William H. Whitehead v. BBVA Compass Bank
979 F.3d 1327
| 11th Cir. | 2020Background
- Whitehead (through his son William) moved funds to BBVA Compass Bank and opened a separate brokerage account at BBVA Compass Investment Solutions (BCIS); James Puckett was Whitehead’s Compass Bank contact.
- BCIS (via investment officer Wesley McGugin) purchased a Bank of the West certificate of deposit (West CD) for Whitehead’s BCIS account.
- After ~19 months BCIS/McGugin surrendered the West CD, realizing a $38,000 loss (plus brokerage fees).
- Whitehead sued Puckett and Compass Bank (not BCIS or McGugin), alleging failure to disclose the penalty for early surrender and asserting federal securities fraud (Rule 10b-5/§10(b)) and state-law claims.
- The district court granted summary judgment for Puckett and Compass; the Eleventh Circuit affirmed, concluding the defendants’ alleged conduct did not proximately cause the loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability under §10(b)/Rule 10b-5 for failing to disclose surrender penalty | Whitehead: Puckett urged purchase and failed to disclose the early-surrender penalty, causing the loss | Puckett/Compass: They did not manage the BCIS account, did not authorize or effect the surrender, and thus are not proximate cause | Affirmed for defendants — lack of causation: the surrender (by BCIS/McGugin), not the purchase, caused the loss |
| Viability of state-law claims (negligence, breach of fiduciary duty, suppression, fraud) | Whitehead: duty and breach by omission in recommending the CD without disclosing penalty | Puckett/Compass: No duty regarding BCIS account transactions; no causal link to the surrender loss | Affirmed — state claims fail for same proximate-cause defect |
| Whether genuine factual dispute about Puckett’s role precludes summary judgment | Whitehead: disputes that Puckett recommended the CD and failed to disclose the penalty | Puckett/Compass: Even accepting Whitehead’s version, any recommendation was too attenuated from the surrender decision to be proximate cause | Even assuming disputed facts, causation is legally insufficient to defeat summary judgment |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary-judgment burden-shifting framework)
- Anderson v. Liberty Lobby, 477 U.S. 242 (standard for genuine dispute of material fact)
- Ledford v. Peeples, 657 F.3d 1222 (plaintiff must prove economic loss caused by defendant’s misrepresentation/omission in securities fraud)
- Robbins v. Koger Properties, Inc., 116 F.3d 1441 (recovery barred when misrepresentation is not proximate reason for pecuniary loss)
- Ellis v. England, 432 F.3d 1321 (mere conclusions/unsupported allegations insufficient to defeat summary judgment)