United States District Court, N.D. Alabama, Southern Division
WILLIAM H. WHITEHEAD as power of attorney for LEWIS E. WHITEHEAD, JR., Plaintiffs,
BBVA COMPASS BANK, and JAMES C. PUCKETT, Defendants.
K. KALLON UNITED STATES DISTRICT JUDGE
in a representative capacity, William Whitehead filed this
lawsuit through power of attorney for his father, Lewis
Whitehead, Jr., alleging claims under § 10(b) and Rule
10b-5 of the Securities Exchange Act of 1934, 15 U.S.C.
§ 78(a) et seq., and negligence, breach of
fiduciary duty, suppression, and fraud under Alabama law.
Doc. 1. The court has for consideration BBVA Compass Bank
(“Compass Bank”) and James Puckett's Motions
to Dismiss, or in the Alternative, Motions for Summary
Judgment, docs. 5 and 6, in which they seek dismissal on
standing and a purported failure to raise a cognizable claim.
See docs. 5 at 7-11; 6 at 7-11. Basically, Compass
Bank and Puckett contend that L. Whitehead purchased the
investment at issue in this case through a different
subsidiary arm of BBVA and that they had no involvement in
any of the decisions at issue in this case. They maintain
that to the extent L. Whitehead has a cause of action, it is
against the other entity and the individual broker he dealt
with for this investment. The motions, which are fully
briefed, docs. 5 - 9, and ripe for review, are due to be
STANDARD OF REVIEW
light of both parties submitting evidence and affidavits in
support of and opposition to the Defendants motions,
court considers this matter pursuant to the provisions of
Rule 56 of the Federal Rules of Civil Procedure. “The
court has discretion as to whether to accept material beyond
the pleading that is offered in conjunction with a 12(b)(6)
motion.” Property Management & Investments,
Inc. v. Lewis, 752 F.2d 599, 604 (11th Cir.1985).
However, once the court looks at matters outside of the
pleading, “[t]he district court generally must convert
a motion to dismiss into a motion for summary
judgment.” Day v. Taylor, 400 F.3d 1272, 1276
(11th Cir. 2005). Under Rule 56(a) of the Federal Rules of
Civil Procedure, summary judgment is proper “if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56. “Rule 56
mandates the entry of summary judgment, after adequate time
for discovery and upon motion, against a party who fails to
make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that
party will bear the burden of proof at trial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)
(alteration in original). The moving party bears the initial
burden of proving the absence of a genuine issue of material
fact. Id. at 323. The burden then shifts to the
nonmoving party, who is required to “go beyond the
pleadings” to establish that there is a “genuine
issue for trial.” Id. at 324 (citation and
internal quotation marks omitted). A dispute about a material
fact is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
summary judgment motions, the court must construe the
evidence and all reasonable inferences arising from it in the
light most favorable to the non-moving party. Adickes v.
S. H. Kress & Co., 398 U.S. 144, 157 (1970); see
also Anderson, 477 U.S. at 255. Any factual disputes
will be resolved in the non-moving party's favor when
sufficient competent evidence supports the non-moving
party's version of the disputed facts. See Pace v.
Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir. 2002)
(a court is not required to resolve disputes in the
non-moving party's favor when that party's version of
events is supported by insufficient evidence). However,
“mere conclusions and unsupported factual allegations
are legally insufficient to defeat a summary judgment
motion.” Ellis v. England, 432 F.3d 1321, 1326
(11th Cir. 2005) (per curiam) (citing Bald Mountain Park,
Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)).
Moreover, “[a] mere ‘scintilla' of evidence
supporting the opposing party's position will not
suffice; there must be enough of a showing that the jury
could reasonably find for that party.” Walker v.
Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing
Anderson, 477 U.S. at 252).
MOTIONS TO STRIKE AND FOR SANCTIONS
court turns first to the discovery related motions - the
Defendants' motion to strike the affidavit W. Whitehead
submitted in opposition to their motions for summary
judgment, and W. Whitehead's request for the court to
sanction the Defendants for making alleged false statements.
Defendants' Motion to Strike
move to strike W. Whitehead's affidavit, doc. 8-1,
asserting that W. Whitehead “offers opinions on which
he has no personal knowledge, and fails to even come close to
meeting the standards for admissibility.” Doc. 10 at
1-2. An affidavit “must be made on personal knowledge
[and] set out facts that would be admissible in
evidence.” Fed.R.Civ.P. 56(c)(4). “Affidavits
which fail to meet the standards set forth in Rule 56(e) may
be subject to a motion to strike.” Thomas, 248
F.Supp.2d at 1112 (citation omitted). “However, if an
affidavit contains some improper material, the court need not
strike the entire affidavit, rather it may strike or
disregard the improper portions and consider the remainder of
the affidavit.” Id. In that respect, the court
will focus only on the sentences in the affidavit that offer
conclusory statements and legal conclusions, and lack the
“basis for such personal knowledge.” Duke v.
