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Trudel v. Suntrust Bank

United States District Court, District of Columbia

January 25, 2018

DEBORAH A. TRUDEL, et al., Plaintiffs,
v.
SUNTRUST BANK, et al., Defendants.

          MEMORANDUM OPINION

          JAMES E. BOASBERG United States District Judge

         This case revolves around a decades-old family saga that, as this Court observed in a previous Opinion, reads like the plot of one of John le Carré's Cold War novels. It opens in 1996 with the airport assassinations of Yevgenyi Scherban, a Ukrainian politician and businessman, and Nadejda Nikitina, his wife. Scherban left more than $100 million behind, along with three sons - Evgenyi, Ruslan, and Yevgen - who have since engaged in a global hunt for their missing inheritance.

         This latest chapter concerns but a small sliver of the family fortune - namely, one savings account held with Defendant SunTrust Bank at its Boca Raton, Florida, branch. Scherban opened this account around 1994 and deposited more than a million dollars into it. In 2003, the account was apparently closed with no funds remaining, but SunTrust has little explanation for what happened to its balance. More than twelve years later, Plaintiffs brought a twelve-count Complaint, alleging foul play. The Court has since dismissed all but two of those counts, leaving one claim for accounting and one for fraudulent concealment. After protracted discovery, both parties now moves for summary judgment. The Court will grant SunTrust's Motion, thereby closing the book on the Bank's role in this unfortunate tale.

         I. Background

         A. Factual Background

         The Court outlined the Scherban family history in detail in its previous Opinion. See Trudel v. SunTrust Bank, 223 F.Supp.3d 71, 76-81 (D.D.C. 2016). It therefore limits the discussion here to the aforementioned savings account (with terminal digits 5216) and its often puzzling transactions. As SunTrust ultimately prevails, the Court recounts these facts in the light most favorable to Plaintiffs, except to note disputes where relevant.

         At the outset, the parties debate when exactly Scherban opened this joint savings account. Plaintiffs plead that he did so around 1994, while SunTrust suggests it was opened on March 1, 1995. Compare Second Amended Complaint (SAC), ¶ 38 with ECF No. 79 (Def. MSJ), Exh. 3 (Affidavit of John A. Barry), ¶ 5. The ownership of that account is also somewhat murky, but the Court has assumed (to Plaintiffs' benefit) that Scherban designated two direct beneficiaries on the account: Nikitina and Ruslan. See Trudel, 223 F.Supp.3d at 78.

         Regardless of Ruslan's ownership status, he alleges that he “was not involved in managing” the account, “did not get any copies of any statements from SunTrust, ” and did not review any such statements. See ECF No. 31-9 (First Affidavit of Ruslan E. Scherban), ¶¶ 4-5, 10. He lacked this knowledge because Scherban's assistant, Alexei Alexeenko, was tasked with keeping tabs on the family's American financial interests. Id., ¶¶ 4, 10 (identifying Alexeenko as the “manager” of the account and speculating that copies of statements from SunTrust were “withheld by Alexeenko, who . . . concealed various documentation from [Ruslan] and from the two other heirs”).

         With Ruslan left in the dark, the account's balance slowly dwindled. Before Scherban's and Nikitina's deaths on November 3, 1996, Plaintiffs pled that the 5216 account contained over one million dollars. See SAC, ¶ 41. On December 17 of that year, SunTrust received a fax signed “N. Nikitina” requesting that the Bank transfer via wire $282, 000 from Account 5216 to a Czech Republic bank account held by a corporation, Gwynfe Holding Limited. See SAC, ¶¶ 45-46. Among other suspicious circumstances (e.g., Nikitina was deceased), the fax misspelled the name of the Czech bank and did not use SunTrust's wire-transfer form. Id., ¶¶ 52-53. Yet SunTrust employees approved the transfer anyway. Id., ¶¶ 48-51. The family discovered in 2014 or 2015 that Gwynfe was incorporated in the British Virgin Islands until its dissolution sometime after 1999. Id., ¶¶ 57-58. In addition to suing SunTrust here, Plaintiffs named Gwynfe as a Defendant, and the Clerk of Court recently entered default against it. See ECF No. 99. That transfer and Gwynfe's culpability, however, are not before the Court now.

         Given the counts that remain, the current controversy instead centers on one question: what happened to the remaining $812, 215.93 in the account? The answer is elusive. According to SunTrust, any records related to the 5216 account are long gone, as it retained such information for only seven years after closing the account. Plaintiffs have pieced together several old bank statements, but those records paint only an incomplete picture of the account's activity. A June 30, 1997, statement, for example, shows an unexplained $50, 000 debit, leaving a balance (after accrual of interest) of approximately $771, 000. See ECF No. 46-5 (Pl. Opp. to MTD), Exh. A. Then, a statement dated March 31, 2001, shows $3, 773.04 remaining. See ECF No. 71-2 (Pl. Reply to Mot. to Reopen Discovery), Exh. 5. SunTrust has little explanation of how roughly $767, 000 went missing over those nearly four years, other than casually pinning the blame on Alexeenko. See Def. MSJ at 5. For their part, Plaintiffs seem to allege that the Bank has squirreled away the cash. See SAC, ¶¶ 62-65. Finally, SunTrust reports that the account “was closed” in January 22, 2003, apparently with no money remaining. See Def. MSJ at 3; see also id., Exh. 3. It again offers no explanation of where the $3, 733 balance went, other than speculating that the funds “were withdrawn, ” perhaps by Ruslan. See ECF No. 87 (Def. Opp. to Pl. MSJ) at 8-9.

