N. Am. Bullion Exch., LLC v. CC Trading, LLC, 17-CV-203-LRR

Decision Date12 August 2019
Docket NumberNo. 17-CV-203-LRR,17-CV-203-LRR
Citation412 F.Supp.3d 1119
Parties NORTH AMERICAN BULLION EXCHANGE, LLC, Plaintiff, v. CC TRADING, LLC, et al. Defendants.
CourtU.S. District Court — District of North Dakota

412 F.Supp.3d 1119

NORTH AMERICAN BULLION EXCHANGE, LLC, Plaintiff,
v.
CC TRADING, LLC, et al.
Defendants.

No. 17-CV-203-LRR

United States District Court, D. North Dakota, EASTERN DIVISION.

Signed August 12, 2019


412 F.Supp.3d 1123

Brent J. Edison, Matthew W. Sorensen, Steven Francis Lamb, Vogel Law Firm, Fargo, ND, for Plaintiff.

Nicholas C. Grant, Shea Ashley Thomas, Ebeltoft Sickler Lawyers PLLC, Dickinson, ND, for Defendants.

ORDER

LINDA R. READE, JUDGE

TABLE OF CONTENTS

I. INTRODUCTION...1124

II. RELEVANT PROCEDURAL HISTORY...1124

III. SUBJECT MATTER JUISDICTION...1124

IV. SUMMARY JUDGMENT STANDARD...1125

V. RELEVANT FACTUAL BACKGROUND...1125

A. Parties...1126

B. Overview of the Dispute...1126

VI. ANALYSIS...1126

A. NABX's Conversion Claim and Unjust Enrichment Claim...1126

1. Parties' arguments...1126

2. Applicable law...1127

a. Conversion...1127

b. Unjust Enrichment...1127

c. Rule 8(d)(2)...1128

3. Application...1128

B. Fraud Claims...1129

1. Fraud claims against CC Trading...1129

a. Parties' arguments...1129

1. Actual fraud...1129

2. Constructive fraud...1130

b. Applicable law...1130

1. Actual fraud...1130

2. Constructive fraud...1131

c. Application...1131

2. Actual and constructive fraud claims against Christensen...1132

a. Parties' arguments...1132

b. Applicable law...1132

c. Application...1133

3. Summary...1133

VII. CONCLUSION...1133

412 F.Supp.3d 1124

I. INTRODUCTION

The matter before the court is Defendants CC Trading, LLC ("CC Trading") and Charles Conrad Christensen's "Motion for Partial Summary Judgment" ("Motion") (docket no. 21).

II. RELEVANT PROCEDURAL HISTORY

On September 29, 2017, Plaintiff North America Bullion Exchange, LLC ("NABX") filed a Complaint (docket no. 1), alleging breach of contract (Count I), conversion (Count II), unjust enrichment (Count III), actual fraud (Count IV) and constructive fraud (Count V).1 See generally Complaint ¶¶ 31-56. On November 6, 2017, CC Trading and Christensen filed an Answer and Affirmative Defenses (docket no. 5).

On November 15, 2018, CC Trading and Christensen filed the Motion. On December 5, 2018, NABX filed a Resistance (docket no. 24). On December 19, 2018, CC Trading and Christensen filed a Reply ("Reply Brief") (docket no. 29). No party has requested oral argument, and the court finds that oral argument is unnecessary. The matter is fully submitted and ready for decision.

III. SUBJECT MATTER JURISDICTION

The court has diversity jurisdiction over the claims because complete diversity exists

412 F.Supp.3d 1125

between the parties and NABX alleges that the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a)(1) ("The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000 ... and is between ... citizens of different States.").

IV. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). "Summary judgment is proper ‘if the pleadings, the discovery and disclosure materials on file, and any affidavits show’ " an absence of a genuine dispute as to a material fact. Hilde v. City of Eveleth , 777 F.3d 998, 1003 (8th Cir. 2015) (quoting Torgerson v. City of Rochester , 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc)). "A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party; a fact is material if its resolution affects the outcome of the case." Massey-Diez v. Univ. of Iowa Cmty. Med. Servs., Inc. , 826 F.3d 1149, 1157 (8th Cir. 2016) (quoting Gazal v. Boehringer Ingelheim Pharm., Inc. , 647 F.3d 833, 837-38 (8th Cir. 2011) ). "The movant ‘bears the initial responsibility of informing the district court of the basis for its motion,’ and must identify ‘those portions of [the record] ... which it believes demonstrate the absence of a genuine issue of material fact.’ " Torgerson , 643 F.3d at 1042 (alterations in original) (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). Once the movant has done so, "the nonmovant must respond by submitting evidentiary materials that set out ‘specific facts showing that there is a genuine issue for trial.’ " Id. (quoting Celotex Corp. , 477 U.S. at 324, 106 S.Ct. 2548 ).

