI had implied authority and investors acquiesced to H&H’s role | Court: GERI had implied authority and investors acquiesced; H&H entitled to summary judgment |
| Breach of fiduciary duty / conflict of interest from concurrent representation | Investors claimed concurrent representation of GERI and investors created a conflict and H&H failed to disclose potential indemnity claims | H&H argued interests were aligned, no actual conflict shown, and investors produced no damages from alleged conflict | Court: No evidence of a material concurrent conflict or resultant damages; summary judgment for H&H |
Key Cases Cited
- USACM Liquidating Tr. v. Deloitte & Touche LLP, 764 F. Supp. 2d 1210 (D. Nev. 2011) (aiding-and-abetting fraud subject to same limitations as underlying fraud)
- Orr v. Bank of Am., NT & SA, 285 F.3d 764 (9th Cir. 2002) (discovery rule tolling statute of limitations)
- Siragusa v. Brown, 971 P.2d 801 (Nev. 1998) (accrual date may be decided as a matter of law when evidence is uncontroverted)
- Homes Sav. Ass’n v. Gen. Elec. Credit Corp., 708 P.2d 280 (Nev. 1985) (principal bound by agent’s acts where agent had authority)
- Dixon v. Thatcher, 742 P.2d 1029 (Nev. 1987) (agent must have actual or apparent authority to bind principal)
- Coblentz v. Riskin, 322 P.2d 905 (Nev. 1958) (definition and scope of implied authority)
- Fed. Mining & Eng’g Co. v. Pollak, 85 P.2d 1008 (Nev. 1939) (ratification by acquiescence requires principal’s knowledge and acceptance of benefits)
- Howard v. Howard, 239 P.2d 584 (Nev. 1952) (common-law fraud statute of limitations)