         Adding to the intrigue, Plaintiffs have also discovered a June 2002 letter, purportedly from SunTrust, sent to lawyers for Nikitina's estate. See ECF No. 81-5 (Pl. MSJ), Exh. B. The letter reports that there has been no “client-initiated” activity in the account since March 1, 1995 (i.e., the day SunTrust says that Scherban opened the account), and that the Bank's statements were repeatedly returned in the mail. Id. Defendant has no record of sending this letter, which contradicts Plaintiffs' own evidence showing withdrawals from the account between 1997 and 2001.

         B. Procedural History

         On November 6, 2015, the three sons and Scherban's and Nikitina's estates filed the present lawsuit against Defendants SunTrust, Alexeenko, Gwynfe, and Does 1 through 10 (ten unnamed individuals, including Gwynfe employees, who had facilitated the allegedly fraudulent transfer). See ECF No. 1. Since then, this suit has undergone several metamorphoses.

         One month after filing, Plaintiffs apparently feared that the Court lacked personal jurisdiction over Alexeenko, and so they stipulated to dismissing him without prejudice. See ECF No. 11 (Notice of Voluntary Dismissal). Then, following SunTrust's first motion to dismiss, the Court issued an Opinion instructing Plaintiffs to remove the estates as parties, as estates cannot bring a direct suit, and to designate instead the proper personal representative. See Estate of Scherban v. SunTrust Bank, 2016 WL 777913, at *2 (D.D.C. Feb. 26, 2016). The Second Amended Complaint, which is operative here, named Deborah Trudel (the estate representative), Ruslan, Evgenyi, and Yevgen as Plaintiffs. The Court subsequently dismissed these latter two sons, as there was no allegation that either shared a legal interest in the 5216 account. See Trudel, 223 F.Supp.3d at 81-82.

         The remaining two Plaintiffs (Trudel and Ruslan) brought twelve counts in tow, each largely related to the Bank's handling of the account between 1996 and 2003. While Tolstoy once observed that “the two most powerful warriors are patience and time, ” neither served Plaintiffs terribly well here. On December 12, 2016, this Court dismissed the lion's share of their Complaint, holding that Counts I-VII and XII were all untimely. Id. at 90. These claims - including conversion or confiscation, breach of contract, negligence, breach of fiduciary duty, fraud, unjust enrichment, money had and received, and constructive trust - thus all fell by the wayside. Id. The Court also dismissed counts for declaratory relief (Count IX) and civil conspiracy (Count XI) for failure to state a claim. Id. at 90-91, 94-95.

         That left only two counts standing: one for accounting (Count VIII) and one for fraudulent concealment (Count X). Both sides have now moved for summary judgment on the whittled-down claims but not before fighting myriad battles over discovery. The Court describes those disputes in more detail below, but given that history, it is not surprising that Plaintiffs have alternatively moved under Rule 56(d) to forestall summary judgment until they can conduct even more discovery.

         II. Legal Standard

         “When faced with cross-motions for summary judgment, the [C]ourt must review each motion separately on its own merits ‘to determine whether either of the parties deserves judgment as a matter of law.'” Family Trust of Mass., Inc. v. United States, 892 F.Supp.2d 149, 154 (D.D.C. 2012) (quoting Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003)). If the Court determines that one party is not entitled to summary judgment, it “changes tack on the cross motion and gives the unsuccessful movant ‘all of the favorable factual inferences that it has just given to the movant's opponent.'” Nucap Indus., Inc. v. Robert Bosch LLC, No. 15-2207, 2017 WL 1197104, at *6 (N.D. Ill. Mar. 31, 2017) (quoting R.J. Corman Derailment Servs., LLC v. Int'l Union of Operating Engrs., Local Union 150, 335 F.3d 643, 647-48 (7th Cir. 2003)). It is nonetheless still possible for a court to deny summary judgment to both sides.

         Summary judgment is appropriate “only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not genuinely disputed.” Airlie Foundation v. IRS, 283 F.Supp.2d 58, 61 (D.D.C. 2003) (citing Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975)); see also Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); CEI Wash. Bureau, Inc. v. DOJ, 469 F.3d 126, 129 (D.C. Cir. 2006). A fact is “material” if it is capable of affecting the substantive outcome of the litigation. See Liberty Lobby, 477 U.S. at 248; Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). A dispute is “genuine” if the evidence is such that a reasonable jury could return a verdict for the non-moving party. See Scott v. Harris, 550 U.S. 372, 380 (2007); Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at 895. “A party asserting that a fact cannot be or is genuinely disputed must support the assertion” by “citing to particular parts of materials in the record” or “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1).

         In considering a motion for summary judgment, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [its] favor.” Liberty Lobby, 477 U.S. at 255; see also Mastro v. PEPCO, 447 F.3d 843, 850 (D.C. Cir. 2006); Aka v. Wash. Hosp. Ctr., 156 F.3d 1284, 1288 (D.C. Cir. 1998) (en banc). The Court must “eschew making credibility determinations or weighing the evidence.” Czekalski v. Peters, 475 F.3d 360, 363 (D.C. Cir. 2007). To defeat summary judgment, however, an opposition must consist of more than mere unsupported allegations or denials and must be supported by affidavits, declarations, or other competent evidence, setting forth specific facts showing that there is a genuine issue for trial. See Fed.R.Civ.P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The non-movant is required to provide evidence that would permit a reasonable jury to find in its favor. Laningham v. Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987). If the non-movant's evidence is “merely colorable” or “not significantly probative, ” summary judgment may be granted. Liberty Lobby, 477 U.S. at 249-50.

         III. Analysis

         Having considerably narrowed the field, the Court now examines whether Plaintiffs' remaining two counts can survive another round. Applying Florida law, see Trudel, 223 F.Supp.3d at 82, the Court first assesses Plaintiffs' claim for an accounting before untangling their various theories of ...


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