Nationstar Mortg., L.L.C., 893 F.Supp.2d 1238, 1244
(N.D. Ala. 2012). Consequently, the following portions of the
affidavit are due to be stricken: (1) Paragraph 2 statement
that “Mr. Puckett's affidavit is completely
false;” (2) Paragraph 3 statement that “Mr.
Puckett's affidavit is attempting to claim that he was
vice president of only Compass Bank is false;” (3)
Paragraph 6 statement that Puckett's affidavit regarding
his involvement in the brokerage account “is an
absolute lie;” (4) Paragraph 7 statement that
Puckett's affidavit regarding his involvement in
securities recommendation “is an absolute lie;”
and (5) Paragraph 8 statement that Puckett's affidavit
regarding his involvement in recommending the Bank of the
West Certificate of Deposit (“CD”) “is an
absolute lie.” Doc. 8-1 at 1-4.
while Defendants are generally correct that W.
Whitehead's statement in Paragraph 9 that he
“see[s] absolutely no reason whatsoever that Puckett
sold the CD other than to churn commissions, ”
id. at 4, constitutes a personal opinion, it is
unclear if this statement rises to a “level of
conclusoriness below which an affidavit must not sink if it
is to provide the basis for a genuine issue of material
fact.” Orthopedic & Sports Injury Clinic v.
Wang Labs., Inc., 922 F.2d 220, 224 (5th Cir. 1991).
Therefore, although this personal opinion fails to
“create an issue of fact sufficient to defeat a motion
for summary judgment, ” Owens v. City of Fort
Lauderdale, 174 F.Supp.2d 1298, 1311 (S.D. Fla. 2001),
the court declines to strike this statement. Cross v.
Stafford Hosp., Inc., No. CIV.A.7:07-CV-80-HL, 2009 WL
927763, at *3 (M.D. Ga. Mar. 31, 2009) (“[T]o the
extent the individual [defendants] proffer their own personal
opinion as to [plaintiff], the Court will consider those
portions of the affidavits.”).
Plaintiff's Request for Sanctions
Plaintiff asks the court in his brief to “sanction [the
Defendants] for the deliberate and intentional false swearing
of [Puckett].” Doc. 7 at 6. The motion is flawed in
several respects. First, the Plaintiff has failed to file
separately his “sanction motion from its opposition
papers, ” as required by Rule 11(c)(2) of the Federal
Rules of Civil Procedure. Second, the Plaintiff has failed to
comply with Rule 11(c)(2)'s requirement that the movant
provide notice and 21 days to correct the challenged conduct.
Fed.R.Civ.P. 11(c)(2). Third, the Plaintiff concedes that he
“discovered and has refuted the false statements and
perjury of the Defendants before any actual harm has been
done by the false statements.” Doc. 7 at 7. Finally,
the Plaintiff failed to show that Puckett's affidavit
contains false statements that “served no purpose other
than to harass and intimidate opposing counsel.”
Thomas v. Tenneco Packaging Co., 293 F.3d 1306, 1328
(11th Cir. 2002). For all these reasons, the request for
sanctions is rejected. The court turns now to the underlying
dispute and the motions for summary judgment.
2012, W. Whitehead and his father, L. Whitehead, met Puckett,
who at the time was a private banker at Compass Bank and vice
president of the bank's wealth management program. Docs.
5-1 at 2; 7-1 at 2. The following year, Puckett introduced
the Whiteheads to Wes McGugin, an investment officer at BBVA
Compass Investment Solutions (“BCIS”). Doc. 5-1
at 3. L. Whitehead, with his son listed as a joint tenant and
purchaser, subsequently opened a brokerage account with
McGugin. Id. at 3, 15. The Whiteheads used this
account to execute one investment in particular that is at
issue in this case.
relevant facts began on April 10, 2015, when McGugin had a
conversation with the Whiteheads about investing $450, 000
into a structured CD through the Bank of the West, during
which he explained the risks of failing to hold the CD to
maturity. Doc. 9-1. Two weeks later, L. Whitehead invested
$450, 000 in the Bank of West CD. Doc. 5-1 at 16. The
following year, McGugin advised the Whiteheads over the phone
that they should sell the Bank of the West CD based on
McGugin's impression “that the basket of stocks
underlying the CD were down and [he] did not believe they
were going to rebound.” Doc. 9-1 at 4. Thereafter, in
November 2016, McGugin liquiDated: a capital loss of $38, 000
the Bank of West CD. Doc. 5-1 at 9, 16. W. Whitehead
maintains that McGugin never informed him of the sale, that
the Defendants here - Compass Bank and Puckett -
intentionally omitted “risks factors” included in
published documents about the Bank of the West CD, and that
he “see[s] absolutely no reason whatsoever” for
the sale “since if they were held to maturity there
would be no loss.” Docs. 1 at 6; 8-1 at 5. Based on the
loss of capital, W. Whitehead, in a representative capacity
of his father through power of attorney, filed this lawsuit.
Bank and Puckett seek summary judgment on two primary
grounds: (1) that W. Whitehead lacks standing to prosecute
this claim on behalf of his father, and (2) that they had no
involvement with the securities at issue. See docs.
5 and 6. The court reviews each contention in turn.
Whether W. ...