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Vegas Diamond Properties, LLC, A Nevada Limited v. Omar Benjamin Wiggins

April 18, 2012


The opinion of the court was delivered by: Hayes, Judge:


The matter before the Court is the Motion for Summary Judgment filed by Defendant Omar Benjamin Wiggins. (ECF No. 117).


I. Procedural Background

On January 8, 2010, Plaintiffs Vegas Diamond Properties, LLC ("Vegas Diamond") and Johnson Investments, LLC initiated this action by filing a Complaint in Nevada state court against La Jolla Bank and Action Foreclosure Services. (Ex. A, ECF No. 1-2). On January 13, 2010, Defendants removed the action to the United States District Court for the District of Nevada. (ECF No. 1). On April 22, 2010, the Federal Deposit Insurance Corporation ("FDIC") moved to be substituted as receiver for La Jolla Bank and moved for a change of venue to the Southern District of California. (ECF Nos. 15, 16). On June 3, 2010, the FDIC was substituted as receiver, and the action was transferred to this Court. (ECF No. 24).

On July 14, 2011, Plaintiffs filed a First Amended Complaint ("Complaint") against Defendants La Jolla Bank, the FDIC as receiver for La Jolla Bank, Action Foreclosure Services, Omar Benjamin Wiggins, Rick Hall, Martin Rodriguez, Frank Warren, R.W. Loveless, and Lynn Hein. (ECF No. 94). The Complaint relates to loans made by La Jolla Bank to Plaintiffs, the proceeds of which Plaintiffs loaned to real estate developer Robert Dyson for use on a development project in Anza, California. Plaintiffs allege that Defendants concealed material information regarding problems with the Anza project and Dyson's lengthy financial history with La Jolla Bank. Plaintiffs allege that Wiggins was "an accountant/ bookkeeper" for Dyson who was "intricately involved" with Dyson and La Jolla Bank "to the detriment of Plaintiffs" in negotiating and structuring the subject loans. Id. at ¶¶ 5, 30. Plaintiffs allege claims against Wiggins for: (1) fraudulent concealment; (2) negligence; (3) civil conspiracy; (4) aiding and abetting deceit; (5) intentional misrepresentation; and (6) tortious breach of the implied covenant of good faith and fair dealing.

On January 5, 2012, the claims of Plaintiff Johnson Investments, LLC were dismissed for failure to substitute counsel in compliance with Civil Local Rule 83.3. (ECF No. 130).

On December 14, 2011, Defendant Frank Warren was dismissed from the case without opposition from Plaintiffs. (ECF No. 124). On February 9, 2012, Defendants Action Foreclosure Services, Rick Hall, Martin Rodriguez, R.W. Loveless, and Lynn Hein were dismissed on the grounds that Plaintiffs failed to serve those defendants. (ECF No. 136). On February 28, 2012, Defendant FDIC, as Receiver for La Jolla Bank, was dismissed pursuant to 12 U.S.C. § 1823(e). (ECF No. 141).

On November 21, 2011, Defendant Wiggins filed a Motion for Summary Judgment asserting that he did not knowingly conceal any facts or make any false statements regarding the subject loans and that Plaintiff Vegas Diamond was aware of all material facts relating to the loans. (ECF No. 117). Defendant asserts that he was "only an independent contractor who provided services to the companies owned by Robert Dyson" and that he "was not present nor involved in any discussions or negotiations between Mr. Tarkanian [principal to Vegas Diamond], Mr. Dyson, and La Jolla Bank." (ECF No. 117-2 at 4).

On December 14, 2011, Plaintiff filed an opposition to the Motion for Summary Judgment, contending that "there were special circumstances imparting a duty upon Wiggins to disclose certain material facts to Plaintiff." (ECF No. 122at 16). Plaintiff contends that Dyson and Wiggins "acted as agents for [La Jolla Bank] in negotiating the loan with Plaintiff" and that "such a relationship imparted fiduciary duties upon Wiggins." Id.

On December 20, 2011, Defendant Wiggins filed a reply. (ECF No. 125).

II. Undisputed Facts

Plaintiff Vegas Diamond and Johnson Investments each owned property in Las Vegas, Nevada. Vegas Diamond and Johnson Investments took out loans with La Jolla Bank totaling over $25 million, secured by their respective properties, and loaned the proceeds to developer Robert Dyson to be used for a real estate project in Anza, California. The ability of Vegas Diamond to repay their loan from La Jolla Bank was dependent on the ability of Dyson to repay his loan from Vegas Diamond. Dyson was unable to repay the loans from Vegas Diamond, and the respective properties were foreclosed upon in March 2011.

In support of his motion for summary judgment, Defendant Wiggins submitted a signed declaration stating, in part:

2. I was an independent contractor who provided services to the companies owned by Robert Dyson. I was not Mr. Dyson's accountant or bookkeeper. At the request of both Mr. Dyson and Danny Tarkanian, I sometimes acted as a go-between, including sometimes transmitting messages, delivering documents and obtaining signatures. I also prepared worksheets and paperwork related to the Anza Project which were requested by Mr. Dyson and Mr. Tarkanian. However, at no time did I knowingly conceal any facts or make any false statements.

3. I was not present nor involved in any discussions or negotiations between Mr. Tarkanian, Mr. Dyson and La Jolla Bank. I did not negotiate with La Jolla Bank or anyone else. I never did any work for La Jolla Bank. I did not conduct or participate in any loan negotiations on behalf of anyone. I did not restructure any loan for Mr. Johnson or anyone else. I did not participate in any decision making relating to Mr. Dyson's business, La Jolla Bank's business... or the Anza Project.

4. I did not act knowingly to conceal or misrepresent anything, did not conspire with anyone, and did not commit any acts in furtherance of any common design.

5. In addition, based upon my conversations with Mr. Johnson, Mr. Tarkanian and Mr. Dyson, it was apparent to me that the true facts relating to the loans on the project, the use of loan proceeds, the delays with the project, the political climate in the Anza Valley, and all the other matters... [that] Plaintiffs allege constituted wrongful concealment, were actually known by Mr. Tarkanian and/or his legal counsel at the time. (Wiggins Declaration; ECF No. 117-3).

Danny Tarkanian, managing member of Plaintiff Vegas Diamond, submitted a signed declaration in opposition to Defendant Wiggins' motion for summary judgment, stating in part:

5. Beginning in 2007, during the course of dealings leading up the loan transaction [between La Jolla Bank (hereinafter "LJB") and Vegas Diamond], Defendant, Ben Wiggins (hereinafter "Mr. Wiggins") was directly involved in all aspects of the loan transaction on a day to day basis on behalf of Mr. Dyson.

6. Mr. Wiggins was the point of contact for Mr. Dyson. 7. Mr. Wiggins was involved in virtually every meeting which was held between Vegas Diamond and Mr. Dyson.

8. Mr. Wiggins was acting as a chief financial officer and accountant for Mr. Dyson throughout the course of dealing on the loan transaction.

9. Mr. Wiggins provided Mr. Dyson's financial documents to Vegas Diamond.

10. In providing Vegas Diamond the financial documents, Mr. Wiggins reviewed the financial documents with Vegas Diamond and explained them to Vegas Diamond.

11. In reviewing and explaining the financial documents of Mr. Dyson to Vegas Diamond, Mr. Wiggins emphasized the financial strength of Mr. Dyson and always made it look as though Mr. Dyson had a lot of money.

12. Mr. Wiggins often informed Vegas Diamond that LJB was requesting certain documents or other paperwork from Vegas Diamond.

13. Mr. Wiggins often reworked the financial paperwork of Vegas Diamond saying this is how it is to ...

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