On a motion for summary judgment, the court must view the facts "in the light most favorable to the nonmoving party." Id. (quoting Ricci v. DeStefano , 557 U.S. 557, 586, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) ). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial," and summary judgment is appropriate. Ricci , 557 U.S. at 586, 129 S.Ct. 2658 (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "The nonmovant ‘must do more than simply show that there is some metaphysical doubt as to the material facts....’ " Torgerson , 643 F.3d at 1042 (quoting Matsushita , 475 U.S. at 586, 106 S.Ct. 1348 ). Instead, "[t]o survive a motion for summary judgment, the nonmoving party must substantiate [its] allegations with sufficient probative evidence [that] would permit a finding in [its] favor based on more than mere speculation, conjecture, or fantasy." Williams v. Mannis , 889 F.3d 926, 931 (8th Cir. 2018) (third alteration in original) (quoting Barber v. C1 Truck Driver Training, LLC , 656 F.3d 782, 801 (8th Cir. 2011) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r of Internal Revenue , 614 F.3d 799, 807 (8th Cir. 2010). "Evidence, not contentions, avoids summary judgment." Reasonover v. St. Louis Cty. , 447 F.3d 569, 578 (8th Cir. 2006) (quoting Mayer v. Nextel W. Corp. , 318 F.3d 803, 809 (8th Cir. 2003) ).

V. RELEVANT FACTUAL BACKGROUND

Viewing the evidence in the light most favorable to the nonmoving party, and allowing

412 F.Supp.3d 1126

them all reasonable inferences, the uncontested material facts are as follows.

A. Parties

NABX is a North Dakota limited liability company with its principal place of business in North Dakota. Complaint ¶ 2. CC Trading is a Wisconsin limited liability company with its principal place of business in Wisconsin. Id. ¶ 3. Christensen is a Wisconsin resident and is the sole member of CC Trading, serving all roles as governor, manager and officer of the limited liability company. Id. ¶¶ 4-5.

B. Overview of the Dispute

Both NABX and CC Trading are in the business of buying and selling bullion product. "Memorandum in Support of Defendants' Motion for Partial Summary Judgment" ("Defendants' Brief") (docket no. 22) at 3, ¶¶ 3, 5; "Memorandum of Law in Opposition to Defendants' Motion for Partial Summary Judgment" ("NABX's Brief") (docket no. 24) at 1. In January 2016, CC Trading opened a trading account with NABX and the parties began transacting business with each other. Complaint ¶ 11; Defendants' Brief at 3, ¶ 10; NABX's Brief at 1. During the parties' trading relationship, NABX bought bullion product from CC Trading, and also sold bullion product to CC Trading. Defendants' Brief at 3, ¶ 11; NABX's Brief at 1. NABX and CC Trading did not have a written contract specifying the terms and conditions of CC Trading's account with NABX. Defendants' Brief at 3, ¶ 12; NABX's Brief at 1. Instead, the trading relationship between NABX and CC Trading involved both parties purching and selling bullion product with each other on a transaction-by-transaction basis. Defendants' Brief at 3, ¶ 13; NABX's Brief at 1. When CC Trading started buying and selling bullion product with NABX, the transactions were in relatively small dollar amounts. Complaint ¶ 17; NABX's Brief at 2. Over time, however, the transaction amounts increased greatly. Id. In May 2017, NABX terminated its trading relationship with CC Trading. Defendants' Brief at 4, ¶ 17; NABX's Brief at 2.

VI. ANALYSIS

A. NABX's Conversion Claim and Unjust Enrichment Claim

1. Parties' arguments

CC Trading argues that they it is entitled to summary judgment on NABX's conversion claim because "the tort of conversion is not available to [NABX]." Defendants' Brief at 5. Specifically, CC Trading...

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